I'm back!

Hey guys!  I'm back!  Sorry it's been so long.  Lot of interesting things happened to me in the year.  First of all, I got married, so here's a shoutout to my new bride (Priya)!  After that my sister got married, and then my new brother-in-law had a baby.  Also, the company I work for just got purchased by IBM. 

So as you can see, it's been a busy year for me.  Now that the excitement has calmed down, I'm going to go back to doing regular posts.

Now down to business.  I've changed the format and layout of the blog.  Looks like while I was out blogger added a bunch of new features which I'm going to try to incorporate in my blog.

I was looking over my earlier posts.  Crazy how things have changed since I posted.  Previously, I was blogging in the depths of the financial crisis.  Now the market has stabilized, and we're just waiting for the employment numbers to come back.  I want to review a little bit about what I blogged about before.

Corporate Bonds -  This strategy has been working out great.  Every bond I've purchased last year is over $100 (I recommend buying below $100).  A lot of my bonds have been called, a lot of them were "make whole" bonds that I bought, so I got my full value early.  I then rolled those over into other bonds that will hopefully be called at full value.  A lot of them also have given me tender offers where they will give me most of the money upfront instead of waiting 2-3 years for the rest.  This is thanks to low interest rates right now, since no one wants to pay these high interest rates when they can sell new bonds at lower rates.  Now, this does make it difficult to buy new bonds at higher rates since there are not as many since interest rates are so low, but I still do find bonds >5%.

Gold - As you guys know, gold is at it's all time high.  I blogged before about how I didn't understand gold and it is a speculative investment and so I wouldn't buy it.  I've changed my mind.  I ended up buying some at $1100 an ounce.  I feel that gold is in a bull market right now and it could hit $2000 an ounce.  I could be wrong but the way the government is spending and printing money, I don't see how gold will come down anytime soon.  Peter Schiff, who i follow, is prediciting $5000 an ounce.

I am going to be blogging regularly..if there are any questions you guys have or if there is any topic you want me to cover, let me know.

20 Year Bear Market?

sorry, haven't posted in awhile. Just got engaged, so been pretty busy with that.

Here's an article that talks about Shilling. I'll post his stuff since he seems to be the only one who is right. Make sure you read the 2nd page, looks like we are in a 20 year bear, good thing 9 years of it are almost done.

Link to article.

Similar to Great Depression

3/15/09...I read an article awhile ago which I can't find anymore. The article showed that during the great depression, the market would go down and create a new low, then rally back up almost to the previous low and then go back down and create a new low and would continue doing this.

I looked at charts and it does seem to have done this between 1929-1935. I'm worried that this rally we are having now is following the same pattern and it will go up to a previous low and then crash and create a new low.

Here's another article that compares to the two.

Market Bottom

I know this is a non-stock blog, but I know most people are still interested in stocks.

I've been reading a lot about where people think the market bottom will be. Most analysts think that the low end for earnings next year for the S&P will be around $63. Now if that is true, if we take a conservative 10 multiple, that brings the S&P to around $630 versus its close of $735 on 2/28/09.

Why is this important, well, a large portion of the gains in the market happen in the few years after the bottom, so people love to guess when the bottom is and make the greatest gains. Now there are people who think that the S&P could go to 450. So, you might want to wait till then to put your money in.

Lower

Lower still!

Debt Payments

I just noticed that a majority of the corporate bonds that I own have a debt payment in March/April and September/October. I am not sure why that is so, but it is something I noticed. The reason I bring this up is because that means there will be a lot of companies that won't have as much cash in March as they did when they make this payment. Of course their liabilities will be reduced, but having cash is probably better. I don't know what kind of effect it will have on their stock prices but I doubt it is good.

Scary

A couple articles I read scared me recently. I had read the same things on blogs and the non-mainstream media, but when you start seeing them in the mainstream media, it begins to scare me. Basically, they are saying the govt may not be able to borrow all the money it needs for the stimulus since countries don't have the money they used to. Interest payments are the 4th biggest expenditure for the US govt after Social Security, Medicare, and defense. The article that scares me the most is the one that says it is possible that the US govt loses their AAA rating. If that happens the dollar could collapse and that would be trouble. Maybe we should be buying gold!

Couple links:

Can countries afford to pay for our bailouts?

These links are embedded in the above link:
Biggest debt buyers

AAA rating ok?

Real Estate

I haven't blogged on real estate, but I think it is an obvious investment (when the prices make sense) and now would be an optimal opportunity. I would suggest anyone who does not own a home and wants to should seriously start looking and buy this year. Obama is giving first-time homebuyers who purchase their homes before Dec. 1 an $8,000 tax credit. I expect home prices to go down another 20% in the next 6 months, so now would be a good time to start looking.

Couple things to consider.

• The treasury has been buying bonds in order to lower the interest rate
• If you're job in is trouble, it might not be a good idea to buy a house and then have to foreclose on it.
• Of course you also get to deduct the mortgage interest on your house.
• Look into Mortgage credit certificates in your county, you can save a lot of money by getting tax credits through the life of the loan.

2/28/09 -- Update, looks like the CA govt might be giving a 10K tax credit also!