Stock Broker Advisers

                    

SEC regulations see that stock brokers have to treat clients differently than in the past. Of course it doesn’t do much for most investment portfolios, but it makes bureaucrats feel better.

                       

In the old days a broker had to be sure that an investment was ”suitable” for a client. What was suitable was often debatable, but that makes securities markets as erratic as they are.

                       

Now the broker is supposed to have a “fiduciary duty” toward the client. That should open a hornet’s nest of endless legal problems

                       

The main result of this is to give investors more ammunition to sue brokers for real or imagined damages. That offers more power to the lawyers. And to give brokers the excuse to become more profitable “advisers.”(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Poor Investment Analysis

                    

The majority of securities analysts could not operate a pushcart. Yet, they constantly critique top business executives about the way they run multi-billion dollar companies.

                       

In addition to this prevailing fault, financial community analysts have an extremely limited time frame. While a business must look years ahead, those involved with Wall Street securities usually operate with much shorter time-goals. That makes them market timers where the success odds are known to be poor.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter

Why Securities Markets Are Erratic

                     

Securities markets are generally erratic. But when you think about it, they really ought to be calmer than they are.

                       

Institutional investors and advisers are considered professionals. They’re the experts who account for 80%, and often more, of all trades and activity. Why then should the markets behave erratically? Pros ought to know what they are doing, unlike the other 20% or so of the public amateur investors.

                       

However, Wall Street "wizards" invariably act in a mob-like manner. They still make their millions, simply because they are ensconced as what I have described as Wall Street inside players. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Wall Street’s Experts?

                      

Little deep investment research and thought comes from the analytical securities segment of Wall Street. What goes for research there is primarily in the form of company reportage. These have to do with reported earnings, without any true understanding of the nature of those earnings.

                       

Furthermore, much of what earnings are announced could be the result of fanciful accounting. So all that analytical reporting may be meaningless, if not misleading.

                       

Little is done on what is most important to the investor; the use of disciplined strategy. Most analysts and money managers have no time for careful, insightful thought of the multi- hundreds of strategies, which, along with disciplined use, are essential.

                       

Moreover, the investment community is incestuous, in a way which creates herd-like, impulsive instincts. This results in the inanities that become repetitive gospel, over the years. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole twitter.)

Medicare and Social Security Ponzi Schemes?

                  

The biggest Ponzi scheme of all time may well be sponsored by the U.S. Government.

                       

Medicare and Social Security are estimated to be short by over 110 trillion dollars. That makes them completely bankrupt, were they genuine, private insurance enterprises.

                       

The average American has no idea how Social Security works. it’s not as advertised because there is no trust and reserve fund behind it, though you often hear politicians mention “lock box.”.

                       

Benefits are paid today from earnings of those still working, So, what makes this different from any other Ponzi scheme? Paying off some today with money taken from others, to whom benefits are promised tomorrow. Social Security tax funds taken in, are never really invested. They are used to pay off Social Security obligations of today. Government also has exhausted what is supposed to be the Medicare Trust Fund.

Social Security will run out of money in a couple of decades, or much sooner, when there are probably not enough workers to pay off retirees.

                       

So what makes these programs different from other Ponzi schemes? (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Social Security, Medicare and Medicaid Prospects

                   

By 2050, Social Security, Medicare and Medicaid, will take up nearly the entire federal budget, if it remains on its present course. By 2080, Medicare alone will comprise the entire federal budget. This projection is unsustainable. There will have to be some changes done by politicians in office.

                       

But the impending debacle does point up the stupidity of those in office today, who have set forth a path to disaster, for us, our children and grandchildren.

                                           

Congress and the administration are creating a bankrupt system for us and our descendants. Solutions will only involve far less services and benefits, with rationing and much higher taxes, as well as huge inflation. We have never encountered such financial problems before.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Government Bait and Switch

The government’s “stimulus,” has evolved in its usage. The old meaning had been perfectly useful in Keynesian economic parlance. But it has now became a cover for politicians who conveniently use the term to hide other motives they may have.

                       

What the bulk of the population thinks of when Washington attempts to stimulate the economy is that spending will get business moving, employers hiring and consumers buying as quickly as possible. Today , and not years in the future.

                       

Poor psychology is what makes deep economic recessions linger on. A true stimulus must promptly change that poor psychology.

                       

But when only a small amount of stimulus money is actually designed to be spent quickly, another motive is apparent. When the vast bulk of stimulus money is designed to be a slush fund to expand federal and state government non-productive outlays, the goal is different. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Securities Selections in the Media

                     

Financial portfolios you get in the media are amusing; they are not, however, a serious consideration. Because you can get burned if you follow such advice.

                       

Media suggestions come with some adviser mentioned; the one making the recommendations. That adviser has been singled out from among tens of thousands in the business.

                       

Advisers are always seeking publicity; they strive to have pet portfolio ideas published. So why this mention in the media? Is it a friend or relative of the columnist or reporter or interviewer?

                       

Furthermore, the portfolios are usually an attempt to time the market. Also, they never identify objectives by investor age or risk capacity or psychological sensitivity. It makes the reportage useless. And dangerous. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Annuity Termination Costs

                     

Annuity salesmen often overlook start-up costs of annuity contracts that can be in effect for up to seven years.

                       

Salesmen commissions and administrative expenses must be met. Early termination requires faster amortization. These are in addition to management fees that are imposed each year on annuities that involve variable investment.

                                       

Furthermore, the annuity may have life insurance provisions that you may not need. You will still pay for that feature.

                       

So annuities may involve costs you are not aware of, And you cannot easily drop contracts. There will be penalties for making corrections or changing your mind.(See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Education From Financial Media Headlines

                                        

Investors get most of their financial and business education from the media, especially those brief bytes and headlines.

                       

Schools don’t provide adequate information for students to comprehend economics and finance. As a result, the public cannot evaluate the ads, nor headlines that apply to finance and business topics, or to get meaningful explanations from inept media sources.

                       

They therefore get biased, one-sided opinions without any contrasting arguments or alternatives.

                       

Brokers and advisers cited in the media frequently promote a particular point of view. The media often poorly screens content.

                       

Remember also, the importance of investor age, family status, personal psychology, finances and risk status, have lots to do with investment choice, Media slants often neglect them. So stay alert to basics and avoid tips from questionable sources. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Don’t Believe Investment Ads

                          

Ads give only possible advantages, and not the downsides of investments being suggested. Why take the advice? Yet, so many investors learn about what they buy solely from ads and salesmen.

                       

I have researched over 1,600 investment strategies that are occasionally or frequently used. I have also looked into the pros and cons of each. And I have not found one that has an exclusive advantage, without at least one disadvantage.

                       

An example: Sellers of gold investments may be selling one type without discussing various other forms, or whether everyone ought to be buying gold at all, despite looming inflation. The public never gets full information.

                       

Furthermore, investor age, family status, personal psychology, finances and risk status, have lots to do with investment choice. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)

Why Use Solar Panels?

                    

Covering the desert landscape with solar panels is not the way to make the environment “green.”

                       

When solar panels get covered with desert dust and dirt, they don’t accomplish their goal. They have to be washed down with water every month. Yet, precious water is not amply available.

                                                   

The Wildlife Conservancy and other clear-minded environmentalists are against solar panels in the desert. That, in addition to the fact the process still has to be subsidized by taxpayers. (See the Earl J. Weinreb NewsHole® comments and @BusinessNewshole at Twitter.)