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Quote of the Day

Thursday, May 03, 2012

May 3, 2012 -- Our job in this market at this time in history is to husband and take care of our money and savings. In other words, the idea is to keep what we've got. On previous sites, I've advocated my old friend Harry Brown's brilliant method. It is so simple and logical that it works. Harry divided his portfolio into four equal (in value) parts. The four parts were stocks, bonds, gold and T-bills. Harry called his vehicle the Permanent Portfolio (PRPFX). Whenever one section rose above 32%, he redivided the four sections into equal value parts. It was a "set it and forget it" strategy, and it worked. The portfolio was re-set once a year.


Here's the record of investment returns in the Permanent Portfolio since 1990, statistics courtesy of Addison Wiggin of The Daily Reckoning.

1990 1.6%

1991 13.1%

1992 4.4%

1993 12.9%

1994 -2.5%

1995 18,0

1996 4.9%

1997 7.5%

1998 10.8%

1999 4.2

2000 3.2%

2001 0.9%

2002 7.0%

2003 14.0%

2004 6.6%

2005 8.1%

2006 11.0%

2007 12.9%

2008 1.9%

2009 7.8%

2010 14.5%


There is an actual Permanent Portfolio security which you can buy. Look it up on the internet. The symbol is PRPFX. The latest price for PRPFX is 48.54. The all time high was just above 49. The Permanent Portfolio is a good and relatively safe way of holding on to your wealth.






Just read this great book, Hold Me Tight, by Sue Johnson. In the book Sue tells of the terrible damage that mothers can inflict on their infants by not responding to their emotional needs. When a baby cries out, it needs its mother's warmth and affection. Without its mother's immediate attention, the infant can suffer massive emotional harm.


I know, because this is what happened to me. My own mother's mother (my grandmother) died when Mom was three years old, so my own mother never had the experience of actually being parented.


I used to cry and scream all night, hoping that my mother would come to comfort me, but my mother never responded . Mom had heard and believed the horrendous theory of "letting them cry it out."


This damage to my psyche pained me not only as an infant and as a child, but it haunted me all my life. I blame ignorant doctors like Dr. Spock for sponsoring the "cry it out" thesis, and I curse them to this day. It took me the better part of my life to address the pain and anguish that I underwent as an infant to get over my fright and pain. That early pain lasted for the rest of my life. It also colored my pessimistic view of the world.


For new mothers and moms-to-be I most strenuously recommend the book, Hold Me Tight. I'd never ask anyone to go through what I went through all my life. I never experienced a serene and fearless minute.


My mother was a decent and intelligent women and she did what she thought was right and best. She meant me no harm, She was a product of her ignorant times. And I curse the arrogant and stupid doctors and child care "experts" who almost ruined my life. The only thing worse than a little knowledge is the wrong knowledge plus sheer ignorance.




My PTI was down 6 at 6396. The moving average at 6375, so my PTI is bullish by 21.


The Dow was down 61.98 to 13206.59.


Transports were down 50.19 to 5284.33.


Utilities were down 2.61 to 467.20.


NASDAQ was down 35.55 to 3024.30.


S&P 500 was down 10.74 to 1391.57.


There were 910 advances and 2,119 declines on the NYSE.


There were 128 new highs and 39 new lows.


Total Volume on the NYSE and associated exchanges was 3.97 billion.


Bonds: Yield on the 10 year T-note was 1.926. Yield on the long T-bond was 3.113. Yield of the 91 day T-bill was 0.081%.


Dollar Index was up 0.086 at 79.218. Euro was down 0.12 at 131.52. Yen was down 0.21 at 124.59. Currency Prices as of 1 PM Pacific Time.

June gold was down 19.20 to 1634.80. July silver was down 0.635 to 30.010.


June light crude was down 2.68 to 102.54.


My Most Active Stocks Index was down 7 at 273.


The Big Money Breadth Index was down 4 at 1028.


GDX was down 1.78 at 43.88.


HUI was down 17.12 at 419.98.


CRB Commodity Index was down 2.62 at 301.46.


The VIX was up 0.68 at 17.56.


Permanent Portfolio Fund (PRPFX) was down 0.15 to 48.54 (previous day closing). YTD Return: 5.75%.


Late Notes -- I have the feeling that "they" tried to knock the Dow and gold down throughout the whole session -- but they couldn't find the sellers. Dow holding stubbornly above 1300 and gold holding just as stubbornly above 1600. It's just two markets searching for trends and not finding them. Or is standing still a trend? But remember, gold doesn't have to do anything -- gold is a piece of wealth like the painting, "The Scream," by Munch that sold for $119 million today.