Search This Blog

Tuesday, June 28, 2016

Where's the Financial "Weather Girls"? Where's all the Warnings?

It was very nice to see the Dow drop over 900 pts over the last two trading days but unfortunately early morning numbers look like it will a profit-taking day for the vultures.

This is a point we've made before but do you ever notice if there is an impending weather event such as hurricane, tornado cluster, blizzard or such, the local news is wall to wall coverage with every local station pre-empting commercials to provide up to the second info to keep you and your family safe?

And they always have this long, extensive checklist of things you need to buy or possess for after the weather event passes -- fresh water, batteries, radio, heaters or fans depending, plywood, full tank of gas in the car, cash on hand in case local businesses aren't able to accept credit, etc..

Ever notice that?
Ok, now when the last time anyone on TV has warned you what to do to prepare you for economic meltdown or global depression-recession or something like Brexit?

When's the last time these financial news soulless Bastards ever advised selling a stock or a portion of your portfolio to stay afloat?

Here's an example..

Back two years ago today, the value of Exxon stock was $100.68 a share..  Let us say on that date (6/28/14) you purchased 5,000 shares and to keep things extremely simple math-wise, there are no fees to think about

So $100.68 x 5,000 = $503,400  That is what you have invested in Exxon
Now you watch those crap networks like CNBC, Fox Business and Bloomberg and read WSJ so you are always up on the latest 'news' and you see by Oct 14, 2014 Exxon is worth 10% less than what you paid ($90.22)

The talking meatsticks on TV; the experts tell you to hold on to your oil stocks... Prices can't keep dropping forever..  So you ignore your instincts and by Dec 15, 2014, Exxon is now valued at $86.90 (these are all real numbers, not made up by us to make a point)

The assholes on TV tell you to hold onto your stock.. Do you?
Let's say the idea of losing 14% of the total value of your stock is abhorrent to you so you stay in.. Oil and gas prices have to eventually go up. right?

And so you watch and read and see your precious stock drop a little more every day until by August 25, 2015 it is now valued at $68.71, a 14 month loss of nearly 32% of the stock's original value.

So who in the financial news was there to protect you?

As it so happened, that date was the two year low point and its slowly climbed to a price of $88.86 yesterday;  From Dec. 15, 2014 to June 27, 2016, Exxon basically went up $1.96 which is half the amount charged if you dare to order additional spaghetti sauce at an Olive Garden..
And based on this example, a person locked in $503k in personal investment income in order to make $10k (2% profit) after 18 months

A lot of people lost money the last few days on Brexit..  We admit we feel no empathy but the truth is that happened..  Where was their warnings?

Some of these people were extremely wealthy, others were nations themselves totally blindsided..

Did no one even strategically go over the possibility that the British people would want nothing to do with the EU??
Britain has had a history of going it alone in the past.. At one time it was the only influential Protestant nation in a thick soup of Catholic nations wanting to invade then kill off that "heretic" Queen Elizabeth

And don't forget it was Britain alone that was the difference between a Nazi controlled world and life as we know it.   No matter how bad things may seem today, they'd have been 1,000 worse had Churchill and the Brits not been so strong and defiant toward the Hun.
Whether it be bad weather or your finances it is highly irresponsible not to have immediate, short term and long-termcontingency plans for every financial scenario no matter what others may think.

Their opinions are not important here. Only yours.

Because if/when the economy does collapse on itself, there's not going to be any gorgeous 20-something sluts with tight sweaters, short mini skirts and knee-high leather boots on the boob-tube advising you how to recoup all you lost..