International Business Machines’ (IBM) CEO Ginni Rometty on Q3 2014 Results – Earnings Call Transcript
By Floyd Brown, Chief Political Analyst
With this week’s carnage on Wall Street, it’s no surprise that investors are feeling insecure.
But while everyone is fretting, I remain confident and hopeful. That’s because I know that the Federal Reserve calls the shots, and we’re merely players in its game.
And just like any other game, you have to know the rules to successfully invest in the markets.
So even if you don’t share my inner calm, I’m going to tell you why you should…
Knowing the Rules
First of all, you have to understand that the Federal Reserve works to protect government first and then the governing elite in tandem.
Basically, don’t expect the rich to do without their Ferraris or Maseratis. The Federal Reserve stands ready to print dollars until the moneyed are happy.
Just last week, John Williams, the San Francisco Fed President, was preaching low-interest rates to Reuters: “If we don’t see any improvement in wages that would be a sign that we’ll still have a lot of slack in the economy and we’re not getting any inflationary pressure to move inflation back to 2%.”
If this does turn out to be the case, then any increase in interest rates will be postponed. What’s more, the Fed may even consider revving up its purchase of assets through another round of quantitative easing (QE), according to Williams.
He said, “If we really get a sustained, disinflationary forecast… then, I think moving back to additional asset purchases in a situation like that should be something we should seriously consider.”
Even with $ 4.4 trillion of assets already under its bloated belt, this devourer of the private economy still can’t get enough.
Heck, maybe these socialists won’t be happy until they own every piece of paper in the country. After all, it’s obvious that their real motive is to keep borrowing costs low for governments that are gobbling up the world’s wealth.
The Ultimate Monopoly
So after accepting that the Fed is the author of the game, you have to come to grips with the simple fact that America is no longer a free market economy. Instead, it’s what economists would call a “mixed economy.”
Some vestiges of once-free markets still work resoundingly well, but government has been socializing sector by sector. First, the progressives captured Washington, D.C. with the election of Woodrow Wilson… then the income tax was established… and finally there was the creation of the ultimate monopoly: the Federal Reserve.
Today, the most successful of businesses seek to be vassals of government, rather than the masters of the universe seen in the 19th Century.
Don’t believe me? Just look around. Google (GOOGL) catalogues data for the U.S. government and monetizes the data by selling search-related advertising. Boeing (BA) builds planes and rockets for Uncle Sam first and the world’s airlines second.
Even financial firms and banks reap billions selling and trading government bonds, a market that wouldn’t exist were it not for government overspending.
But what does this have to do with the everyday investor? It’s simply proof that, because of the way government works today, stocks are the only place to be.
In fact, if it weren’t for the government, many companies wouldn’t even be in business…
Some of the best customers of hotel chains and airlines are the hordes of government workers traveling on “business.” And who do you think fills all those business class seats to Europe? It isn’t private enterprises or pensioners, that’s for sure.
Make Your Final Move
Is my portfolio nominally down right now? Yes, but over the long run, stocks have paid me very nicely to be a long-term investor.
If you’re sitting in the bond market today (with rates being crushed to barely a trickle), you’re just slowly losing money. Your returns in real dollars are an illusion.
Basically, this is the final inning of a rigged game. Massive wealth is being transferred from the productive to the nonproductive, and people who saved and scrimped in the 1950s and ‘60s are being drained.
The only thing we can do is avoid falling prey to the Fed’s plan.
Look for firms with good margins, real profits, and dividends. These firms and real assets – such as real estate, timberland, farmland, and natural resources – are the place to be. When the washout comes, even though few places will be a haven, these will be the best.
Your eyes on the Hill,
Tech giant Apple (AAPL) reported its Q4 results after Monday’s closing bell, beating analyst estimates and seeing its shares rise..
AAPL’s Q4 Earnings in Brief
- The company reported EPS of $ 1.42, easily beating the estimated $ 1.31. Revenues came in at a hefty $ 42.12 billion versus the expected $ 39.85 billion.
- The company sold 39.27 million iPhones, 12.31 million iPads, and 5.52 million Macs during the quarter.
- Apple predicts Q1 2015 revenue to be between $ 63.5 and $ 66.5 billion, just above analyst estimates.
Apple CEO Tim Cook had this to say about the results: “Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus. With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple’s strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015.”
The company declared its next quarterly dividend of 47 cents, which will be paid on 11/13/2014 to shareholders on record as of 11/10/2014.
AAPL stock was up $ 1.03, or 1.03%, in after hours trading. YTD, the stock is up 23.6%.
The Bottom Line
Apple (AAPL)] is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
By Tim Maverick, Staff Writer
November 30, 2014. Mark that day on your calendar because it’s likely to be the day that will change the gold market forever.
The Swiss people will vote on a referendum that’ll refresh the country’s centuries-long affinity for gold and restrain paper money.
Bringing this issue to a vote has been a struggle; the Swiss government and the Swiss central bank strongly oppose the referendum.
But the people of Switzerland demanded to be heard.
Effects of a Swiss Gold Referendum
The ballot includes three key provisions:
- Prohibit the Swiss National Bank from selling any more gold.
- Repatriate all Swiss gold from overseas, particularly from the Anglo-countries of the United Kingdom, United States, and Canada.
- Require that at least 20% of the central bank’s assets be actual physical gold bullion.
Between 1999 and 2003, the Swiss central bank sold about 50% of its gold reserves. And, like the Bank of England, it sold at a rock bottom price of around $ 200 an ounce.
Currently, the country holds only 1,040 metric tons of gold in reserve or 7.7% of the central bank’s assets.
If the Swiss vote yes on the referendum, it’ll have an incredibly widespread effect.
For one, Switzerland will be the first developed country this century to restrict the central bank and other policymakers’ ability to print money and expand government.
However, it’s the gold market that will feel the main tremors.
Despite its loathing to do so, the Swiss National Bank will be forced to go into the physical gold market and purchase bullion.
UBS analysts predict that the Swiss National Bank will have to buy about 1,500 metric tons of gold over that three-year period.
That is no small amount.
Ole Hansen, head commodity strategist at Saxo Bank, said, “That kind of gold buying would put what we’ve seen recently in China to shame.”
To give you some context, in 2013, China purchased 1,176.4 metric tons of gold, according to the China Gold Association.
How to Profit From a Yes
To benefit from a yay vote, investors should consider buying physical gold bullion.
Another terrific option is to purchase an exchange-traded fund (ETF) that debuted in mid-May, the Merk Gold Trust (OUNZ).
Its expense ratio is a reasonable 0.40%. Plus, when you liquidate the fund, you have the option to actually receive delivery of gold bullion (held in London for Merk) or gold coins. You won’t get that benefit from many other ETFs.
To liquidate, investors simply file a delivery application and submit it to their broker. The gold delivery itself is a non-taxable event since you’re taking delivery of an asset you already own – gold.
Merk’s first such applicant this past summer received delivery of 54 American Buffalo 24-carat gold coins.
It’s very likely, Merk will receive plenty more of these applications if the Swiss vote yes at the end of November.
And “the chase” continues,
I have been following a dividend growth strategy for some time. The aim of the portfolio is to provide early retirement via dividend income. For 2014, I am targeting approximately $ 28k in dividend income. This update summarizes portfolio progress in Q2 2014.
Source Of Funds
I am using selective reinvestment of my dividend income from 2013 as my primary source of funding for new investments, in addition to excess disposable income from savings.
2014 Dividend Income
In Q1 2014, I received approximately $ 4,311 in dividends. This was primarily from my Australian positions ($ 3,391), with the rest ($ 920) coming from my US portfolio.
Q2 2014 was an equally great quarter, with approximately $ 4,541 received in total dividend income. I received approximately $ 3,492 from my Australian portfolio and $ 1,049 from my US portfolio.
For Q3, I received $ 8,878 in dividends. My Australian positions contributed $ 8,010 in income, while my US portfolio
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