Folks, I want to take this opportunity to thank you for subscribing to my blog. And I want to give special thanks to those of you who have added your comments, both supportive and contradictory. It’s flattering to know that others think enough about what you have to say to not only welcome it into their mailboxes every week, but to digest and think about it.

This will be my last post for a while—perhaps for quite some time. And, this evening’s broadcast will also be my last for a while as well, as I’m also going to take a sabbatical from my on-line “radio” show. Both of these activities have been labors of love. But they have both consumed considerable time, energy, and thought—resources that I’ve decided to apply exclusively to a couple of other things.

The first is a very exciting, new project whose mission is to promote financial literacy. As most of you who have known me for a while know, this is—and has been—a passion of mine for some time. And, I’m going back to school to acquire some skills in the graphic arts and video field that I can apply to this project. And I’m looking  forward to both the education and the constructive result.

I’m also going to play a more active role in helping my wife, Dianne, with her business. She’s been doing a fantastic job as it is; but it’s time for me to be more actively supportive than I have been. I think this will be fun as well.

So, thanks again for both your interest in my effort to help you be more successful investors, and your indulgence when I’ve occasionally drifted off target to rant a bit.

I’ll keep my Web site open at http://www.financialiteracy.us. The archives for this blog will remain there for anyone to prowl around in and refer to. And, there’s no need to unsubscribe, should you want to know about it when or if I should start back at it again.

Best wishes and so long for a while!

Ellis Current Events, Food for Thought, Fundamental Investment Views, How to Invest, Investment Concepts, NAIC Veterans' Lounge, Stock Market Shams, Successful Investing

I’d like to provide something of a ray of sunshine to those who, while usually stalwart and rational investors, may have become dismayed by the current investment climate.

You simply cannot  judge the investment climate by the state of the stock market. Instead, I look at the number of companies whose shares are available on the major exchanges that meet my rigid requirements for sustained sales and earnings growth and for their ability to sustain healthy profit margins.

For that purpose, I consult the result of screening the database of companies provided by ICLUBCentral and NAIC for those which meet or exceed the “Acceptable” Take Stock Quality Index. In normal times, and until the recent market collapse, only about 150 companies, give or take 10, met those criteria. This meant that, of the more than 9,000 publicly-traded companies, fewer than 2 percent warranted my investment interest. When this recession was at its worst, that number of shares declined to only 32! There is no question but that the recession decimated the number of companies that could meet those strict guidelines. Happily, that number is once again commencing to grow.

Ellis Food for Thought, How to Invest, Investment Concepts, NAIC Veterans' Lounge, Successful Investing rational value, safe investing, stock market

Well, here it comes! Expected to rival the rout of 1994, next Tuesday should see a relatively large turnout.

Why? Because all of those who sat on their hands before, thinking their votes weren’t worth the trouble, have had a chance to see what happens when apathy rules. And they’re not about to sit still this time and let us get deeper into the hole.

While the only question remaining seems to be how much of a rout it will be, until the day after, there’s no telling who will represent us going forward. But, I do have a wish list for the electorate, and it goes like this:

Read more…

Ellis Current Events, Food for Thought, NAIC Veterans' Lounge conservative, election, guts, liberal, parties, political courage, politics, representative, rout, vote, voting, wishes

My mission, when I started this blog, was to persuade my readers that “investing,” is not what the securities industry has spent gazillions convincing everyone it is: betting on the stock market, which is risky and unpredictable. Rather, “investing” is a simple means of earning money with your money. It can make you wealthy and is virtually risk-free. For at least this week, we’ll return to our roots and stick to the mission, both in this post and in Thursday’s on-line “radio” show.
Read more…

Ellis Fundamental Investment Views, How to Invest, Investment Concepts, NAIC Veterans' Lounge, Successful Investing fundamental analysis, investing, making money, money, securities industry, technamental, technical analysis

Hey, I know I’m preachin’ to the choir here. Anyone reading this blog is probably already pretty savvy about economic issues. But this is a topic I touched on at the end of one of my on-line radio broadcasts a couple of weeks ago, and it needs a whole broadcast to get the point across. So we’ll do it this coming Thursday evening.

The middle-class is evaporating fast enough to make your head swim! The chasm between the haves and the have-nots is widening by the day; and the number of people who are receiving money without earning it are commencing to outnumber those who are earning and paying for them.

Read more…

Ellis Current Events, Food for Thought, NAIC Veterans' Lounge corporate greed, education, middle-class, poor, profits, rich

I’ve been wanting to vent about the media for some time; so here goes! And I’m going to violate a basic precept when I do—I’m going to generalize.

In general and with notable exceptions, those who write or speak in the media are very bright, well educated, academically grounded, and articulate people who, despite their protestations to the contrary, are egregiously irresponsible, self-righteous, and self-important! In the name of honesty, forthrightness, and zeal to fulfill their fancied obligation to honor their readers’ and listeners’ right to know everything, they say and do things on a daily basis, the result of which can destroy the very rights they claim eagerness to uphold.
Read more…

Ellis Current Events, Food for Thought, NAIC Veterans' Lounge 4th amendment, media, right to know, secrets, the press

The Wall Street Journal strikes again! This time it’s an article entitled “The Decline of the PE Ratio.” And once again, it was too hard to pass up as a topic for this blog.

The first sentence alleges that the PE ratio “is shrinking in size and importance.” And it points out that, in spite of the fact that U.S. companies announced record profits during the second quarter—beating forecasts by more than 10%—the market dropped 5% this month.

It goes on to connect the dots, making the point that “the market’s average price/earnings ratio…is in free fall, having plunged about 36% during the past year,” and claiming that, because PEs have declined while earnings have risen, that the PE ratio may no longer be a reasonable metric by which to value the market. They’re absolutely right…if the market is what you invest in!
Read more…

Ellis Current Events, Food for Thought, Fundamental Investment Views, Investment Concepts, NAIC Veterans' Lounge, Successful Investing herd, intelligent investors, market, market decline, PE, Price Earnings Ratio, stock market

As you’ve noticed, occasionally I drift off topic (investing, lest you forget) and indulge myself in writing about things that may touch on my core interest but are only indirectly related to it: current events, the economy, politics, etc.—things about which I have strong feelings and which current events compel me to comment.

As you know, I’m disgusted with the obvious absence of financial literacy, responsibility, and just plain common sense that’s displayed by so many in elected office, from the top of our government institutions to the bottom. And I’ve railed about it time and again, wishing that some able folks would get off their duffs, take the bull by the horns, and give up their comfortable complacency to act instead of just talk.  Read more…

Ellis Current Events, Food for Thought, NAIC Veterans' Lounge

Did you ever watch a school of dolphin or porpoise as they follow closely beside a boat? Of course, no single one can stay two feet in the air all the time; but, each rises from the water, arches gracefully above it for as far as he can propel himself, and then knifes back into the sea. Shortly after the first emerges, another does the same, and then another. And so on. The effect is that, at any one moment, a number of the graceful animals are above the surface, glistening in the sun, and there is a constant presence there.

We buy shares of quality companies to hold until we want or need the money. The “rule of five” tells us that, of every five companies we select, we can expect four to do as well or better than expected, but one is likely to disappoint us. And, occasionally, the herd will bid up the price of one or another of our companies to a point where we can no longer expect as healthy a return going forward as we did because we have already enjoyed much of the appreciation. In any of those cases, we will need to replace our companies with others that will better meet our requirements.

Ellis Food for Thought, Fundamental Investment Views, Investment Concepts, NAIC Veterans' Lounge porpoises, portfolio management, rule of five, save the best, when to sell

A couple of posts back, I made some comments that ignited a challenge to me to come up with some kind of measurable evidence that our system really works.

The beauty of this investment methodology is that it’s not one that’s so doctrinaire that, given the same set of circumstances, everyone could be relied upon to do exactly the same thing. The variables are simply too many and too subjective. Therefore, you can’t put together a control group whose performance you can empirically measure against a benchmark.

Believe me, if I could make my point without seeming to brag, I would. What I buy, when, and for how much, and how my portfolio performs is my own business. So, I’ve tried to avoid talking about my own case and relied on the logic and common sense of this approach to impress people with its validity.

Read more…

Ellis Food for Thought, Fundamental Investment Views, Investment Concepts, NAIC Veterans' Lounge, Successful Investing