Thursday, January 17, 2013

Work It Garth!

Turner working the lead generation tool blog  for new clients this morning.
"The trouble is, money can grow much faster in other non-scary assets, so if the goal’s paying down debt, why make extra mortgage payments?  
A balanced portfolio of fixed income and growth assets (no stocks or mutual funds) with 40% in safe stuff (like preferreds) has yielded 8% over the last three years and popped into double digits last year.  
Why not enjoy a five-year mortgage term with cheap payments, sticking it to the bank, while growing your extra money by 50% to trash the loan upon renewal?"
Blatantly pumping his services and performance is what the idiots have come to expect from Turner after spending the time to research his record thoroughly, however lets look at it properly.
"The trouble is, money can grow much faster in other non-scary assets, so if the goal’s paying down debt, why make extra mortgage payments? 
Because that way your debt definitely gets paid off?  You don't risk losing on that money and still owing the mortgage? 
A balanced portfolio of fixed income and growth assets (no stocks or mutual funds) with 40% in safe stuff (like preferreds) has yielded 8% over the last three years and popped into double digits last year. 
Two slight inaccuracies here, the "balanced portfolio" results he speaks of are here and screenshot below..
with 40% in safe stuff (like preferreds) 
And 60% non "safe stuff", which is where the 4.74% "negative growth" came from in 2011?
"yielded 8% over the last three years "
Weasel sales words, carefully skirting around the fact that 2011 was a negative year for a "balanced" portfolio,  it most certainly did not yield 8% that year.

What irritates this bunch of idiots about presentation in this fashion is the implication that this growth is permanent, and that one major meltdown out of the blue can't remove the whole three years"growth" in a few days, because it can. 

Which really begs the question:

"and popped into double digits last year. "
Objection! - er, no, again, technically,  it didn't, -  it  "popped"  into double digits this year. 


So lets look at what else you could have done over  the period 2010 to 2012.

The idiot's standard to compare performance to is a combined basket of 50:50 Gold:Silver, because if you can't beat that, why would you even bother doing anything else at all?

Why would anyone expose themselves to permanent digital market risk in a very risky world, when they could own the one asset class that is free of counterparty risk and has outperformed all others over the previous decade?  Why? ..anyone?  : )  ("it's a bubble" nonsense debunked here)

So our (superior) balanced portfolio returned:

51.5% in 2010
+4.5% in 2011
7.0%   in 2012   for a three year average of 63/3 = 21% per annum. 

Therefore, these idiots would not even consider day trading funds unless they were confident they could easily best 20%+ per annum, otherwise, why would any idiot bother?

Happily, as the idiots have already shown with a mere two days of idiotic trading, the Anti_Turner ETF account is now +7.9% (banked, ie non-returnable) on the year with a small DOW short still in play currently. 

So as the data seems to show that any old idiot can easily outperform a balanced portfolio, over a medium duration (3+ years, try it, pick any 3 [completed, ie not 2013] consecutive years from the table and the 3yr average is more than 8%) just by buying and holding inert metals, and another bunch of idiots can bank 8% from a few trades in two days, (which did not even all win, by the way) then Mr Turner's idea of a balanced portfolio, that leaves your entire worth permanently exposed to market risk and to counterparty risk (your brokers or their brokers or their brokers going down) at all times, for entirely average returns, that do not even cover the real rates of inflation.. ?

Well, lets just say this bunch of idiots wouldn't be very happy about the idea of committing (never mind borrowing) money (or re-mortgaging their homes) to do that..

PS. It should also be definitely noted, we have nothing whatsoever against Mr Tomenson, we do not know him, nor does he seem to have any 30 year record of incorrect predictions to (counter) back him up. As moderately successful idiot daytraders our views on markets and investments are somewhat counter to most, in this regard however, only time will prove which was the better approach. We entirely expect that he is the brains behind the outfit, and in all liklihood is most probably fading Turner's financial advice too. If not, then we would suggest a closer look at this strategy, because data suggests that it would make much more than 8% per year.

What we primarily object to is Turner's pumping of this strategy as:

a) his own
b) how "clever" investors have always done it
c) his constant derision of assets that consistently outperform his suggestions
d) his lack of apologies, EVER that we can find, for all his bad advice / financial damage done in the past, and 
e) his aligning of somebody else's portfolio's relative success over the last three years, with literally anything he has said prior to that.. 


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