DidoSphere’s Simplest Path to Wealth – Investing – TIME YIELD the 2 main ingredients in an Investment Recipe

didosphere investing time & yield the two main ingredients in an investment recipe

If only…I could have been on my yacht today fishing in the Bahamas


‘DidoSphere’s Simplest Path Wealth’ – Time Yield – At age 30, most of us know very little about money.  Even those who graduated with a finance or accounting degree will encounter difficulties in putting the theories they learned in college into practice when they get to the real world.  If I knew then what I know now, I could have retired at 55 and could have been spending my days on my yacht fishing in the Bahamas and drinking fine wine in the evenings.  The problem when we are young is that we are too skeptical to listen to good advice due to many years of indoctrination.  We have been listening too long to quips such as, “If something sounds too good to be true, it probably is”.

The decade of the eighties was a period when I tuned out to music-radio and tuned in to talk-radio.  I took in a lot of talk radio, close to 12 hours a day.  I know very little about 80s music but I learned a lot about politics, sports, sex and money from radio personalities who flaunted their knowledge in their respective areas of expertise. I kept a small radio next to my early version PC (personal computer) and listened all day long, non-stop to various talk show programs, switching back and forth to NYC stations, WABC, WNBC, WOR and WMCA while laboriously tinkering with budgets, forecasts and analyses on Lotus 123.  I slept with the radio on much to my wife’s chagrin, albeit I was using headphones. I listened to political discussions, travel, sex, sports, real estate and finance.  Most of the programs were “call in” shows meaning listeners called in to voice their opinions, challenge the host or ask for advice.  Although I was amused with Dr. Joy Browne’s sex advice and Bob Grant’s ultra-conservative antics, the ones I enjoyed the most and found most useful were the financial advice shows of Bruce Williams, Bob Brinker and Bernard Meltzer.  Come to think of it, I never called into any of those shows, but many of the callers’ problems mirrored my own, so I implemented many of the solutions the hosts propounded.  I learned a lot from those shows but one of my biggest regrets in life is not listening to Bruce Williams’ advice.

Bruce Williams’ Advice


On one of his shows in the early eighties, right after his usual, “Welcome my friends, welcome to my world” intro, Bruce Williams went right into the news of the day.  I can remember as if it were yesterday, he said, “In today’s financial news, you can now buy a non-callable 30 year T-bond (30 year treasury bond) with a guaranteed interest rate of 14.5%.  Imagine my friends, if you invest your $50,000 today you will have $2.5 million in 30 years.  You don’t have to invest in anything else.  You don’t have to buy gold, real estate or do anything fancy.” I did not follow the advice, not because I did not have the cash (in fact my wife and I had close to $100,000 in the bank by then) but because, 1) 30 years is such a long time and retirement at that age was the furthest thing from my mind, 2) the advice simply sounded too good to be true.  It sounded so incredible in its simplicity, it cannot possibly work, so I thought.  There must be a catch somewhere.  So I cast it off as satire or hyperbole from a talk show host always on the look-out for ratings.  How wrong I was!!!  Imagine my friends, had I followed this sound advice from a talk show host, with little risk, my $100,000 would have grown to $5 million in 30 years.  I could have retired in my fifties, in pursuit of Marlin on my own 40-foot fishing boat off Cabo San Lucas.  Instead, I squandered a big chunk of my money pursuing riskier, more exotic investments (See Chapter, “Isn’t There a Better Investment Strategy?).   Today you will find me still tinkering with budgets, forecasts and analyses, albeit on excel which is faster than Lotus 123, so I have a little extra time to write books that I hope will someday become best sellers.   Read more:  DidoSphere’s THE SIMPLEST PATH TO WEALTH, an Amazon Kindle Book.   https://www.amazon.com/Simplest-Path-Wealth-Turn-Million-ebook/dp/B01KPQB0OS/ref=sr_1_6?s=digital-text&ie=UTF8&qid=1509563427&sr=1-6&keywords=didosphere


June 16, 2017 – Do you notice the Yield Curve narrowing?

Do you notice the Yield Curve narrowing?

Hi Folks,

As I’ve explained in my book, “Dow to Drop 80% Soon?” one of the best predictors of a recession is a negative yield curve.  The yield curve is inverted when long term yields are lower than short term yields. The yield curve inverted just prior to every U.S. recession in the past 50 years.


As of June 15, 2017, the yields between the 10-year and 30-year treasuries have been narrowing, i.e. 10-year is now 2.16% and 30-year is now only 2.78%.   See the government website below:


When the yield becomes negative or inverted, market sentiment suggests that the long-term outlook is poor and the yields offered by long-term fixed income will continue to fall. It also spells trouble for the financial sector as what started happening in late 2006.  The incentive for depositors to leave their money with the bank for longer periods of time, say 5 to 10 years is to earn a higher interest rate. If the interest rate of return is the same or less for 5 years compared to 1 year, this incentive is gone.   This means that profit margins fall for companies that borrow cash at short-term rates and lend at long-term rates, such as hedge funds, banks and mortgage companies.  Equity lines of credit and adjustable rate mortgages (ARMs) which are periodically adjusted usually go up since they are based on short-term interest rates.   Debtors who got stuck with these loans will need more money to pay for additional interest.  They will need to tighten their belts since they will have less money to spend on consumer goods that is why recessions follow an inverted yield curve.

Although we are at record high territories in the stock market, with the Dow trying to breach the new resistance level of 21,700, we live in dangerous times.  I see the Dow can quickly lose 3,000 in just a period of 10 to 20 days.  The reason for this stock market high is the pro-business stance of this administration even though not very much has come to fruition yet, i.e. the talk about curtailing burdensome regulations, lowering corporate, capital gains and repatriation taxes and increasing the defense and infrastructure budgets.  Investors are optimistic that Trump’s government technocrats will continue to develop policies that will increase our GDP which should keep recession farther away in the horizon.



Correction before Dow 20,000?

Correction before Dow 20,000?

Dear Readers,

Just like I said in my previous post, we may experience a 5-10% correction before breaking through the resistance level of Dow 20,000.  It has been 2 weeks now that the Dow has been hovering around the resistance level of Dow 20,000 but has not closed above that. We may be in dangerous waters although in the long run I still feel bullish about stocks. Read my book “Living Rich and Loving It”, to find out when you should really get out of stocks and put your money into a money market fund.  Merry Christmas, happy holidays and a prosperous New Year!!!

Don’t mix investing with politics

November 22, 2016

As of today’s closing, all the U.S. stock market major indices reached record highs.  The Dow closed above the resistance level of 19,000.  In the short run, the stock market will not have a “stairway to heaven” type of climb. I guarantee there will be dips at the slightest whiff of any bad news. Remember the first quarter of this year when the price of crude dipped below $35 per barrel? Moreover, there will be profit taking by the Gnomes of Wall Street.

The new resistance level we are looking for on the Dow is 19,500.  There may be a 10% correction before reaching this resistance level.  The climate has suddenly changed with the election of Trump.  The Gnomes of Wall Street, or perhaps we should call them the shepherds leading the flock suddenly decided that a Trump presidency is good for the economy.  Does anyone even remember that the Dow futures were 800 points down on election night as Trump started winning the battleground states one by one?  What was that all about?  Even though the market opened higher on the day after Election Day, my friend Jake got out of the market as soon as it opened at 9:30, Wednesday morning and put his entire portfolio into a money market fund. He voted for Hillary and was afraid that Trump’s victory would precipitate a global equity sell-off because he believed that Trump is an unpredictable, unstable and unqualified leader who’s the laughing stock of the whole world.  Even after the Dow gained 1,000 points, my friend Jake is still out of the stock market.  He told me last night he “cannot believe why the market keeps going up”. Don’t mix investing with politics, folks. Happy thanksgiving!!

After the dust settled…

Wednesday morning after Election 2016, the 1,000 point drop in the Dow that many so-called experts predicted as they were watching Trump beat Clinton one battle ground state after another did not happen after all.  In fact stocks are not only in the positive territory at noontime eastern standard time but had healthy gains of 1-1.5%.  Still Myles Udland, a financial writer for Yahoo Finance says, “…don’t mistake Wednesday’s rally for an “all clear” sign from markets. The unknowns around any new presidency are considerable, and perhaps no recent administration presents more question marks for investors than  a Trump White House”.  Adam Parker, a strategist at Morgan Stanley, wrote in a note to clients on Wednesday that, “We are more bearish today than we were yesterday because of increased uncertainty.”

Frankly, I am tired of listening to these geniuses and shame to investors who blindly listen to them.  These are the same type of geniuses who led investors on the wrong path in 2008.  After investors lost 50% of their savings during the bear market that followed the great recession, these geniuses told them to get out of stocks.

Go ahead, listen to Udland and Parker.  Get out of the stock market now and you’ll be sorry.  I say this because Trump’s fiscal policy is pro-growth.  Low taxes, less government regulations, repatriation of foreign profits, possible repeal of Obamacare, infrastructure investments, etc.  Of course I am concerned about a few uncertainties such as Trump’s promise to replace Janet Yellen whom I think is doing a great job and protectionism but I don’t think Trump would act recklessly with regard to these two concerns.  He has VP Pence and other technocrats to hold his hands. So when will the stock market crash? We will exchange thoughts and ideas. Follow this blog and learn.

Consumer spending keeping the stock market up

The 3rd quarter earnings report of most of the reporting companies in the S&P 500 beat analysts’ estimates.  This is due to a combination of higher sales due to more consumer spending and reduction of expenses because companies have become more efficient.  This combination of more revenue and less expenses is giving many companies a healthy cash flow that should find its way into capital investments and stock purchase.

What is fueling consumer spending?  It seems that Americans are resigned to a Hillary Clinton presidency and they think it won’t be so bad.  There also has not been any terrible news lately. In addition to the good earnings reports, oil is holding at about $50 per barrel and copper price has been hovering around $2 per pound. The doom sayers are wrong again about the big stock market crash that they predicted would happen before the U.S. presidential elections.  The BIG CRASH will happen but it will not be before November 8.  Folks, it may not even happen until 2018.  I see the road to the next recession as a slow bleed not a heart attack. We are due for a 10-20% correction since the last correction was in the middle of February this year.  We will discuss this on the next blog.  Stand by.

Elections & the Stock Market, What Me Worry?

If you have been following my articles, you know too well that I am a fiscal conservative.  I had been tough on President Obama from the time he took office but I must admit that I made a lot money since 2009.  Many of my readers have written me emails asking how the stock market will react if Hillary wins, if Trump wins.  First of all I agree with Larry Kudlow that in the short run Trump’s tax plan of reducing individual, corporate and capital gains taxes is good for the economy and for stocks as was proven by JFK, Reagan and Bill Clinton.  Reducing tax on foreign capital is also great for the economy because repatriation of foreign earnings is money that will find its way into the stock market.  Folks, remember my example on the basics of the law of supply and demand which is again repeated below:

Imagine you are 1 of the 5 remaining finalists on the CBS show SURVIVOR.  You have not eaten any solid food in 5 days.  Jeff Probst, the host brings out a slice of pizza and gives each person $100.  He asks the players to bid an amount for the slice of pizza and the highest bidder wins.  Since there is only one slice, it is safe to say that each player would scramble to bid $100 for that single slice even though that slice normally costs only $2 in any fast food court because once that slice of pizza is gone, it’s gone.  What if there are 6 or 7 slices?  What if there are 20 slices?  Then the bidders will not have to bid so much because there are more than enough slices to go around. Everyone can get a slice even with a low ball offer.

How does this relate to the stock market?  Well, if billions of dollars keep entering the U.S. economy, where will it go?  Investments, new business ventures, real estate and yes the stock market.  Very little of it will go into treasuries, due to low interest and some of it will go into bonds.  But a great amount of it will find its way into the stock market.  Having said that, the polls indicate Hillary will win.  Hillary’s plan to increase taxes on those earning over $250,000 and increase tax on corporations from 34% to perhaps 40-50% and reduce estate tax exemption from $5 Million to $3.5 Million will have a negative effect on the economy in the short run.  In the long run, economists have long argued whether or not more money in the hands of the private sector is really better than more government spending.  Will $100 million in the hands of the board of directors of Procter and Gamble really be better than giving it to welfare recipients?  Procter and Gamble would probably invest the money on new equipment, increase hiring, salaries and bonuses and the recipients will spend the money thereby putting more money into the economy.  Welfare recipients would probably spend the money on food and household necessities thereby putting more money into the economy.  Your thoughts.




Countdown to the next stock market crash

We did it once before in 2007, we can do it again!  The countdown has begun to the next bear market, a 10% to 20% correction.  The Dow reached an all-time high on August 15, 2016 of 18,723.  Since then it has not breached that resistance level.  A 10% correction from this resistance level would bring the Dow down to 16,851 and a correction of 20% would bring the Dow down to 14,978.  Friends, I do not think we will experience a correction that will breach the 52-week low of 15,451.  It may breach this support level if the interest rate curve inverts which portends a recession in which case the Dow may lose 40-60% of its value.

I just don’t see it yet folks, no matter what the gloom and doomers say.  The interest rate curve is not flattening, the economy is sluggish and the Feds will not soon raise interest rates.  But even if the Feds raise the interest rate by 100 basis points right now, it is still sustainable in this current economic climate and it will not cause a negative yield curve.

Standby folks.  Those who made a lot of money in 2009 just by following my posts, will do it again when the next recession hits.  Meanwhile, be happy to be earning 4-8% with your money invested in VTSAX and other S&P 500 Index funds just like many other investors.  When the bear market that follows a recession hits, that is when we will make our real money.

Follow this blog and we will keep monitoring economic indicators that may cause the breach of the resistance and support levels in the Dow, S&P and NASDAQ.

Happy fishing!!!!


Living Rich & Loving It

The book I wrote, "Living Rich & Loving It" which is available on Amazon Kindle strives to develop a vision that being rich is not only about achieving financial independence.  It’s about living a happy, healthy, simple, balanced and fulfilling life with minimal stress.  This is a cradle to grave guide to life book.  If you have goals, dreams and aspirations in life, you have a sense of direction but you still need a road map to take you from here to there. I hope this book will serve as that road map for you.

Learn how to:

  • Find a job you love. If you cannot wait to get up and get to work every morning, then you’ve found the job you love.  Otherwise, you need to read the chapter, “Find a Job You Love” and the chapter, “Increase Your Income with these Ideas”.
  • Create a budget so that you will always have a surplus at the end of each month.
  • Maximize contributions to your retirement account and accumulate more than a million dollars for retirement.
  • Determine if converting to a Roth IRA or Roth 401k is right for you. Ed Slott, the IRA guru says converting your IRA to a Roth IRA is tantamount to moving your account from “accounts that are forever taxed to accounts that are never taxed”. WRONG!  See Chapter, “Your Retirement Plan”.
  • Never lose money in the stock market by using “The KISS Principle” and “Auto-Pilot Strategy”.
  • Predict the next recession by watching the “yield curve”. It is so simple yet so effective.
  • Calculate the amount of life insurance you need. Insurance brokers will hate this chapter. The answer will surprise you.
  • Avoid Veblen Goods – the savings will amaze you.
  • Shop around for everything. If you are struggling to make ends meet, this chapter will show you why.  Learn how to save more and spend less.
  • Purchase your primary residence – Pros and cons of owning vs. renting. The analysis chart shows the clear winner which will surprise you.
  • Distinguish good debt from bad debt---when borrowing makes sense. Analysis table proves that some debts are good.
  • Never take unnecessary risks. Don’t do anything stupid. This chapter shows that stupidity is the great equalizer in life.  Doing any of the things on the list may change your life or worse may end your life in the blink of an eye.
  • Stay away from rental properties. This chapter tells you why it is not worth being an absentee landlord.
  • Handle emergencies without an emergency fund. The analysis chart shows why you should not have an emergency fund. The figures will astound you. This chapter also shows the reader where to get cash for emergencies once you get rid of your emergency fund.
  • Never ever listen to Suze Orman that 401k loans are taxed twice. 401k loans are not taxed twice. This chapter proves it.
  • Plan for college. How will you pay for your children’s college education? Read the many different ideas in this chapter on how to increase your children’s chances of getting offers from good colleges and universities.  See the 9 simple steps you can take in chapter, “Planning for College”.
  • Increase your income. Make more money in your spare time with these ideas. When you read the money-making ideas in this chapter, you will scratch your head and say, “why didn’t I think of that?”
  • Create a document storage and retrieval system. So simple yet so effective. It will free up a lot of your limited living space.
  • Implement a stress-free personal time management system. This system will organize your day and free up plenty of your time for use at your leisure.
  • Store and safeguard passwords – Simple trick will help you create and remember strong passwords.
  • Maximize your Social Security benefits – In light of the elimination of “File and Suspend” and “Restricted Application” strategies, the chart shows claiming strategies for 1) Single never married, 2) currently married, 3) married at least 10 years, divorced at least 2 years, currently single, 4) divorced, has remarried and currently married, 5) widow/widower, 6) surviving divorced spouse, married at least 10 years, currently single or remarried after the age of 60.
  • Find the best places for retirement – Some of these retirement communities are surprising. Some viable locations have ½ the cost of living of most U.S. cities.
  • Pay for nursing home and long-term care. The cost of nursing home and long term care can wipe out your entire estate.  Read this chapter for solutions.
  • Qualify for Medicaid benefits for LTC. You do not have to spend down your savings.  This chapter explains many different ways other retirees have been dealing with the “spend down” dilemma.
  • Establish estate planning. How to protect your estate from estate tax and inheritance tax.
  • Enrich Your Life by Exploring the World – Travel as soon as you can while you are still young. This chapter discusses why the money you spend traveling and exploring the world is money well spent.
  • Stay Healthy and Fit as You Age – There are a few minor behavior modification changes that you can put into practice that will keep you healthy throughout your retirement years.

Ready to live a Rich, Happy, Healthy, Simple and Balanced Life?

Buy this book here!

Stock Market Investors, Fasten your Seatbelts

As of this writing, all of the major market averages have been declining significantly.  The Dow Jones Industrial Averages (DOW) is down 400 points, NASDAQ, 90 points and the S&P 500, 45 points. If you read the headlines right after Federal Reserve Board Chairman Ben Bernanke testified before the Senate Banking Committee today, July 21, 2010, you would think the world is coming to an end.  AP prints, “STOCKS FALL SHARPLY...” while Reuters states, “OUTLOOK UNUSUALLY UNCERTAIN….”  The fact is that a sluggish economy will benefit smart investors.  Smart investors do not act solely on emotion and fear because they are savvy enough to know that harbingers of gloom and doom who write about the stock market, the economy and investments know just as much as Mr. Adam Monk, the stock-picking monkey who reportedly made a lot of money for those who followed his picks. Gloom and doomers quickly reverse themselves the moment the wind changes direction.  It is like following the herd which is not hard to do.

The fact is that a sluggish economy will keep inflation and interest rates low making it easier for consumers to purchase.  Prices of goods especially large ticket items such as automobiles, home appliances, furniture and computers will be kept in check.  The price of real estate had been rolled back to a decade ago in many areas of the country.  This, coupled with low mortgage rates should encourage first time homebuyers and real estate investors alike to snap up bargains. A sluggish recovery will put more pressure on this administration to rethink its goal of increasing taxes.  A sluggish recovery would prove to this administration that taxing the rich and increasing entitlements is not the way to economic recovery and prosperity.  A sluggish recovery means the consumer is not spending as much, as expected in a typical expansion.  Hence, the consumer has more money to pay down his debt and to increase his savings.  He is poised to spend.  He may go out on a spending spree at the onset of any type of good news because in our culture, in a free market society, the consumer has an inherent need to keep up with the Joneses.  Another important factor is that many businesses are reporting record profits but are reluctant to invest and hire due to uncertainty about taxes, Europe’s debt crisis and more government regulations.  When the uncertainty goes away, the recovery may catch fire quickly and may even overheat.  The European bank stress test results to be disclosed this Friday, July 22 may add to more uncertainty which may cause investors to dump stocks. But the savvy investor can look beyond the horizon.

Geithner and Bernanke know what is going on with the economy and they have the power to change things. Bernanke told lawmakers today, "If the recovery seems to be faltering, we have to at least review our options, but no further action is planned for now because the economy is still growing”.  Geithner has the power to counsel President Obama with regard to taxes and he must have told Obama that the private sector does not like tax increases.  I predict that this administration will take appropriate action if signs point to another recession which President Obama will have to own.  He will not let this fragile recovery slide back into a recession because that would most likely seal his fate as a one-term president.  To me, fixing this economy is as simple as following what JFK, Reagan and Clinton did, and that was to reduce corporate and capital gains taxes.  Obama may be compelled to follow the same route if the economy appears to be sliding back into a recession and once again, that would be good for investors.

If this recovery continues to be sluggish but does not fall back into a recession, stock prices will continue to rise even though they may turn sideways some days and drop halfway to the floor other days.  Yes stocks will rise and fall but they will not sink to recession level prices unless there is another recession.  Economics 101 and plain common sense.

This article is not intended to provide financial advice.  Please consult your financial advisor before acting on any advice provided herein.

Any opinions and views expressed herein are the sole responsibility of the writer.