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Churn, Churn, Churn

October 11, 2012

The market professionals are at it again. They don’t know whether the “market” is going to go up, stay the same, or go down by the end of the year. Are we going to have heads, edge, or tails this year, they ask out-load? Frankly, my dear, it doesn’t matter. For one thing, absolutely nobody (we hope) will bet the farm on what they think, and, secondly, the portfolio of equities that we designate as (B) in any market (please see these Posts) is a Perpetual Bond™ and has the properties

The Perpetual Bond™
“Alpha-smart with 100% Capital Safety and 100% Liquidity”
With No Fees and No Loads on Capital

which makes “market wonder” irrelevant, doesn’t it. It makes sense to have a guaranteed heads-up approach to our investments rather than one that depends on the toss of a coin.

The other thing that we know for sure is that the Contra Portfolio (N) of the companies that are not (B) will tend to have a zero or less return in aggregate. Please see, for example, NASDAQ 100 – (B)(N) There And Done That, June 2012, and there are many other explanations of that behaviour in these Posts.

However, the “60/40”- or “40/60”-guys (please see our earlier Post, Churn, Churn, Churn, September 2012) are waiting to pull the trigger and make the big gamble with your money in the pension funds, endowment, trust and mutual funds that they manage. They have to do something, don’t they, and dreaming up an economic scenario or cause for concern is a lot easier than dealing with the real one, isn’t it. Please see our Post, The Secret Life of a Portfolio Manager, July 2012.

For more information, please follow the Tags or Categories attached to this Letter or simply enter Search for additional references to any term that we have used.  Related data may be obtained from us (for free) in a machine readable format by request to


Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”.

Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability.

We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now.

The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”,  ”price of risk”, “risk price”, and the symbols “(B)”, “(N)” and N*.

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