(B)(N) The Personal 12% Bond

Rich is Good

Drama. The NASDAQ has become our personal ATM machine and we’re taking about 12% per year from it to pay our bills and also leaving another 15% or so for growth and to pay even more bills in the future and it’s doubled our money in less than five years.

The chart below tells the story: the faded blue area shows how much money we took out of the investment and spent and we’re able to take out more money every year at 12% and not even think about it; the blue line at the bottom shows how much cash we have right now for further investment and the green line at the top shows our net worth, all of which we can get tomorrow if we need it.

Exhibit 1: The Personal 12% Bond

The Personal 12% Bond (The Company)

Our accountant said that Exhibit 1 above couldn’t be done – there isn’t anything in “market theory” that suggests that it could be done and everything and legions of financial planners and actuaries who swear that it can’t be done – so we showed her the 15% bond, the 20% bond, and the 30% bond in the same market and using exactly the same methods, and she sold her house and bought the 30% bond and is now retired in Costa Rica which just shows how dangerous a little knowledge can be; please see Exhibit 2 below for more details and, depending on your budget, click on them to make them larger as required.

Exhibit 2: The Tycoons and their Personal 15%, 20%, and 30% Income Bonds

Of course, a lot of people think that it’s sinful, or risky, to earn money in the stock market and that they should work for an honest living on their labor and struggle to pay their bills every week because it builds character.

And, indeed, that’s true – it builds character – but having a lot of “unearned” money to spend also builds personality which we can read about in the Bloomberg Billionaires.

We note that their combined fortunes easily go up and down by about $10 billion every day which would be the Daily Bread of about 10 million American-style workers or executives at $1,000 per day or the Daily Bread of 100 million World-style workers at about $100 per day, which is most of us, and $10 billion is still much less than the Daily Market Float (about $2 trillion) which is the World Class Workspace of the full market (B)-class Portfolio which we call “The Perpetual Bond” because it’s forever and never needs any supercilious adjustments as long as there is a market somewhere.

And we need to think about getting used to earning more of our money in the stock market because that’s where the money is and we’ll need it the future (Bloomberg, October 26, 2016, How the Next President Could Save Social Security).

So, the gloves are off, boys and girls, and we’ve taken a $100 billion “position” for our pension plan and we’re running the 12% bond in the NASDAQ (as above) and we have a reasonable expectation that your money is going to go down more often and that ours will always go up and only up as long as there is a market and you’re looking for an income in it; please see Exhibit 3 below (and click on it and again to make it larger as required).

Exhibit 3: The Personal 12% Full Market Perpetual Bond

For more examples of the (B)-class portfolio in difficult markets, please see our recent Posts on”The “W” Syndrome“, Steel,  Green Energy and The Coal War which is heating-up again now; and the Canadian Mines have also taken-off – please see our recent Post “(B)(N) Extreme Economics – The (New) Canadian Mines” for a heads-up on that.

And for more information and examples of the Free Market Yield and the terms that we have used above, please see our Posts “(P&I) The Dismal Equation (Ecclesiastes 9:1)” and “(B)(N) S&P 100 Volatility Risk and The Full Moon” and “(B)(N) NASDAQ 100 Volatility and The Stone Bunnies“ and for an introduction to The Barometer “(B)(N) What’s A Girl To Do” or “(P&I) The Swiss Franc Debacle“.

And for more information on real “risk management” in modern times and additional references to the theory and how to read the charts and tables, please see our Post, The RiskWerk Company Glossary and “(P&I) Dividend Risk and Dividend Yield“, and our recent Posts “(P&I) The Profit Box” and “(P&I) The Process – In The Beginning“; and we’ve also profiled hundreds of companies in these Posts and the Search Box (upper right) might help you to find what you’re looking for, such as “(B)(N) TLM Talisman Energy Incorporated” or “(B)(N) ATHN AthenaHealth Incorporated” or “(B)(N) PETM PetSmart Incorporated“, to name just a few.

And for more applications of these concepts please see our Posts which rely on the Theory of the Firm developed by the author (Goetze 2006) which calibrates The Process to the units of the balance sheet and demonstrates the price of risk as the solution to a Nash Equilibrium between “risk-seeking” and “risk-averse” investors within the demonstrated societal norms of risk aversion and bargaining practice. And for more on The Process, please see our Posts The Food Chain and The Process End-Of-Process.

And for more on what risk averse investing has done for us this year, please see our recent Posts on “(P&I) The Easy (EC) Theory of the Capital Markets” or “(B)(N) The Easy (EC) Theory of the S&P 500“, and the past, The S&P TSX “Hangdog” Market or The Wall Street Put or specialty markets such as The Dow Transports & Utilities or (B)(N) The Woods Are Burning, or for the real class action, La Dolce Vita – Let’s Do Prada! and It’s For You, Dear on the smartphone business.

And for more stocks at high prices, The World’s Most Talked About Stocks or Earnings Don’t Matter – NASDAQ 100. And for more on what’s Working in America, Big Oil, Shopping in America or Banking in America, to name just a few.

Postscript

We are The RiskWerk Company and care not a jot for mutual funds, hedge funds, “alternative investments”, the “risk/reward equation” and every other unprovable artifact of investment lore. We have just one product

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

For more information on RiskWerk, 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 RiskWerk@gmail.com.

Disclaimer

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®™, The Medina Bond®™, The Barometer®™, the Free Market Yield®™ and Extreme Economics®™ 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*.