The Working Capital Model (WCM) looks at investment performance differently, less emotionally, and without a whole lot of concern for short-term market value movements. Market value performance evaluation techniques are only used to analyze peak-to-peak market cycle movements over significant time periods.

Security market values are used for buy and sell decision-making. Working capital figures are used for asset allocation and diversification calculations. Portfolio working capital growth numbers are used to evaluate goal directed management decisions over shorter periods of time.

WCM tracking techniques help investors focus on long term growth producers like capital gains, dividends, and interest— the things that can keep the working capital line (see Part One) moving ever upward. The base income and cumulative realized capital gains lines are the most important WCM growth engines.

Please refer to the chart in Chapter 7 of The Brainwashing of the …

It matters not what lines, numbers, indices, or gurus you worship, you just can’t know for certain where the stock market is going or when it will change direction. Too much investor time and analytical effort is wasted trying to predict course corrections— even more is squandered comparing portfolio market values with a handful of unrelated indices and averages.

Annually, quarterly, even monthly, investors scrutinize their performance, formulate coulda’s and shoulda’s, and determine what new gimmick to try during the next evaluation period. My short-term performance vision is different. I see a bunch of Wall Street fat cats, ROTF-LOL, while investors beat themselves senseless over what to change, sell, buy, re-allocate, or adjust to make their portfolios behave better.

Why has performance evaluation become so important short-term? What happened to long-term planning toward specific personal goals? When did it become …

Every correction is the same, a normal downturn in one or more of the markets where we invest. There has never been a correction that has not proven to be an investment opportunity. You can be confident that governments around the world are not going to allow another Great Depression “on their watch”.

Every correction is different, the result of various economic and/or political circumstances that create the need for adjustments in the financial markets.
While everything is down in price, as it is now, there is actually less to worry about. When the going gets tough, the tough go shopping.

In this case, an overheated real estate market, an overdose of financial bad judgment, and a damn the torpedoes stock market, propelled by demand for speculative derivative securities and Hedge Funds, finally came unglued.

But it is the reality of corrections that is …

“My wife was trying to sleep and she’s waking up and saying “What’s wrong with you?” What could I tell her, that I was cracking up over a financial book—?”

“As I approach retirement in a few years, I’m very encouraged by the cash flow my portfolio can generate. If I can generate nearly 8% cash flow in the worst bear market in 70 years, and with minimal capital gains, I’m feeling pretty good about the future.”

In the midst of financial crisis, market upheaval, and world-class uncertainty, at least one financial book provides an easily implemented strategy for safer investing. The Brainwashing of the American Investor is more than just “the book that Wall Street does not want you to read”.

It’s a book that might have helped you avoid many of the errors that have made this crisis so painful at a …

Crash! The 2007 thru 2008 financial crisis halved 401(k), IRA, and Mutual Fund values in a matter of months. For many, retirement dates had to be pushed back; for others, new jobs had to be found. The tragic flaw? No income allocation in the investment program. Market value builds egos; income pays the bills.

Few employers cautioned Savings Plan participants that 401(k)s are just not defined benefit programs. Few mutual fund distributors suggested to benefit departments that their programs were missing something of critical importance.

Throughout the meltdown, all investment securities fell in market value. But the vast majority of income securities, including closed end income funds (CEFs), have continued to pay interest and dividends. Market value builds over-confidence; income pays the bills.

The Working Capital Model (WCM) is a comprehensive system for investment management that is based on uncompromising rules of engagement. …

Most people enter the investment process tip first. They hear something, grab an idea from a popular blog, accept a Cramerism or some motley foolishness, and think that they are making investment decisions. Rarely, will the right-now, instant-gratification, Internet-generation speculator think in terms that go beyond tomorrow’s breaking news.

It just doesn’t work that way in the long run. Investing takes place in an uncertain environment with at least three important cycles working their way through time at different rates of speed. Each should have an impact on investor decision-making. More often than not, short-term thinking and impulse decision-making are ineffective long-term investment strategies—

Today, in the midst of a cyclical “perfect storm”, how many Wall Streeters have the cold-blooded temperament required to focus on anything other than dwindling market values, depressing economic news, and income securities that just don’t …

There has never been a correction that has not proven to be an investment opportunity. While everything is down in price, there is actually less to worry about than when prices are historically high. More money has been lost by people who bought into last year’s markets than by those who will buy into this one, at this stage of the correction. When the going gets tough, the tough go shopping.

Every correction is different, the result of various economic and/or political circumstances that create the need for adjustments in the financial markets. This correction is worse than most that I’ve experienced, but the doom and gloom scenarios many have been pushing are unlikely to come to fruition. Once the media elects a new president, they’ll just have to start reporting better news: 96% of all mortgages are current sounds a whole …