What Would You Cut?

Everybody’s answer or mantra is Waste . But then their minds go blank in describing what waste and how much of the budget that would impact. (extremely small) So lets look at the 2008 budget and you tell me where to cut.

Most of Budget Goes Toward Defense, Social Security, and Major Health Programs

Remember the defense budget has/is exploding higher. Because of our aging population, the next two biggest expenses (Medicare,Medicaid & CHIP) and Social Security are going to expand rapidly. Also debt is going to grow. That’s over 70% of the budget. Let’s take a look at the Safety Net programs that have declined for decades. Would you cut.

  • Tax credits on children for moderate/low taxpayers
  • Supplemental income for elderly and disabled poor
  • Unemployment insurance
  • School meals for children, food stamps, housing assistance, aid to abused and neglected children etc.

These programs “lifted approximately 15 million Americans out of poverty in 2005 and reduced the depth of poverty for another 29 million people.”

So what exactly would you or your conservative friend cut? Show them the chart . I did and it left one speechless on what to cut. What would you cut? More info on programs

KISS & Stocks (Keep It Simple Stupid)

If you don’t understand a term look in up at Investopedia.com dictionary


Index Percentage Volume
Dow -2.01% up
NASDQ -1.12% up
S&P500 -1.89% up
Russell2000- -1.76% -

Investors411 record – 5 years of beating benchmark S&P 500 and almost all major US indexes

Technicals, Fundamentals & Analysis

See Positions , Strategy , and Overview for changes made over weekend.

Three major events for week

  1. Bernanke reappointment – Now seems likely (from latest Lexus/Nexis news search) = Bullish
  2. Obama State of the Union - Is Obama all talk about shadow banks . Too early to tell . If not = Bearish
  3. Earnings – As almost aways doing better than expected.

Significant indexes

  • McClellan Index at -79.33 =  significantly oversold.  (see Sunday’s Investors411 for more)

FEARLESS FORECAST – Oversold markets will rebound on the Bernanke news, but could get spanked if folks believe Obama has the guts to break up the too big to fail shadow financial institutions. Obviosuly I hope he does. The short term hit to stocks is far better than another possible systemic meltdown where taxpayers bail out big corporations.

We are way oversold so expect a Bullish week.


The  Positions Section (also at top of blog) has the latest buys and sells (Usually updated over weekends)

These are positions I actually own


As stated Sunday adding (10% to 20%) to positions because we are so oversold. See Sunday’s Investors411

Whenever I invest in an individual stock I try to set a 7% stop-loss.  That’s a price 7% below what I bought it for that Fidelity automatically sells the stock.

I’ve lost 7/8% on small IMAX & ENOC positions this year. Still own some IMAX bought at 12.9

Note – I’m far more comfortable with ETF’s than individual stocks.

ETF’s – I know its tough to take a chance and buy when everything is sinking, and may sink some more. Decided only to possibly risk 10% of portfolio.

  • EWZ – (Brazil) Add 5%
  • ? – Haven’t decided yet between EDC, ROH & TYH . All of these are high risk ETF that do 2 and 3 times the indexes they track – emerging markets and techs (Last 2) Would love to see further dip.

Will send out by email to group that has email address when I do invest .  If you’d like to get on this list send me an email .

See POSITIONS (scroll down) for details on this and what’s under consideration for 2010.

Long Term Outlook = NEUTRAL


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