Category Archives: Investing/Financial Planning

Congratulations History is made; 10 Year Treasury Breaks a Record!

Posted on May 30, 2012 by | Comments Off

Today the 10 year treasury hit an all time low of 1.62% as of just a few minutes ago. Contrary to the confident headlines you may read tomorrow, the reasons for this are various, possibly cumulative,  and no one knows with certainty. We will give you our thoughts in order of our internal probability for clarity from our side of the fence. So here we go:

  • Fear from overseas issues (Money moving from other fragile economies into ours)
  • Fear of Equity markets (Fixed income has continued positive money flow)
  • Signal of a slowdown here in the US (Low rates often signal a slower economic time)
  • The FED has won – Recall the fed wants lower rates for housing and economic growth (We think this a low probability)

Again, any or all may be reasons, but when you read the possible overconfident headlines, remember no one knows for sure!

Have a Great Day, below is the last chart of the week, we promise!

Friday we will have a fun uplifting post that a fellow professional investor quoted to start your weekend happily!

JK

214-706-4300  www.jkfinancialinc.com

This is a two-day chart of the 10 year treasury yield. Lower chart means lower yield.

Courtesy, TC 2000.

 

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Posted in Interest Rates, Investing/Financial Planning, Market Comments, World Political

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When things are too good to be true; Facebook

Posted on May 29, 2012 by | Comments Off

A memory of a coach telling us as players, “If you dance in the end zone, you better be able to back it up” comes to mind with Facebook, especially given the events that have occurred over the last few business days.

While many of the stories we have seen come from a slant of “The game is rigged!” our thoughts again focus on a price or capitalization that was assumed when the Facebook IPO occurred.

Yes there were issues, GM pulled their advertising, the NASDAQ had opening problems, Morgan and Goldman (lead underwriters) have had mishaps before. While all of these items are true, in the end it appears price does matter even for an alleged very hot issue.

While there are certainly sharks swimming in the Wall Street ocean, the valuations and growth rates used to establish the price of Facebook may have been aggressive, making us feel like, for now, Wall Street is a more realistic place.

Here is a chart of the action since Facebook started trading through mid-day today.

Have a great Tuesday/Monday!

JK

214-706-4300

www.jkfinancialinc.com

We are not recommending any investment (long or short) in Facebook and do not own or have any shares short at this time.

 

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Posted in Investing/Financial Planning, Market Comments

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Happy Memorial Day, Greece is the Word

Posted on May 25, 2012 by | Comments Off

This coming Monday, Memorial Day, is the national holiday honoring and in memory of those in the armed forces who work so hard to allow the rest of us to enjoy the safety and lifestyle we have today. With a nephew and MANY close friends and acquaintances currently serving, I feel the need to say an extra special thanks to all of you.

THANK YOU FOR ALL YOU DO!

Markets:

Greece is the new Word and certainly will make for headlines over the next coming weeks. We would not be surprised to see large market movement in both directions. As the old saying goes, “buy low and sell high” it’s really that simple.  So when things are on sale we will do so, and visa versa.

Lastly, as today marks the movement from one grade to another for my oldest, let’s not forget to spend time with the important ones in our lives. I really do agree that the days go slow but the years go fast!

Have a super long weekend.

I am out most of the morning today, returning briefly later in the afternoon and we will be out on Monday.

Best Wishes and Happy Memorial Day!

JK

214-706-4300

www.jkfinancialinc.com

 

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Posted in Investing/Financial Planning, John Kvale, Personal, World Political

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Mysterious Form 5498 Now Available Electronically, Coming Soon to your Mailbox, Office Hours For the Rest of the Week

Posted on May 23, 2012 by | Comments Off

The mysterious and somewhat confusing IRS form 5498 is now available electronically and may soon be making its voyage to your mailbox.

This tax form is one of the most confusing forms for everyone as it appears to come late in the tax season, however this is by design. Form 5498 reconciles with the IRS the following, although not in entirety:

  • Rollovers
  • Account balances
  • IRA/Qualified related tax issues

It arrives late in the season so as not to confuse you during the heat of the tax season and after regular April deadlines.  Granted, it eventually does confuse, but that is another story.

Do not worry that you are just now receiving this form. Just drop this form into your fresh new file for your 2012 taxes records and you are done!

Office Hours:

Cathy is taking Thursday and Friday off as her youngest daughter graduates from High School, and I will be out on Friday morning, returning briefly in the afternoon. We will not be open on Monday in honor of Memorial Day!

Have a super day and a great rest of the week!

JK

214-706-4300

www.jkfinancialinc.com

 

 

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Posted in Clients/Clients Only, Investing/Financial Planning, Tax Related

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Facebook Proves Price Does Matter

Posted on May 21, 2012 by | Comments Off

On Friday the much awaited Facebook IPO began trading. With a storm of issues surrounded this initial offering, it appears that fundamentals overwhelmed hype, which is not always the case. I happened to be with a group of multiple professional investors on Friday, and while we all thought the price was rich, no one called the disappointing (to Wall Street) price action that has ensued.

The Facebook IPO was scheduled for a later am morning issuance so the employees and managers of the company could have a convenient 9 am pacific time viewing. While the NASDAQ made concessions and moved the original open to the west coast, they may have wished they had stayed in New York. After almost 30 minutes of unscheduled delays, trading began as orders were rushed, dumped, and what only a legal battle will soon determine, left few knowing who actually owned shares by the end of the day.

Not withstanding the bad opening and the glitches in the systems, it appears a richly valued company with extreme expectations has done the unthinkable “Broke the Offering price” in less than one day of its trading.

Here is a chart through mid morning trading:

Time will tell how this turns out, but given the questions we have heard from many, we thought it worth mentioning this Monday morning!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in General Financial Planning, Investing/Financial Planning, Market Comments

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Summer Vacation Plans and Thrifty Money Savings Tricks, Isn’t that an Oxymoron?

Posted on May 18, 2012 by | Comments Off

With summer brings vacation, the fun, family, travel  AND a few associated expenses. In a special light-hearted, headed into the weekend post, we thought we would stray from the icky heavy market talk briefly for some brighter, fun ideas for the summer. Of course, fun without frugality would be straying to far for us, so here are a few ideas you might consider for summer savings.

  1. Write a portion of that vacation off.  We do not want to compromise the integrity of your vacation, much less your tax return, but do consider meshing a vacation with business in order to write a portion off.  According to this Intuit Tax related article, the spirit of the code is what is not “ordinary and necessary.” We are not recommending stretching the rules by any means, only staying aware of items that may save you tax dollars later.
  2. Book that flight on a Monday, Tuesday, or Wednesday for savings. According to Smarter Travel, several Orbitz executives find that Monday through Wednesday seems to be the best days to book travel. The execs state that time of day is of little difference, rather the particular day is of most importance. My personal favorite day to book air travel is Wednesday, away from a holiday and near the middle of the month if possible.
  3. Take a look at VRBO or Homeway.com (one in the same now)  for great vacation rental properties. I have personally rented from these sites over a dozen times now, and have yet to have a bad experience. Knowing several friends who have wonderful homes that are a part of these services also gives me confidence in the recommendation. Book early and be prepared to sign a contract, which is usually standard in nature.
  4. Staying away from peak times is the ultimate travel saver, which prior to having children I did not realize the advantage. If you have the option of traveling when others do not, YOU WILL be happily surprised, not only in price, but also in complication due to traffic.  Try to Zig when others Zagg, so to speak.

Short of bringing the sand, umbrella, water, mountain, or ocean to you directly, this is our next best effort that hopefully you have enjoyed. Be safe, and maybe if you remember a few of these ideas, you might have a few extra bucks in your pocket when you return!

Have a Great Day!

JK

PS – Donald “The Brain” and I are out of the office today in Las Colinas on important business.

214-706-4300.

www.jkfinancialinc.com

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Posted in Investing/Financial Planning, John Kvale, Personal, Tax Related

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How A Greece Default Might Actually Work? Simon Derrick, Bank of New York Chief Strategist Explains

Posted on May 16, 2012 by | Comments Off

Yesterday (5-15-12) I had the opportunity through a CFA related event to visit with, and listen to Simon Derrick, chief strategist of Bank of New York and London resident. Simon had one of the most vivid explanations of actually how Greece may default, as such I wanted to share it with you.

In actuality, it may be a smoother transition that many thought. These are possibilities, not guarantees, but the best I have personally heard so far.

On a Friday after most market participants have headed home, sometime after the next Greek election which occurs on June 17th 2012, according to Simon, Germany could announce there is nothing they can do for Greece, but they will attempt to help the other countries as much as possible. This would set into motion a Greek announcement that their country will have a two-week bank holiday in order to keep from having a run on the bank.

During the bank holiday the printers start churning, and a new currency is born. This currency is then disseminated throughout the country for use and the Euro currency is sent packing.

A second less immediate thought, but very important item is the approval of new Passports for travel between the neighboring countries. (This is interesting and speaks to the tourist and travel related importance for Greece.)

Capital markets will certainly do what they do with rates and currencies, most likely devaluing the newly minted currency. While no one knows the exact amount, 20-30% would be reasonable and could even be higher.

Here is where it gets interesting, after the dust settles, and some type of stabilization occurs (assuming it does), Greece, a tourist centric country, is sure to throw out extremely great travel deals to kick-start their newly formed country. Since their currency will most likely be valued so low, they will have a very strong advantage over their former connected countries in attracting tourists.

Maybe we will all be taking Greek vacations soon, only time will tell.

Here is a recent Bloomberg interview with Simon talking in greater details about currency and mentioning rates, which we will be speaking about soon.

 

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

 

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Posted in Economy, Investing/Financial Planning, Market Comments

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90 Day Treadmill aka Earnings Season Report Card

Posted on May 14, 2012 by | Comments Off

With the end of earnings season nearing, we wanted to look back and see what this quarter’s report card looked like. For those new readers, we call earnings season the 90 day treadmill as the demands of Wall Street are stringent and occur every 90 days. Each quarter is followed quickly by another in treadmill like form. Every public company who participates in this treadmill, willingly accepted the challenge when they went public.

Looking back to our April 13th, post here are the expectations and what actually happened from Thomson Reuters:

Top 3 Expected Versus Actual Growth Sectors:

  • Industrials  10.8% Actual + 6.9%
  • Financials  8% Actual + 4.7%
  • Technology  7.8% Actual + 9.6%

Bottom 3 Expectations:

  • Telcom  -14.4% Actual + 13.1% (The worst expected, was the best actual; remember estimates are just that)
  • Materials -12.9% Actual + 7.3%
  • Utilities  -9.3% Actual – 2.1%

With most earnings reported, the growth of 7.6% was much greater than the 2% expected as we entered treadmill season. Accordingly, the S&P current is trading at just over 14, near the long-term average of 15, however above a slower growing economic multiple.

Have a Great start to your week!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season, Investing/Financial Planning

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Summer Doldrums, We Don’t Think So !

Posted on May 11, 2012 by | Comments Off

Even though my 7 and 4 year old swear summer is upon us (counting down the days), which often makes for a dull time in the capital markets, we think this will be an interesting summer.

US tax issues, debt ceilings, “Pain in Spain” (insert numerous other little brother country name) and an election for the US should keep the cobwebs from forming this summer.

We were a little light on comments this week (this being the 3rd), but promise to make it up to you next week. A 90 day treadmill update, along with a few summer saving ideas lead our list of “to do’s for the coming week.

Once again we thank those who made Robert McTeer’s article of questions this week, well done, we are still very impressed!

Until next week, we thank you all for reading our work and wish you a wonderful weekend!

JK

PS : If you have a friend that needs financial related help, send them our way, we are glad to assist in any way and thank those who have already done so!

214-706-4300

www.jkfinancialinc.com

 

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Posted in Investing/Financial Planning

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Congratulations to those who sent Robert McTeer Questions, You Made An Impression

Posted on May 7, 2012 by | Comments Off

Congratulations to all of you who sent questions for the recent Robert McTeer Private Client event.

YOUR QUESTIONS WERE OBVIOUSLY IMPRESSIVE AS IT MADE HIS COMMENTS THIS WEEKEND.

Here is Mr. McTeer’s Sunday Post “Some Questions and Answers” which includes your Questions. Go ahead, take a look, and see for yourself.

Wow guys, you made a great impression. Those of you who sent questions, pat your self on the back!  Well done, and thanks from the rest of us for the great job and super impression you made.

April 28th, 2012

2 PM

Private Client Event

While this takes a little steam out of our coming Newsletter, we are happy to give you all a shout out of congratulations.

Have a Great Monday and a super start to another great week !

JK

214-706-4300

 www.jkfinancialinc.com

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Posted in In The News, Investing/Financial Planning, World Political

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