The Black Cloud of Panelists at the CFA Dinner

Posted on February 2, 2012 by | Comments Off

Last night, as mentioned earlier in the week, a group of “experts” joined to visit and discuss the domestic and global economic situation at great length. Each one of the four horsemen spoke on a very macro view of the world.

As dinner concluded and the microphone volumes increased the blue skies turned dark and I began to fear of indoor lightning bolts and rain. Projected time frames ran from an optimistic 2018 to a pessimistic 2022 for the good times to return.

Over use of leverage, EU debt issues, and continued government criticisms were abundant as we hit the mid-point of the discussion. One speaker virtually guaranteed we were in a recession at the current time. We will keep track as the year passes.

While I operate most times from an optimistic view-point and “There are very few statues of pessimists!” it is healthy to always listen to the negative views. In the case of this dinner, one night may cover several days or even a week of negatives.

After reviewing my notes from the meeting one last time……still all negatives, definitely a weeks worth!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Market Comments, World Political

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When to File Your Personal Taxes? We Recommend You Wait until Late March or Early April

Posted on February 1, 2012 by | Comments Off

As the tax forms flow to our mail and email boxes, we thought it was a good time to give you our gentle reminder NOT to file your taxes before late March or early April, especially given our “Rockwell Somebody’s Watching You“ year.

Corrected 1099′s are a regular part of lives this day and age due to the complexities of investment products. Remember, as clients, we may have investments in stocks, mutual funds, bonds, as well as commodities, foreign stocks and bonds, and partnerships, which generate a K-1.  Many of these investments have accounting adjustments late into the tax season, resulting in a domino effect on 1099′s and other reporting instruments.

In addition to more complex investment statements, we also have our first Rockwell year, in which the government has begun tracking and reporting gains and losses. We will introduce you to a new friend, Form 8949 soon, but needless to say there are more moving parts this year to go along with our continued growth in complex investment products.

We continue to advise we all take a deep breath, stay patient, and keep our income tax lives off-line, until very late March, or early April.

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com.

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Posted in Investing/Financial Planning, Tax Related

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Facebook and Sipping from the Earnings Fire Hydrant

Posted on January 31, 2012 by | Comments Off

It appears the long-awaited Facebook IPO is nearing the Wall Street docks, with Morgan Stanley and Goldman Sachs (surprised Goldie is not lead, with their large earlier investment) being the underwriters.

Yesterday I saw or heard at least six different opinions on the Facebook IPO most of which were positive. At this time, given the lack of information that has been officially released, it is impossible to formulate an accurate opinion. It is difficult to pick the team that will win the big game, especially not having any idea who are the players. Our position is casual observers during this process, however we are always interested.

Today we have 29 companies from the S&P 500 reporting which is similar to taking a sip of water from a fire hydrant.  Most earnings have been ok, but not terrific, again setting the bar relatively low, in our opinion.

Donald is in town tomorrow for a group of expert forecasts for economic and capital market related events sponsored by the local CFA association. We will bring you the cliff note edition of facts, should they prove interesting.

Back to work as conference calls beckon.

Have a Super Day !

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season, Investing/Financial Planning, Market Comments

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Iran the Powder Keg, From Two Points of View !

Posted on January 30, 2012 by | Comments Off
Sometimes we cannot see the forest due to the trees!

This saying came to mind as we have buried our heads in conference calls, economic data, government statements lately, only to have an epiphany moment twice in the last few days.

Iran’s actions, and possible reactions will have effects on the capital markets. Capital markets responses vary greatly depending on the conflict and occurences.  It is hard to determine what a major Iranian conflict may cause both market, and economically, but we felt if important to update you on the current situation, especially since it has been so prominently tossed in our lap over the last couple of days.

On Friday (1-27-12) I had the opportunity to hear Gil Elan speak at a Navy League meeting, thanks to a nice invite from a close friend and peer in the investment business.

Gil Elan

Mr. Elan, a retired Lieutenant colonel with vast experience as an Israeli combat and briefing officer, and terrific speaker, took the attending group of people through the most recent Iranian conflicts and possible outcomes of several scenarios. I was very surprised to hear just how “hot” the situation has become. While the outcome is not know, there are more negative possibilities than positive at this time. Thanks very much to Mr. Elan for the update and terrific history lesson.

Prepping for the upcoming week with my Sunday evening usual listening in the background, 60 Minutes; the headline story, an interview with Leon Panetta , US Defense secretary caught my ear. Mr. Panetta being such a jolly fellow, forces one to listen closely to his words as much of what he says is EXTREMELY pertinent and while guarded, can have nuggets of information buried within the delivery.

With Panetta and Elan both agreeing not only in the severity of the situation, but very nearly on the same time frames of actions and reactions to Iran’s nuclear program, less than a year, we thought it worth putting on all of our radar.

While this may not be a “Good Monday morning, have a great week!”  discussion, we do have a good runway of time before it appears there will be any actions, making it much easier to discuss with clarity, even if it is a Monday morning!

We will keep our eyes peeled for more details, but do understand there are sizable uncertainties when discussing the Iranian situation.

Have a Great day and Super week!

JK

214-706-4300

www.jkfinancialinc.com

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

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Question of the Week, Including a Personal Story…. “How Frequently Should I Review My Will?”

Posted on January 27, 2012 by | Comments Off

Our question of the week, this week, comes from our field of dream clients again (that’s you guys), but is also part of our regular repertoire of questions we ask when meeting new clients. This weeks answer comes with a slight twist due to possible tax law changes.

From our question one can infer we recommend everyone have a Will. Even if your situation is relatively simple, a lack of Will directives can extend the process in time and increase financial costs.  As an example, my Uncle passed away about 13 years ago and was single with no children. Unfortunately his Will could not be found. While his estate was not complicated, the lack of organization and direct beneficiaries strung the settling of his estate process out to almost 2 years, and greatly increased the expenses.

We recommend a review of your Will at least every 5 years or earlier if your situation changes. By dusting off that Will and reviewing the major players (Executor, Trustee, Guardian, Power Of Attorney) you may find someone in the document you have lost contact with, or whom a better person may fit today. Take action and call your Attorney to have these folks updated, it is an easy process and well worth your time in the long run. 

Here is the Twist:

There are possible major Estate law changes on the horizon which we will constantly be notifying you of over the next several quarters. Given this fact dramatic estate planning changes may be ill-advised at this time. Please do not take this as a reason to procrastinate necessary updates, but there are significant tax laws sun setting at the end of this year. 

We are not attorneys or attempting to practice law so see your attorney for that, but do dust off that Will if it has not seen light in over 5 years, you might be surprised at what you find!

Next week, we have a CFA related event that brings Donald in town for a whirl wind tour and a meeting of self-professed expert forecasts for the year 2012 (we will bring you the commentary.)  Office upgrades continue as this week brings a new high-tech trading platform and a Tamarac system,  which we will explain soon.

Have a Super Day and A Great Weekend, and don’t worry Zigg is doing fine!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in General Financial Planning, John Kvale, Personal

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The FOMC Mistake; Calling it as We See it !

Posted on January 26, 2012 by | Comments Off

Yesterday the FOMC released their regular statement regarding policy and actions at 11:30 AM central time followed by an extended live Q&A with the Fed Chief,  Bernanke. We feel the FOMC has made a mistake with their statement.

Here is the specific sentence in the release that has us concerned

“In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run–are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.”

As is often the case when we have a strong opinion, we have made it a point to not read the various analysis before voicing our thoughts.

Here are the reasons we feel this statement was a mistake:

  1. There was nothing gained by pushing the time line out another year right now. Keeping that statement in the hat for this time next year (if necessary) would have been a much safer way to go.
  2. It is too hard to predict what the economic situation is going to be that far in the future (We liked the original runway of time as it pushed any fed decision out-of-the-way of the election.)
  3. Investor  confidence (domestic and more importantly internationally) is paramount in retaining control of US interest rates. In investment professionals minds, holding rates low until next year, no matter the economic situation was feasible. Extending the stated term another year slightly cheapens this statement AND their original statement of low rates until 2013.

“Hot on the Long End”

Ultimately what we will now even more closely watch for is longer termed bonds rates rising.  In Wall Street lingo, it is called getting “hot on the long end.”  Rates have a funny way of making officials and investors eat their words. The FOMC changing their minds in the future would not be the worst thing that has ever happened.

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

PS We are not being Zaggers, but do call it as we see it !

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Posted in Economy, Interest Rates, Investing/Financial Planning, Market Comments

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Dancing in Davos with Tea Leaves from a State of the Union, 90 Day Treadmill (The Mouse Wins)

Posted on January 25, 2012 by | Comments Off

As the World Economic Forum’s Annual Davos retreat  officially kicked off in Switzerland today, we find ourselves more interested in pondering the tea leaves from last night’s State of the Union (transcript.) 

Just so you know:

Yesterday early morning during our first 90 Day Treadmill post of this quarter, my laptop mouse and I had a conflict, with the mouse emerging as the winner.  Here is the full post for yesterday’s post as once the mouse took over only a partially completed early am email was sent, thanks for your patience. 

Dancing in Davos

There will certainly be interesting comments coming from Davos, however as of late we feel it is more of an honor to be seen at the summit than the importance of the delivery of information. Most programs are streamed and we see many acquaintances on the schedule over the next few days, however, remember this summit is more of at “Think Tank” summit than solution.

Tea Leaves in the State of the Union

While we are cautious to declare the finding of a needle in the haystack yesterday evening during the State of the Union address, we are interested by much of the rhetoric, especially concerning natural resources. Worth noting, it is always much easier to discuss than take action especially during an election year.

That’s it for now, from a very rainy Dallas Texas, finally! 

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Education, Investing/Financial Planning, Market Comments

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90 Day Treadmillers (Earning Season) Update – Again

Posted on January 24, 2012 by | Comments Off

90 Day Treadmiller's

As we mentioned in the Parting Thoughts section of our Q1 2012 Newsletter, we understand this information may not be as exciting and riveting to others as it is to us. Because of this fact we stretch the bands of humor to help keep your attention.

Our 90 Day treadmiller (we are open to name suggestions) represents the fast, but constant job managers must participate, to keep Wall Street happy while also developing longer term visions and strategies to grow their business.

Here are the results and expectations, so far from Reuter’s, but we dig a little deeper for reasons that will explain themselves shortly:

With 16% of S&P 500 members reporting earnings about 2/3rd of the members are beating estimates to the tune of a 1% growth rate (recall, the fourth quarter was a tough one for many.)

Growth Expectations for the Quarter are just over 23% (Wow, you may say, but let’s dig a bit deeper)

Top Expected Growth Sectors:

  • 892% –  Financials **
  • 13% — Energy
  • 11% — Industrials

Bottom Three Sector Expectations:

  • (22%) –  Telcom
  • (11%) — Materials
  • (3%) — Utilities

**Skewd Numbers:

Due to the bounce back in earning from the Financial Sector, the giant expected growth rate is greatly skewing the average growth for the S&P 500 this quarter. Without Financials the expected growth rate is a mere 1%, much more reflective of the latest quarter drabness.

As I finish this article in my usual spot at Starbucks early this am, what I thought was a glitch in the Wifi, was actually me losing the battle between the mouse and control.  If you happen to receive a raw unedited version of this article via email, we hope you enjoy our originality!! haha

Have a Great Day!

JK

FFTFF (Feel Free to Forward to a Friend)

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season

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Favorite Question of the Week from the Field; Zigg Still on Vacation

Posted on January 20, 2012 by | Comments Off

With our friend Zigg still on his island and his friends intent on staying for a while, we decided to shift gears and discuss our favorite question of the week.  This week’s question derives its origin from several conversations we have had lately with client’s, making it topical for discussion.

Should I only put the amount the company matches in my 401k? and a follow-up question,  Should I put extra, non-pre taxed funds into my plan?

NO and NO !

We recommend you put as much as possible in your company 401k even if there is no match at all. There are various restrictions such as compensation and general government caps which limit contributions, but putting as much PRE-tax funds into your 401k as possible, is our recommendation.

Various plans allow you to continue after-tax contributions to retirement plans, which we are not advocates of doing.  Most plans do not have the ability to provide for specialized allocations which may be more appropriate for investment.  Don’t bypass saving these extra dollars and spend!  Just save these funds in a more self-directed manner. 

In closing, just because Zigg is on vacation, does not mean there are not sharks out there, keeping our guard up for an “Event” is still a good idea, however, economic, consumer, and earnings (more discussions soon) look very good!

Have a Super Day and a Great Weekend!

JK

214-706-4300

www.jkfinancialinc.com

 

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Posted in General Financial Planning, Investing/Financial Planning

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Q1 2012 Newsletter is Posted for Your Perusal, Little Brother Gets a Confidence Vote

Posted on January 18, 2012 by | Comments Off

Our Digital Q 1, 2012, professionally espoused coming year forecast Newsletter has been posted to our Website on our Newsletter Page. We question forecasts from any professional, but work hard to give you our best thoughts and ideas.

Q1 2012 Newsletter

For now, our internal list of very important items concerning capital markets has seen EU worries drop in importance, as China economic growth, and US earnings climb the rungs of importance.

Little Brother countries are having confident government bond auctions resulting in lower interest rates (See: “What Happens When Investors Lose Confidence in Your System” in our Latest Newsletter), and that is relieving investor concerns, which has resulted in a more positive capital market.

Starting tomorrow, the 90 day treadmill really kicks into high gear. With our ears to the conference call line grindstones, we look forward to bringing you varous managers outlooks soon!

Have a Great Day!

JK

214-706-4300

www.jkfinancialinc.com

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Posted in Earnings Season, Economy, Investing/Financial Planning, Market Comments, Newsletters

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