the swan strategy€¦ · 13.04.2019  · monthly cap- weighted geometric average of total returns...

The SWAN Strategy:

A Conservative Way to Beat the Market

and Earn High Income in 2019.

“A bull market is one that can shake off

even bad news.”

– Don Gimpel

Bull Markets Are Lasting Longer

Why Are the Bulls Winning?

Possible Reasons:

• The economy’s shift from manufacturing to

services, which are less cyclical

• The increasing demand for stocks in the face of

share buybacks and a secular decline in the

number of publicly traded companies

• The gradual decline in interest rates

• The Fed’s willingness to step up and prevent a

bear market (or crash) from becoming a full-

scale depression (referred to as the “Fed put”).

“Ye Shall Prosper in the Land:

Three Financial Lessons from the Bible”

by Mark Skousen Editor,

Forecasts & Strategies

Presidential Professor,

Chapman University

www.markskousen.com

In honor of next weekend:

Why the Jews don’t feel guilty

about money and Christians do?

Abrahamic Covenant “Abraham shall surely become a

great and mighty nation, and all the

nations of the earth shall be

blessed in him.

“Because that Abraham obeyed my voice, and kept my

charge, my commandments, my statutes, and my laws.”

Genesis 18:18, 24:35, 26:5.

“And the Lord blessed Abraham in

all things. And he has given him

flocks, and herds, and silver, and gold, and menservants

and maidservants, and camels, and asses.

The Prayer of Jabez

“Jabez was more honorable than

his brothers. His mother had

named him Jabez, saying, “I gave

birth to him in pain.” Jabez cried

out to the God of Israel, “Oh, that

you would bless me and enlarge

my territory! Let your hand be with

me, and keep me from harm so

that I will be free from pain.” And

God granted his request.

‒1 Chronicles 4:9-10

Benjamin Franklin’s favorite proverb

“Seeth thou a man diligent in his business?

He shall stand before kings.”

– Proverbs 22:2

Anti-Wealth Statements in the New Testament

“Jesus said unto him,

If thou wilt be perfect,

go and sell that thou

hast, and give to the

poor, and thou shalt

have treasure in

heaven: and come and follow me.

“But when the young man heard that saying,

he went away sorrowful: for he had great

possessions.” ‒ Matthew 19:21-22

St. Paul and Riches

“And having food and raiment

let us be therewith content.

But they that will be rich fall

into temptation and a snare,

and into many foolish and

hurtful lusts, which drown

men in destruction and

perdition.

“For the love of money is the root of all evil: which wile

some coveted after, they have erred from the faith, and

pierced themselves through with many sorrows.”

– 1 Timothy 6:8-10

#50 “The Sermon on

Wealth”

or “The Use of Money”

(1843)

1. Earn all you can.

2. Save all you can.

3. Give all you can.

John Wesley, 1703-1791,

Founder of the

Methodist Church

“Capital is Protestant.”

– Montesquieu

Highlights: Jacob Fugger, John Wesley,

and Ben Franklin

Benjamin Franklin (1706-1790)

Franklin’s Three Virtues:

Industry, Thrift, Prudence

“The way to wealth, if you desire

it, is as plain as the way to

market. It depends chiefly on

two words: industry and

frugality.”

“Nothing but money is sweeter

than honey.”

“An investment in knowledge

always pays the best interest.”

“Economy is a great source of

wealth; No revenue is sufficient

without economy.”

“A fool and his money are soon

parted.”

American Exceptionalism

I, in my own mind, have

always thought of America as

a place in the divine scheme

of things that was set aside

as a promised land...Any

person with the courage, with

the desire to tear up their

roots, to strive for freedom, to

attempt and dare to live in a

strange and foreign place, to

travel halfway across the

world was welcome here. Ronald Reagan,

1911 - 2004

The Triumph of the Optimists

World stock markets 1900-2000. Source: “Triumph of the Optimists” (2002)

Wall Street Outperforms Since the Financial

Crisis of 2008-09: America vs the World

My Favorite Way to Beat the Market

Dividend-Paying vs. Non Dividend-Paying Stocks

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Returns of Russell 1000 Stocks by Dividend Policy, 1/31/1979 - 6/30/2011Monthly cap-weighted geometric average of total returns of R1000 component stocks

Div Growers Div Cutters Non Div Payers Div Payers Russell 1 000

Rising Dividends Lead to High Total Return

Rising dividend stocks and funds.

Lowell Miller’s formula:

“investing with peace of mind.”

High

Quality

Growth

of Yield

High

Yield High Total

Return

+ = +

Main Street Capital (MAIN)

MAIN Outperforms S&P 500 Index and Warren Buffett

The Gain in Main is Simply Insane!

Vince Foster,

founder and

chairman of MAIN,

will speak at this year’s FreedomFest,

July 17-20, Paris Resort, Las Vegas

www.freedomfest.com

Omega Healthcare (OHI)

Enterprise Products (EPD)

Microsoft (MSFT)

Flying Five Performance Since 2009

(August to August)

Looking back since 2009, the 30 Dow average is ahead 190%, but the Flying

Five has almost quadrupled its value, up 387% (including dividends for both).

Year    Dow 30 Flying Five2009-10  + 9% + 19%

2010-11  + 19% + 28%

2011-12  + 5% + 18%

2012-13  + 26% + 29%

2013-14  + 13% + 21%

2014-15  + 7% + 7%

2015-16  + 9% + 26%

2016-17  + 10% + 10%

2017-18  + 16% + 20%

2018-19  + 6% + 19.1%

Flying Five Stocks

Every August, buy the five highest yielding,

lowest priced Dow stocks

Current recommendations:

1. Cisco Systems (CSCO)

2. Pfizer (PFE)

3. Verizon (VZ)

4. Coca Cola (KO)

5. Merck (MRK)

“Dividends are the

critical factor giving

the edge to most

winning stocks in

the long run.”

‒ Jeremy Siegel

Warning to Income Investors:

Beware of Panic Selling

At FreedomFest 2013,

Las Vegas, USA

“Everyone is a disciplined, long-term

investor until the market goes down.” ‒ Steve Forbes

“The big profits go to the intelligent,

careful and patient investor, not to the reckless and overeager speculator.”

‒ J. Paul Getty,

“How to Be Rich”

Profits

“Do you know the only thing that gives

me pleasure? It is to see my dividends

coming in.”

‒ John D. Rockefeller

Dividends

Maxims of Wall Street,

$20 for first copy,

$10 for all additional copies.

Free with subscription to F&S for $99.95…

Warren Buffett's

Favorite Quote

Book

"It's amazing the depth of wisdom one

can find in just or one or two lines from

your wonderful book. I keep it on my

desk and refer to its for daily wisdom."

‒ Dennis Gartman

“The world’s largest gathering of free minds.”

Kevin "Mr. Wonderful" O'Leary

Shark Tank

The Big Debate

John “Austin Kid" Mackey

Whole Foods vs.

Conscious Capitalism Pure Greed

www.freedomfest.com

CAN MONEY BUY HAPPINESS?

Hello green, goodbye blues

A study found a

satiation point

around $75,000

for an individual.

While emotional

gains disappear

after that, gains

in life evaluation

continue.

Money may be the husk of things, but not the kernel.

It gives you food, but not appetite.

Medicine, but not health.

Acquaintances, but not friends.

Servants, but not faithfulness.

Days of joy, but not peace or happiness.

‒ Henrik Ibsen