Lepard's Financial Advice

[llepard]

I have been getting a lot of PM's asking for advice.

Rather than respond to each one individually here are my thoughts.

By law I am not allowed to give advice since I am not a government registered RIA. Having said that, and using the First Amendment as my defense, I will offer my opinions based on 30 years of investment experience. It may not apply to your situation. You must make your own decisions.

1. I would not own any stocks or mutual funds long. NONE. Not even emerging market funds (which IMHO will be good at the bottom). They will all be sold in the coming panic.

2. I would not own any bonds other than foreign bonds, and even those may come to be a problem. Paper is going to become worthless. I would sell municipals, bond funds, money markets, all of that stuff. Ask people in the First Reserve fund -- they cannot get their money back.

3. I would keep a very large cash balance in a safe place. Enough to pay for 6 months of living costs.

4. I would not put over $250k in a bank, and even that I advise against. Banks could be shut down. ATM's may not work. Credit cards may not work.

5. I would not pay off any debt if I could be sure to service it. I will repay it with worthless future dollars.

6. I would stock up on food and essentials. I have 6 months of food in my house.

7. I would buy and store precious metals in a safe place.

I would be prepared to clean out my bank accounts, brokerage accounts, all money accounts. I would know how to wire and transfer money quickly. In fact, I would try to get everything to cash now, or to accounts which are overseas. If you have an account overseas that is more than $10k you must report it or you are committing a felony.

8. If you are an investment professional or have investment experience you might want to use stock short sales, put options, and futures. If you do not know what you are doing don't touch this. There is a lot of volatility.

9. One idea i have right now, that I hold in my 401k is SRS. It is 2x the inverse of the REIT index. Trading at 97.91. Should go much higher. Also, I own puts on Wells Fargo. FHUVU. Oct. 37.5 traded Friday at 4.00 Very risky.

I would avoid cities. I would be prepared for a lot of changes.

There is a very hard storm coming. The key will be to hang onto what you have. In a bear market he who loses the least is the winner.

Be very wary of all financial institutions. They can fail. Do not put too many eggs in one basket. I have a dozen brokerage accounts. One day we could wake up and it will be GAME OVER. The dollar is devalued. Ten old dollars are worth one new dollar. All accounts are frozen. You have what you have.

I believe that in this scenario Gold is the best defense.

 

[runningdiz]

Thanks again Lepard you always provide us with an interesting and helpful read! Will definitely use this "opinion".

 

[liberteebell]

Thank you for the info!

 

[freelance]

Thanks for the post. I was going to write you, but I figured you were up to your eyeballs in alligators right now. ;-)

 

[CurtisLow]

Thanks for the information Lepard.

Question. My home is up for sale. When I get a buyer, and the deal go's Thu. what is the safest way to make sure the money I receive is there then I buy my next place? around-200k

Thanks!

 

[Arklatex]

Thanks llepard, true patriot.

My 'financial adviser' had my portfolio at 2% in gold, after I got off the phone with him it's at 20%, silver at 8%. I moved out of all smallcap, midcap, and large SP indexes. I did leave money in the income fund, the big dividend players, and moved 7% into mining stocks, GDX. 4% into the S&P inverse instrument.

I also left 10% in emerging markets. I feel good about all of that.

What I don't feel good about is I left 40% in bonds and fixed securities. I know a lot more about equities than I do debt but I'd always been under the belief that bonds were much safer than stocks during recessions. I guess if we have hyperinflation though that is not true.

 

[Malakai]

Thanks for info! Wish I had my own $$ to invest it sounds like fun.

What do you think of buying a house right now? We have 66k in the bank from sinkhole settlement, in a BB&T CD. I advised my mom to use them, and considering things I've since read, I think it was a good decision.

Anyway, she wants to sell this one off for whatever we can get, and buy another house. This will have nothing to do with investing, happy to weather the coming storm from the new home.

So would you advise just buying the nicest thing we can afford now, or waiting and doing something besides a CD paying 1.5%?

Curtis, I'm curious, is your home worth 200k? A year ago houses in my area were still selling for 200k, and they were 50-70k before the bubble. Now the only ones selling for over 100k are from people still getting zero down mortgages (amusing that they are still available so easily)...

 

[Arklatex]

I'd get out of that CD thats paying 1.5%, you can find local banks that are paying 5% in regular checking accounts. Might not stay like that for long though if there are more interest rates cuts.

A house in the south or midwest out in the country is probably wise!

 

[Malakai]

..

 

[Kotin]

Thanks alot Llepard for your insights.

Let us patriots stick together through the coming crisis.

 

[Suzu]

I believe that in this scenario Gold is the best defense.

I disagree with this statement. If the dollar is worthless, what good is exchanging metals for dollars? Better to have the means to grow food. Everyone will be willing to trade for food when food is scarce. You can't eat metals.

The means to grow food includes: (a) land with good soil, sufficient rain and/or ability to irrigate; (b) seeds that will produce plants with fertile seed; (c) knowledge and skill to produce your crops without the aid of agricultural chemicals; and (d) the right tools to work the land.

 

[llepard]

I disagree with this statement. If the dollar is worthless, what good is exchanging metals for dollars? Better to have the means to grow food. Everyone will be willing to trade for food when food is scarce. You can't eat metals.

The means to grow food includes: (a) land with good soil, sufficient rain and/or ability to irrigate; (b) seeds that will produce plants with fertile seed; (c) knowledge and skill to produce your crops without the aid of agricultural chemicals; and (d) the right tools to work the land.

Agree. Food more important than gold. But, gold is money in every country in the world. Some of them will have food. Gold will be good to exchange for food.

Money is nothing more than a claim on productive capacity. Having the capacity would be the first goal. But capacity is not easily moved. Gold is.

I think gold could be worth 2-100x its present value in terms of real purchasing power if the entire world decides that paper money is crap. There is not enough gold in the world compared to productive capacity and the government has illegally suppressed its price.

 

[SeanEdwards]

I disagree with this statement. If the dollar is worthless, what good is exchanging metals for dollars? Better to have the means to grow food. Everyone will be willing to trade for food when food is scarce. You can't eat metals.

The means to grow food includes: (a) land with good soil, sufficient rain and/or ability to irrigate; (b) seeds that will produce plants with fertile seed; (c) knowledge and skill to produce your crops without the aid of agricultural chemicals; and (d) the right tools to work the land.

I think the point is that people will be willing to trade food for precious metals. PM's will again become the preferred medium of exchange. Yes, it's worthwhile to have your own source of food, but you can't stockpile food as well as you can stockpile PM's. Get your food security addressed, and then start padding the nest with pm's that you will be able to use in trade in even the nuttiest apocalypse scenario.

 

[LibertyEagle]

Do you think commodities and basic materials have a lot further to fall?

 

[Kotin]

I would say get alcohol like rum or whiskey, big jugs of them.


we all know for many people alcohol will be more valuable then food.


so it will be a great trade and barter tool.

 

[billjarrett]

Most of my money is in a 401k now, in very conservative investments (I haven't lost very much at all). I just changed jobs, and the money is in my old 401k.

I'd like to put this into something more solid (like gold/silver), but if I withdrawl I lose quite a bit in taxes. I actually have very little cash on hand at the moment (especially not 6 months worth). Unsure what to do.

 

[KramerDSP]

Larry, thanks for your advice. Could you clarify what you mean when you say "5. I would not pay off any debt if I could be sure to service it. I will repay it with worthless future dollars." Specifically, what do you mean when you say "could be sure to service it"? Thanks for all you do.

 

[gb13]

Thanks Lepard.

One question: How do you feel about silver, as opposed to gold, for someone with limited capital for PMs. The main reason I've been buying silver lately is because the premiums for smaller quantities of gold is enormous. I've been getting good deals on silver lately.

Thanks for the great advice.

 

[Johnnybags]

Sound advice - I will offer poor mans advice

If you have a few grand in savings like 75 percent of America, convert Federal(P)reserve notes(P) (is for preserving wealth for the elite) into US Mint Nickels. They are our only non fiat means of exchange. Inflation will only cause it to be made of zinc or steel. Upon a new mint made of such, the value will at least double. Worst scenario is its still worth .05 if massive deflation hits.

Second, if you have more equity, you can short, buy puts, or buy rural acreage outside of cities a couple hours away, preferably with farmland and water supply. New Hampshire is a good choice. Mass residents are likely to vote out the income tax and have the legislature block the will of the people and many will move over the border(demand). Close to the Mass border and near Vermont(Keene) is prime. Massachusetts is insolvent.

Third, food, seeds, etc. I would also invest in fermentation supplies(beer or wine kit) now. Booze is always in demand and the kits will soar in price. Get it now and start your own small budget brewery.

4th- Arms and ammo

5th- An alias

 

[RJB]

5. I would not pay off any debt if I could be sure to service it. I will repay it with worthless future dollars.

My only debt is student loans (about $100,000). I'm broke and renting a house. I have the student loan on deferment. I guess I should keep it that way for now.