Why NetWorthProtect Believes We Are In Buying Territory

1) U.S. Downgrade is basically a ”Political Leader B#tch Slap” (one I think they deserve): Below is an excerpt from Standard & Poor’s (S&P) most recent Sovereign Default Study – the study most applicable for discussing US debt obligations.  Notice anything concerning the difference between AAA, AA and A?    This is an average cumulative default table – so on average, for instance, the 5-year cumulative default study for BBB-rated debt is 3.97%.  THERE IS NO DISCERNIBLE DEFAULT FREQUENCY or frequency variation around any sovereign debt rated above A.  Thus, S&P’s own study shows no default variation differential between AAA & A.  The fact that the US is AA+ or A- is completely qualitative and arbitrary relative to historical default data.  This means that the market will continue to view the U.S. as effectively AAA because the downgrade has nothing to do with statistics and models.  BUT, it has everything to do with telling the U.S. Leaders that they screwed up so bad that a subjective over-ride of their debt rating model is warranted given the government’s inability to balance the budget and create a budget surplus, control spending (and its general failure investing money).

S and P 500


2) 10-year Treasury Yields of … Read the rest

Read More

LinkedIn Prices



Yesterday, LinkedIn (LNKD), the online professional networking service, priced a secondary offering of 8.8 million shares at $71 per share after reporting its first quarterly loss since its IPO back in May 2011.

So let’s review some numbers here because I am having a tough time with this one.

As of September 30, the company’s last 12-months (LTM) Revenues were $435MM and LTM Net Income of just over $10MM.    With add-backs from depreciation and amortization the company generated Earnings-before-interest-taxes-depreciation-amortization (EBITDA) of about $25MM.

LinkedIn’s May IPO raised $352.8 million for the company ($248 million in net proceeds) and and as of September 30, the company still has $387MM in cash and short-term investments on its balance sheet and no real debt.

LinkedIn offers three major products

  • Hiring Solutions: Revenue derived primarily from the sale of LinkedIn Corporate Solutions and LinkedIn Jobs products, selling LinkedIn Jobs on their website to enterprises and professional organizations.
  • Marketing Solutions: Revenue  derived primarily from fees received from marketers, principally advertising agencies, direct advertisers and user created ads that are displayed on their website.
  • Premium Subscriptions: Revenue  derived primarily from online sales of our Business, Business Plus and Executive subscription products. These are monthly
Read the rest

Read More

Should You Leverage The S&P 500 In Your Portfolio


Recently I sat down to think of possible improvements that I can make that will enhance the performance of my Questrade retirement investment portfolio. Like most people, I have significant exposure to the greater U.S. equity markets with approximately 45% of my finance portfolio invested in large capitalization equities, which are components of the S&P 500 Index.

S&P 500

The S&P 500 Index tracks the combined performance of the 500 largest companies in the U.S.  So, buying a share in a mutual fund or Exchange-Traded Fund (ETF) that has an investment mandate to mirror the S&P 500 will give you returns equal to the index, less any fees and expenses related to managing the portfolio.  In other words, if I hear someone say “the S&P 500 went up 2% today”, then it is highly probable that about 45% of investment portfolio increased in value by 2% as well.

Now, I am quite certain that for the foreseeable future my portfolio will continue to have significant S&P 500 Index exposure.   Therefore, whether I know it or not, I am effectively saying, “I believe that investing in an S&P 500 Index Fund is going to give me the necessary long-term returns to fund … Read the rest

Read More

10 Reasons To Love Christmas



I love Christmas, it is great time of the year!  The parties, the celebration, giving, receiving, seeing friends and family, in my eyes this is what life is all about: connecting with the most important people in your life.

Here are 10 Reasons that I love Christmas PLUS, 5 Reasons to love Christmas even if you do not celebrate Christmas.

  1. Giving to others ALWAYS makes me feel great!  This year out picked out cool gifts (in my humble opinion) for my little nieces and I can’t wait to watch them tear open the presents.  Makes you feel like a kid again just watching…
  2. Seeing people I love (including my cute wife).  This is really great, the whole family gets together and celebrates each other, not just the formal Christmas/religious events.  Connecting with my friends and family is very important and what better way to do it then over some egg nog and gift giving!
  3. Spending Money!  You heard me right, spending money.  As many of my regular readers know I am a saver, I like to save, I like to budget, I like to make sure I save enough and then double-check that I am saving enough.  But at Christmas
Read the rest

Read More