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Housing & Expansion

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For September, the S&P/Case-Shiller National Home Price Index showed that prices rose 5.2% year-over-year, down from the 6% range over the past year. The bullish case for housing is beginning to wane as rising interest rates are raising the cost of buying a home. Residential investment has also fallen in seven of the past eight quarters. We note, though, that unemployment is low and consumer confidence is high. And white-hot conditions aren’t always conducive to sustainable growth in housing.

In the post-World War II era, the U.S. has experienced 10 periods of economic growth; these expansions have averaged 20 quarters, or five years. Recent expansions have been more durable. The six expansions since 1960 have averaged 27 months.


Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logical and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset management team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset management team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

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Who is T-Mobile

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Briefly

T-Mobile US is a facilities-based wireless telephone carrier. The company is the result of the merger of Deutsche Telekom's T-Mobile wireless division with small regional wireless carrier MetroPCS on April 30, 2013. The company offers national wireless voice and data services to consumers and businesses in the U.S, and simple no-contract service plans.

CEO John Legere has been with T-Mobile for over six years, becoming president and chief executive in September 2012. His most recent experience was with telecom network provider Global Crossing. He was named CEO of Global Crossing just months before that company went into bankruptcy in January 2002 and remained on as CEO through the sale of the company to Level 3 Communications in October 2011.

Deutsche Telekom effectively controls T-Mobile with a 65% ownership interest, and DT's interests may diverge from those of minority shareholders. While it has pledged to remain involved in TMO, this could always change and even the perception that DT is pulling out could impact TMUS shares. Management could also become distracted by negotiations around the Sprint merger. TMO continues to have a substantial debt burden. This could slow needed capital investments in its network, as well as future spectrum purchases or other acquisition opportunities.

TMO competes directly with services offered by the major national carriers, AT&T, Verizon and Sprint. AT&T and Verizon are larger and can draw on many more resources than TMO. The large carriers can also offer bundles of services, including wireless, landlines, high-speed internet, and, increasingly, video, which customers may prefer to a stand-alone wireless service.

The company's results are seasonal, with the first and fourth quarters strong and the second and third quarters weaker. The seasonal decline in subscriber acquisitions and concomitant softer revenue growth at midyear may mislead investors into misinterpreting the company's results and share price volatility.

TMO's unlimited service business model and low-cost operating structure is oriented to appeal to price-sensitive consumers. Some might call this the lower-tier or 'subprime' end of the market - the same consumers who have been hit hardest by a weak economy. In the company's favor is its 'Un-carrier' marketing campaign, competitive pricing and the high value that consumers put on having a wireless telecommunications link.

Our Offerings

Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logical and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset management team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset management team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

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SOS Header Image

SOS

Article headline image. Paul Truesdell on

Put your phone down. Pick up a book and read. Stop watching reality television shows, stupid YouTube videos, and TMZ. Instead, listen to classical music, do a crossword puzzle, and begin writing a daily journal by hand. Describe with flair your favorite chair and why you feel safe and secure in that chair. Now stand, stretch, bend, and rotate your neck, arms, and torso. Plank, run in place, do pushups, and a few sit-ups or crunches. But for God’s sake, put the damn phone or tablet down and turn off the mindless social media dribble that is filling your brain with crap.

If you suffer from intense feelings of stress, inadequacy, depression, and aloneness, it may be the result of SOS: Stupid Overload Stimulation.

For example, consider TrueStar Advisors. Unless you are a complete idiot, you know that fixed cost investing through a true fiduciary is the only way to go. You save time, money, and effort. When you need advice, you are going to get it without being sold the latest bundled pile of B.S. And yet, you sit there reading this and doing nothing. Why? Overstimulation and being overwhelmed by things that are meaningless. Information that you can and should control, but you don’t. As a result, you suffer anxiety, which if left to rot, may turn into depression.

Damn It, Stop It

Evidence from reputable researchers is growing that overstimulation is a significant factor in anxiety and depression. The toll of constant stimulation, a lack of sleep, proper exercise, and never turning-off and tuning out can become a killer. Noise, multitasking, cluttered surroundings, and non-stop social media are linked to isolation, anxiety, and depression. Muscles tense, knot, and ache. Why? It could be the result of overstimulation, a lack of rest, and always being on-call, tuned in, and Johnny on the spot.

A meltdown is akin to a child’s temper tantrum. Some get quiet, lose weight, over-eat, stop grooming, and abuse those who genuinely care for them. The noise, noise, noise leads to stress, confusion, and left unabated, insanity. Just look at the number of drug addicts, alcoholics, and outright lewd and disgusting behaviors that have become common. Why? Why have we seen an increase in stupidity in the nation?

In my opinion, the key lies in simplicity. It begins with what I call: Me, Me, Me. There was the me before today, the me of today, and the me tomorrow. You have to be selfish and focus on yourself first. If you don’t get selfish and quickly, you lose. You will miss the next hour to stupid, and that will turn into another lost day, week, month, year, decade, and life. Stop giving a damn about others until you have your act together, and that act begins in your head.

Regulate your environment. Sit, stand, or walk alone without headphones or earplugs and listen to nothing. Get up early, before everyone else in your home, at the most peaceful and quiet time, and think. Calmly let go and let the ideas and thoughts flow. Find balance, think balance, enjoy the benefits of a balanced life. Breath deeply, stretch broadly and relax. Control your physical, emotional, intellectual, relationship, and financial wealth. But never forget, that the most essential component of wealth is your physical and least is your financial. Yes, coming from an investment advisor, you can bank on this. The most critical component and the one thing you have the most control over is your physical wealth, then emotional, followed by intellectual, relationships, and financial.

Removing the overload includes using a true fiduciary who is not selling you to make a commission. The stress from being sold a money management product is awful, and saying no isn’t easy. But doing something isn’t either, especially when you’re overloaded. Chill out, relax, do what’s right, and get off your butt and get into the game of you. It’s your game, not theirs. Play your game and have fun doing it.

Think About It

We are here to help you, not sell you.

Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logical and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset management team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset management team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

Get Started

Rolls Royce Phantom for Everyone Header Image

Rolls Royce Phantom for Everyone

Article headline image. Paul Truesdell on

“Congratulations on your new million dollar vehicle,” Robert said as David got out of his new 2018 vehicle.

“Oh you’re so funny, ha, ha, ha,” Robert replied, “like I own a Rolls Royce Phantom.”

“Actually, Davey my boy, that thing is worth a lot more than a Rolls Royce.”

“You’re nuts. What have you been drinking?”

“It’s not what I’ve been drinking, it’s what I read on the website of my investment advisor.”

“TrueStar Advisors, right? Isn’t that the group you keep saying I should go with?”

“Yep.”

“So what did you read Robert?”

“Well, here’s what’s on the website today. The average monthly payment for a new vehicle is $479. If that money were invested each month for 30 years and earned a 9.8% return, you’d have 1 million dollars.”

David’s eyes narrowed, he dipped his head as he furrowed his forehead, and said: “What?”

“So that’s a pretty nice ride you have there, and unless you paid cash for it, that’s a million dollar vehicle.”

“Okay, that sucks. Thanks for ruining my day buddy boy.”

“Hey, I’m there for you Davey.”

“Yeah. Well, next time I’ll just pay cash.”

Robert smiled and said, “Good idea, you’ll save half.”

David took a step back, put his hands in his pants pockets, and said, “Half? What else did you learn that will ruin my day?”

“David, I’m not ruining your day, but those guys at TrueStar don’t pull any punches. For example, I also read that the average car in 2017 cost $30,032. That amount invested at 9.8% for 30 years will be worth $500,000, and that’s what a Rolls Royce Phantom is going for.”

David sat down, crossed his legs, cupped his hands behind his head and said: “You know, I think I need to get real about money, tell me more about TrueStar Advisors.”

Think About It

Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logical and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset management team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset management team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

Get Started

Average Header Image

Average

Article headline image. Paul Truesdell on

Normal

What is normal? What traits involving personality, memory, happiness, leadership, creativity, intelligence, stability, and so on, makes one average?

Average by itself is a confusing concept. The arithmetic mean is the sum of all divided by the number of quantities. For example: 91 + 84 + 56 + 90 + 70 + 65 + 90 + 92 + 30 = 668. 668 divided by 9 = 74. Median represents the middle score, which in the example is 84. Then there’s mode, which is the most common, of which 90 is it.

Now let’s use 7.4, 8.4, and 9.0 as normal rates of return for a brokerage account with a value of $10,000. After 10 years of 9% returns, the account is worth $23,673. The 8.4% account is at $22,402, and the 7.4% one is worth $20,414. Over $3,000 difference between the arithmetic and mode average.

Words & Meanings

Words should have specific meanings. Using the wrong words to describe this or that can have a tremendous impact. Now consider Mr. 9% with a 0% assets under management commission and Mr. 7.6% with a 1.5% commission. Mr. 7.6% is now at $17,740, and over the next ten years, he will be at $31,471 to Mr. 9%, who will be at $56,044.

This is a mathematical version of advisor, agent, banker, broker, and financial planner (AABBFP). Each has it’s own specific meaning, duties, responsibilities, laws, rules, and regulations. Lumping AABBFPs into one is wrong, just as it is to say the different averages are all the same.

Finger

Can you use a calculator? Do you have a finger? Congratulations, you are a financial planner. “Oh come on,” you say. “Yes,” I say, it’s not difficult to push the buttons on a calculator, and it’s not difficult to do your own financial planning. What is hard is doing what one sets out to do. The planning is easy, the execution is hard. This is why we focus a lot of our effort on the intangible aspect of wealth, and the non-financial tangible wealth components. As every professional athlete will tell you, the game is 90% mental.

The 25% Average Return

Bob has $10,000 and nails it with a 100% return for 2019. Bob now has $20,000. In 2020 Bob blow it and loses 50%. Bob made 100%, then lost 50%, and so, 100 minus 50 equals 50. Since Bob invested for 2 years, he is averaging a 25% return. And yet, Bob is back to $10,000. Never mind the details, Bob’s proud of himself and his average return when talking to his buddies.

Help us help you to unbundle the expensive financial products you most likely have in your brokerage account. The advisory commission on top of the internal commissions charged by mutual funds, ETFs, annuities, and partnerships can easily cost you hundreds of thousands to millions of dollars in lost wealth.

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The way we do it, it’s better, simple, and works.

Think About It

Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logicial and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset managment team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset managment team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

A Case of Coca-Cola Header Image

A Case of Coca-Cola

Article headline image. Paul Truesdell on

Do we discuss the global economic market and forecast based on the data we are aware of? Yes. Does it make much of a difference in the lives of most of our clients? No. Shocker!

Generally speaking, the overwhelming majority of our clients have delegated the management of their money to use because we are a true fiduciary. Second, most of our clients know that we preach and they believe in the following: “Do what you like, are good and profitable at, and can control.” With that said, let’s take a few minutes to explore global, fiduciary, and delegation.

  • The global economy is in its 10th year of expansion following the hogwash that took place in 2007 through the early part of 2009. The odds are overwhelming yes for a variety of reasons.
  • Will there be an imminent recession? We don’t think so.
  • Will technology disruption continue? Yes. In fact, thinking long-term, so too was: fire, the wheel, the cotton gin, steam engines, and trains. Technology is not new; however, for those who are new and who suffer from recency, it’s a huge deal.
  • With a slowing economy, will government expenditures continue at the pace they are now? Who knows. We thought the day of reckoning would have already come, but as it is, they continue to print the greenbacks and shuffle the debt around like a New York City shell game con.
  • Will relations between China, Russia, the EU, and the US thaw? No. Different cultures, government, ethics, and morality will always divide people; however, with an open society and porous borders, harmony and consensus if far more difficult to maintain in the US with a long-term perspective.
  • Will fiduciary standards akin to those of TrueStar Advisors, become the norm in the financial services industry? No. The commission-based brokers and conflicted advisors have too many lobbyists, and politicians are easily swayed with money.

On an individual basis, it’s wise to be aware of what is going on globally, but it is far more critical to know what is going on at home. And when we say “home,” we are actually talking about your home. Reducing one’s consumerist ways and adopting a modern minimalist approach, will make far more of a difference in the lives of most Americans, rather than relentless focus on getting a better deal on a case of Coca-Cola at Sams, Costco, or Walmart.

Think About It

A case of Coca-Cola (24 cans) currently cost approximately $13 at Sams. If one invested $13 per week for 40 years, and earned a 9% rate-of-return, the $27,040 not spent on fizzy waters would be worth $241,803. Again: Think About It.

Bitesize Bites is a public daily mini-podcast covering one item for those who want it fast. Bitesize Bites are designed to be "Think About It" items that should prompt immediate thought and action by many.

Connecting Dots is a public daily podcast that takes one or more topics and ties them together with logicial and organized thought. Connecting Dots explains history, current events, and forecasts in a way that will make most nod their head with the realizations often not seen or thought of previously.

The TrueStar Podcast is a weekly public podcast by Paul and Paul, Paul Grant Truesdell the Chief Executive Officer and Paul Grant Truesdell, II the Chief Technology Officer. Paul and Paul's conversations are amazing, entertaining, and will open a lot of eyes.

The Blog is a public daily posting of a few items being discussed among the asset management team, changes, updates, and news about the firm, as well as a brief opinion or forecast.

Deep Dive is a weekly client only podcast where each episode is focused on a single topic and challenges the listener to actively participate in Connecting Dots for their individual benefit.

Current is a daily client only listing of items being discussed among the asset management team at TrueStar Advisors. Brief ideas and comments as to what is "current" and a focus of attention provides a bit of insight as to what is going on with your management team.

Get Started

Website Changes & CES Header Image

Happy Sunday!

Website Changes

There are a few changes that have already or will take place today on the website.

Podcasts

In the footer, there is a new listing called Podcasts. This listing will also appear in the header. Podcasts are divided into public and client only.

Public podcasts include Bite-Size Bites, Connecting Dots, and The TrueStar Podcast. All three can be accessed on our website as well as significant podcasting networks such as Apple and Overcast. Deep Dive is a client only podcast. Current is also for clients only. Click on Get Started to begin the simple process of becoming a client at The Home of Fixed Cost Investing.

Connecting Dots

Today's Connecting Dots will be about AirBnB. The podcast will be published around noon and will be a rambling discussion about the past, current, and future of travel accommodations.

What is Current?

A few years ago, a revolving group of us attended several Network After Work events in Tampa, Orlando, and Jacksonville. We also sought out other venues such as chamber of commerce and Meetup events. Our goal was to get to a social-business setting for intelligence gathering. What were we seeking? Knowledge about what people think one does in the financial services industry.

Our conclusion was:

No clue.

Not Me or My Guy but Him, Yes Him

From those conversations, we learned that most people view advisors, agents, bankers, broker, and financial planners with a high level of disgust; however, if someone was working with an individual or firm, well then, that was different. Their person was great. This is where LOL would go if this were a Twitter post. It was the same thing everywhere we went. “Congress is full of crooks, but my Congressman is from my party, and he’s great.” And so we tried a few things to move the needle. One was to do a frontal assault and call it the way it is. That does not work. Why? Because most people have no clue as to what they are paying or how their person gets paid. To tell someone, they are being ripped off when they don’t even know they are paying or flatly deny they are paying anything at all is a complete waste of time. And so, the best thing we found is to have a page on the website where we gently explain the problem. Next, we found that most people do not know the difference between an advisor, agent, banker, broker, and planner. For that matter, most people lump all of these titles together into one bag called “financial services.” And of course, people do because that’s what the industry has done.

Showcase Reality

Current came about as a result of the frustration over the lack of understanding about the complexity and time it takes to professionally manage money. Some think this is easy, some think it's hard, and others can't follow a discussion beyond how to spend money with a credit card. To keep our clients current, we created Current, to showcase current events that we are discussing among the asset management team. The response for those who were given preview access was: “I had no idea…”. As a result, a few items from Current will appear on the Blog, but only a few. If one wants more, Get Started and become a client.

Newsletter Fraud

One day soon we will show you how badly most agents, advisors, bankers, brokers, dealers, and financial planners treat their clients by walking you through what we call “The Newsletter Fraud.” In essence, advisors, agents, bankers, brokers, and financial planners commonly use newsletter mills to sent items to their clients in physical or digital format. Unfortunately, there continues to be a significant percentage of people who think the material was created by their person or is an in-house product. Again, soon we’ll show you how widespread the same-old-thing is.

CES

CES will begin in a few days. Formerly known as the Consumer Electronics Show, CES is an annual trade show organized by the Consumer Technology Association. CES takes place in Las Vegas. This year looks to be a big year for many companies to showcase their latest gadgets, software, and systems. CES began in 1967 and has grown and changed from a floating location to an annual monster size event with Las Vegas as the anchor location. Honda and Yandex will be showing their autonomous work vehicles this year, and LG will be pushing their craft brew beer making machine. One of the items we will be looking at with great interest is the development of 3D printing machines on a corporate and personal level.

Me Too Booth Babes

A few years ago, someone took offense to scantily dressed glamor models being used by some exhibitors. The resulting press caused a ruckus, and most attendees rolled their eyes in disgust over another non-event event. With self-appointed PC police abundant in all walks of life, coupled with the recent mojo of the Me Too events of the day, it will be interesting to see to what degree this or another side-show becomes a dominant topic over the primary purpose of the thousands of vendors, and two hundred thousand in attendance.

Be Positive - Bad Luck Didn't Happen Today Header Image

Blake Nordstrom, an heir to the Nordstrom Inc. fortune who ran the department-store chain with his two brothers, died Wednesday morning, less than a month after he revealed to employees and other that he had been diagnosed with cancer.

Mr. Nordstrom, 58, was co-president of Nordstrom, a title he shared with his brothers Erik and Peter. His brothers will continue to lead the company, which is publicly traded but still run and controlled by the Nordstrom family.

By all accounts, Mr. Nordstrom was a nice man who did his job the way his father did. Despite the good luck of being born into a great family, lymphoma can affect the best and worst among us.

If you are reading this, congratulations. Why? Because you have the good fortune to have another day to make the most of the time you have on this ball of mud we call earth. As we say often: "For some, if not for bad luck, none would be had at all."

The Nordstrom family turned a single store in Seattle into a company with stores across the nation. The market capitalization is approximately $8 billion.

How much is the price of physical wealth?

Priceless.

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On a related note, the former CEO of Red Robin, Michael Snyder, committed suicide on Sunday, December 2nd. Mr. Snyder left the helm of the Colorado-based casual-dining chain in 2005 after being forced to repay $1.25 million in unauthorized perks, including misuse of the corporate jet. Mr. Snyder opened the first Red Robin franchise in 1979, expanding to 14 restaurants that he ran with his brothers, Steve and Brad. He had been the company’s largest individual shareholder as of 2007. Mr. Snyder is one of a growing list of people who are ending their life at their own hands.


From 1999 through 2017, the age-adjusted suicide rate increased 33% from 10.5 to 14.0 per 100,000. 47,173 Americans died by suicide our of 1,300,000 attempts in 2017. Despite the growing problem, more attention is paid to the number of children who are killed during a school shooting. 438 children or adults were shot, and 138 died on school campuses from 2012 to 2014. During this same time period, 99,419 people died in car accidents. In 2014, there were 12,333 deaths (due to any cause) of people with diagnosed HIV infection ever classified as AIDS, and 6,721 deaths were attributed directly to HIV. of 14,000 unaccompanied children who have entered the United States this year, Felipe Gomez Alonzo, from Guatemala, is the second child to die in recent months while in protective custody. The pubic outcry has been substantial.

What's the Point?

Political correctness should never take precedence over facts and figures. Investing on emotions is dangerous and a violation of one's fiduciary duty. As a true fiduciary-based investment advisor, we consider the qualitative and acknowledge the importance of lobbying and squeeky-wheel attention, but we focus on the quantitative. 1 + 1 = 2, always has, and always will.

Think About It

Red Flag Warning

Article headline image. Paul Truesdell on

Posted in  SEC Enforcement Action, Red Flag, Broker Theft, Ponzi

UNITED STATES SECURITIES : AND EXCHANGE COMMISSION, : Plaintiff, v. JOHN GREGORY SCHMIDT : JURY DEMANDED Defendant. CASE NO. 18-cv-320

For the past 35 years, Defendant John Gregory Schmidt has been a registered representative associated with a series of broker-dealers, including the past 11 years with a large, SEC-registered broker-dealer. (“Broker A”). Over his career, Schmidt attracted a loyal base of retail brokerage customers who trusted Schmidt to guide their financial decisions as they approached retirement. From at least 2003 through 2017, Schmidt betrayed his customers’ trust byperpetrating a classic fraudulent scheme: he robbed Peter to pay Paul. Schmidt – acting without customer authorization – repeatedly sold securities belonging to some of his brokerage customers and secretly transferred the sale proceeds to cover shortfalls in the accounts of other customers. In total, between 2003 and October 2017, Schmidt misappropriated over $1.16 million from accounts belonging to seven customers (the “Misappropriation Customers”) and transferred that cash to at least ten other customers whose accounts were experiencing shortfalls (the “Shortfall Customers”).

Trust But Verify

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