Dan’s Blog

The Stock Market's Costume

Dan Calandro - Sunday, November 01, 2015

Stock market strength has fully recovered from the corrective shortfall it experienced in August. The S&P 500 is still off 446 points, or 2.5% from its previous high, while the Dow Jones Industrial Average (just an abysmal performing portfolio, see: WHAT’S WRONG WITH THE DOW -- AND HOW TO FIX IT, for more info) remains 846 points off from its all-time high, or 3.7%. See below.

The benefits of 15-51 construction are abundant: it goes up faster and higher, corrects less, and recovers faster and higher than any other portfolio model. That makes it easier to make more money with less dollars at risk -- and isn’t that the objective?  But I digress…

As mentioned in previous blogs, START SPREADING THE NEWS and APPRECIATE THAT, the August correction was just the “first salvo in the next major corrective cycle.” I cautioned investors that “major market corrections like [the last one in 2008] take time to metastasize…” and reminded them that, “The first market rattle of the last major correction occurred in February of 2007 – eight months before the market topped, and eighteen months before the correction began its severe decline.”

I have pointed out many times how similar this stock market build-up is to the one that led to the ’08 crash. Another similarity can be seen again by how the stock market reacted after the first mini-correction of this cycle.

Take a look at the chart below; it shows how the Dow reacted after the first sign of trouble that hit the market in February 2007, when HSBC announced a surprise $4 billion charge related directly to subprime mortgage defaults. 

Just to remind you again, the Dow went on to hit its all-time high six months after this chart ends.--Not because the subprime mortgage dilemma went away but because media pundits and market “experts” rationalized that HSBC was just an “isolated situation” and that subprime defaults were not a systemic problem -- even though bank after bank continued to fail.

That’s a very similar condition to today. The mini-correction that occurred in August 2015 was largely driven by the dramatic slowdown in economic output in China that seems to have gone away just two months later -- at least where the stock market is concerned. Take a look at the chart below that shows how the Dow reacted after the mini-correction in August.

To draw a broad comparison to the two corrections, the Dow largely recovered to its previous high just two months after major negative news hit the market both times. Even though the 2015 mini-correction is choppier and more dramatic than the one in 2007, the timeframe and level of rebound are very similar. 

And just like in ‘07, this stock market recovery hasn’t been driven by a turnaround in Market condition. This is corroborated by the Wall Street Journal which recently pointed out, “An indicator of Chinese factory activity showed an unexpected contraction in October, denting hopes that the world's second-largest economy will post a fourth-quarter turnaround.”

It cannot be underestimated how important China was in the wake of the ’08 debacle. As central governments around the globe began spending ungodly amounts of money that they didn’t have, China was there to lend them a significant portion of that money. Today, China still has more than a trillion dollars of U.S. debt. Without Chinese demand for debt securities, it would have been much harder for world bankers to have kept interest rates low.

Explosive Chinese growth in the wake of the ’08 crash also helped a wide array of U.S. firms, from raw material suppliers, to consumer products companies, to professional service firms. Without Chinese demand lifting a substantial portion of the U.S. market, corporate profits, the job market, and the stock market, would have all taken much longer to recover.

Today that safety net is showing signs of wear, and can’t be counted on to bailout the world market the next time the mess hits the fan.

That’s a significant development.

And just like when the HSBC news hit the wire in February 2007, the Chinese problem of today isn’t an isolated situation and hasn’t gone away. Instead, the Chinese situation is emblematic of a weaker and more fragile global economy that is in dire need of freedom, leadership, and reform. Yet despite the absence of these enhancements, the stock market has swiftly recovered.

The lack of robust gain this year doesn’t mean that the stock market isn’t over-valued.

Consider that so far this year the Dow is down 1%, the S&P 500 is up 1%, and stock market strength via the 15-51 Indicator is up 8% -- but all three stock market indicators remain near all-time highs. The pitiful Dow, for instance, is off just 3.5% since its May 19, 2015, high (18,312). It’s bottom this year is 2,000 points lower than where the Dow stands today (15,666).  In other words, the stock market has largely regained the high valuation it lost when news of the economic slump in China hit the wire, making it seem like the Chinese news is isolated and no big deal.

Today’s stock market is a wolf in sheep’s clothing. Don’t be fooled by the costume! 

Take a look at these recent Wall Street Journal headlines:

  • U.S. Companies Warn of Slowing Economy
  • Retail Figures Mostly Disappoint
  • Consumers Spend Less Amid Soft Wage Gains
  • U.S. Employment Costs Rise, Suggesting New Wage Pressure
  • U.S. Consumer Spending Shows Caution

Add to this the recently released third quarter 2015 GDP metrics, where it was announced that 3rd quarter Real GDP growth came in at just 1.5% growth -- that’s 62% less than the rate posted in Q2, and 65% less than the rate during the same period of last year.

Weak and uneven growth is a staple of the Obama economy. In fact, never before in history has the stock market been so consistently strong with such a weak and fragile underlying economy.

Think about it this way…in the seven years of the Obama administration the stock market is up on average 11% per year; while Real GDP has averaged just 1.8% growth per year. Compare that to the first seven years of the Bush administration, when growth in Real GDP averaged 2.4% per year and the stock market averaged just 3.9%.

The stock market is so much more over-valued now than it was seven years into the Bush years it isn’t even funny. That’s the reason the mini-correction in August was so much more severe than the one in February 2007. (FYI, the Feb. ’07 correction trimmed 6% off the Dow Jones Industrial Average from its previous high, and the Aug. ’15 correction shaved 14% from the Dow’s previous high value.)

The more over-valued a market is the more severely it corrects. That’s just the way it goes.

And that’s the dynamic you can expect during the next major correction -- a sharper and more severe downward move followed by a slower and rockier road to recovery.

Stay tuned…

 The road to financial independence.

Appreciate That

Dan Calandro - Sunday, October 04, 2015

Not much has changed since START SPREADING THE NEWS was posted. The U.S. economy remains weak and uneven and the stock market reflects it. The Dow Jones Industrial Average is still off 10% from its all-time high (18,312) reached on May 19, 2015.  The Dow is down 8% so far this year and the S&P 500 has lost 5%. Only stock market strength is in positive territory for the year; the 15-51 Indicator is up 2%. See below.

The U.S. market is sloppy indeed -- but it’s in great condition compared to the rest of the world. Take a look at these recent WSJ headlines:

  • Economists React to the September Jobs Report: ‘Nothing Good to See Here’
  • Flat Personal Consumption Expenditure Latest Sign of Weak Inflation
  • What Do U.S. Economists Think of Official Chinese Statistics? ‘Only a Fool Would Believe Them’
  • Analysis: Global Turmoil Impacts U.S. Job Growth
  • Japan Sees Some Slowness in the Economy
  • Eurozone Producer Prices Fall Sharply
  • French Statistics Agency Forecasts 1.1% GDP Growth in 2015
  • Russia Lowers Ruble (their currency) Forecast
  • Fed’s Dudley: ‘A Long Way’ From Having Bubble Fighting Tool Kit

My goodness, the world is a mess. And it begins and ends with America.

President Obama came into office promising to drastically increase U.S. exports -- to be accomplished, no doubt, on a weak monetary policy platform. But the rest of the world followed suit and today U.S. exports are again at the low levels experienced at the bottom of the Great Recession.

Speaker of the House John Boehner resigned and his replacement looks to be just as stupid. Heir apparent, Majority Leader Kevin McCarthy, suggested that the Benghazi and email investigations into Hillary Clinton’s performance was more about politics than it was about finding facts and protecting national security.

It’s hard to take American government seriously. (Vladimir Putin certainly doesn’t -- but more on that in a bit.)

The slowdown in China shouldn’t be underestimated. It’s worse than the media’s spin and looser money polices haven’t helped. China is in a bad way, and when the global bubble bursts (which it will, of course) the world won’t be able to rely on its growth for a bailout.

Like China, both Japan and the Eurozone followed the American lead and implemented weak money policies like QE -- and, as predicted in these blogs, neither effort has produced sustained economic growth and/or moderate price inflation. Remember, steadily rising prices are a sign of economic strength. Falling prices indicate weakness.

Earnings of the S&P 500 grew less than 1% in the second quarter of this year and many analysts are predicting a 3% drop in third quarter earnings. As a business owner I can corroborate that projection. My company experienced its softest quarter of growth in the third quarter since the Great Recession.

The world economy is in shambles.

Indeed, a weakening global economy will produce fewer jobs, and fewer jobs will produce less consumer spending, which of course drags down global GDP. All of that translates into weaker corporate earnings, more stock market volatility, and lower price valuations. 

And none of this is to mention the status of global conflict and the weakening leadership position of the United States.

The Russian economy is a disaster, and Putin is unwilling to do what is necessary to turn it around. After all, free market policies are enemies of the State. As such, he turns to militaristic policies to build national pride and embolden his power structure. His seizure of Crimea, for instance, boosted his domestic standing substantially. And now he is making an even bolder statement in Syria.

It isn’t Russian involvement in Syria that is so striking but instead how Putin has gone about it. Under the guise of battling ISIS, he sent a three star Russian general into the U.S. Embassy in Iraq and told the Americans to remove their warplanes from Syria. In other words, get out; we are here now.

In approximately one hour after that meeting Russia began bombing positions inside Syria -- and many reports indicate that initial targets were not of ISIS but instead positions of the U.S. backed rebels.

That’s Putin spitting in Obama’s eye.

A weak America is not good for the world.

Neither is an emboldened Russia.

Over the years Russia has grown closer to Syria and Iran, who by the way, have assumed a much larger role in Syria with the reinvigorated Russian presence. Iran is a largely Shiite nation. Syria, though ruled by the Shiite Assad, is largely a Sunni populous. You see, the civil war in Syria is a religious war between Muslims -- Sunni and Shiite -- and Russia is on the Shiite side.

The Russian attempt here is to arrest Middle Eastern influence from the U.S. and prove Russia as a more appropriate and trustworthy ally for the region. 

They can succeed because the U.S. has a haphazard and confusing Middle Eastern position. Think of this...In Syria, America is supporting the Sunni’s on one hand but against the radical Sunni faction, ISIS, on the other. In other words, America is fighting against the Shiites halfheartedly. In Iraq, a largely Shiite country, America is fighting on the Shiite side along with Iranian affiliates in a fight against ISIS (Sunni). In yet another venue, American ally and major oil producer Saudi Arabia (largely Sunni) is fighting Shiites in Yemen (who are also backed by Iran) but Saudi Arabia has no legitimate U.S. support for the cause.

The Middle East, and America’s policy to it, is a total mess.

Yet oil is still just $45 a barrel, and gasoline prices are lower now than they were at the bottom of the Great Recession. Gold, too, is lower than logic would expect. But yields are on the right track for a Market environment like today. They’re still at rock bottom levels and falling. See below.

When things get scary -- and investors are scared right now -- there is increased demand for safe investments like U.S. Treasuries. That’s why I don’t expect U.S. yields to change significantly when the Fed finally decides to raise interest rates. 

Nothing spurs more demand for U.S. bonds like an impending crisis -- a crisis, by the way, that some Fed governors don’t feel capable to fight. And who could blame them? Sovereign debt is at unprecedented and unsustainable levels. During the next crisis governments won’t be able to print ungodly amounts of money and debt to leverage the economy out of recession like it did the last time -- and the Fed knows it.

That’s what makes the next crash so scary. Governments won’t be able to “stimulate” the economy through massive central planning spending; and they won’t be able to keep global yields and inflation low while they fight the good fight. China won’t be able to carry the global economy out of recession with booming growth. The Euro won't be able to survive, as major sections of the Eurozone will fail and bring about a global currency and debt devaluation. And the wars in the Middle East will expand.

Not pretty.

That’s the reason the stock market corrected so sharply in August. The environment is more risky and inching closer to major correction. That causes the stock trend to be more volatile, more dramatic, and less willing to test previous highs. See the difference below between the most recent downward correction versus all the previous ones in the most recent two years. 

It looks different because it is different. It was the first salvo in the next major corrective cycle. Appreciate that -- and SURVIVE THE NEXT CRASH.

Stay tuned…

The road to financial independence.

Start Spreading the News

Dan Calandro - Sunday, August 23, 2015

Stocks took a beating last week as all major stock market indexes (the Dow, S&P 500, and 15-51 Indicator) lost 6%. Stock market strength via the 15-51 Indicator is the only index still in positive territory for the year. It’s up 2% year-to-date even after this most recent correction. The Dow and S&P have lost 8% and 2%, respectively, so far this year.

Yields have also fallen by a sizeable amount in the past week, ending 7% lower. And even though gold added 4% in the last five trading days, it’s still down 2% for the year. Below is the ugly chart of year-to-date activity.


The Dow Jones Average hit its all-time high on May 19 of this year (18,312), and since then has dropped 1,853 points, or 10.1%. Some people define a 10% move as a “correction” and a 20% fall as a “Bear Market.” I find these arbitrary definitions not only confusing, but silly.

Corrections are simply a price condition that can happen at any time, in either direction (up or down), for any reason, and in any denomination – 5%, 10%, 20%, or 30%, etc. For instance, the S&P 500 moved 6% this week. That’s a correction – even though the S&P is down only 7.5% from its all-time high (2,131 reached on May 21, 2015). Anyone saying anything different is just being silly.

Bull and Bear Markets are much different than simple price corrections – they are market conditions. Bear Markets are when stock prices lead the market (a.k.a. the economy) downward. Bull Markets are when stock prices lead the economy higher. See the difference? Bear Markets relate downward stock prices to a receding economy, and Bull Markets tie upward prices to an expanding economy.

To better illustrate the difference between corrections and Market conditions we’ll use the run-up to the last major correction to make the point clear. Below is a chart that starts at year-end 2005 (the heat of the housing-boom) and extends to the essential bottom of the last major correction, February 2009. Three critical points are highlighted along the Dow’s trend-line during that time: the market’s top (indicated by a red square), a 13% downward correction from the top (signified by a red diamond), and a further 7% corrective move commencing a Bear Market (signified by a red circle). See below.


As you can see, the 13% downward move signified by the red diamond is clearly a negative price correction. And though it easily could have been called a Bear Market based on its trajectory (the Dow’s trend looked destined to lead the economy lower) confirmation of the Bear Market didn’t arrive until July 2008 (the red circle). That’s when the Dow crossed under the GDP trend-line. At the commencement of the Bear Market the Dow Average was coincidentally down 20% – but as you can see, prices continued to correct another 23% before reaching bottom. The whole move was a “correction” to the downside. It began in October 2007 and didn’t end until February 2009.

A Bear Market lasts for as long as the stock market averages underperform economic output as measured by the long-term GDP trend-line. In other words, the Bear Market doesn’t end until stocks start to consistently lead the economy higher (a.k.a. a Bull Market). This transition, from one type of market to another, is never an even process.  In fact, the stock market was littered with up and down corrections from the time the Bear Market arrived (July 2008) until it finally ended (around June 2013). See below.

Downward corrections do not always make Bear Markets just as upward corrections do not always make Bull Markets. For instance, it would be foolish to ascertain that the market move from March 2009 (the market bottom) to July 2010 (the first yellow diamond after the market bottom) was a Bull Market simply because stocks advanced from 6,148 to 10,772. At that point stocks were still 4,000 points off their high and well below the long-term trend-line of Nominal GDP. (The DJIA is a nominal trend-line.)

The yellow circle all the way to the right of the chart above is where the new Bull Market commenced (June 2013) – which is the point at which stocks began to consistently lead the economy (GDP) higher.

So why do I go through such great pains to make this point clear?

Because it is important to understand what happened last week. It was a simple price correction – and a minor one at that. Sure, six percent is a big move for a five-day trading week. No doubt about it. But it’s important to keep it in perspective. Last week’s 6% move was a minute event in the grand scheme of things. In fact, the Dow’s 10% correction is just as miniscule, a proverbial blip on the radar screen.

Consider that “the market” is still valued higher than the peaks of the tech and housing booms in Real terms – and the modern economy is nowhere as robust as they were. (This is explained more thoroughly in my new piece, SURVIVING THE NEXT CRASH, which can be downloaded for free on my homepage.) And, ironically, the Dow is currently trading at the same exact multiple as it traded to Nominal GDP in October 2007, just before the last major corrective cycle began. (How’s that for an eerie coincidence?)

The chart below drives this point home by bringing the above trend-line up to date. It’s a 10-year look from year-end 2005 to present day, August 21, 2015. This timeframe puts last week’s move into proper context. See below.

Last week’s 6% drop looks like no big deal in the chart above – and that’s an accurate assessment. And while last week’s move was an insignificant amount in the big picture, it was still a major warning signal. A move of that size in such a short amount of time is the equivalent to a quick, sharp chest pain. It should seize attention.

And the reason it should capture attention is because stocks should really be trading close to “fair value” – that’s 2,000 points from where the Dow stands today after the 6% correction – which would represent a 20% correction from its recent top. But that 20% move would not automatically present a Bear Market because stocks would be trading at fair value and above Nominal GDP’s long-term trend-line.

To be sure, however, a 20% correction can certainly indicate that a Bear Market is on the way. Recall the major issues facing the global economy. Growth has been consistently weak and uneven at all corners: China is in a shambles. Europe is a disaster. The Middle East is at constant war. Emerging markets are at high risk. And the fragile U.S. economy is producing frail growth and statistics that have been inflated by trillions of dollars of newly printed money via QE that has produced an abysmal ROI and amassed the largest amount of national debt ever recorded in world history.

That said, it is totally reasonable to expect stocks to continue downward and for a Bear Market to ensue. In fact, current market indicators and dynamics are acknowledging this threat.

Take oil, for instance. It is down below $40 per barrel for the first time since the heat of the Great Recession. The drop in oil is reflective of lower global demand and the unwillingness of producers to curb supply. Let us also not forget that terror organization ISIS uses oil proceeds to fund their war effort, as does global antagonist, Russia. These threats provide extra incentive to keep oil wells pumping and prices low. Add to this the specter of Iranian oil supplies flowing into world markets that were freed by the new nuclear agreement – and $30 per barrel seems almost impossible not to materialize.

Lower oil prices are a double-edged sword. While the economy likes the revenue savings to spread around other market sectors, and therefore provide economic benefit, the current dynamic is different. In this instance, lower oil prices indicate soft demand and economic weakness. In other words, consumers aren’t spreading savings from energy products to other sectors of the economy. This is corroborated by what’s happening in China.

China’s manufacturing base is shrinking and growth is slowing substantially, and in a surprise move last week, they abruptly devalued their currency in hopes to reverse their downward spiral. In other words, China made this move because internal economics are going south and global demand is weak. A devaluation of their currency, in theory, would make Chinese products cheaper and thus increase demand and growth.

But there’s a problem with that thinking. First, most world governments are also devaluing their currencies at the same time. This minimizes the potency of the Chinese move. And second, many Chinese suppliers are raising their prices in the face of their government’s currency devaluation, which also produces headwinds to the Chinese currency move. 

Again, currency games like this and QE cannot fix Market problems.

Perhaps that is the reason global stock markets are selling off and U.S. bond yields have dropped so dramatically. Remember, yields decrease when bond demand increases. The recent drop in yields (along with lower stocks prices) indicates a skittish investor populous migrating from risk to safety. Gold’s recent reversal corroborates that dynamic. See below.

The first market rattle of the last major correction occurred in February of 2007 – eight months before the market topped, and eighteen months before the correction began its severe decline.

Major market corrections like that take time to metastasize, which luckily gives investors plenty of time to act before it’s too late – that is, if investors are listening to what the markets are saying.

Last week was just the beginning – and the worst is yet to come.

Spread the word, and stay tuned…


The road to financial independence.™


What's Wrong with the Dow--and How to Fix It

Dan Calandro - Friday, August 07, 2015

The Dow Average has been anything but average recently. In fact, the S&P 500 has consistently outperformed it over the last one, two, five, and ten-year periods. That makes the Dow Jones Industrial Average a below-average portfolio.

What’s the problem?

Perhaps the greatest benefit of a small portfolio is its ability to turnaround quickly and provide rapid growth after corrections. As such, one would expect the Dow 30 to have greatly outperformed the 500 stocks of the S&P since the bottom of the last correction (March 2009). But that hasn’t happen. See below. 

During this six-plus-year period the S&P outperformed the Dow by 23 percentage points (189% versus 165%), or 4% per year. That’s absurd.

A 500 stock index should never consistently outperform a 30 stock portfolio. Never. Instead, the Dow’s performance should have been somewhere between the S&P 500 and the 15-51 Indicator (see below.)

The Dow, right now, should be somewhere over 21,000. Not only can it not get there, but it also can’t beat the S&P 500. Why?

The DJIA has structural issues, and more specifically, suffers from poor stock selection.  Think of this…

Of the Dow’s 30 components only 12 have outpaced the S&P 500 over the last year – and one-third of those are financial stocks (Goldman Sachs, Visa, Travelers Insurance Group, and JP Morgan Chase). In fact, the Dow currently has five financial stocks, which ranks that industry 4th in priority order. But because the financial industry accounts for the majority of the Dow’s gains, such an allocation signifies that the financial industry contributes 1/3 of all economic growth in America. That isn’t even close to being accurate indication.

The Dow’s highest ranked industry is technology, with 7 stocks that amount to approximately 23% of the entire Dow portfolio – and 5 of those seven stocks have underperformed the S&P by huge amounts (IBM, United Technologies, Microsoft, Intel, and Cisco Systems). As stated in my book, technology is about the future – and much of those five Dow tech-stocks are about the past. This industry clearly needs some updating.

In the Dow’s second ranked industry, consumer services, half of its components have consistently underperformed the S&P 500 (McDonalds, Wal-Mart, and Verizon) – as did 4 of the six consumer staples stocks (Coke, Johnson & Johnson, Procter & Gamble, and Merck). Needless to say, these industries also need some tender-loving care.

This is not to mention that all of the Dow’s energy and basic stocks have also failed to meet the S&P’s performance (ExxonMobil and Chevron, Caterpillar and DuPont, respectively.)

The Dow has become a pitiful collection of mediocrity, and the proverbial cherry on top is General Electric, the only original Dow component still remaining in the portfolio, which hasn’t sniffed a reasonable return since Jeff Immelt took office. He is clearly no Jack Welch.

Add them all up and a stunning 18 out of 30 stocks, or 60%, of the Dow’s components have underperformed an easy-to-beat S&P 500 index.

That’s an embarrassment.

It’s time for the people managing the Dow to make some drastic changes. It’s time to eliminate the redundancies and upgrade the portfolio’s brands and components. It’s time to put nostalgia aside and finally say goodbye to stalwart names like IBM and General Electric. Yes, they’ve been there for a long time. But who cares. Investment is a performance business – and the S&P 500 is kicking the Dow’s behind. (Again, there’s no good reason for a 500 stock index to consistently outperform a 30 stock portfolio.)

The main objective of LOSE YOUR BROKER NOT YOUR MONEY is to teach investors the art of portfolio construction and how to build a superior one. If investors understand the concepts of construction there is no portfolio on earth that they can’t fix and/or outperform. To demonstrate this I will use the techniques outlined in my book to make adjustments to the DJIA, creating in essence, my version of what the Dow should look like today.

Knowing that the Dow needs to upgrade itself to better reflect the modern day market, two technology moves are obvious – IBM and Cisco have to go. IBM will be replaced with a computer company for the modern era, Google (GOOGL), which will really bolster the personal computing segment (recall that Apple was added to the Dow earlier this year.) In addition, the Google move will make it easy to replace Cisco Systems with the multi-faceted Cummins Inc. (CMI), which would help diversify this industry by GDP spending class. 

In the consumer service industry, McDonalds, Wal-Mart, and Verizon, will be replaced by companies that better reflect the changing patterns of American spenders: Panera (PNRA), Costco (COST), and amazon.com (amzn) will be added.

Consumer staple Coke will be eliminated in favor of Church & Dwight (CHD) and superior pharmaceutical developer Gilead (GILD) will replace Merck.

The financial industry is a place that the Dow can upgrade by getting smaller. For instance, with Visa and Goldman Sachs in the portfolio there’s no reason to suffer with the poor long-term performance of American Express.  And as suggested earlier, the Dow currently has too many financial stocks. As a result Amex will be eliminated and not replaced.

In the industrial industry GE is out and Ford Motor Company is in, and with the extra slot created by eliminating Amex in the financial industry, conglomerate Parker-Hannifin (PH) will be added to expand this industry’s offering.

The choices the Dow’s managers have made for the energy industry is one of their most perplexing. I appreciate the wisdom of an integrated oil and gas company for the portfolio – but two of them? Having both ExxonMobil and Chevron is the epitome of redundancy. That duplication is eliminated in my version of the Dow Jones Average where Chevron gives way to Piedmont Natural Gas (PNY).

Those adjustments change 1/3 of the Dow’s components, 10 in all, and would upgrade and modernize the portfolio. And since the changes made preserved market allocations, my version of the Dow Average would remain a "market portfolio." The portfolio’s movements will prove that should it move in a "market-like" way.

Once again, the purpose of these changes is to elevate the Dow’s performance trend to where it should be – somewhere between the S&P 500 and the 15-51 Indicator.

The chart below shows my version of the Dow Jones Industrial Average placed among the other major market indexes (the current DJIA, S&P 500, and 15-51 Indicator). See below.

The changes made almost double the Dow’s output since the last market bottom in ’09 (294% versus 189%), and places the value right where it belongs – between the S&P 500 and the 15-51 Indicator – while continuing to move in a "market-like" way.

Building and/or fixing portfolios to achieve desired results is quite easy to do using the techniques of my award winning method.


Until next time...   


 The road to financial independence.

Happy 4th!

Dan Calandro - Saturday, July 04, 2015

It’s hard to believe that LOSE YOUR BROKER NOT YOUR MONEY was published four years ago today. Below are the results for the portfolio detailed on page 162 versus the major market indexes since publication.

4 Year Gain

15-51 portfolio        101%

DJIA                           39%

S&P 500                   55%



Happy 4th!

ShieldThe road to financial independence.™

Stay tuned…

Stability or Storm?

Dan Calandro - Sunday, June 14, 2015

Jun 14, 2015

The prices for stocks and gold continue to oscillate to nowhere. Both the Dow Jones Industrial Average and gold are flat for the year. While those two benchmarks haven’t produced any growth so far, stock market strength via the 15-51 Indicator has gained a respectable 5%. See below.


Now that may not look like much, but 5% in a no growth market is five times better than the average. It also might not look like much because of the way the chart is scaled, starting at 15,000 and topping out at 23,000. That’s for a reason to be shown a little later. The point to takeaway here is that all stock market indicators appeared to have based at a top value, and seem unable to build higher valuations. That’s because the economy can in no way substantiate them.

In the same vein, gold has based at a bottom valuation and seems unwilling to move significantly lower than its current value (the GLD is at $113.) Gold’s low valuation base can be seen more clearly in a chart with a longer timeframe. See below.


All of these trend lines have really flattened out over the past several months. Flattening trend-lines can be perceived two ways: as stability, or as the calm before the storm.

Stocks are indicating a no growth condition for the economy – or at best a growth rate that can’t substantiate higher stock valuations. Rightfully so. And while stock indices might appear stable, they are actually waiting for a trigger to move. Call it a calm before a storm. And where is that storm brewing? 

The bond market.

In an article entitled, Bond Yields Hit 2015 Highs Across Globe (June 10, 2015), the Wall Street Journal reported that Germany’s 10 Year yield has moved over 1% one percentThat’s big news, right?

Quietly, U.S. yields have also moved higher. Exactly two months ago the U.S. 10 year was at 1.85%. Today it’s at 2.4%. That upward move matches the 30% increase German yields have experienced. And though yields are rising, they still have a ton of room to go higher.

That’s that proverbial risk in bonds that has been mentioned in these blogs repeatedly, and most recently in, Just Ask the Greeks. Heck, you don’t have to be a rocket scientist to know that when global yields are just one point off their zero-percent bottom that they have no choice but to move higher.

When yields rise bond values fall.

And because yields have an infinite amount of space to move higher and just a point or two to move lower, bond values have and infinite amount of space to move lower and just a smidgeon of space to move higher. That’s what makes bonds such a high-risk proposition at this point in the cycle.

And why have yields moved so swiftly recently?

The world bond markets are reacting to the possibility of a major Greek default, again. And why hasn’t their problem gone away? Because the Greeks haven’t changed their operating model. They continue to burn bailout money without remedy. Every time a new agreement is reached between their creditors the problem temporarily goes away and global markets relax. Once the latest tranche of bailout money depletes, risk of default resurfaces and markets freak out – again.

A Greek default will most likely be followed by its departure from the Euro, and that will throw markets into a real tizzy.  Bond values, which run in an opposite direction of yields, are already erratic.  But investors haven’t seen anything yet. The chart below is on the same exact scale as the first one shown in this blog. This will help differentiate the perceived stability in stocks and gold versus the volatility in bonds. As stated previously, yields have been forced low via quantitative easing (QE). As a result of this prolonged artificial stimulus they have yet to find a natural base.


So here is what you have right now in the markets. Stocks and gold are flat and bond values are plummeting. Even so, bonds are not low here; and even though they are correcting doesn’t mean it is a time to buy them. They are high. And the reason they are high is because yields remain at historic lows.

The concept of Buying Low and Selling High doesn’t purport to doing so blindly. Bonds are correcting, indeed, but they are still high with much room to move lower. The same is true with stocks; they are high and have more room to move lower than higher.

Commodities that run contrary to monetary value are still low. That is to say that gold is as much of a buy at these levels as bonds are a sell. But like all investments, decisions to invest now in those kinds of markets must be long term in nature.

To put it plainly, these are the worst types of Market conditions to make money in. Everything is high risk, be it short or long term. The reason for that is the combination of extremely high valuations and a fragile underlying economy. And that won’t change until Market conditions change.

For investment, investment profit comes much easier when it is easy to make money in the marketplace – when unemployment is decreasing, labor participation is increasing, and wage growth is robust. That’s the way it goes.

Until then keep an ample amount of powder dry. It's cloudy out there and a storm is due.

Stay tuned…


ShieldThe road to financial independence.™

Just Ask the Greeks

Dan Calandro - Monday, May 18, 2015

There is a lot of confusion surrounding the bond market and yields, and there is one misnomer I feel compelled to address. A recent Wall Street Journal article entitled, U.S. Government Bonds Rise; Foreign Investors Pile into Auctions (May 14, 2015) highlights a common misconception about bonds. The author attempts to explain the recent pop in yields by citing strong demand for a recent 10 Year auction. They’re up 28% since their January low. See below.


But strong demand doesn’t cause yields to rise – it causes them to fall.  Recall that quantitative easing (QE) created new and additional bond demand in order to keep yields low – which it did. If the premise that strong demand causes yields to rise were true, QE would have raised yields not lowered them.  

Bond values fall when yields rise.

The article’s author opines, "Many investors see the [bond] selloff as a correction…They don’t expect bond yields to rise sharply given the tepid economic growth outlook …" To qualify his stance the author quotes a senior portfolio manager at Invesco Ltd. who said, "We still believe there are structural headwinds to the global economy," then the author adds, "which would contain a rise in bond yields."—And that’s the great misnomer.

To believe that yields are tied directly to economic performance – that is, weak economies produce low yields – is complete and utter foolishness. Take Greece for example; their economy is weak, and in fact, is in recession. Low yields are extremely helpful during recessions – yet their 1o year yield is 10.5% and their two year yield is 21%. An inverted yield curve is when short term yields are higher than long term yields. That’s where Greece is today – it’s inverted – despite their economy experiencing "structural headwinds."

Instead, yields are tied directly to the associated risk of default. Greece can’t afford itself and there is little doubt that they will fink on a substantial portion of their debts – the only question is when. That’s why short term lenders are demanding more than 20% interest to lend them money. They’re weak and risk of default is high, and so are their yields. In their case, a stronger economy would lower yields, as their risk of default would lessen. Not the other way around.

To invest in bonds right now is a risky proposition at the very least. To chase higher yields from borrowers like Greece is a fool’s game – and so not worth the associated risks. And at just a couple of bips above inflation, a 2% U.S. bond is just as risky. Sure American yields can dip down lower. Heck, Germany’s 10 year yield is around .67%. Indeed, bets can be placed on lower near term yields and perhaps money can be made. But that doesn’t mean the odds favor such a position.

In fact, the opposite is true. The odds for bonds are in the house’s favor because there is more room for yields to move up than down. To put it another way, there’s more room for bond values to fall rather than rise because yields remain at historic lows. In markets such as these, investors don’t buy U.S. bonds to make money. They buy them for safety and security. They buy them to not lose everything should the world fall apart.

That’s why foreign money is flooding into U.S. bonds. The United States has the greatest system of government, the strongest middle class on the planet, and is the only country to never fink on a loan obligation. And even though the U.S. is more than 100% leveraged (that is, there is more debt than economic output) risk of default is nil. For that reason U.S. yields will remain low as long as the Federal Reserve wants them low, and inflationary pressure remains mute. The level of economic output has little to do with it. After all, yields have been low in America since the Great Recession.

It’s a different story around the world. Countries like Greece are having a hard time raising money even though they offer high interest rates. But let’s face it, twenty percent interest payments aren’t worth a hill of beans if the checks don’t clear.  Greece needs a stronger economy, not a weaker one, to attract capital at lower rates.

Indeed, economic strength would prompt central bankers to raise interest rates. Such a move would be in hopes to slow growth and thwart inflation. But that’s much different from the Wall Street Journal’s pronouncement, that a sluggish global economy will contain high yields. The only thing a sluggish economy contains is prosperity. 

Just ask the Greeks. 

Stay tuned…


The road to financial independence.™

The Fed's Misplaced Priority

Dan Calandro - Wednesday, April 29, 2015

While the markets have oscillated since my last blog their status remains unchanged. All stock markets, American or otherwise, remain near all-time highs. Here are a few Wall Street Journal headlines that can be tied to recent stock market volatility.

  • GDP Growth Estimates Tumble, Again (3.25.2015)
  • U.S. Stocks Down After Weak Economic Data (4.2.2015)
  • Fed’s Rate Decision Hangs on Dollar, Growth Concerns (4.22.2015)
  • European Stocks Tumble as Greece Crisis Roils Markets (4.17.2015)

Economic growth has been weak, uneven, and unreliable since the economy was leveraged out of recession in 2009. That’s because government stimulus programs and ballooning national debt are not ingredients to long-term growth and vitality. Instead, they are unsustainable band-aids that do little more than make things look better than they actually are.

Despite the fragile economic base stock valuations are 24% higher than they were at the peak of the housing-boom, when GDP growth was three times stronger than it is today. The word overinflated is an understatement in today’s stock markets. And how did that condition come to pass? 

Bad monetary policy.

Remember when the Federal Reserve engaged in its low interest rate policy in the wake of the ‘o8 crash? Back then easy money policies were implemented to return the American economy to growth from recession, and to lower the unemployment rate to pre-recession levels. But isn’t that where we are?—The economy has averaged 2%+ growth for more than 5 years and the unemployment rate has averaged 6.5% for more than two years – it’s currently at 5.5%.

Why hasn’t the Fed increased rates? 

Well, according to the WSJ article noted above, "the strong U.S. dollar and unsteady global economy" are the primary concerns for the Fed’s interest rate decision.

So let me get this right, America has to wait for the economies in Europe and Asia to correct before U.S. monetary policy can be normalized.—Really???

Let’s correct the record to begin the discussion. The U.S. dollar isn’t getting stronger; the Euro and Yen are getting weaker, as both the European Central Bank and the Bank of Japan are in the midst of quantitative easing programs. The dollar appears stronger because the U.S. has concluded its devaluing effort via QE. Again, the only reason the dollar appears to be getting stronger is because other major currencies are getting weaker. Dollar strength is via smoke and mirror. 

And while it is true that higher interest rates will "strengthen" the dollar to some degree, and that that event will most probably hurt U.S. exports, those aren’t the Fed’s true concerns.—Instead, they’re worried about the "global economy." There is a reason for this.

Just as the former Soviet Union proved communism a bankrupt ideology, Europe is on its way to do doing the same for socialism – and Greece is the face of it.  That’s why news regarding the financial condition of Greece "roils" the markets.

Consider that the highest individual tax rate in Greece is 45% – which kicks in at just $100,000. On top of that individuals pay a social security tax of 16% and a Value-Added Tax (VAT) of up to 23%.  (A VAT is like a sales tax and excise tax rolled into one.) That is to say high earners can pay up to 84% of their earned income to their central government. Local taxes and fees would be on top of that high central rate. 

Greek Corporations are a bit luckier. They pay an income tax of 26% and a social security tax of 28% – totaling 54% to the central government – plus various other fees, licenses, and local taxes.

Because of the high tax rates Greek unemployment is a repressive 26%, and the economy has been in recession since 2009. And despite the high tax rates 20% of all Greeks live below the poverty line and the government still can’t afford them. Their national debt is 175% of Gross Domestic Product and they can’t borrow any more money.

As Margaret Thatcher once said, "The problem with socialism is that eventually you run out of other people’s money."

The central problem with socialism is that it doesn’t incentivize high output and performance. The tax structure encourages minimal effort and greater dependence on government. How could it not? When people pay an 84 % tax rate they have no incentive to earn at high levels and every bit of incentive to demand more from their government – regardless of their income level.

That’s what inspired the most recent Greek election results. 

Radical left-wing socialist Alexis Tsipras was recently sworn in as the new prime minister of Greece. Tsipras ran as the "anti-austerity" candidate, promising to eliminate EU mandated budget cuts if elected. That’s code word for higher taxes and more government spending.

High tax rates do not make a State solvent. In fact, the opposite is true.  As the population drawing off of the welfare system increases and high earners decrease a budget deficit has no choice but to ensue. Socialist governors like those in Greece then raise taxes higher, borrow more money from other nations, and make greater promises to unhappy constituents who are paying too much and getting too little. But sooner or later the spigot runs dry.

And that’s where Greece is today.

The EU is the chief financier of Greek budget deficits, and they imposed the budget-cut demands in exchange for increased funding. Lenders have that legitimate right. So it should be no surprise that a stand-off quickly followed Tsipras taking office: Greece won’t cut government entitlement spending – and because of that, the EU won’t lend them any more money. And why should they? Greece doesn’t have the money to payback what it already owes. 

Even so, there is little doubt that Greece would have benefited from the ECB’s quantitative easing effort if they played ball and moved towards fiscal responsibility – the policy of affording oneself. But no, Greece isn’t interested in that. They believe they are entitled to more – and that other nations should pay. 

Greece is proving Margaret Thatcher correct – but the proof doesn’t end there. Several countries over there are in major trouble, Portugal, Cypress, Ireland, and Italy, to name a few.

So if the United States has to wait for Greece and the rest of socialist Europe to get healthy before interest rates are intentionally increased then monetary policy may never be normalized here. And that’s the real shame; America desperately needs higher interest rates to incentivize lenders to lend – especially to small businesses. That, along with the boost in purchasing power a stronger dollar provides American consumers, would greatly help strengthen the domestic economy.

But no, the Fed’s priorities are elsewhere -- and their logic is misplaced.

As the "risk-free" rate the U.S. drives world interest rates. Higher rates in America will cause Greek interest rates to move much higher. That will make it harder for Greece to borrow additional funds (a good thing) and most certainly expedite their exit from the Euro. And Greece wouldn’t be the only one -- just the first one. So yes, higher U.S. interest rates would be good for us and bad for them.

Sadly, Europe and their failed socialist cause matters more to our Federal Reserve than the prosperity of American free-market capitalism.

And we let them get away with it. 

 ShieldThe road to financial independence.™

Killing the Markets, All by Myself

Dan Calandro - Thursday, March 26, 2015

One of the most paralyzing conditions for investors is when they’re scared of making a move – afraid of what might unexpectedly happen. How often things don’t go as planned -- and so they sometimes decide to leave well enough alone and hope issues magically disappear and/or correct, and that robust gains will automatically incubate out of thin air. Indecisiveness – that is, not taking action when a different outcome is desired – is an ingredient to failure.

Another tenant to failure is making changes to your portfolio simply for the sake of change. This will only produce change – and it will be luck that determines the outcome, be it good or bad. Gambling requires good luck. Investment requires no such thing.

Positive, long-lasting change comes most easily from logical, calculated reasoning, and superior 15-51 construction.

Confidence begins with an understanding of how your portfolio is built.

As you know, the Dow Jones Industrial Average recently made a component change, replacing perennial underperformer AT&T with consummate highflier Apple. The change was announced on March 6, 2015, two weeks prior to the move taking effect. The announcement, on March 6, caused me to reconsider my portfolio.

Because I know the Dow Jones Industrial Average and the 15-51 strength indicator like the backs of my hands, I instantly knew the impact the Apple change would have on both portfolios. This isn’t because I’m so smart, but because both portfolios are so easy to understand.

For instance, you don’t have to be a rocket scientist to figure that replacing a dog with a dynamo has no choice but to bolster performance. The Dow is comprised of just 30 stocks, after all. A one stock change represents 3% of the entire bunch – until you consider price. 

The Dow is a price weighted average. So at $120 per share, Apple will have about four times the weight as the stock it replaced, AT&T, which is currently trading around $30 per share. That puts Apple at fifth position from the top in Dow Jones ranking – a significant move from AT&T.   

The Apple change has no choice but to dramatically affect the trajectory of the Dow Jones Average.

Knowing this, and that one of my core objectives for the 15-51 strength indicator is to move in a market-like way as defined by the Dow, I knew instantly that the 15-51 indicator had to change when Dow Jones made their announcement. (For more information see: Today’s Paradox: Success with Less Money).

The objective for my 15-51 move was to keep that portfolio on the same trajectory as the Dow Jones Average.

Below is a one month chart of the Dow and 15-51. The dates changes were made to the portfolios are signified with diamonds on their according trend lines.


As you can see, 15-51 continues to move in a "market-like" way. It is also plain to see that it operates in an above-average way. That, by definition, is what it is supposed to do. In other words, my 15-51 portfolio does reliably what it is expected to do. 

Nothing breeds confidence and comfort more than executing objectives.

That’s a key benefit of the 15-51 system. Because it’s so easy to understand and use, desired results are more easily achieved.

Smaller portfolios are easier to understand, manage, and predict.

To prove that point, let’s once again turn to the S&P 500. The S&P is a much larger and more complex portfolio than the two previously mentioned, and because of that, has to change more to achieve its market objective. For instance, the S&P 500 has changed eight times so far this year – and six of those changes were made in the month of March 2015, with four coming on March 23 alone. The chart below includes S&P 500 activity (March 23 is noted with a black diamond on its trend line.)


Remember, both the Dow and S&P have the same exact objective – to indicate the market average of stock market activity. The 15-51 objective is to indicate stock market strength. All three portfolios should move in a similar "market-like" way.

As you can see, the S&P 500 is struggling to achieve this core objective with its most recent moves. But that’s not because the people who manage it aren’t smart investment managers, or because they are trying to make the portfolio move in a contradictory way as the Dow. That’s not it at all. It’s because the portfolio is too big.

Managing a portfolio the size of the S&P 500 or bigger is so much harder than tending to the Dow or 15-51. That’s the reason S&P trends sometimes get away from what their management team wants. Its size makes it too easy to fall short of expectations. 

Smaller portfolios also produce greater investment returns.

This is also the reason teams of skilled fund managers consistently fail to achieve market returns while I routinely kill every mutual fund and market index from here to Shanghai, all by myself. 

And you can do it too.

Easy to understand. Simple to use. Superior results.

ShieldThe road to financial independence.™

Can One Export Derail Them All?

Dan Calandro - Sunday, March 15, 2015

Stock prices and yields are key indicators of economic vitality. In healthy markets they move together higher during expansions, and lower during downturns. These are both choreographed moves from central government planners as well as natural results from free market activity.  

Investors are naturally pulled towards higher rewards – and nothing outperforms the stock market during economic booms. As a result, capital leaves the bond market and enters the stock market during sturdy expansions. In order to lure that capital back to the bond market, borrowers (those who issue bonds) must raise interest rates, or sell their low interest rate bonds at a discount (thus causing the yield to rise), to incentivize those with capital to acquire debt rather than stocks.

In addition to the natural momentum of rising yields during expansions, central bankers add further impetus by raising core interest rates to control growth and thwart inflation. Core government rates drive all other interest rates, so a rise in them pushes all other yields higher than they would otherwise be.

Government action to raise interest rates is known as a "tightening" event.  Tight money and higher interest rates are generally associated with "strong dollar" conditions. 

Rising interest rates and the tightening of money makes a country’s exports more expensive to foreign customers. Such a dynamic causes foreign demand to fall by some measure, which in turn causes corporate profits to fade by a correlating metric.  That’s the reason there has been so much ruckus surrounding the "strengthening" U.S. dollar.

But that’s not the whole concern facing American multi-nationals.

First a quick reiteration of the international environment. The entire Euro Zone has been in a no growth condition for a very long time and Japan (the world’s third largest economy) isn’t much better, growing at a sluggish 1% clip per year. China (the world’s largest economy) has been slowing for several consecutive quarters and recently downgraded their growth target; and Russia is a total mess (more on that a little later). But none of this – repeat, none of it – is new news. American export activity has been weak and unreliable for a long, long time.

So what’s different now – why all the hubbub?

It is important to note that Japan, and more recently Europe, have initiated multi-billion quantitative easing programs – and that is the fly in the ointment.

In America, quantitative easing (QE) was born from the subprime mortgage debacle termed "the financial crisis" which ended with the crash of the financial system in the fall of 2008. An emergency measure called TARP (Troubled Asset Relief Program) was installed just before President G. W. Bush left office – and that’s when the monetary ponzi scheme began. So TARP is the forefather of QE, and the last QE effort in the United States ended in late 2014.

The point here: QE lingers around for a long time once initiated.

QE is monetary technique used to lower yields and devalue currency. QE is a "loosening" monetary event. So it should be no surprise that currencies who deploy it depreciate against those that don’t – as the U.S. depreciated against the Euro when its QE began in 2008, and how Europe is now depreciating against the dollar with its new QE effort.

And let there be no mistake, Europe and Japan are devaluing their currencies with reason. They want to make their products cheaper in their country, for their constituents, and their consumers. Their hope, without question, is for their producers to grow at the expense of foreign competitors like the U.S. and China. It’s quite logical really, and can be tied directly to the U.S. stock market.

Will newly installed QE programs in foreign countries start to steal profits from American producers – and if so, how will that affect the U.S. economy and stock market?

It is important to note that while Europe is the latest to join the QE folly, not every country is playing the same kind of game. China does things much differently, but has recently injected billions of dollars into their banking system to loosen things up. Russia, a country with a $2 trillion GDP, doesn’t know what to do. After raising rates sharply they’re now cutting interest rates to fight inflation and recession at the same time. They’re losing the money game – which is the reason they’re picking on the Ukraine, but that’s another story.

The point here: all major economies have engaged in the first money war of the 21st century – so the ending can’t be good.

Up until now central bankers have been in a collective race to the bottom. The U.S. led the world by aggressively devaluing the dollar with TARP, QE, aggressive interest rate cuts and massive central government spending. Most major countries followed suit with ambitious interest rate cuts and central government stimulus programs, but all opted to stay away from schemes like QE – until recently, that is.

The U.S. was first-in and now it is trying to be first-out of the money pyramid. It is widely expected that the Federal Reserve will start raising interest rates in just a few months (June 2015) – this after exiting QE a similar short time ago. These tightening events are taking place while the rest of the world is loosening monetary policy.

This opposing dynamic adds fuel to the export fire.

Consider that U.S. exports are roughly 14% of GDP. At that contribution a 10% drop would cut U.S. growth in half for 2015. That’s the economic issue to consider – and as we know, economic threats factor greatly into stock price speculation. 

Another speculative threat to prices is the strange new trading environment for stocks. It has been so long since the U.S. operated in a rising yield, tight money environment – especially one that follows such a prolonged period of inflation induced by QE intoxication. This historical first will be interesting to watch.

And since so many foreign countries waited so long to loosen monetary policy as aggressively as the U.S. did, an equally long delay to their tightening events should be expected. That means the pricing disadvantage for U.S. exports will last for some time. Call it a new normal.

Investors need to realize that a tightening monetary event totally changes the stock market dynamic.

Strong expansions like the tech-boom and housing-boom were able to handle strong dollar and tight money dynamics – higher yields and taxes, and costlier exports – and still produce solid growth rates. But this expansion isn’t like those. This economic expansion is centrally levered and directed. The other two were consumer driven, which is the reason GDP growth was so much stronger then than it is today – which is also the reason this economy, corporate profits, and stock prices are so vulnerable.

Confusion about the market’s susceptibility festers because the U.S. economy appears to be strong when it really isn’t. Unemployment is 5.5% – but labor participation is at a 40 year low; the stock market is at all-time highs – but economic growth is weak and uneven; the dollar is strengthening – but that’s only because major global currencies are aggressively devaluing.

These are the same reasons the Dow Jones Industrial Average has been scared away from the 18,500 top, the 10 year yield remains near the basement at 2%, and gold appears weak, down 10% in the most recent month. Below is a two year chart.


Weak and strong are only appearances in these crazy and unprecedented times. After all, we live in a world where the mass media is consumed with speculation about the condition of corporate exports when the root cause of the problem isn’t even mentioned, let alone in proper context. That could lead some investors to question what they’re seeing and believing.

Indeed, American goods are going to get a lot more expensive overseas for a long period of time. Demand for U.S. products over there should fall, and corporate profits and stocks prices here should follow to a correlating metric. And it will be one U.S. export -- a government product called QE – that will cause it all.

Stay tuned…

ShieldThe road to financial independence.™

Recent Posts


Besides receiving periodic updates and alerts, subscribe to our email list and gain direct access to Dan Calandro, award winning author and inventor of the 15-51 system.™ Dan is the ultimate investment coach, and because he provides this service free of charge to his following, you can count on the most honest and unbiased investment advice offered in the industry.

  • Learn
  • Lose Your Broker
  • Knowledge is the foundation of success. Dan’s method is grounded in basic logic and common sense, and is backed by history, fact, and mathematic. It’s easy to understand, simple to use, and consistently produces superior results. Guaranteed.
  • Plan
  • Surviving the Next Crash
  • Having an action plan at the ready is a vital ingredient to transforming the next major correction into the greatest investment opportunity of your life. This captivating new piece is a great addendum to the book. Get it now for FREE!
  • Achieve
  • See the performance you can expect with the 15-51™ system! Dan’s portfolio routinely outperforms the markets by more than 600% over the long-term – and you can do it too! Click on the image to see the proof.
  • Support
  • Dan makes good on his chapter 8 guarantee by personally connecting with his readership to answer questions and coach members through the investment process.