Bryan Perry's Cash Machine: Double-digit Income Investing

Weekly Update: December 15, 2014

The Upshot of a Down Oil Market

Markets around the globe are retrenching some hard-fought gains in lockstep with the rapid decline of crude oil prices. The drop in crude prices is nothing short of a crash as Saudi Arabia, Iran, Kuwait and other smaller oil-rich nations that are bringing oil to markets as low as $10 per barrel. They are attempting to orchestrate a strategy to curb U.S. production from the shale energy boom that has America importing the least amount of oil in the past 10 years.  The table below illustrates the pace with which OPEC imports have been reduced during just the past five years.

While consumers are cheering lower gasoline prices, currently averaging $2.50/gallon on a national basis, stock investors are feeling pain from how the market is responding to cheaper fuel, as it's viewing the free fall in oil prices as a net negative for global growth. Whether this perceived notion of oil is pointing to a global slowdown or whether the market has it wrong and this is simply a supply glut that will act like a massive catalyst for global economic growth isn't known as the oil correction has been so swift.


Monthly Issue: December 8, 2014

Adjusting for a Fluid Energy Market

Heading into the close of 2014, the major averages are pushing higher, with the Dow and S&P posting record highs, the Nasdaq not far behind and the Russell 2000 lagging. The bond market has been the standout performer all year, with the 10-year Treasury gaining 17% and leaving most fund managers wondering how that could of happened in a recovering economy with the Fed exiting quantitative easing.

Overseas interest rates are getting pushed lower by a combination of slower growth, bearish commodity prices, big doses of fiscal stimulus and the perception of chronic deflationary pressure. This has other developed country sovereign debt yields trading well below what's offered by U.S. Treasuries. The current 2.3% yield on the U.S. T-Note looks cheap by comparison to that of the German 10-year at 0.69%, the Spanish 10-year at 1.78% and the Japanese 10-year sitting down at 0.50%.


Compare & Contrast

The compare and contrast feature includes a table of guaranteed yields reflecting current yields as a way to compare risk-free investments versus recommendations within the Cash Machine service. Having a handle on what Jumbo Certificates of Deposit, Treasury Bills, Treasury Notes, Ginnie Maes and Money Markets are paying provides important reference points for investors stepping outside these traditional and ultra-safe investments.

Yields determined as of 11/10/14.

Securities Yield
30-Day Treasury Bill 0.04%
1-Year Treasury Note 0.12%
5-Year Treasury Note 1.60%
10-Year Treasury Note 2.32%
30-Year Treasury Bond 3.04%
Taxable Money Market 0.27%
Tax-Exempt Money Market 0.12%
1-Year Certificate of Deposit 1.12%
5-year Certificate of Deposit 2.30%
SPDR S&P 500 ETF (SPY) 1.84%
The Average Cash Machine Investor 11.99%

Watch List

I'm always looking for new investment opportunities to add to our portfolios. Here's what I'm researching right now. I'll let you know if any of these companies meet my buy criteria.