A Fly (Spy) On The Wall

FlyThe conversation started when daughter Holly asked, “Are you really going to drive for over six hours to meet a guy for lunch?” “Yep!” I said. My wife Jo chimed in, “Dennis is good friends with Chuck Butler who retired from EverBank and writes the Daily Pfennig. They will probably spend 1 1/2 hours solving all the problems of the world.”

My response; “Naah! We can solve the world’s problems in less than an hour, we will spend some time talking baseball.” Both girls laughed when Jo said, “I’d love to be a fly on the wall listening in on that conversation.”

Jo’s remark clicked. Many readers love Chuck and have followed him for years. I told a couple of readers we were going to meet, and they made similar remarks – they would love to be listening in. OK, why not? We will take a cue from the famous band, James Comey’s FBI Leakers, and listen in.

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Some background

When I was contacted by Casey Research to write a column, I was concerned. Their newsletters were complicated, filled with big words, fancy acronyms and sometimes difficult to follow.

Chucks’ down to earth, easy to understand style in his Daily Pfennig was more like me. He’s a straight shooter and tells it like it is in ordinary, everyday language.

I asked Chuck if we could talk. I wasn’t sure I fit the Casey Research mold. Did he think I could really write for them? Would they let me be me? I expected maybe ten minutes of his time.

Over an hour later I had a page of notes, my confidence bolstered, and off I went. When Casey Research was sold, Chuck encouraged me to start Miller, On The Money and continue doing what I love. Were it not for his help and encouragement, I would not be writing today. Damn right I’ll drive for six hours to meet him for lunch.

A Fly (Spy) on the wall

Chuck and DennisChuck looks terrific. Chuck is always smiling, but he was more relaxed than I can ever recall. Our meeting was one year after he retired from EverBank. While he may not be driving to the office every day, he is still doing what he does best.

Chuck is still writing the Daily Pfennig. (It’s free) I urge every reader to sign up and READ IT! After a week or so you will totally understand why I feel as I do – there is nothing else like it – anywhere. Chuck has become my go-to resource when I need help.

We discussed the recent article in Financial Sense by Jim Puplava, “Liquidity Crisis Looming”. Several issues are major concerns:

“On a daily basis, almost 90 percent of trading on exchanges is carried out through high-frequency trading and index investing….

We’re seeing a greater concentration of risk among passive index funds and ETFs. The top 10 holders of the FANG (Facebook, Amazon, Netflix, and Google) stocks are all index funds….

Today, index funds account for 43 percent of all stock fund assets, and this is projected to be 50 percent in the next 3 years….

In total, index funds represent $7 trillion of U.S. stock funds that have no active manager. All buying and selling are done automatically.

Ownership of stocks in the S&P 500 is concentrated with three companies: Vanguard, BlackRock, and State Street. They represent about 88 percent of the S&P 500, and if we include Schwab and Fidelity, over 90 percent of the S&P 500 is basically now in the hands of five companies. (Emphasis mine)”

My first question for Chuck was, “Put yourself in the position of a recent retiree who may have a good size nest egg (maybe 401k) that they now must self-manage. Where do they go for help?”

The major brokerage firms all sing the same song, “come in and let us do a free financial analysis.” They fill out their company worksheet and feed the information into their computer. Out pops a recommended portfolio; the vast majority consisting of their company funds – where they earn management fees.

What about Certified Financial Planners (CFP) and those with advanced education and licenses? While they may look at a bigger picture like life insurance, annuities, estate planning, and taxes, don’t be surprised when you find they have their own computer program that does the same thing that Schwab or Fidelity – or they just job it out to “their resource”. The result is a family of funds that is theoretically diversified for safety.

One reader told me that they asked their CFP about annuities. He referred them to “his resource” – an annuity expert. After they read our “On The Money” Annuity Guide they said they were sold a high commission variable annuity, not one best suited for their needs.

Chuck’s response was how retirees must understand and direct their financial managers and broker. When he bought an annuity, he told his manager exactly what he needed.

Never forget, your financial manager works for you and you must oversee the process.

You may be surprised when you ask your money manager about stop losses, foreign currency or owning metals for inflation protection. The companies that now hold 90% of the S&P 500 want to continue to manage as much of your money as possible and charge their fees.

What happens when there’s a market downturn, people get frightened and want to get out of the market? We agreed with Jim Puplave’s concern:

“This may leave us facing nasty results, because in the event of a market downturn, as these ETFs and passive index funds crowd to exit their positions, they create a market liquidity trap as there is no one left to sell to.”

When the public gets scared and wants out of the market, will the government step in and take the other side of the trade? Imagine what happens if the big five, controlling 90% of the S&P 500, put in huge sell orders. As the market drop accelerates, sell orders are executed – triggering more sell orders by the automated traders, causing the market to drop even more quickly and dramatically….

Where will it end? How low will it go? Which accounts will be looked after versus those who take the biggest loss?

Why do we suspect Senator Blowhard, who sits on the banking committee is at the head of the line, while Joe Smith, truck driver from Selma, AL finds his shares redeemed at a much lower price?

We concluded that no matter what credentials your financial manager might have, their heart can be in the right place, and they can be doing the right thing by looking after your interest – you are still at the mercy of the financial institution that is making the trade. Stop losses, gold, position sizing, diversification, and foreign currency can all help insure against losing everything, but all investors are still very vulnerable.

Chuck’s comments on gold mining stocks:

If you buy a Gold mining company, you should know a LOT about the company, the people and much more….

But with physical Gold, you only have to know the current price!


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Moving on

I lamented to Chuck that I’m frustrated by the number of retirees who blindly follow the advice of their financial managers; particularly those who may have lost their spouse. It’s very sad when the money manager is the first to go; the survivor is totally vulnerable.

We have friends who lost their spouse and soon were in relationships with what appears to be financial predators. One predator was a “grief counselor” at the local church, theoretically helping people who recently lost their spouse.

Others are getting bad advice, buying high commission products or making poor investment choices because the “nice young man” said this is what they should do.

Some feel their children can help them manage their money. Unless your children are financially savvy, you could be making a mistake. While their hearts may be in the right place, your concern should be their financial acumen and skills.

I’ll never forget the letter from an 82-year-old widow who had “helped out her children quite a bit” and now she was broke and scared. Her final remark, “You give me hope.”

How do we encourage the non-financial managing spouse to learn about retirement planning – so they cannot be taken advantage of? What if one spouse makes it clear he/she does not want to learn?

We have seen cases where the financially savvy spouse bought annuities and other financial products to make sure their partner is protected.

Chuck brought up an interesting point. Well educated, smart people may be pushing back for different reasons. Might it be that embarking on an educational journey is admitting you are both aging, and the day will come when your partner will die? I never thought of the emotional aspect, and it makes sense.

We were not sure how to solve that challenge unless it is with third-party help facing life’s issues. If that does not work, then the financially savvy partner will probably have to work around it trying to insure their partner is well protected financially for the rest of their life.


Chuck Butler writes a weekly column for The Dow Theory Letters. I’m impressed with the quality of the research. They provide a terrific guide for portfolio allocation – including precious metals.

They have offered Miller On The Money readers – a special introductory discount – 10% off their 3-month trial, or 15% off a full year subscription.

CLICK HERE to order the 3-month trial.

CLICK HERE to order the full year subscription.

These are special links for OUR READERS ONLY and the discounts are factored in.

I won’t bore you with the baseball talk. I’ve outlined the major issues that Chuck and I discuss regularly. You have worked hard to accumulate your nest egg. Making it last so you can enjoy a comfortable retirement is a job that must be done!

Hopefully, the FBI and other spooks who may have been listening in got some good advice.

On The Lighter Side

Remember the movie, “A League of Their Own?” It was about a woman’s baseball league started during WWII.

High School GymThere was one scene where a country girl was trying out for the team in a small high school gym and she smashed the baseball through the window.

That scene was shot in the New Harmony, IN high school gym, where my wife Jo went to school. The school is gone, but the gym remains.

I’ve mentioned that every Memorial Day Weekend they have a reunion for all New Harmony high school graduating classes. Tables are set up by graduation year. Six of Jo’s 16 classmates attended; all lifelong friends. In some cases, there were three generations of family attending.

The highlight for me was when they asked the oldest and then the youngest alumni to stand. A little lady, with beautiful grey hair, stood alone. She graduated in 1948, celebrating her 70th high school class reunion. She had not missed a reunion. She attended the annual banquet each year – for the last 70 years. Wow! The youngest alumni presented her with a beautiful rose.

What a visible display of life. If young people want to see what they will look like as they age, all they needed to do was look around the room.

I LOVE small town America and what it stands for. I’ll admit that there were tears running down my cheeks.

And finally…

Phil C. sent along some lessons in life from a 90-year-old woman.

  • Life isn’t fair, but it’s still good.
  • Life is too short – enjoy it.
  • When it comes to chocolate, resistance is futile.

And my favorite:

  • The best is yet to come!

Until next time…


  • Rebecca Smyth

    I read several of your writings, Dennis. Loved it all. Keep writing, setting goals and enjoying life. Proud of you and Jo Ellen, too. Fred and I are glad we got to spend time with you both.

    • Dennis Miller

      Hi Becky,

      Thanks for taking the time to write, I do appreciate it.

      So when is Ireland gonna happen???


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