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Bill’s By The Number$

Bill’s By The Number$

  1. WORSE THAN MOST – The S&P 500 was down 3.5% (total return) in January 2014, its worst January since 2010.  January’s performance was worse than 87% of the last 300 months (i.e., 25 years).  The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
  2. STOCKS AND BONDS – In the last 25 years (i.e., 1989-2013), the S&P 500 has produced a total return of at least +20% in 10 different years.  Over the same period, long-term US treasuries have produced a total return of at least +20% in 4 different years.  The Barclays Capital Long-Term Treasury index, calculated using US Treasury issued obligations with maturities of 10 years or greater was used as the bond proxy (source: BTN Research).
  3. ELEVEN MONTHS TO GO – At the end of 2013 (12/16/13), 10 Wall Street equity strategists forecasted the closing value of the S&P 500 as of 12/31/14.  The predictions ranged from a low of 1900 to a high of 2100, with all 10 predicting that the stock index would rise in 2014 from its 12/31/13 close of 1848 (source: Barron’s).
  4. SUPER PRICES – The most expensive Super Bowl ticket (face value price, not the price paid through a ticket broker) for Super Bowl # 1 in Los Angeles (1967) was $12.  The most expensive ticket for Super Bowl # 48 in New Jersey (2014) was $2,500.  The increase in Super Bowl ticket prices from $12 in 1967 to $2,500 in 2014 is equal to +12.0% compounded per year for 47 years (source: Super Bowl).
  5. STOCKS vs. TICKET PRICES – Over the past 47 years (i.e., 1967-2013, or from the time of Super Bowl # 1 to the end of last year), the S&P 500 has gained +10.2% per year on a total return basis (source: BTN Research).
  6. COULD YOU LIVE ON THAT? – 47.8% of the individual income tax returns filed in the USA for tax year 2011 reported less than $30,000 of adjusted gross income (source: Internal Revenue Service).
  7. RATE DOWN, LIABILITY UP – If all state and local governments were to recast their pension liabilities using a 5.5% discount rate, the unfunded accrued liabilities of these public sector plans nationwide would nearly triple from $766 billion to $2.2 trillion.  The discount rate used to calculate the present value of pension liabilities is oftentimes benchmarked to high-quality corporate bond yields.  A majority of pension plans currently use discount rates of approximately 7.5% (source: Moody’s).
  8. NO THANKS – Only 1 in 9 US workers belongs to a union (11.3%), the lowest percentage nationwide since the 1940s.  Participation is just 7% in the private sector vs. 35% in the public sector (source: BLS).
  9. CAN YOU WAIT? – An individual that has earned income up to the maximum Social Security wage base each year who then waits to take his/her Social Security retirement benefit until age 70 will receive +77% more income per month than if he/she had taken a retirement benefit early at age 62 (source: Social Security).
  10. DEBT – Total outstanding debt of the USA was $17.249 trillion as of 1/30/14, up from $17.076 trillion as of 10/17/13, the date that the debt ceiling was suspended per Congressional legislation signed following the 16-day government shutdown.  Congress has had no debt ceiling since 10/17/13, but rather has permitted “normal spending” to occur through 2/07/14 (Friday of this upcoming week), at which time a new debt ceiling is to be agreed upon (source: Treasury Department).
  11. SPENDING – Our government’s projected budget deficit for fiscal year 2014 is $750 billion.  For every $1 of expected tax revenue, our government anticipates spending $1.25 (source: Treasury Department).
  12. LAWMAKERS – Legislation passed by the House last Wednesday (1/29/14) would cut $8.6 billion from the nation’s food stamp program over the next 10 years.  An August 2013 bill considered by the House would have cut $40 billion over the decade.  The Senate is to vote on the latest legislation this week (source: Congress).
  13. WHAT A DISASTER – Property losses from worldwide disasters in 2013 totaled $192 billion, just over half of the $380 billion of global losses (an all-time record amount) from 2011.  The 2013 global total of $192 billion was less than the $210 billion of property losses from the 3/11/11 Japanese earthquake and resulting tsunami (source: Aon Benfield).
  14. NOT SUPER CLOSE – Prior to yesterday’s Super Bowl # 48, only one game (Super Bowl # 25) was decided by a single point.  SB # 47 (played 2/03/13) was a 3-point victory for the Baltimore Ravens (source: BTN Research).
  15. SUPER BET – Prior to yesterday’s Super Bowl # 48, the favorite had won 33 of 47 games, i.e., 70% of the time.  The Denver Broncos were 2 point favorites in yesterday’s football game (source: BTN Research).