Month: June 2012

Cadillac CTS-V When Dreams Come True

Yesterday I participated in the Cadillac Experience at Monticello Motor Club.  This was an event put on by Cadillac to show how awesome the new CTS-V is.  Historically, the thought of a Cadillac conjures up memories of huge, boat-like vehicles that were comfortable and rode beautifully, but were not exciting or fun to drive.   In recent years, Cadillac has tried to change that image.  Cadillac wants their cars to be seen as high performance vehicles that are also comfortable, everyday drivers, so they offered the Cadillac experience.

The day began with registration, lunch and then 30 minutes of class time to discuss the car and proper driving techniques.  The Cadillac CTS-V is a beast of a machine with a 556 Horsepower engine that delivers 551 lb.-ft. of torque.  It is the fastest production sedan in the world and has a 0-60 time of 3.9 seconds.   Needless to say, trips to the grocery store in this machine would be more exciting than in your typical everyday driver.

Our first experience on the track was sitting shotgun as an instructor drove us around the course.  The entire Cadillac experience was driven on the South Course of Monticello Motor Club, which is a 1.6 mile course with 12 turns.  To feel the power and handling of the Cadillac CTS-V as it whipped around the course nearly knocked my socks off – and this was while merely riding shotgun.

The second part of the Cadillac Experience involved the participants driving the cars to test handling and braking.  As I sat in the vehicle, I felt like the seat was hugging me.  It was plush yet supportive.  The steering wheel gave me the feeling of being in a sports car.  The interior was classy, yet modern.  I was already impressed.  As I stepped on the gas, the engine roared like a fire-breathing dragon, yet it was muted beautifully by the vehicle’s impressive sound diminishing technology.

The first stop was at the accelerating and braking area.  As I arrived at the start cones, the instructor said, “FLOOR IT”.  We got up to 60 m.p.h in the blink of an eye, then the instructor said, “Firm brake”.  The car came to a halt as if a parachute flew out of the back of it, yet there was no skidding.  The next part was a drive around a hairpin turn.  This is when I became ultra impressed with this vehicle.  Even though this vehicle is heavy, it cornered impressively, with almost no body lean.

Next was the slalom course, where I was instructed to go as fast as I could while going through 4 sets of cones.  So I floored it.  I made it through the first three sets of cones but was going too fast to recover and make it through the fourth cone.  The instructor told me how valuable a lesson this was.  It wasn’t about flooring it, it was about figuring out how fast I could go to make it through the cones.

The third stop was the passing portion.  Cones were set up to simulate passing a vehicle.  The purpose of this portion of the course was to test handling, acceleration, and braking.  I stopped at the cones.  The instructor said, “floor it”.  So I whipped around the cones, flew into the braking area, and stomped on the brakes.  The massive brembo brakes brought the car to a quick stop, again with no skidding.   We performed these exercises 5 more times to get a feel for the car.

Then we went back to the classroom for more instruction.  The next portion of the Cadillac Experience involved driving the course behind an instructor in order to view the proper lines to take around the course.  It was difficult to keep up with the instructor the first couple times because I couldn’t seem to harness the power of the car coming out of the turns without creating under-steer.  But the third time, I was able to keep my car behind the instructor as if we were connected by a steel rod.  This provides a testament to how easy the Cadillac is to drive.  The steering is not too stiff, and not too loose.  It is just right, and the car is superbly responsive.  The most amazing thing about this vehicle is the lack of body roll as it zooms through the turns, considering it is over 3800 pounds.

The third portion of the Cadillac Experience allowed us to drive the car around the course on our own.  I had only driven the car a few times, yet already felt like it fit me like a glove.  The final part of the Cadillac Experience was a “hot lap” sitting shotgun as the instructor showed us the true abilities of the car, and how fast a professional driver could make it around the 1.6 mile course.  My heart was in my throat.  I could not believe how fast we were going and at many points thought to myself, “there is no way we are are going to make it around this turn at this speed.  Yet, the Cadillac CTS-V handled it like it was a walk in the park.

I have always owned foreign cars, and have driven a BMW 650i and the BMW B7 Alpina.  In fact, I have said that I would never buy an American car.   Participating in the Cadillac Experience, and driving this world class car, has completely flipped my belief system on its  head.  As of the day before the Cadillac Experience, I coveted the aforementioned BMW’s.   I now covet the Cadillac CTS-V.

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A Rock Solid Mutual Fund

When choosing funds to diversify their invesment portfolios,  most people simply consider the various forms of stock and bond mutual funds.  They assume that having x% in large cap, small cap, and international and x% in bond funds makes their investment portfolio diversified.  The problem with this thinking is the near 30 year bond bull market is nearing its end.  When interest rates rise, bond funds will perform terribly.  Also, when interest rates rise substantially, the stock market will also perform poorly because higher rates = higher borrowing costs for companies = lower earnings.  Considering interest rates are near 0, and Ben Bernanke is a believer in the Taylor rule, when rates rise, they will rise quickly.

In order to squeeze out more performance in our portfolios when interest rates begin to rise, it will be necessary to thing outside of the box.  One mutual fund to consider is the Permanent Portfolio (PRPFX).   This fund consists of 20% gold, 5% silver, 10% Swiss Franc assets, 30% stocks, and 35% dollar assets.   It is considered a conservative allocation fund and has performed admirably over the last 10 years.  Here is a link to the semi-annual report if you want to view the holdings and other information about the fund.

The fund is not designed to have huge returns, and investors should not expect the fund to return 10% per year, as it has over the last ten years.  It is designed to be a conservative place to put your money.  Average annual returns are

1 yr: -1.92%

3 yr:  11.52%

5 yr: 7.72%

10 yr: 10.44%.

Very recent performance has been poor, mainly due to the price of gold and silver collapsing over the last year.  However, a very attractive characteristic of this fund is it has only been down one out of the last 12 calendar years.  In 2008 it was down 8.36%.  But, almost all mutual funds were down that year due to the financial crisis.  If you are looking for a conservative mutual fund that is diversified among several asset classes, the Permanent Portfolio should be high on your list.

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