Interesting situation, crude May futures contracts are up about 10$ from the year bottom. The price is out of the sharp downtrend but facing horizontal resistance from current level all the way to 66$. (The 50% Fibonacci line).
Nation’s 4th Largest Real Estate Broker To Provide Video Podcasting Servic
Real Living, the country’s 4th-largest real estate brokerage, has partnered with MLPodcast to provide their agent network with listing and community video podcasts. Using existing still photos, listing data and marketing copy, MLPodcast produces high quality music videos with professional voice narrations.
EBI didn't recover today with a close at $4.40. EBI had an intraday high of $5.25 on the 26/2/2007 and the trend has definitely broken. I highlighted this one as an ASX opportunity looking weak after yesterdays sell off. I'll wait until Monday before deciding on the others that closed below our stop loss.
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How Smart are the Smart Guys? A Unique View from Hedge Fund Stock Holdings.
By: John Griffin, University of Texas & Jin Xu, Zebra Capital Management
Published: August 21, 2006
Thanks go out to Mebane Faber at WorldBeta for giving us the heads up about this article. Mebane has an interesting blog that amounts to a live test of alpha-centric [...]
Meanwhile Hedge Fund Sector Returns Can be Synthesized
By: Alex Dunnin, Financial Standard
Published: February 26, 2007
State Street Global Advisors looks to be the next major player to enter the hedge fund replication business. Paul Brakke, Senior Managing Director at SSgA is down under this week pitching pensions on the latest craze. Says Financial Standard:
“By using benchmarks [...]
Pulitzer Prize jurors will meet next week to mull over the best of this year's journalistic offerings, and one series getting notice is the Boston Globe's in-depth Debtor's Hell investigation. I've been reading through the pieces during my downtime; there's a lot of material, and it's excellent. The Globe documents both the skyrocketing growth of the problem -- between 2000 and 2005, the number of debt-collection lawsuits filed in Mass. averaged out to one for every five households -- and the catastrophic flaws of an overwhelmed regulatory system that lacks the resources and manpower to keep abuses in check.
I love rigorous work like this that shows off journalism at its best. When regulators, politicians, and the courts fail to protect citizens from predatory practices and ensure just outcomes, we need media attention to focus a spotlight on the problem. Accountability begins with awareness.
In the spirit of spotlighting, I also wanted to point attention to a fantastic piece from last spring in the New York Review of Books: "The Health Care Crisis and What to Do About It". Ostensibly a critical look at several recent books on the U.S. health-care system, the article is really a rigorous examination of what's going wrong, why, and what issues reform measures will need to address.
And if anyone needs another example of why the heath care status quo is not acceptable, just take a look at today's Washington Post: "For Want of a Dentist". The unwritten rest of that headline is "... a ten-year-old boy died from a toothache."
Below is an image from The Wall Street Journal that shows the data glitch that occurred, causing the sell off to look more dramatic then it really was.
The US market revived as Federal Reserve Chairman Ben Bernanke soothed markets, increasing investor confidence at least for the short term. China, The Dow, S&P 500 and Nasdaq Composite Index were all up yesterday and the ASX is expected to
Lately I've been lamenting the fact that I don't have an emergency fund. I've read the articles, and I agree that it's a wonderful, great idea. However, the closest I've been able to come is to save up my paychecks each month to pay for the next month's expenses... thereby giving me a small cushion. But, in reality, I crave the peace of mind that I know having "3-6 months worth of expenses" tucked away would give. I also crave getting my credit card debt paid off as soon as possible. Now how in the world does one balance these two?
In the end, having looked hard at my particular situation, I think I'm going to either completely forgo the emergency fund for now... or just put away one month's worth of expenses.
Why, you ask, if I know how important an emergency fund is, am I deciding to forgo one? Because I looked over my risks of having a major life emergency... and how one would effect me if I did, and have decided that my risks do not yet warrant forgoing paying off my high interest debt to sock money away in an account that pays substantially less in interest than I am paying for the interest on said debt.
Am I crazy? Well, let me lay out the particulars... and then I would love to hear your feedback! Below are the things that in an emergency I would use my fund for - and my explanation for why at this point in my life I can wait a bit for the emergency fund.
Car - I have one, but I don't use it to get to work (I walk). If it broke down or worse, completely died, it would suck, but I could live without it.
Apartment - I'm in the process of signing up for renter's insurance, so my "stuff" will be covered. If the place burned down it would definitely not be good... but I have people to crash with and I could find a place in my area relatively quickly.
Health - I have excellent health benefits - if my health takes a turn for the worse, I'm covered.
Disability - I have both short term and long term disability coverage.
Computer - yes, this one gets it's own category :) If my computer died on me, I would be devastated. But, I have access to computers at work, and my roommate has a computer so I could live until I saved enough to replace it.
Job - yes, if I lost my job I would be in a bit of a bind without an emergency fund. However, the risk of me losing my job is relatively low. I work in a staff position in a university setting.. and my job is not dependent on grant money. That being said, if the worst did happen I have discussed my "going to wait on the emergency fund" choice with certain key people in my life (i.e. immediate family) and they have agreed that if I did in fact lose my job they would help me out.
Cat - if my cat needed any expensive surgery, etc. I would in fact be screwed. This is actually the only reason I will probably opt for a "1 month" emergency fund rather than literally no emergency fund. However, as you can usually work out a payment plan for services I think the 1 month fund should be sufficient for this.
So, all that being said, I feel pretty confident in my choice to throw all of my money at my debt and wait until after most or all of it is paid off to build up an emergency fund. I look forward to hearing everyone else's opinion though!
February has quickly come to an end. Here are some notes on my life and finances:
I have given notice to my employer. I have a few weeks left however.The market took a dive recently, I checked on my Roth IRA and it lost almost 4%, which is over $100! My 403b lost well over $50.Donation time! January was hunger, and February is the environment. A donation of $100 dollars was made to the
Marti deserves and Oscar, but not for this film. Admittedly, I've not seen ANY of the others on the shortlist but!
Mou gaan dou the original Hong Kong 2002 flick "Infernal Affairs" which The Departed is based on is far far superior as a movie! excellent, as is Infernal Affairs II. Infernal Affairs III sucked though.
And I thought The Last King of Scotland was a great Hollywood Movie - not a classic, but for an accessible blockbuster style movie it was great.
Vehicle is paid off. Savings is increasing. The lull in posts was mainly because all we could be doing for the past few months was save. save. save.
1. Jeep is paid off as of January
2. Savings has increased to $8000 total
3. Side jobs are bringing in about 800 a month for the time being.
4. Retirement accounts are slowing growing with now a total of $14,000
5. As of the Jeep being paid off, my month savings contribution has increased to $1,200 not counting any extra income from side jobs
5. The girlfriend will be pulling in a steady paycheck for the next 5 months or so. (now, most of this money will go to her paying off debt, but some will go to our savings )
It was only yesterday that I posted on how we have had an incredible Bull Run over the last 4 months, and it was only a matter of time until there was a slip up along the way.
Quite often, it only takes one small trigger for the domino effect that is falling share markets across the world. Today we saw after whispers that the Chinese Government, in an attempt to slow down growth, will begin taxing capital gains on shares bought and sold on the Chinese share market. This triggered the largest sell off on the Chinese market in 10 years, followed by the largest in the US and Australian markets since September 11.
So, investors that have panicked to sell off their investments and place them in super (of which possibly close to 50% is invested in Australian equities), today saw thousands wiped off the values of their super. I am now kicking myself that I didn't practice what I preach and Short Sell the S&P ASX 200 Index yesterday.
What is Ironic is that those cautious investors who have been sitting on the fence, waiting for the legislation to be passed through Parliament finally got the news they have been waiting for this morning. The super changes that have been proposed have been signed off by the Senate and are now Law. Good news coming to those who wait, or just a fortunate coincidence of events?
Is the Bull Run finally over? Most think not. The market is likely simply correct to more sustainable levels, consolidate for a while, and run again when we've all forgotten about the issues of today. Such is the nature of the beast.
I can't believe I forgot to post about this. Blame it on my hiatus and just being busy in general.
I got a new job ;) As I've written here before, I do a lot of contract work on the side. I have been doing it for a little over a year. Well, over the christmas holidays I was told that the company was generating more business than we could handle as part-timers. So, the owners asked me to jump with them and go full-time.
We all quit our days jobs in mid January and have been working at this since. I'm a lot busier than I was at megacorp, and my job responsibilities have increased beyond just programming. I am involved a lot with business decisions from interviewing and salary recommendations to planning and revenue discussions.
Salary wise, the move was somewhat of a lateral one for me. Meaning, on a yearly basis, the salary is comparable. However, the compensation package is less. I get no paid holidays, my health insurance is four times more expensive, and I don't get a lot of the little perks that add up. However, I have infinite more flexibility with my work hours (even though they are more!), and there is the potential for profit sharing next year if our growth rate continues.
The biggest hit to my bottom line is that I no longer have a side gig paying a 25% "bonus" to my day job. However, it's important to realize that even if I'd stayed at megacorp, I'd have lost that portion of my yearly income. My new company needed a full timer, not another contractor. So that gig would have dried up for me no matter what.
Anyway, I'm getting in at the ground level with a new company. Even though this is technically our third fiscal year, we all had day jobs before this. I'm betting on this really taking off and being a company I can grow with for the next 10 years. Ideally, I'll be able to evolve with the company and take on new roles. After all, I can't see myself being a programmer for the rest of my career.
I'm pretty sure everyone is posting about today's market movements. So I'll post it from my perspective.
First, the numbers: Drop of 3.428%, which was a four figure drop for me (my biggest one day loss so far). Needless to say, this has thrown a wrench into the end of year goals I had.
Funny, even with this big of a hit, I'm not really phased. I started investing last year, and threw all my cash into the market right before the big dip in May. That really helped me get used to the idea of buying on the way down, and I ended up stronger for it.
This year will be no different. I've got 4k (a lot for me!) ready to invest later this week. This dip just means I am getting it all on sale ;)
The All Ordinaries closed down 2.45% or 148.1 points, matching the losses of China, US and Europe. Although IDL and EBI closed below our stop loss I'm inclined not to recommend any sells until we view the close of US market tonight, but EBI is a possible sell based on its close.
We noticed a lot of the ASX opportunities closed higher from the early sell off, with CHC the only stock closing
Today I ate an odd combination of foods. This morning when I finally ate something I fixed up a potato patty (from the left over mashed potatoes), an egg and some left over bread pudding. Tonight as I am battling the beginning's of my first cold this winter, I again fixed another potato patty and heated up the last of the left over bread pudding.
No, we're not talking about the limbo. Here's the latest, according to CNN headline news.
"Stocks tumbled across the board Tuesday, with the Dow sinking about 500 points at one point. It closed 415 points down -- the biggest one-day drop since the stock market reopened after the September 11 attacks. The New York Stock Exchange tried to limit declines by imposing trading curbs. The selloff is on the back of a nearly eight-month rally."
My stock investment account plummeted by more than $5,000 today. Ouch! And the verdict is still out on my mutual funds and retirement accounts. It's a good thing I'm in it for the long haul. But still....
According to a study released today by investment bank Putnam Lovell NBF, alternative asset managers represented nearly one-third of all acquisitions in the asset management industry in 2006 (59 transactions totaling $175 billion). In part, the firm chalks this record number up to increased demand for absolute return products:
“Demand for absolute return continues to rise: institutional [...]
Hedge Fund Copycats Catch Mutual Fund Buyers as Returns Dwindle
By: Danielle Kost & David Clarke, Bloomberg News
Published: February 26, 2007
There is a common belief in the asset management community that retail investors are “return chasers” compared to institutions. In other words, it’s generally tough to convince a retail investor that a loser fund is actually a great investment because [...]
How is the market going to react today. The DOW dropped 416 points (3.29%), with as much as 546 points during the days trading before recovering. This was the biggest days drop since the Sept. 11, 2001, terrorist attacks.
Trader Mike discusses how traders on the floor alleged bad data with "some sort of technology bottleneck was responsible".
The ASX will be looking at a similar drop
What do you get when the government takes it upon itself to supply a commodity at zero price to the consumer? You get a lot of surprised bureaucrats, and headlines like this:
Demand for English Lessons Outstrips Supply
That particular headline's from a story by Fernanda Santos in the Feb. 27/07 New York Times ($$ subscription required soon). It deals with the woes suffered by government programs aimed at teaching English to immigrants to the US, and the woes experienced by the immigrants who want to take the English classes. The main woe, from the consumer's point of view? Long wait times.
As immigrants increasingly settle away from large urban centers — New York’s suburbs have had a net gain of 225,000 since 2000, compared with 44,000 in the city — many are waiting months or even years to get into government-financed English classes, which are often overcrowded and lack textbooks.
A survey last year by the National Association of Latino Elected and Appointed Officials found that in 12 states, 60 percent of the free English programs had waiting lists, ranging from a few months in Colorado and Nevada to as long as two years in New Mexico and Massachusetts, where the statewide list has about 16,000 names. .............................................................................................................
Luis Sanchez, 47, a Peruvian truck driver for a beer distributor in New Brunswick, has been in this country 10 years — and on the waiting list for English classes in Perth Amboy five months. “You live from day to day, waiting to get the call that you can come to class,” Mr. Sanchez said in Spanish, explaining that he knew a little English but wanted to improve his writing skills so he could apply for better jobs. “I keep on waiting.”
Mr. Sanchez is unlikely to get the call soon: Perth Amboy’s Adult Education Center recently discovered that it was operating in the red and canceled 9 of its 11 evening classes in English as a second language, including all at beginner and intermediate levels. In Orange County, N.Y., where the immigrant population doubled in the past 16 years, the Board of Cooperative Education Services’ adult education program has stopped advertising for fear its already overflowing beginner classes will be overwhelmed.
And with any zero-price-out-of-pocket system you get rationing:
In Framingham, Mass., 20 miles west of Boston, hundreds of people used to spend the night in line to register for English as a second language, so the program now selects students by picking handwritten names from a big plastic box.
“With the lottery, everyone has the same chance,” said Christine Taylor Tibor, director of Framingham’s Adult E.S.L. Plus program. “Unfortunately, you might have to enter the lottery several times before you get in.”
A lottery is fairer, in some gambling-inspired sense, but is it optimal? The older system, unpleasant though it was, acted as a signal of the value applicants put on getting into the program. At least, if you assume that the fact that some people were willing to line up all night to get in was an indicator of the value which those people placed on the classes.
Advocates for more English classes say the state-federal financing split leaves an adult education system whose quality and reach vary widely from place to place — and is lacking most everywhere. Senator Lamar Alexander of Tennessee, where the immigrant population has tripled since 1990, largely because of an influx of Mexicans, sponsored a bill last year that would have given legal immigrants $500 vouchers to pay for English classes since so many of the free ones were full.
“Most education policy is the prerogative of state and local governments, but I would argue that the prerogative to help people learn our common language is a federal responsibility,” said Senator Alexander, a Republican who was education secretary under the first President George Bush. “If we make it easier for people to learn English, they will learn it. I think that ought to be a priority of our government, and I don’t think it has been.”
The government-financed classes are most often run by school districts or worker training centers and generally require only a registration fee of perhaps $10. Libraries, churches and community centers often also provide free or inexpensive classes, like the English Language Institute at Westchester Community College in Valhalla, N.Y., which offers nine levels of instruction for $76 to $247 per three-month session. Then there are private programs like the one at Pace University in Pleasantville, N.Y., which costs $790 for two classes a week for 14 weeks.
Then there are employer-based public-private initiatives:
At Skyline Furniture Manufacturing Inc. in Thornton, Ill., a suburb of Chicago, about half of the company’s 60 employees have learned English at the factory over the past five years, under a state program in which the government pays to bring teachers to work sites if companies pay workers for the hours in class.
“It makes sense to us because our workers can do their jobs better, and it makes sense to them because they can advance in their jobs,” said Cinthia Nowakowski, the plant’s manager, adding that three of the company’s eight foremen were promoted after completing the program. “Besides, it’s convenient. The guys don’t have to worry about having to arrange transportation to get to school or getting there and finding that there’s no room in the class.”
So why don't more companies do this sort of thing, and do it without government aid? From the company's point of view, teaching their workers English is an example of an investment in what's known as general, rather than specifichuman capital. It's undoubtedly true that, as a result of having the training, the workers will be better at their jobs, but the down-side, from the company's perspective, is that it also makes them more marketable to other employers (see the quote from Luis Sanchez, above). Not to mention the time lost from production. For this to make sense to the company, there must be an expectation that the improved productivity of those workers who stay with this employer will outweigh the lost productivity during the classroom time, plus the productivity which is lost when some newly educated workers get jobs at other firms and have to be replaced by less skilled ones, whose English might not be good. Asking the company to swallow the cost of paying the instructors might tip the decision at the margin.
Carl DeJura, director of adult basic education at Brookdale Community College in Long Branch, N.J., said he has lately crammed as many as 40 students into a class — “double what it should be.”
“If you have to cut back on textbooks, supplies and materials to serve the people who need it,” he said, “that’s what you do.”
English language courses like this are very valuable, but in trying to decide how to implement them you have to remember that demand curves slope down and that a zero price will result in excess demand. You've got to think that there would be a way to run these so that, say, university English students could make a profit by teaching the classes. Although classes in deconstructionism would probably not increase anyone's productivity by all that much.
Still, think about it from another perspective. An important service being supplied by the government at zero (or near zero) price to the user, resulting in excess demand, long waiting times, over-crowded facilities and suppliers having to cut back because they've run through their fixed budgets.
Maybe the Americans are ready for single-payer health care after all.
I've transferred the remaining balance (almost entirely bonuses) out of my ING account. I was holding onto it for reasons that really didn't make any sense in the long run. I still think it's an easy introduction to the world of online savings, but I know I can do better. I'd like to say that I'm taking the money and immediately putting it into Emigrant, but instead, I'm using it to pay off the plane ticket for my trip next month. Since I haven't left town since Thanksgiving, I'm counting this as a worthy expense.
I'm also shifting my emergency fund to E-Trade next month. I found out about the signup bonus over at BankDeals, and that tipped me. It has beneficiary service, although not quite as smooth a signup as the CSR promised, and local branches if I really have an issue that needs personal resolution. So now all my online accounts will be earning 5.05%.
I get a much lower rate on my "overdraft fund," the credit union savings account available for immediate transfers to my checking account or credit card. I don't fret about that because I only hold $300-$500 there, and I figure the peace of mind from having instant access to extra cash is worth a few pennies in foregone interest.
I am nothing if not consistent, and staunchingly stubborn in my views and opinions. Remember when I first opened the debate on money vs. happiness? Maybe you’ve caught my recent thoughts about lack of money creating unhappiness when I decided to add “The Pursuit Of Happyness” to my list of movies to watch.
And while most people just got over the excitement of the Academy Awards, I’m staying excited to recommend another movie for you! The movie isn’t even out yet, but the theme and inspiration for the movie will certainly add another dimension to the debate of money vs. happiness. I do not believe that money begets happiness, and feel it’s always important to prioritize what’s truly important, even as we choose to accumulate wealth. On March 9th, you may feel the same as me after watching “The Ultimate Gift“. What’s so good about the film’s message?
The Message
To understand the message is to understand how the movement came about.
A few years back, a little book started something very big. A message that has already prompted people to give to others, connect with friends and family, and help those in need like never before. Every one of us has powerful gifts to share, now we all have the added inspiration, resources and opportunities of a full-fledged movement. Each day, the momentum grows and the impact widens, as The Ultimate Gift continues to inspire thousands, if not millions, of others to share the gift and change the world.
The Story
The inspired movie will make for a good family movie night. Couples who are searching for the answer to what they would like to find in their lives, in each other. Even if you are single, a young adult or even just a kid, this can be life changing event that helps in your search for the significance of your being.
When his wealthy grandfather dies, trust fund baby Jason Stevens anticipates a big inheritance. Instead, his grandfather has devised a crash course on life with twelve tasks – or “gifts” – designed to challenge Jason in improbable ways, sending him on a journey of self-discovery and forcing him to determine what is most important in life: money or happiness.
Sometimes, we got to stop and smell the roses, it cannot be about dollars and values all the time. There are things in this world which no one can put a dollar value on, could analyze or take for granted.
The Trailer
Thanks to YouTube, you can check out the official movie trailer right here on Investorial.com!
Honestly, do you like these movie recommendations? It’s definitely not the usual topics that we tackle here on Investorial, but I believe that before we get into the nitty gritty of investment and finance, we should be honest about why we are pursuing such knowledge. There is a reason, and that reason ultimately resides in how we want to interact and be remembered by the people we love.
An update to a story we carried last week on hedge fund databases….
Hedge fund analytics company PerTrac released the results of their 2006 survey of hedge fund databases today. Apparently the world’s hedge fund database providers have surveyed a lot of hedge funds over the past year. PerTrac recorded a massive 61% jump in the number [...]
Dates: May 7-9 (East Coast), May 21-23 (West Coast)
Location: New York (East Coast), San Francisco (West Coast)
Organized by: Pensions & Investments
Thanks to its big-name sponsors, drinks are on the house at these two events. In fact, everything is on the house at these events - as long as you’re an end investor or pension consultant.
According to [...]
U.S. Dollar Drops Against Counterfeit U.S. Dollar
"At the close of trading Monday, the U.S. dollar dipped to a record low of $.60 against the counterfeit U.S. dollar, which also outpaced the dollar against the euro and the yen."
Interesting fact they forgot to mention is that the North Korean won is pegged directly to the counterfeit U.S. dollar.
Actually that's more true than it is funny.
I just got an email from Drew Nive, CEO of Forex Capital Markets (FXCM) apologizing for technical difficulties with their software that apparently shut down trading yesterday and part of today (Feb 25-26). I trade with FXCM via my FX Engines account, but was actually complete unaware anything had gone wrong - the reason being I've just switched all my trading to completely automated execution
With the dramatic increase in inventory in recent years, the number of townhomes and condos for sale has risen dramatically. Where once there may have only been 1-2 units for sale in a development, there are now likely 1-2 other units (or more) with the exact same floor plan. Given that builders typically do several developments in the same or neighboring cities, there can be a large amount of competition within just a couple miles.
While everyone would agree that it is a boon for buyers, almost all of those people would also say it is a detriment to the seller. While the competition is high, that also means that it should be much easier to determine at what price a seller’s townhouse or condo will sell for, given its current condition, view/location, and updates.
In this market sellers that try to argue that their’s is worth more than the one next door because of XYZ will struggle but those that look at the competition and the comparable solds and price accordingly will find that the sales process isn’t as bad as they thought. Buyers can choose the house in the best condition AND with the best price. If you’ve got that, you’re home free.
In this slower housing market, there’s a huge supply of housing available for buyers to look at. The problem with this amount of supply is that it is hard for some buyers to make a decision on what they want and go forward and make an offer.
In the days when houses sold in days, if not hours, and there was a huge undersupply of housing, buyers had to act quickly to make an offer on the house the liked the most. In today’s market there’s no urgency and no scarcity, so the buyer has no outside encouragement to make an offer quickly. In the last year I’ve worked with two different buyers that have looked at over 50 homes without making an offer.
Buyers need to keep in mind that while choice is nice, it can also cause you to lose focus on what you’re really looking for. It is important to have a list of your “must-have features” and to really understand what price point you’re comfortable with and stick with both of them.
What do you get when you combine and English major with money?
Answer: An English Major's Money, this week's Blog of the Week. An English Major's Money is a blog written by a 23-year-old '06 college grad working an entry-level job in New York City. She's trying to learn to manage her money to maximize both her fun and her future.
I love blogs like this because they prove that personal finance is important for EVERYONE! I also love the fact that although she is young, she is getting a grip on her finances now rather than waiting until she is older. Folks, starting young is the real key to success when it comes to personal finance.
One thing that bugs me is that I'm sure she cringes when she reads this blog since I'm not an English major! LOL!
The stock market in India is booming like nobody's business and so many companies are looking at going public by offering an initial public offering (IPO). The whole IPO scene has become an easy way to make money. Just subscribe to an IPO offerng during the offer period and then once the stock lists, dump the sucker in the market and make an easy 10-25% returns. The key to success is obviously picking the right IPO. So how do you do that? I use the classic herd behaviour approach to do it since I dont have the time to sit and analyze each company and its fundamental merits. Let me explain in detail...
The NSE website lists all the currently running IPOs and when you click on any one of them it actually gives you near realtime data on how much of subscription that the particular IPO has undergone during the offer period. If I see a large (1000 - 4000%) oversubscription especially in the institutional buyer's market, I figure that the big guys with their advanced research teams have figured out something interesting in this stock so I might as well buy it.
Mind you this works most of the time especially if you are planning to sell short term. There have been spectacular failures in this approach for me in the past but hey - this isnt exactly research you know! I am OK with the results that I have seen so far.
As far as getting an allocation goes, let us not even go there....!!!
I decided to start tracking the current NSE IPOs so I can plan this game better (of course it is a game - a gambling game - don't be dumb and think we have anything that is scientific here!). To make the IPO dates public, I initially added it to Google calendar. I am adding a link to the same on the right. If you use google calendars to track any of your dates, just clicking on the button will add my calendar to your list of available calendars.
Welcome to the 62nd Carnival of Investing, the first Carnival ever hosted by A Financial Revolution. You are about to join us for an exciting experience during which we will present the 5 Oscars of Investing to the bests posts of the week. I am your host, William Wallets. The staff and I here at A Financial Revolution are looking to put together an intensive blog that teaches the younger generation about personal finance and investing with examples and in depth posts about various topics. Please take the time to look around, I am sure you’ll find something that you’ll like.
Without further ado, let’s check out the Oscars Edition of the Carnival of Investing. This week, we received 16 submissions in 5 categories. The 5 awards we will be presenting this week are: Best Personal Finance Film, Best Directing of Investment Advice, Best Documentary (Most Informative), Best Foreign Film (Sector Specific), and Best Special Effects (Technical Explanation). First, I’ll present the nominees and then at the end of the post, I’ll announce the winners of the Oscars!
Best Personal Finance Film
Bill presents Saving On Taxes posted at Ask Uncle Bill. Bill highlights some reasons why you should do your taxes yourself!
John Collett has uncovered a sad truth about the Financial Planning industry in his article "Minimum training for planners is not enough".
The Diploma of Financial Planning, which you are required to complete to be a licensed Financial Planner, is quite frankly a joke. It requires the completion of 4 modules. Each of these modules require completion of an assignment and an exam. The assignments are rarely updated, and therefore plagiarism is rife. The assignment requires completion of an open book multiple choice test. Yes that's right, open book AND multiple choice! This is often likened to a game of hide and seek, the answers are there, you just have to find them.
After completion of a University Degree, I was amazed the requirements to be a Financial Planner were so minimal, and after doing this course (which can be fast tracked in about a week), you are legally able to tell people how to invest their life savings! I can honestly comment that the Diploma of Financial Planning did teach me very little and most of my skills came from other avenues, including a 3 year University degree (whilst it wasn't in the financial planning field, it was heavily biased towards Economics and Finance which made it easy to apply Financial Planning knowledge), as well as learning as I went. The diploma also fails to attack real life scenarios, with its examples all based around the all too perfect 'client'.
The Financial Planning Association is working hard to promote the Certified Financial Planner (CFP) qualification. From now on to enrol to the CFP program you must hold a relevant University Degree, however grandfathering means that anyone who was advising in the 90' and early 00's was automatically granted CFP status after 3 years advising. Whats more, a CFP has exactly the same rights as a regular Financial Planner, so there isn't huge motivation to become a CFP.
I'm not saying you should avoid advice. Financial Advice is important, however, suss out your adviser. I'm not saying they require a uni degree or CFP, some of the best advisers I know have neither. Talk generally about the economy, financial markets and current affairs in finance. If you're a good judge of character you will soon work out if your adviser is the real deal!
The industry to be taken seriously, must get serious about making it tougher for Financial Planners to get qualified. It is an industry that is already tainted, and does not need any more bad publicity. Until then we will remain the laughing stock of our professional peers.
Last night before going to work I ate 2 baked potatoes (about 15 cents each) and some pork & beans. I then took the remainder of the pork & beans to work with me for my lunch. Total estimated expense 70 cents
When I arrived home I ate a couple of eggs, and promptly fell asleep, missing church again.
Tonight, as I get ready for work, I fixed and ate mashed potatoes and leftover bread pudding.
So I wrote previously about how I am trying to structure my contributions to cram as much money as possible into my retirement accounts this year. Well, TIAA-CREF just sent me a letter about this year's contribution limits for my 403(b).. and my 457(b). What what now?
Apparently I have BOTH a 403(b) and 457(b) set up for me through my work plan. I am not sure what a 457(b) is, but it appears to do the same thing that I am doing with my voluntary contributions to the 403(b). And my maximum limit on it is $14,740. Which means, total between the two, I could put away $30,240.
This has opened up whole new possibilities of cramming money into the account! I am tremendously excited. (Especially since I found out that you can only change your allocations once a quarter, and thus must plan more carefully.) So I think I will wait and see how things shake out in the next couple months as there may be some changes in my life going on, but I might be able to get a whole lot more money in there! (This would also save me a fortune in taxes, given how much self-employment income I have.) Very interesting...
I wanted to take this Sunday afternoon opportunity to present some of the features that A Financial Revolution has to offer. If you notice on the right sidebar, there is a section called features. I’ll be giving some brief descriptions of these features in hopes that the readers will find them at least somewhat useful.
Welcome New Visitors - An introduction to A Financial Revolution. Why we’re here and what we’re setting out to do.
The Staff - The staff of A Financial Revolution. Right now it’s just me (William Wallets) and Benjamin Frankbling. We may add on some board members soon, stay tuned.
The Archives - A Financial Revolution’s Archives. Here you’ll find a list of every post that has ever appeared on AFR. Search the archives, I am sure you’ll find something that interests you.
Multi-Part Series - A listing of the multi-part series posts on AFR. The popular series include Introduction to Investments and Uncle Sam’s Revenge! Have any suggestions for series? Let us know!
Product Reviews - Various financial products and services and AFR’s take on each of the products. We here at AFR have high expectations and give our reviews with this high expectations in mind.
William Wallets’ Library - Suggestions for financial reading from William Wallets. Reviews and overviews will be added over the course of the coming weeks.
Subscribe to AFR - Get AFR delivered daily to your feed-reader of choice!
We’ve covered a lot of developments in the so-called “hedge fund replication” field. But switching gears now, we’d like to look at what amounts to “mutual fund replication”. Sure, hedge funds aim to provide a high proportion of alpha in their returns, but hedge funds don’t have a monopoly on alpha. In fact, as the chart in [...]
I’ve gone through much of the “material” written up on this website which is supposedly aimed at providing investors with knowledge on proper share/managed fund investing techniques.
I’ve come to the conclusion that much of the material presented is, to take a phrase from John Bogle, “… financial pornography” indeed they use provocative and seductive headlines like … “$1000 to $1,000,000″ it’s all very slick and utterly convincing.
However as I kept reading, I noticed over and over again how many of the stories/articles wound up somehow directly or indirectly promoting one of their “how-to investment” services.
In fact many of the articles were basically advertisements for these services which may or may not be any good, I’ve never tried them, but to try and pass off these articles as “information” as opposed to “informercials” is plainly wrong in my book, perhaps even misleading or fraudulant conduct.
My overall thoughts on fool.com, it’s a site promoting itself as a place for financial education but is in actuality a front to lure would-be customers into using their “investment” services.
Financial Knowledge is the Key to Financial Prosperity
Here in Finland a landmark legal case is brewing about forest treatment. Single forest owner is being accused of mismanaging his forest.
According to the government dictated forestry regulations, one can only cut as much as sustainable development requires. What do you think that means in practise?
It means that if the owner wants to leave the forest into natural state, owner is allowed to do that. However, if the owner wants to cut trees, owner must follow the law about forest treatment. The law states very clearly, how many trees there must be left standing and how big they should be. After this comes whole slate of different treatment measures. This bureaucratic system leads into forest cultivation, is that sustainable development?
In this case, the enforcing forestry official says that the area, which was cut, should have been cut almost to the bare bones, then treat the soil and plant pine trees instead of firs that used to be dominant tree on the location.
Government now demands 10 000 euro from the forest owner, because he cut only the biggest trees and left everything else on natural state. Owner now wonders the rigid practise, because he has been managing his forests in the same traditional manner for over fifty years and they all grow just fine.
Any cumbersome laws limiting forest management on your area?
When the Federal Government announced the transitional arrangements to super, with up to $1,000,000 per person being able to be contributed between 9 May 2006 and 30 June 2007, we all expected a mad rush on the Boomers selling up their assets and dumping the proceeds into super.
Well it looks like it's started. Carrie LaFranz reports on how Real Estate listings are well and truly on the rise, with a large number of listing reportedly being made purely to take advantage of the new rules. The proceeds, when thrown into super, are helping contribute to the Bull Run that our market is currently having.
All of a sudden the Baby Boomer's love affair with bricks and mortar has shifted, thanks to Mr Costello offering them tax free retirements. It goes to show, the "property is the best form investment" mentality that many Boomers exhibit is soon forgotten when they are presented with the opportunity to save a few dollars in tax.
However, before you get rid of your investment property, which is apparently about to increase its yield by up to 20%, at a possible discount due to a glut of For Sale signs in front yards, there may be alternative strategies available to you.
1. Sell your properties later. If you're part of a couple, you can contribute $150,000 each to super every year until you turn 65. This can be averaged out over a 3 year period, effectively allowing a one off $450,000 contribution each. Now lets assume you sell a property just prior to July one year, you can put in $150,000 each before July, and then $450,000 each after July. This is a total of $1.2 million.
2. Borrow to contribute. This one should be treated with caution. However, if you think your property would fetch more after July, when the glut of sales declines, you could borrow against your property now, and contribute this to super, paying the loan off when you sell the property. However, you will be liable to pay interest on this loan which is not deductible.
3. Transfer your property to a self managed super fund. If you own commercial property, this can possibly be transferred to Self Managed Fund. Capital gains tax will be payable, as you are effectively transferring ownership to another entity. Unfortunately domestic property cannot be transferred to a SMSF.
Before you rush to sell your investments, have a think about the other options available. Tax should be at the front of your mind. If the capital gains tax you will be paying is going to be a lot, the tax free status of super in pension phase may not be worth it. There are ways to lower this tax payable, but that's for another time.
As the market currently on what seems like a day by day basis hits record highs, one has to wonder how long this record breaking bull run can last.
This chart plots the Australian All Ordinaries Index for the last 12 months (to 23 Feb 07). Apart from a couple of small blips, it's been all up hill since late September!
Now, if you're one of the increasing numbers who believes that there is only so long a run like this can go for and we're due for a correction, you might stick all of your money in cash until this correction happens.
However, investing in cash only provides you with limited returns. What would be great is benefiting from a correction when it happens. Or what if you think the market as a whole will keep going up, but think that Telstra shares are overpriced and are due to fall and want to benefit from this fall?
Well the answer is you can. You do this by "going short". There are numerous ways to go short, or sell a stock (or index) that you think will fall. You can purchase Call Options or Warrants, or sell Contracts for Difference (CFD's) or even short sell on the ASX. However, these strategies are risky, and not for the novice investor.
There are other ways to benefit from this strategy though. This involves investing in fund managers who can "go short". These are usually referred to as "Long / Short Funds". In a previous post I have written about how the after tax returns of actively managed funds often do not justify the extra risk and fees involved. However, a fund with the option to take on strategies like this can definitely provide value IF they get it right!
These types of funds are relatively new to the market. I have tried to find some returns on some tried and tested long/short funds, however they all seem to have existed for less than 12 months. Time will tell if these fund managers can predict when to go long and when to go short.
Some funds offering a long/short option are:
Acadian Australian Equity Long / Short PM Capital Australian Share Fund JANA Australian Share Long Short Trust Macquarie Alpha Opportunities Fund Perpetual Share Plus Fund
Time will tell what the success of these funds is.
If you've seen a Financial Planner you are likely to have heard this one: "It's about time in the market, not timing the market". Basically this means don't worry about what the market is priced at, if its over or underpriced. This doesn't matter. Just get your money in the market for the long term and over time you will be better off than those who trade in and out trying to pick "peaks" and "troughs" in the market.
This definitely makes sense, as who can tell when the right time to invest is?
However, I have recently, as part of a Post Graduate Diploma, studied Technical Analysis. When I told my colleagues I was taking on this subject, they laughed at me. Technical Analysis goes against all the fundamentals that as a Financial Planner and Economist I should believe in. At university they talk about it like it's a black art of some sort . However, I've always been interested in charting and wanted to better understand how to analyse charts, so took on this course.
For the uninitiated, Technical Analysis involves examining price action to determine changes in the supply and demand balance. In other words, using charts to determine whether to buy or sell securities. A common misunderstanding is Technical Analysis uses past prices to predict future prices. There's definitely more to Technical Analysis than this, with Behavioural Finance a major factor in Technical Analysis.
My growing understanding of Technical Analysis, has led me to believe that Technical Analysis can be used to "Time the Market". It's definitely not foolproof, but if you pick the right triggers, you can use Technical Analysis as well as Fundamentals to invest. For example, lets say I like the fundamentals of BHP and want to buy them for the long term. I can undertake some Technical Analysis and decide that I think in the next month it will fall by 10%. Then wait around and get in at a discount to what I would get in otherwise. Obviously I could be wrong and it never reaches the low that I predict, but that's the risk you take.
I remember a client last year decided to invest $500,000 in Australian Share managed funds through his margin loan. This was in early May, 2006. If you think back a while you might remember a correction of around 10% soon after this. So within a matter of weeks, this guy's portfolio was now worth around $450,000. Now, assuming a return of 10% per annum, over 10 years, the portfolio invested prior to the correction would be worth $1,167,184, a gain of $667,184 over the period. If he had of waited a month or so, the portfolio would be worth $1,296,871, an increase of $796,871 over the period. This is a net gain of $129,687 more than the other strategy.
An extra 20% return just to pick the right time to enter the market? I'll take that thankyou!
Frozen Waffles, Bag of Potato Chips, Italian Bread, Jumbo Hot Dogs, Pancake Syrup, Graham Crackers and Tomato Ketchup.
10 Quarter Pound Frozen Hamburger Patties were only $5.49. The hamburger buns were only 69 cents. That's less then 62 cents per burger (one fifth the price of a McDonald's Quarter Pounder)!
Their generic cereals are only $1.49 per box. I don't taste the difference.
To have $100,000 sitting in the bank, to do with what I please. That would be lovely. Unfortunately for me, I'm only a few years out of university, and whilst my savings (I like to call them investments, as I have very little in cash) are looking ok (a lot better than some my age who have fallen for the credit card and personal debt trap!), I am blessed with the ability to enjoy spending my money too much!
I found out recently that a guy who I went to uni with has just put a deposit on a unit in Sydney, using the $100,000 he saved while he was at uni.
That made me ask the question, how does someone save $100,000 while they are at uni? I remember uni days were living week to week on the few bucks I was earning working 15-20 hours in retail.
Then I remembered, while I was out partying at the local seedy uni pubs, skipping lectures for a few more beers at the on campus bar and spending my few dollars of savings on clothes and gadgets like iPods (actually in those days Minidiscs were the thing of the future... mp3 players were never going to take off), this guy was pulling a few extra shifts at work, studying hard and getting around in the same daggy clothes and a discman from 1996.
Is he happier than me, now that he has a relatively small deposit on an inner city overpriced shoebox? Who knows. I'd like to hope that smart investing over the coming years might put me in front in the long run, without having to hamper my lifestyle. Until then, I'm happy with my Minidisc player!
I guess, I didn't make my regular post before going to work last night, so I better get you all updated on this extremely frugal diet of mine. I reheated a bowl of potato soup for my meal before work. Took another bowl of it to work with me and am eating the last of it as I type, before turning in for the day. I will be up at 4 to get ready for another day.
total estimated cost of my 3 meals...99 cents
I am thinking baked potato and some other veggie tonight
Who: This series of posts is for people who have been dying to do some analysis of their investments using real financial data and Microsoft Excel. This post will be beneficial for those who have an average knowledge of Excel and a basic understanding of high school mathematics concepts. What: This is the first post in a series about how to actually calculate some ratios and create metrics that will allow you to make sound investment decisions. The theory is covered elsewhere and this is a practical application! This post will discuss downloading data from Yahoo! Finance into Excel and getting the data ready for manipulation.
Where Do I Get The Data?
There are many places from which you can download financial data. Some sources are free while others charge money and some are simple to use while others are quite complicated. For the purposes of this tutorial, I will be using a free and simple source: Yahoo! Finance.
So How Do I Start?
The first thing you will want to do is select some stock tickers that you’d like to research. In this example, I’ll use a mutual fund with ticker RYVPX (I do not advocate or discourage the ownership of this fund, yet). RYVPX is Royce Value Plus Service mutual fund.
Step 1: First, you’ll want to proceed to yahoo finance at http://finance.yahoo.com. Then, at the top left corner of the screen, you’ll want to enter the ticker symbol you want to look up. In our example, it is RYVPX. When you’re done, hit the get quotes button!
Step 2: Now, you should be looking at a Summary of the mutual fund RYVPX that looks something like this:
Click on “Historical Prices” on the left side of the screen to proceed. In the image above, you can see it highlighted inside the red box.
Step 3: Now that we’re in the historical prices area, we need to decide what sort of data we want. Let’s say that we want to analyze RYVPX over the last 3 years and we want to be very, very specific. In the start date, we’ll enter Feb 16, 2004 and for the end date we’ll enter Feb 16, 2007 to give us the last 3 years of data, as of last Friday. Now, we’re not scared of lots of data, so let’s use daily returns. When you’re done, press “Get Prices”.
Step 4: So we are now staring at the data we want. Now what? Let’s export it into Excel. This is surprisingly easy. Just scroll down to the bottom of the page in your browser and look for this:
You should find it immediately under the Yahoo! data table and once you click it, you’ll be able to download and open the Excel File. Once the file is opened in Excel, you can move to step 5.
Step 5: You’ll be looking at the Data in Excel and in order to do your analysis, you’ll do various things with the data and manipulate it in all sorts of ways. That will all be covered in the upcoming posts, but for now, let’s calculate the % change in price from one day to the next (since running analysis on price is less common than running analysis on % change).
There should be data in columns A-G, as shown below. The highlighted column (H) is where you will want to input the calculations for percent change.
Step 6: Finally, enter the formula into cell H2, as shown below. All you want to do is put the previous close in the denominator and the current day’s closing price in the numerator and then subtract 1 from that entire quantity. Drag that formula down and voila, you have the percent change from day to day! Note: The last day will not have a % change, this is ok. Make sure you delete the last % change, as it will show up at 1.00, you don’t want this!
Now what?
Stay tuned over the next few weeks for various analyses you can do and metrics that you can calculate using this base data set. Remember that your analysis is not limited to RYVPX. Data for any ticker that you’re interested in (that Yahoo! has data for) can be downloaded and used to run different analyses.
You have the Yahoo! provided data and daily percentage changes in stock price. Feel free to explore and run any sort of analysis that you like and stay tune for some specific suggestions. Good luck!
I am nothing if not consistent, and staunchingly stubborn in my views and opinions. Remember when I first opened the debate on money vs. happiness? Maybe you’ve caught my recent thoughts about lack of money creating unhappiness when I decided to add “The Pursuit Of Happyness” to my list of movies to watch.
Without further ado, let’s check out the Oscars Edition of the Carnival of Investing. This week, we received 16 submissions in 5 categories. The 5 awards we will be presenting this week are: Best Personal Finance Film, Best Directing of Investment Advice, Best Documentary (Most Informative), Best Foreign Film (Sector Specific), and Best Special Effects (Technical Explanation). First, I’ll present the nominees and then at the end of the post, I’ll announce the winners of the Oscars!
Best Documentary (Most Informative)
Financial Knowledge is the Key to Financial Prosperity
As the market currently on what seems like a day by day basis hits record highs, one has to wonder how long this record breaking bull run can last.
