tag:blogger.com,1999:blog-189461402024-03-23T11:00:36.614-07:00Retire At 30A blog about Personal Finance and Investing in your 20's as told through the (insane) attempt to retire at age 30.Unknownnoreply@blogger.comBlogger76125tag:blogger.com,1999:blog-18946140.post-50103709212323317292009-12-17T13:24:00.000-08:002009-12-17T13:28:44.786-08:00Free AudioBooks on Investing!I just found out that I can download tons of investing books from my local library's website - from home.<br /><br />I love audio books because I can listen to them with little effort when I'm doing otherwise mundane things - standing in line at the airport, waiting in a doctors office, riding the bus in the morning, diving, working in the yard.<br /><br />Sure, you could read in many of those cases, but not all of them. And, I can listen a lot faster than I can read. It just takes less effort to listen than to read - perhaps I have dislexia, perhaps I have bad eyesight, or perhaps it is just more effort to read than to listen. For whatever reason I can get through ideas faster when spoken than when I have to do the optical processing myself.<br /><br />Finding the link to download the audio books can be a bit of a task, but if you call they're usually quite helpful.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-16536723490179560702009-12-15T13:29:00.000-08:002009-12-17T13:53:36.449-08:00Good Insurance vs. Bad InsuranceHere's the dirty secret of insurance - it is a loosing bet for the person purchasing it. Always*.<br /><br />Insurance companies will usually have a loss ratio of 50 to 60%. The loss ratio is just another way of saying, how much they pay out in claims for every dollar they take in. They also have expense ratios in the 20 to 40% range (the cost to run the business- claims adjusters, salesmen, marketing, electricity, rent, etc) so don't think they're making out like bandits. <br /><br />But from a consumer perspective the average insurance policy has about the same expected value as a lottery ticket - you can expect to get back about 50% of the money you put in.<br /><br />But everyone in personal finance says you should make sure you are adequately insured.<br /><br />There seems to be a tension between these two statements - 50% expected value, but still buy it? The resolution to this tension is the word "adequately."<br /><br />Quite simply put, you should only buy insurance against those things you couldn't afford to bear the cost of yourself were they to happen. <br /><br />Medical insurance - in the US today medical insurance is a hybrid of three things - prepaid consumption of health care, volume discounts for health care, and catastrophic medical expense insurance. Even if you are a healthy 25 year old male - with expected cost to see your personal doctor once a year of about $300 to $500 - it still would make sense to pay $400 a month for medical insurance because if you are in a car accident you could quickly rack up $50,000 or more in medical bills from the intensive care unit. Even though you expect to loose almost $4,000 a year on the wager, you can't afford the $50,000 if it were to happen. Thus you should buy it.<br /><br />Car insurance - you pretty much have to have this to drive your car anywhere. But, what kind to get and how much should be dictated by the question "can I bear the cost if this were to happen." Chances are you can afford to pay $150 to a tow truck in the 1 in 10 years event that you get a flat tire and are stranded. So the $3 per month = $36 per year = $360 per ten years proposition of "roadside assistance" is a loosing bet, and one that you don't have to make.<br /><br />Life insurance - Why do you need it? Could your family survive were you to die and not provide income? Chances are, the answer here is, probably not. What if you have a stay at home spouse? Should they not be insured because there would be no lost income? Not if you have kids. A stay at home parent is engaging in "invisible" productive activities - there is no money coming in for them, but there is usually a substantial savings in money that would otherwise have to be spent. So, what would the cost be to get childcare if that spouse were to die? That's how much life insurance the stay at home spouse needs. What about 10,000 coverage for babies? Unless you can't afford the basic costs of a funeral, stay away. Same for married dual income no kids, unless you have a mortgage that requires both incomes. <br /><br />Cell phone insurance - You should insure yourself here. If you keep loosing your phone, either stop drinking so much, become more responsible, or learn how to google "Refurbished __your_phone_here___." You think of it as "it saves me from paying $200 for a new phone" but, they send you a $50 refurbished model - and charge you $3 per month to do so. This is one of the biggest wastes of money. Cell phone insurance is the WORST kind of insurance. <br /><br />Disability insurance - This is going to cost you peanuts, and be happy every month that you're paying so little even while expecting to loose money. This means the chance of you becoming disabled is vanishingly small. Be happy about this fact, and by all means make sure you are covered.<br /><br />Good insurance buys you security. Bad insurance is like buying a lottery ticket. Think about it so you make sure you know what kind you are getting.<br /><br /><br />* I said above insurance is always a loosing bet. I should restate - it is always a loosing bet if the insurance companie's actuarial tables are correct. That is, you can only profitably take on insurance if 1) you know something they don't about your risks, and they don't ask or 2) they've done their math wrong. Now, I know some guys who do math for insurance companies, I wouldn't bet against them.<br /><br />Special proviso on "gimick" coverage. Sometimes insurance companies intentionally under price small elements of their coverage - i.e. laptop breakage. They do this because they know that having this gimick is going to make their insurance more desireable - it is a classic loss leader. They loose $10 on laptop insurance to make $100 on the homeowners policy. It is a sales cost for them, and you should by all means take it. But, if you can't do the math, you should always assume that gimick add ons are correctly priced because 9 times in 10 they are.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-37627386018519323862009-12-12T12:51:00.000-08:002009-12-17T13:06:53.550-08:00The Tao of Personal FinanceFrom the Tao de Ching, I found a fantastic quote that summarizes at least half of responsible money management:<br /><br />He who knows he has enough is rich.<br /><br />That is satisficing! When you ask yourself "what do I need" vs "what do I want" it puts your spending into the right perspective.<br /><br />When you buy fewer things, you don't have to pay as much attention to price. This frees up space in your brain for more productive, or more pleasureful things, like thinking about the next blog post you are going to write. <br /><br />The first question you should ask when you are buying something is "do I need this." The second question is "can I afford it." If the answer is yes then no - you better be talking about food, basic clothing, or shelter - if you aren't you need to reconsider how you define need. If the answer is yes then yes - great, buy. If the answer is no then yes, it is an affordable luxury and you have to ask yourself the question - do I want this?<br /><br />Shockingly, after a few years of "do I need this" you find yourself wanting fewer and fewer things, while being able to afford more. And every item you don't buy feels freeing - you aren't trapped by illusory desires, and you aren't wasting your resources.<br /><br />But, be reasonable. We don't technically need cars, computers, the internet, or cell phones for basic survival. But, they are enabling devices - or, thought of another way - they are investments.<br /><br />Why do I need a car? Because it saves me at least 40 hours a month in transportation time. Even at $5 an hour - that's $200. Most of my readers are going to be making substantially more than that per hour. I need a car because it is a good investment.<br /><br />And good investments are one of the most critical needs in modern life.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-61864343572234667812009-12-01T15:07:00.000-08:002009-12-17T13:20:36.896-08:00What is an InvestmentMost people will answer this by saying "Saving money," or "Stocks, Bonds, and mutual funds." And, these are most certainly investments.<br /><br />However, they represent only a small subset of the investing universe. No, I'm not going to talk about Hedge Funds, Futures, Options, Real Estate, etc. Those are also part of the same sub category of investment - they are financial investments.<br /><br />What then is the essence of an investment? It is putting to action today something of value with the reasonable expectation that by doing so you will receive more value in the future.<br /><br />It doesn't have to be money that you put to action, and it doesn't have to be money that you receive.<br /><br />You can invest time in order to get more time back. Assume you spend two hours each week watering your lawn and garden. You think about this and realize that by setting up the sprinklers you already have in your garage you can cut that time in half. Say it takes you 3 hours to find and set up the sprinklers. You've invested 3 hours today, to save 1 hour per week in the future. <br /><br />You can invest time and money to get more money back. <br /><br />You can invest money to get time.<br /><br />You can invest money to get security (i.e. insurance). <br /><br />What is important is that you are getting more value out than you are putting in. If you are, you are making an investment. <br /><br />Look around, what simple investments could you make? You might be surprised how many hours you can get back for each hour you invest in streamlining your life.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1135312161343217612009-11-22T20:15:00.000-08:002009-12-17T13:22:57.695-08:00Business Plan ArchiveI just found out about a site that is trying to create a collection of old business plans. It is called (shockingly) <a href="http://www.businessplanarchive.org/">businesplanarchive.org</a>.<br /><br />I have only just gotten a chance to read over a few of them, but this site is outstanding. For me the hardest part of writing business plans is just deciding what format to use. In the past, I have found reading over 10 or 20 samples to give me a much better grounding to start from. Now, as soon as I find my Million Dollar Idea, I've got a resource of failed companies to guide me. (irony?)<br /><br />The other cool thing about this site is that it includes a plethora of complimentary material (powerpoint presentations, screenshots, news clippings, etc) that give the business plan context. The site is centered around the dot-com boom and bust.<br /><br />If you're an entrepreneur, or want to be one some day, should be a good tool.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-3038217343906886442008-10-14T18:20:00.000-07:002008-10-14T18:23:22.315-07:00Fundamental value in the housing marketAn asset has no value absent three things: what people are willing to pay for it, what people can pay for it, and it's fundamental value (i.e. an NPV of all present and future dividends and costs)<br /><br />With housing "ability to pay" is the only factor that matters - it either drives the rent price or the sales price. Rent is a fairly liquid market, so it is a good indicator of long term "ability to pay."<br /><br />Here is how you can calculate the fundamental value of housing:<br />Start with income * percent allocated to housing = housing budget<br /><br />Take housing budget, factor it by interest rates, percent loan and term and you have the maximum loan you can support. <br /><br />Maximum loan + down payment = house price.<br /><br />(in excel, use this formula to get maximum loan =pv(rate,years,yearly housing budget) )<br /><br /><br />Some notes:<br />- percent allocated to housing is complicated as it varies from person to person, but there are hard caps on what people will spend on housing - it is physically impossible to spend more than 100%, lenders usually won't allow you above 40%.<br />- down payment is complicated as well, since you have to assume the down payment was either saved or borrowed<br />- housing budget has two parts: investment + lost payments. Rent is 100% lost payments, mortgages start out mostly lost payments then switch over time to mostly investment. This helps explain why mortgages should be more expensive than rent for the same size place.<br />- since inflation increases salaries it should pass through to houses, so over the long term absent any increases in salary or other changes, housing prices will track inflation.<br />- amount you can afford doesn't respond to changes in supply and demand.<br />- what responds to supply and demand is the size of the space you can afford (so in NYC you pay more for square foot, and in places where there is lots of available land you get as much space as you can afford to build)<br /><br /><br />The only long term drivers of house prices are 1) inflation 2) increased wages and 3) increased demand without corresponding increases in supply.<br /><br />Short term fluctuations can be caused by:<br />- Required down payments (or the converse, amount you can finance)<br />- Interest Rates<br />- Expectations and other noise<br /><br />For many places in the US, housing prices have already equilibriated. But in Seattle (where I now live) they have not yet. Based on median income (I assume $63,856, and growth of 4% per year), long term average interest rates (7% for the past 15 or so years), and current house prices (~440 median price) - don't be surprised to see another 10 to 30% drop in Seattle prices -- no appreciation for 5 to 10 years -- or worse.<br /><br />--<br />PS I know, I've been gone for a really long time. This deserves some explanation, but I'm not going to provide it right now.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1139911061071982412006-02-14T01:46:00.000-08:002006-05-09T16:51:43.903-07:00Free $5 and a cool new payment system - Textpayme.comI just read over at wired that somebody has created a payment system that uses text messages to send money - much like what paypal should be doing. The service is currently only available via SMS messaging, but I would be shocked if they don't offer a paypal esque system in the future.<br /><br />If you sign up now, you get a free $5 signup bonus. Check it out <a href="https://www.textpayme.com/us/secure/index.tpm?clref=NzYxNDdjMjktZmE0OS00Nzg5LWI4MmItODZkNWQ0ZTVhYTE4">here.</a><br /><br />Full disclosure, if 36 people sign up using that link by the end of february, I get an xbox 360. I'm not much of a gamer, but I do like xbox 360s. So, help a guy out - sign up with that link.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1139681435132536132006-02-11T10:06:00.000-08:002006-02-11T14:46:48.586-08:00Call for submissions, carnival of debt reductionI will be hosting the <a href="http://mightybargainhunter.com/2005/09/07/carnival-of-debt-reduction-guidelines-and-schedule/">carnival of debt reduction</a> this week. If you have posts you would like included, please email them to retireat30 ... at ... gmail ... dot ... com. Or, easier yet, <a href="http://www.conservativecat.com/Ferdy/Carnivals.htm">use the submit form at conservative cat</a>.<br /><br />While you're at it, remember that <a href="http://www.tradermike.net/">Trader Mike</a> is hosting the 9th <a href="http://retireat30.blogspot.com/2005/12/carnival-of-investing.html">carnival of investing</a>. As always, you can submit articles to investingcarnival ... at ... gmail ... dot ... com.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1139440455687449772006-02-08T15:01:00.000-08:002007-02-01T23:30:10.313-08:00Go with ROTHWith your retirement accounts, if you can max them out or come close, you should go with a ROTH account.<br /><br />The reason for this is simple: $15,000 after tax dollars is more than $15,000 pre-tax dollars (ditto for $4000 after tax dollars vs. $4000 pre-tax dollars).<br /><br />Assuming the money is going to double & 10% taxes (for simplicity):<br />Post Taxed: ($15,000 * 2) * .9 = $27,000<br />Pre Taxed: ($15,000 *.9) * 2 = $27,000<br /><br />In terms of after tax value put in:<br />Traditional: $15,000 * .9 = $13,500 after tax contribution<br />ROTH: ($16,666 * .9) = $15,000 after tax contribution<br /><br />The more you make, the greater the difference is. Someone maxing out contributions in the 10% bracket only takes a 10% hit by going with a traditional program over a ROTH. Someone in the 38.6% bracket looses more than 1/3 of the potential value by contributing to a traditional IRA vs a Roth.<br /><br />In the case of an IRA, you can only contribute to a ROTH account up to a certain level of income. In the case of a 401(k), you can only contribute to a ROTH account if your company offers it, but there is no income limit.<br /><br />High income earners, welcome back to ROTH territory.<br /><br />Info about:<br />401(k)s - <a href="http://www.irs.gov/taxtopics/tc424.html">IRS</a>, <a href="http://www.investopedia.com/university/retirementplans/qualifiedplan/">Investopedia</a><br />ROTH 401(k) - <a href="http://www.irs.gov/retirement/article/0,,id=152956,00.html">IRS</a>, <a href="http://www.roth401k.com/">Roth401k.com</a>, <a href="http://www.smartmoney.com/retirement/401k/index.cfm?story=which401k050609">Smartmoney</a><br />IRAs - <a href="http://www.irs.gov/publications/p590/index.html">IRS</a>, <a href="http://www.investopedia.com/university/retirementplans/ira/">Investopedia</a><br />ROTH IRAs - <a href="http://www.irs.gov/publications/p590/index.html">IRS</a>, <span style="text-decoration: underline;"></span><a href="http://www.rothira.com/">Rothira.com</a>, <a href="http://www.investopedia.com/university/retirementplans/rothira/">Investopedia</a>Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-18946140.post-1139437217545748022006-02-08T12:37:00.000-08:002006-02-15T21:54:40.343-08:00Spend as much on crap as you can affordJust don't spend more. Shocking as it may seem, you can be financially responsible and splurge on stupid things.<br /><br />The $50 doggy vest, the $200 night out, even the $1,000 ski vacation are all acceptable and even healthy expenses IF they come from your disposable income. If they go on your credit card, you're living beyond your means.<br /><br />Disposable income is the money you have left after you save for emergencies and long term goals and after you pay for your necessities. (income - necessities - savings = disposable income)<br /><br />The future growth of our economy depends on people buying more unnecessary crap (and/or <a href="http://retireat30.blogspot.com/2006/02/overworked-try-too-productive.html">working less</a>). As an economy, we covered our necessities (food, clothing, shelter) at least 100 years ago. You need look no further than the fact that only 1% of the US GDP is agriculture (and we are a net-exporter of food) to see that we're covering our necessities just fine (source: <a href="http://www.cia.gov/cia/publications/factbook/geos/us.html">CIA World Factbook</a>). We're still having some difficulty with the advanced social necessities of healthcare and education, but on the basics of living we're doing fine (with some unfortunate exceptions).<br /><br />The biggest challenge is figuring out just how much of the money in each paycheck is disposable income. The easiest way to do this is the <a href="http://moneycentral.msn.com/content/Savinganddebt/Learntobudget/P36153.asp">60% solution</a>: Keep fixed expenses to 60% of your income, put 10% to retirement, 10% long term savings (house, car, college) 10% to short term savings (health care deductibles, car maintenance, home maintenance), 10% to fun money. If you're going to do this, I would highly suggest setting up individual accounts for each of these (e.g. 60% for fixed in your checking, 10% to your IRA and 401(k) for your retirement, 10% to a brokerage account for long term savings, 10% to a high yield savings account like <a href="http://www.ingdirect.com">ING Direct</a>, and 10% to a 2nd checking account and only use the debit card so you can't spend more than you have). By separating your money at the beginning of the month, you know just how much you can spend on crap that month.<br /><br />The worst thing you can do is adopt an "It'll all work out in the end, so I'll just do nothing" mentality.<br /><br />I don't follow the 60% method because I have a more detailed budget that I update at the end of every month (see my series <a href="http://retireat30.blogspot.com/2005/11/budgeting-made-easy.html">Budgeting Made Easy</a>) and I have a much more granular breakdown of my money (I have separate ING accounts for car maintenance, medical expenses, car insurance, etc. - separate post on that later). But I am anal retentive when it comes to most matters of money and I enjoy knowing where my money goes to the last cent.<br /><br />Bottom line: Spending money on crap is not the problem. Spending <span style="font-weight: bold;">too much </span>money on crap is the problem. Limit your spending to your disposable income and it doesn't matter if you buy diamond encrusted trash-bags.Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-18946140.post-1139415846897856332006-02-08T08:08:00.000-08:002006-02-08T08:24:07.593-08:00Overworked? Try too productiveMany Americans say that they are just too stressed, too overworked, and don't have enough time for themselves. It makes for great heart-wrenching human interest stories, but according to a new study <a href="http://www.economist.com/displaystory.cfm?story_id=E1_VQSGTNQ">highlighted in this week's </a><a href="http://www.economist.com/displaystory.cfm?story_id=E1_VQSGTNQ">Economist</a> (<a href="http://www.amazon.com/exec/obidos/redirect?link_code=as2&path=ASIN/B00005NIP1&amp;tag=retireat30-20&camp=1789&creative=9325">Subscribe</a>) we have more leisure time today than we did 30 years ago. (today 2/8 at&t is giving away a free day pass for watching a 30 second commercial if you aren't a regular subscriber, <a href="http://www.bos.frb.org/economic/wp/wp2006/wp0602.pdf">working paper available here</a>)<br /><br />We have more leisure time, but feel more overworked. The article poses two possible reasons: 1) we have a higher opportunity cost for our time, thus a walk in the park is more expensive than it was 30 years ago; and 2) since we are more efficient, we are able to do more in a day, and we over-commit (I am guilty of this one).<br /><br />I've been very skeptical of the "overworked Americans" cry for years. If we're so overworked and underpaid how come there are ipods, tivos, satellite tv, new cars, etc. in every neighborhood? Granted, credit cards finance some of this purchasing, but credit card financing only lasts for so long and from what I can tell the trend towards more stuff has been going steadily for the past 20 years.<br /><br />Now that we have higher opportunity costs for our time, how come so many people waste it watching reality tv?Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1139248717625845272006-02-06T09:54:00.000-08:002006-02-06T09:58:39.766-08:00Real returns might not be what you’re expectingToday’s Wall Street Journal’s Money & Investing section had an excellent article by E.S. Browning on measuring investments by real-world returns. He quotes this research by <a href="http://www.thornburginvestments.com/research/articles/real_real_0705.asp">Thornburg Investment Management.</a><span style=""> (The Journal article quoted numbers through 2005, I could only find the 2004 Thornburg article so I’m using 2004 numbers to avoid confusion)<br /><br />The example discussed in the article is the S&P 500 since 1926.It is common knowledge that the S&P has returned about 10% per year since then. Put another way one dollar invested in the index in the start of 1926 would have appreciated to $2,531.44 at the end of December 2004. This annualizes out to a rate of 10.43%.<br /><br />Thornburg after running the numbers net of inflation, taxes, and fees and found a starkly different story. That same $1 in real (post tax, fees, and inflation) terms would only be worth $44.80. Which only annualizes out to a rate of only 4.96%. They assumed fees of .2% of assets yearly, inflation of 3.04%, and then you can work out that they assume taxes to average out to 2.23% of assets per year. Since we’re talking about annual rates, we can use simple arithmetic to calculate the effects on returns so long as all percentages are in terms of assets per year. APY is implicitly a percentage of assets.<br /><br />In an IRA, things fare quite a bit better since you get to add back in some or all of the value lost to taxes.<br /><br />With a Roth IRA, since you’ve paid taxes on the money already, you get to add back all of those taxes and you get a historical return of 7.19%.<br /><br />With a traditional IRA or 401(k) things are a bit more complicated. You have to deflate the real value of your money by the tax-rate when it is withdrawn. You get to compound at 7.19% yearly, but you have to take out taxes on the back end, and the amount of taxes you’ll take out depends on 1) the amount of income and 2) the tax rate at that time (for me, that’s about 42 years from now).<br /><br />I ran the numbers simplistically, assuming a 33% tax on withdrawals and a withdrawing everything at the end of 20, 30, and 40 years. This Resulted in effective rates of 5.06%, 5.77%, and 6.12% respectively. Bear in mind, that this is a simplification and because you’re only withdrawing a small amount per year.</span>Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-18946140.post-1138855709162507962006-02-01T20:06:00.000-08:002006-02-01T21:10:14.036-08:00Car Insurance: High coverage leads to low premiums?I am in the process of getting car insurance for myself, and I after about two weeks of getting quotes intermittently I have stumbled upon a very odd thing - the more coverage I currently have, the lower my future premiums are.<br /><br />How I found this out.<br /><br />I have been getting quotes from GEICO, Progressive, and a number of other companies (Allstate, 21st century, and using online engines to run searches across many companies). I am currently covered under my parent's policy, but I didn't know what my coverage currently was, so I have just assumed that I had the lowest liability coverage - $25/50/25 (<a href="http://info.insure.com/auto/basics.html">basics of car insurance</a>, numbers in thousands).<br /><br />When I was assuming that, my best quote was from Drive Insurance at $706 for 6 months. This beat the roughly $820 that GEICO and Progressive were quoting me.<br /><br />However, when I found out today that my parents had me covered for 100/300/100 the premium went to $593 (this is for $25/50/25 with 25/50/25 for underinsured motorists).<br /><br />Finding this out, I promptly raised all of the quotes to 100/300/100 and my premium went to $691.<br /><br />I was curious to find that with higher previous coverage, I get lower current rates so I looked into the quotes a little bit more. Here are the detailed premiums:<br /><br /><table><br /><tbody><tr><br /><td width="219">Coverage</td><br /><td bgcolor="#eeeeee" width="223">Limit (in 1,000 $s) </td><br /><td width="202">Premium w/ 25/50/25 prior </td><br /><td bgcolor="#eeeeee" width="202">Premium w/ 100/300/100 prior </td><br /></tr><br /><tr><br /><td><p>Liability:<br /><br />Bodily Injury and Property Damage </p> </td><br /><td bgcolor="#eeeeee"><p>25 person/ 50 accident/ 25 property </p> </td><br /><td>$316</td><br /><td bgcolor="#eeeeee">$247</td><br /></tr><br /><tr><br /><td>Personal Injury (medical) </td><br /><td bgcolor="#eeeeee"><br /></td><br /><td>$35 for 10k</td><br /><td bgcolor="#eeeeee">$40 for 35k</td><br /></tr><br /><tr><br /><td>Underinsured Motorist</td><br /><td bgcolor="#eeeeee">25 person/ 50 accident </td><br /><td>$18</td><br /><td bgcolor="#eeeeee">$15</td><br /></tr><br /><tr><br /><td>Underinsured Motorist Property Damage </td><br /><td bgcolor="#eeeeee">25 each accident </td><br /><td>$21</td><br /><td bgcolor="#eeeeee">$15</td><br /></tr><br /><tr><br /><td>Comprehensive</td><br /><td bgcolor="#eeeeee">$500 deductible </td><br /><td>$72</td><br /><td bgcolor="#eeeeee">$64</td><br /></tr><br /><tr><br /><td>Collision</td><br /><td bgcolor="#eeeeee">$500 deductible </td><br /><td>$244</td><br /><td bgcolor="#eeeeee">$182</td><br /></tr><br /><tr><br /><td><br /></td><br /><td bgcolor="#eeeeee">Totals</td><br /><td>$706</td><br /><td bgcolor="#eeeeee">$593</td><br /></tr><br /></tbody></table>What was most interesting is that going from 25/50/25 to the same cost MORE than going from 100/300/100.<br /><br />It appears that the higher your coverage, the lower the amount of risk you present to the insurance company. The lower the risk you present, the lower your premiums.<br /><br />Now I've definitely got to get my hands on some actuarial tables. This stuff is just too weird.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1138654813764234142006-01-30T12:59:00.000-08:002006-01-30T13:00:14.463-08:00Carnival is upThe 7th edition of the carnival of inveting is now up at Canadian Capitalist's site.<br /><br />Check it out <a href="http://www.canadiancapitalist.com/2006/01/29/carnival-of-investing-7">here</a>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1138185157005931652006-01-25T02:32:00.000-08:002006-01-26T00:15:02.220-08:00Advertising isn't dead, but it is dyingThe new york times just ran this article entitled "<a href="http://www.nytimes.com/2006/01/23/business/media/23adco.html?ex=1295672400&en=c5e4ef6a6b49f485&ei=5088&partner=rssnyt&emc=rss">Advertising Is Obsolete. Everyone Says So.</a>"<br /><br />Advertising is dying because it is being replaced by better methods. The death of advertising is going to be a good thing. <br /><br />First step: Why does advertising exist in the first place?<br /><br />My theory: Advertising bridges a fundamental gap in human's ability to gather and process information. We can only gather and process a finite amount of information.<br /><br />Why is this important? Because commerce at its most basic level is the fulfillment of our wants and needs. In the modern world hundreds or millions of people come together to create every good or service; there are hundreds of potential means to fulfill our needs; and, an almost infinite number of potential desires. With this many potential products to consume or use, we can't possibly consider the full set of possibilities before making our decisions.<br /><br />In the pre-modern world, this was less of a problem because we had less choices. We had the natural world around us and our own work to fulfill our needs. In this situation we could reasonably understand most of the world around us. Further, we created very little surplus and therefore had very little wants to worry about.<br /><br />Currently, I believe 2% of the US workforce is involved in producing food (and we are a net exporter) I don't know what percentage covers shelter and clothing, but I assume it is less than half. That covers pre-modern needs. Then you need to add in education, communication, and transportation to cover modern pre-requisites of participaiton. Once you have totaled up all of our pre-modern and modern needs, there is still an amazing amount of surplus that can either be consumed as leisure or that can go to fulfill our "wants." Long story short, there are a lot of things to consume and each of us has the ability to consume a lot of things.<br /><br />What the hell does this have to do with advertising?<br /><br />Near Infinite Amount of Things that can be Conssumed --> Near Infinite Amount of Information<br /><br />Near Infinite Amount of Information + Limited Ability to process that information --> Information Overload.<br /><br />We simply cannot process all of the potential information.<br /><br />Enter advertising. In a world where all possible information cannot be processed, it is efficient to take some shortcuts.<br /><br />Advertising is a shortcut. It is efficient for producers of products to advertise that these products exist to create either: the desire to use the product to fulfill their needs; or to consume the product as part of their leisure consumption. <br /><br />(digression) The line between want and need isn't completely clear, and I think it is very possible that advertising can create the illusion of their product as fulfilling a need when it doesn't really. (end digression)<br /><br />So, advertising is a solution to the problem of information overload, and it has been a decent solution but not one without problems. (to begin, see digression above) The most important reason why advertising is an incomplete solution is that it connects people to the products that producers want people to buy, not the products that are going to make people the happiest. <br /><br />Thus, my elation at the impending death of advertising. It's not here yet, but it is on its way. The NYT story that sparked this diatribe mentions as one of the key new advertising tricks the impetus to try to get word of mouth advertising by creating "evangelizers." Put another way, they have to create noteworthy products that people like enough to tell their friends about. Put another way, they have to spend their 'advertising' dollars into making their customers happier.<br /><br />But, that's only the beginning of the change. Word of mouth advertising is basically people saying "We're similar, we usually like similar things, I like this, you should check it out." Instead of the producers of products overcomming the information problem, people who like the product share the information with other people like them.<br /><br />Word of mouth, however, is not a complete solution to the problem. The collection and processing of information is spread among more people, tens or hundreds instead of only one. This is progress, but not enough to analyze all potential possible information.<br /><br />But, if you take a quick look at amazon.com, you'll see how computers, reviews, and a thing called collaborative filters (a.k.a. the find good things algorithm) is going to put the next and near final nail in the coffin. Computers take and process more information than humans ever could. <br /><br />Collaborative filters and "find good things" for the uninitiated: Basically, it works like this. Imagine that there are two people - Jack and Susan. Jack likes things 1, 2, 3, and 5. Susan likes things 1, 2, 3, 4, and 6. Looking at the similar tastes Jack and Susan have for 1, 2, and 3; there is a good chance that a correctly programmed computer could recommend 4 and 6 to Jack and 5 to Susan. By looking at patterns of prefferences collaborative filters can find things people will love that they didn't know existed. In many ways, it is a huge system of "word of mouth" refferals aided by a computer. <br /><br />But, advertising isn't dead yet and collaborative filters aren't quite ready to step in and sort our information and prefferences for us. As I see it, there are two barriers to getting to this better system:<br /><ol> <li>Integration of more information. This is a three-part step. To be truly effective at finding hidden value for people, there needs to be 1) an integrated centralized system for all the information to be gathered in, 2) all potential products and services need to be agregated, and 3) a sufficent number of expressed prefferences for the algorithms to work.<br /> </li> <li>Improvement of the algorithms. <br /> </li> </ol> Advertising as we know it is on its way out. Once an advanced integrated system of prefferences and refferences is developed (based on a collaborative filter) ads will no longer be efficient. Those annoying non-targeted ads that you get in the middle of your tv programs won't exist as they do now because they will no longer be the best solution to the problem. <br /><br />I give it 5 to 10 years. Amazon has already made significant inroads and everyone loves their book suggestions. Claria (the people who brought you Gator and GAIN advertising systems - the height of annoyance, but the pinacle of effectiveness - <a href="http://www.emarketer.com/Article.aspx?1003785">Behavioral targeting is king</a>) is working on a search engine based on this (although it could probably be gamed). And I am sure some company I've never heard of has already secured millions of dollars from venture capital firms to build just such a system. <br /><br />The death of advertising is going to be good for consumers because it is going to be replaced by a system that will help us find things we actually want. The ability to force shoddy products onto people with cleaver advertising and brilliant marketing is going to dissapear, and the only way to move your product is going to be: create the most value for consumers. <br /><br />Sure it's not going to evolve exactly like this. But expect the death of advertising as we know it. It is currently the best sollution to a problem of information, and a better solution is on its way.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1138043493346494272006-01-23T11:11:00.000-08:002006-01-23T11:11:33.486-08:00Carnival of Investing #6 is up<a href="http://www.bargaineering.com/articles/carnival-of-investing-6.html">This week's carnival</a> is being hosted by Jim at Blueprint for Financial Prosperity. There are twenty quality posts this week for your entertainment and procrastination pleasure.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1137965120540223752006-01-22T12:29:00.000-08:002006-12-24T10:31:29.616-08:00Expected Value: the Lottery and InsuranceAt dinner the other night my little brother said that he was going to start buying one lottery ticket a week. I told him this was a bad idea, that he should put $1 into a sharebuilder account each week and once a year buy $48 worth of an emerging market index (china this year, india next, malasia in three, etc.). <br /><br />I explained to him that emerging market stocks are psychologically very similar to the lottery - some weeks you're up double others you're down by half (extreme example, not how much they actually fluctuate on a regular basis), and that you have a reasonable expectation that your money is going to increase over time. More on this expectation and emerging markets in a future post.<br /><br />I further explained that with the lottery, every ticket you buy has about a $.50 expected value for every dollar spent.<br /><br />He looked at me like I was crazy and said "an what value?" I realized he had never been taught expected values, and without that information the chance of winning the lottery seemed good - or at least worth a shot. <br /><br />Expected value is the sum of (the value of each possible outcome * the probability of getting that outcome). But that is likely not clear at first.<br /><br />Expected value is best explained using an example:<br /><br /><blockquote>If you and five buddies put $1 each into a pot and then draw straws to take home all of it, what is your expected value of this game? <br /> <br />The good outcome:<br />What is the probability you'll get the pot assuming the game is not fixed and completely random? Answer: 1 in 5<br />What will you get if you win the pot? Answer: $5<br /> <br />The bad outcome:<br />What is the probability you'll get nothing? Answer: 4 in 5<br />What will you get if you get nothing? Answer $0<br /></blockquote>The expected value is then: (.2 * $5) + (.8 * $0) = $1. You get $1 because nobody is taking a profit from this game. <br /><br />With the lottery there are thousands of possible outcomes, but the approximate result is that you can expect on the average $.5 for every dollar spent. <br /><br />If people are only getting $.5 back for every dollar spent, then they have to be getting something else as well for that dollar. You can then say that the fantasy of winning is worth at least $.5 to someone playing the lottery. And, in all likelyhood that fantasy is worth more than $.5. (this has to be true because people only trade $1 for something if they believe that they are getting at least $1 in value back) When I play the lottery (which I do to the tune of about $5 a year), I consider all of the money to be an entertainment expense. If I win, that's fun, but if not, oh well. That's why a lottery ticket almost always has a kind of a game as you scratch it.<br /><br /> <span style="font-weight: bold;">With the lottery you are buying: Expected value + (Entertainment or a Fantasy) >= $1.</span><br /><br />Then the conversation turned to the fact that I had bought an extended warrany on my new car. I explained that I was on the average going to loose money there as well. (I recognize that being a personal financial blogger, this is a sin unparrallell - I've entered into a transaction where I expect to loose money. Let me explain) <br /><br /> <span style="font-weight: bold;">If an insurance company is offering you something, You are loosing money on the average. </span> That's how insurance companies make money. If you haven't already, get your mind around that - it will help you accurately anylize insurance. <br /><br />In spite of this fact, Insurance is often a very good deal! <br /><br />Just like in the lottery, for every dollar you spend on insurance your expected value is less than $1. I don't know the numbers exactly, they could be computed easy enough, but I don't have the time right now. So let's say that the expected value of an insurance policy is $.75 per dollar spent. <br /><br />If you're going to be loosing money on the average, how is insurance a good deal? Insurance companies act like risk brokers. They buy risk from you and millions of people like you for more than the actual cost of that risk. Put another way, they sell you security for more than the average cost that security is going to have for them. <span style="font-style: italic;"><span style="font-style: italic;"></span></span><br /><br /><span style="font-weight: bold;">With Insurance you are buying: Expected value + value of Security >= $1.</span><br /><br />For the Insurance company: Expected value of risk < $1. <br /><br />Thus on the average they will make money, and they are doing thousands or millions of these transactions a year so they enjoy the statistics of large numbers - namely regression towards the mean. <br /><br />Back to my extended warranty. I had originally budgeted $62.5 a month to put into a "car repairs & maintainance" fund so that if something goes wrong I have a reserve. The cost of an 80,000 Mile, 5 year waranty ended up being $24 a month for the life of my loan (that is 80,000 miles and 5 years from today). I will still have maintainance like oil changes, tires, etc. But I don't have to worry about the cost of many other problems. I bought a Nissan and all I have to do if something that is warantied breaks is take it to a nissan dealer and they'll take care of the rest. That security is worth much more than $6 a month ($24 * .25 gap from expected value to the price I paid), the security alone is worth $24 a month to me. <br /><br />I did, however, have a small victory when I was deciding to purchase the warranty. The salesman at the dealership was saying "If you use it once for something like the air conditioning, that's $2000 (on $1,200 total), and it pays for itself. It is a good investment." I looked him straight in the eye and said "No it's not. If the insurance company is selling it to me, it is a bad investment. I am going to loose money on the average if I buy this thing." He looked at me, blinking, as I continued "What I'm trying to decide is if the security is worth the cost." He then promptly calculated the cost and changed his sales tactic to "For only $24 a month you don't have to worry about any major repairs. That's not a lot of money for that assuredness." Car salesmen have an amazing ability to turn sales tactics on a dime. <br /><br /><span style="font-weight: bold;">Upshot: Realize that in the lottery and insurance you're going to be losing money on the average. Knowing that, ask yourself if the entertainment/fantasy in the lottery or security in insurance is worth the money you're going to lose. </span><br /><br /><span style="font-style: italic;"></span>Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-18946140.post-1137961762496091562006-01-22T12:17:00.000-08:002006-01-22T12:29:23.956-08:00Things I learned buying my carThere are a couple of interesting things that I have learned after buying my car. Here they are in bullet point format:<br /><ul> <li>There is a difference between revolving credit history and installment credit history. You need to build both. (<a href="http://retireat30.blogspot.com/2006/01/bad-debt-leads-to-good-credit.html">see this post</a>)<br /> </li> <li>Dealerships will finance anybody. They don't always take a scalper's wage either (I got 6% vs. best possible at my credit union of 5.75%), especially if they finance you through a credit union.<br /> </li> <li>Some credit unions consider new cars to be anything from the last 3 years.</li> <li>If you're buying used, you should do so in a millitary town. Millitary people buy nice cars, treat them well, don't drive a lot (especially if they are overseas or on a ship), and then trade them in cheap. I almost don't want to share this tidbit, I don't want it getting out into common knowledge and raising the cost of my next used car - so please don't re-post this one on your blog.</li> <li>If you finance a car, you have to carry Comprehensive and Collision insurance on your vehicle with a minimum of a $500 deductible. (this raised my insurance $100/month over my initial estimates - I just didn't know)<br /> </li> </ul> If I think of any others I'll add them. If you have any other knowledge learned from experience, please share it.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-18946140.post-1137961023527576832006-01-22T11:57:00.000-08:002006-01-22T12:17:03.613-08:00Bad debt leads to good credit?I have just finished buying my first car (used 2003, very low miles). In doing so, I followed my car salesman friend's advice and went to a credit union to get pre-approved for a loan. The conversation went something like this:<br /><br />Me: I'd like to get a car loan for up to $20,000.<br />CU: OK, fill out this paperwork.<br /><fills><br />CU: My, you have the lowest debt-income ratio I've seen in a long time - 4%.*<br />Me: Yeah, I try to avoid taking on debt, I've had to recently because my job was only paying equity.<br />CU: That's a good reason. <enters><br />CU: Ok, you've got a decent FICO score (650 from them, up to 750 other places - good to excellent if you don't know much about FICO scores), and you're asking for a loan that is less than what you can afford. <sends><br />CU: Hmm... Do you have credit history.<br />Me: Yes, I've been building credit history for 5 years. My credit card limits have been increased steadily from $500 to $20,000 because I always pay on time.<br />CU: That's interesting, because it came back "denied due to lack of credit history"<br />Me: $20,000 in available credit is "lack of credit history" are you sure they aren't concerned with the amount of my un-secured credit lines?<br />CU: No, that's not a problem. Have you ever bought anything on installments? Do you have any installment payment history?<br />Me: No.<br />CU: That's the problem. <span style="font-weight: bold;">There are two kinds of credit: Revolving and installment</span>; you only have installment history. Thanks for comming in, perhaps you'll have better luck elsewhere or at a dealership.<br />Me: <not> Thank you, goodbye. <br /><br />* Debt/Income is calculated as: All Monthly Obligations (minimums on cc's)/Monthly Pre-Tax Income. <br /><br />As I walked out of the credit union I kept pondering the fact that I could buy a car with the space on my credit card, but I couldn't get a secured loan for the same amount. <br /><br /><span style="font-weight: bold;">The upshot: Having, using and paying a credit card responsibly is not enough to build a good credit history! </span> As you are building credit (i.e. as you are starting college), you should buy something on installments. Your computer, a digital camera, a mini-fridge, whatever. Something small that you can make monthly payments on easily to also build installment payment credit history. <br /><br />The ideal situation would be that you could buy it cash, put that money into a high-yield savings account, and set up auto-payments each month. In effect you will have paid a little bit more for your camera, but far less than the high-risk premium you would otherwise end up paying to get a car loan once you graduate. <br /><br />In the end, I got my financing through a dealership at 6% (a deal when you consider that t-bills are at 4.5% - that's the risk free rate; and when you consider that inflation is running at about 3%; thus the effective real interest rate on my car loan is only 3% and they think I warrent only a very low 1.5% risk premium). This is only .25% more than the best rate the Credit Union could have gotten me.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1137959849213339232006-01-22T11:52:00.000-08:002006-01-22T11:57:34.783-08:00Radio Silence, where have I been?It has been about a week and a half since I have posted, and I'm going to put up a few short posts today and likely have another short period of radio silence before I can begin posting regularly again.<br /><br />If anybody has been curious, or cares for that matter, the explanation is as follows:<br /><ul> <li>I'm changing jobs,</li> <li>moving cities (and countries for that matter),</li> <li>taking an intensive pre-work course for my new job,<br /> </li> <li>renting an apartment<br /> </li> <li>buying a car, and<br /> </li> <li>having a baby.</li> </ul> Other than that, i've had a lot of free time on my hands. I haven't left the blogosphere, just needed to spend a little bit more time down on earth for a few weeks.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-18946140.post-1137391789445000082006-01-15T21:41:00.000-08:002006-01-15T22:09:49.630-08:00Which path will lead to YOUR early retirement?Motley fool writer <a href="http://www.fool.com/About/staff/RexMoore/author.htm">Rex Moore</a> has just put <a href="http://www.fool.com/news/commentary/2006/commentary06011310.htm">up a piece</a> on how to retire faster in three easy steps. I'm going to add two more, because I think execution is crucial. <br /><ol> <li>Sit down. He suggests sitting down with family or friends to make it an easier and more pleasant activity.<br /> </li> <li>Brainstorm ways to cut $100 in expenses.</li> <li>Capture those methods and put them into an IRA.</li> <li>R@T Addition: Write down your expected savings and goal. Put these in a place you will see every day. A written goal you see every day becomes a contract with yourself that is much more likely to be fulfilled.</li> <li>R@T Addition: Check back at least every year to see how you did on your goal (this is going to be much easier if you <a href="http://retireat30.blogspot.com/2006/01/budgeting-made-easy-2-of-4-buy-quicken.html">automate tracking of your finances with Quicken</a>)<br /> </li> </ol> Once you have done these things, it is absolutely essential that you CAPTURE the savings immediately. Use automated transfers to your advantage here, and set them up immediately after you have decided to make a spending change.<br /><br />This is the cost-cutting approach to a faster retirement. Another approach, and the one I prefer, is to keep costs stable and grow income. Some ways to do this (and please share others if you can think of them):<br /><ol> <li>If you are paid hourly, work a few more hours a week and put that money into your IRA.<br /> </li> <li>Invest in education applicable to your current or future job (the education has to have a Return on investment, otherwise it isn't an investment in future income it is a leisure activity). Example: Getting an MBA vs. Taking a class on sushi cooking. Unless you're going to use your sushi skills to bring in money somehow, that's leisure not investment.</li> <li>Start a side company or business. If you can't work more hours for more pay, you can always start a side business to generate extra income. If you start spending your leisure time becoming an expert in something, and studying how people make money there, and more importantly where arbitrage opportunities exist (If you study vintage clothing for long enough, chances are you could turn an hour into a thrift store and $30 into $100 on eBay).<br /> </li> <li>Create more value for your boss, and the company you work for. Then, ask for a raise based on your increased importance to the company. At the end of the day you create $X in value at your job, you are paid $Y. $x - $Y = $P the amount of value you have created for the company after they have paid you your salary. If you increase $X, then there is more $P and $Y for you and the company to share. This, of course, doesn't always work. But even if you can't get a raise in your current job, this will put you in a better position to get a promotion or to get a better offer at a competitor. As a general rule, the more value you create, the more you get paid.</li> <li>Next time you get a raise, forget you got it and put that money into your 401k, or IRA.<br /> </li> </ol> In the end, all four of these boil down to one thing - create more value.<br /><br />Just like in spending less, when you are creating value to accelerate retirement: Capture is essential. You have to somehow make sure that you don't start thinking of this extra money as spending money. I like completely separate accounts, and tracking this money as either investment or property in Quicken (if it is cash flow, then there is a chance it is going to flow out again).<br /><br />If you want to retire earlier, you have two options: Live more frugally, or create more value. Obviously these can be combined, but most people it seems focus more on one or the other. While I have now started watching my Lattes, I am unwilling to compromise my standard of living too much to meet my goals. Thus, I'm left with creating more value.<br /><br />Which path are you taking to meet your goals?Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1137073482211137882006-01-12T05:41:00.000-08:002006-07-14T09:31:21.843-07:00Retire at 30 subscriptions top 50As of last night there are 50 people subscribed to the RSS feed from this site. <br /><br />I know for a lot of personal finance and investment bloggers out there 50 is just a drop in the bucket, but for a newbie like myself, it's something to get quite exited about.<br /><br />To everyone who reads my blog, thanks! Before starting this I never knew how enjoyable anonymously blathering on about personal finance and investment could be.<br /><br />If anyone has any suggestions or criticisms about the blog, I would love to hear them. Post a comment if there is something you would like me to write about, anylize, do better, etc.<br /><br />Whoo hoo!Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-18946140.post-1137028284383526942006-01-11T17:07:00.000-08:002006-01-11T17:11:24.586-08:00The Stupidity Tax & Flesh Eating BacteriaI'm fully expecting click throughs from rss readers to skyrocket with this post.<br /><br />The expected value of every dollar spent on the lottery is $.50 (or a 50% loss). If that isn't enough to convince people not to waste their time, Jeffery over at personal finance advice offers this tidbit:<br /><br /><blockquote>"the <a href="http://www.savingadvice.com/forums/showthread.php?t=5559">odds of winning the lottery</a> are 18 to 120 times less than dieing from flesh eating bacteria"</blockquote>For more of Jeffery's take on the famed stupidity tax, see his full post <a href="http://www.pfadvice.com/2006/01/09/just-win-the-lottery/">here</a>.Unknownnoreply@blogger.com2tag:blogger.com,1999:blog-18946140.post-1137002138236017012006-01-11T09:55:00.000-08:002006-05-28T19:35:37.656-07:00Penny Stock Spam PerformanceJust read an article on Kiplinger's about the performance of penny stocks that you get spam email about <a href="http://www.kiplinger.com/personalfinance/magazine/archives/2006/01/pennystocks.html">http://www.kiplinger.com/personalfinance/magazine/archives/2006/01/pennystocks.html</a>.<br /><br />In the article they claim that Joshua Cyr tracked their performance over about a 6 month period. Net result: Down 52% during which time the Russell 2K was up 12%.<br /><br />This begs the question, why are people spamming these stocks if they are going to plummet? Spammers aren't usually malicious people, they are usually people trying to make a quick buck - so my bet is that stock spamming is a pump and dump tactic.<br /><br />So, the expected performance is:<br />Pre spam price = x<br />Post spam price = y<br />6 month price = z<br /><br />Thus, knowing that they are spamming, it is rational that x < y. But it doesn't make sense to me why z would be less than x. It makes sense that z < y because the price change is driven by an artificial increase in demand and not improving fundamentals.<br /><br />Great article, but i am left wanting more. I think I will just have to set up my own spamfolio to track the stocks I get spammed about and see what the results are.<br /><br />If there is a definite discernable negative pattern to the performance of these stocks, then hot stock spam tips might just be the best contra-indicator you can find. I don't know much about short selling, but if 60% negative over 6 months is a generalizable phenomenon, I would kiss the idiots buying the stocks and the assholes sending this spam. Looks like I have two new projects for my to-do list.<br /><br />If anybody who reads this is familiar with this topic, please post a comment with your knowledge. I know nothing about this beyond what I just read.Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-18946140.post-1136992166374187512006-01-11T07:04:00.000-08:002006-01-11T07:09:29.963-08:00Carnivals for week of 1/9/06Carnivals are up.<br /><ul> <li> The <a href="http://retireat30.blogspot.com/2005/12/carnival-of-investing.html" target="_blank">Carnival of Investing</a> is hosted by <a href="http://www.freemoneyfinance.com/2006/01/carnival_of_inv.html" target="_blank">Free Money Finance</a>, and contains my post <a href="http://retireat30.blogspot.com/2006/01/value-investing-site.html">Value Investing Ideas Site</a><br /> </li> <li> The <a href="http://www.consumerismcommentary.com/carnival_of_personal_finance" target="_blank">Carnival of Personal Finance</a> is hosted by <a href="http://www.allthingsfinancialblog.com/2006/01/09/carnival-of-personal-finance-week-30/" target="_blank">All Things Financial</a>, and contains my post <a href="http://retireat30.blogspot.com/2006/01/budgeting-made-easy-2-of-4-buy-quicken.html">Budgeting Made Easy 2 - Buy Quicken</a><br /> </li> <li> The <a href="http://mightybargainhunter.com/2005/09/07/carnival-of-debt-reduction-guidelines-and-schedule/" target="_blank">Carnival of Debt Reduction</a> is hosted by <a href="http://www.pfadvice.com/2006/01/08/carnival-of-debt-reduction-17/" target="_blank">Personal Finance Advice</a>, and although I didn't submit it, Jeffery was kind enough to include my post <a href="http://retireat30.blogspot.com/2006/01/budgeting-made-easy-2-of-4-buy-quicken.html">Budgeting Made Easy 2 - Buy Quicken</a></li> <li> The <a href="http://www.bargaineering.com/articles/festival-of-frugality.html" target="_blank">Festival of Frugality</a> is hosted by <a href="http://okdork.com/2006/01/10/festival-of-frugality-5/" target="_blank">Okdork.com</a><br /></li><li> The <a href="http://www.thecotc.com/" target="_blank">Carnival of the Capitalists</a> is hosted by <a href="http://www.socialcustomer.com/2006/01/carnival_of_the.html" target="_blank">The Social Customer Manifesto</a></li> </ul>Unknownnoreply@blogger.com0