Finance

105 posts

Financial Endgame

9 comments

I was asked recently why I had not posted any 2012 Financial Predictions. The short answer is that my market timing skills have sucked since the end of 2009 and so I decided to stop doing...

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Vindication

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In 2005 I watched the real estate craze from a front-row seat in San Diego. My home value rocketed up to insane levels. Those with homes were drunk with excitement on how much money their home was...

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Why America Wins

20 comments

With a growing number of people dissing America these days, I thought I'd take the contrarian position and explain why America wins. Before I list the reasons, I think we need to explain what it...

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Eye of the Hurricane

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Right now we are in the eye of the hurricane. For weeks we've heard economists talk about recovery and green shoots. Nonsense. Note that these economists are the same ones the missed the recession...

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The Fat Tail

Last month I attended a lecture by Ian Bremmer about political risk and financial markets. It was interesting enough to inspire me to read his book. !The Fat Tail: The Power of Political Knowledge...

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Not As Short As I Used To Be

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At the beginning of the year I listed 633 as my 2009 target for the S &P 500. We came close to that last week. My plan all along has been to lighten up on my short positions as I get close to that...

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Debt and Leverage

In the article Wall Street on the Tundra, financial writer Michael Lewis can brilliantly summarize the roots of the economic meltdown in just three sentences. > When you borrow a lot of money to...

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Mr. Microsoft vs Seattle Billy

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Some of my readers are already familiar with Seattle Billy. For those that missed those posts, here is all you need to know. - Bought a condo conversation at the absolute top of the Seattle real...

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An Update on Seattle Billy

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Back in March, I posted an entry called The Financial Wisdom of Seattle Billy. He is a likable guy, but when it comes to financial decisions, he is the perfect gauge of what not to do. From that...

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Timing the Stock Market

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I am not into Technical Analysis, nor do I care to be. My financial thesis is based on valuations and statistics. Timing the daily or weekly movement is not something I am equipped to do. This means...

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2009 Financial Predictions

33 comments

Here are my 2009 Financial Predictions. My general thesis is: - Cash is King - If You're Long You're Wrong. S&P 500 - By the end of 2009 it will hit 633. This estimate is based solely off...

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Anatomy of a Good Trade

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A few days ago I posted Anatomy of a Bad Trade, where I openly discussed the worst stock trade I ever did and the lessons I learned. This week I had a picture perfect trade, where I followed my rules...

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Anatomy of a Bad Trade

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Occasionally I serve up a post on my investing successes. Now let me tell you about the worst trade I ever made and the lessons I learned. On January 3, 2008, on the post My Drudge Report Oil Short...

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He Bought At The Bottom

10 comments

I love talking to people about investing. Listening to what people are doing and how they interpret the financial news is very helpful to me. Being a contrarian has been profitable to me. In the last...

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Oil Hits $55

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A year ago, it seemed that everyone thought oil prices would continue to rise. I heard predictions for $200 and even $300 a barrel. Who would have guessed one year ago that oil would be down to $55?...

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Financial Logic Fails

12 comments

This weekend I talked to several people regarding the current state of the markets. They all remembered that I had called for this correction and advised moving their money into fixed income. Most...

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Picking a New S&P 500 Target

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Back when the S&P 500 was much higher, I announced my target for this index was 1000. From my July 15, 2008 post Shooting the Messenger: > I see the S&P 500 dropping to 1000 by the end of the year....

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Investing 101 - The 401K

In the post Investing 101 - Before You Invest, I gave my thoughts on how I approach post-tax investing. Now I want to cover the other side, which is pre-tax investing in a 401K or similar plan. Many...

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My Counter Party Is Over

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Back in March, I wrote one of the most popular posts on this site titled Ultra ETFs and Counterparty Risk. It is a long detailed post where I outlined my concern that if a seismic shock to the...

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Funny Finance Book

OK, it isn't a true finance book, but it is one hysterical read. !Dave Barry's Money Secrets: Like: Why Is There a Giant Eyeball on the Dollar? Dave Barry's Money Secrets: Like Why Is There a Giant...

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Financial Book Picks

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In the last few years, I've read quite a few books that are related to finance. Here are my favorites broken-down by sub-genre. Basic Investing !Bull's Eye Investing: Targeting Real Returns in a...

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Won The Lottery Revisited

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On March 9th, 2006 after receiving the money from the sale of my house in San Diego County, I wrote in the post Won The Lottery : > Yesterday, I received the money for the sale of that house. It was...

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Shooting The Messenger

Please don't blame me. It isn't my fault your home price is plummeting, your 401K is getting rocked, and your bank is in trouble. I'm just a student of financial history who saw things differently...

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More Than You Know

Over the past three years, I've read many financial books across various subtopics. Although I had intended to take a break from the finance books, I couldn't pass up a chance to read this book....

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IndyMAC - Dead Bank Walking?

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This March in the post IndyMac Im Never Coming Back, I wrote how as soon as my CD matured I closed out my account. > This morning my CD with IndyMac bank matured. IndyMac has the lowest rating a bank...

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I Wouldn't Bank There

There is a bank that is popular with many people here in Seattle. It even has our state name in its name. Well, a few of my mutual friends have heard my reasons why I'd move my money to a different...

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While America Aged

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I lived in San Diego during their pension crisis a few years ago. The story was confusing and never held any interest with me. Boring. Change the channel. So why would I read a book about the dull...

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Meet Nassim Nicholas Taleb

1 comment

I rarely link to or discuss articles from newspapers, but I must make an exception. The Times Online has an outstanding profile titled Nassim Nicholas Taleb: the prophet of boom and doom. Read it....

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The Simplest Investing Rule

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Karl Denninger has some excellent advice for regular investors on how they can outperform the stock market indexes with minimal research and minimal trades. His rule which he learned from his Chicago...

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Picking a Real Estate Bottom

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Every so often I'll get asked when I am going to buy a house again. My response is not until after prices bottom. This is when I'm asked to give a date prediction. It's not that easy. Instead of...

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Bear Market Investing

I've received some emails regarding my recent post Ultra ETFs and Counterparty Risk. People are interested and amazed to learn there are ways to make money as the stock market drops. It used to be...

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Just What I Said

Despite having one of the least attractive book covers I've ever seen, Just What I Said is an outstanding collection of economic columns from one of the best, Caroline Baum. !just-what-i-said Just...

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Ignore My Financial Advice

A few people in the last month have asked me for financial advice. Giving financial advice is a delicate and risky endeavor. It's not like fitness or nutritional advice. If I tell an overweight...

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Firing My Mutual Fund

Sometime in November, I got around to reading the Letter to the Shareholders for the Oakmark Equity and Income Fund. For about a year I had some money parked in this fund and I was up about $2,000....

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The Black Swan

Why the modern world can't seem to predict outlier events with extreme impact is the focus of the book The Black Swan. !The Black Swan: The Impact of the Highly Improbable The Black Swan: The Impact...

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When Genius Failed

Long-Term Capital Management (LTCM) was the hedge fund that imploded in 1998. It used massive amounts of leverage to generate high returns. As long as that leverage works in your favor, you can make...

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Real Estate Cassandra

From Wikipedia: > In Greek mythology, Cassandra was a daughter of King Priam and Queen Hecuba of Troy whose beauty caused Apollo to grant her the gift of prophecy. However, when she did not return...

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Inverse Investing Made Easy

When buying equities the game has a simple philosophy: Buy Low, Sell High. That's all fine and dandy if you believe prices are going higher. What happens if you wish to invest and you feel the market...

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Renters Lose Money?

You always hear how renting is dumb and you are just throwing your money away. Under normal market conditions owning is a better financial decision than renting. However, real estate prices today in...

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Buy Low, Sell High

Back in the late months of the dot-com days, I sold all my stocks and used the money for a home down payment. It turned out to be a brilliant move. Had I stayed in the market another 6 months, a...

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Won the Lottery

In 2001, I placed a 5% down payment on a house that was priced at $389,000. Quite a few people shared reservations that I wasn't making a very wise decision. One aunt who had previously lived in...

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