Tuesday, September 29, 2009

Work Draining...

I know I haven't been posting much lately. One reason is that work has just been so draining lately. I don't know why but it seems to be taking much more out of me than it usually does and these have been fairly light days lately. At first, I thought it was rest related, but after resting up all weekend, the first day left me feeling sore after. Now I'm really drained. My legs ache, my right upper arm burns and when I close my eyes, I feel like I want to just curl up in a ball.

Saturday, September 26, 2009

20kT of gold?

http://www.nevadacounty.com/business/mormons-scammed-for-50-million-promising-sale-of-20000-tons-of-gold/
http://en.wikipedia.org/wiki/Official_gold_reserves
I recently found out about this scam where people were ripped off by a con artist claiming to be raising funds to broker a deal involving twenty thousand tons of gold. That's right, twenty thousand tons.
Man, that's a positively staggering amount of gold. As the article says, more than twice the USA's gold reserve. Based off the wikipedia figures, 1/8th of all gold ever mined, roughly the amount of gold held in the combined reserves of the USA, Germany, IMF, France and Italy. I can see why someone wanting to make a transaction this size would have trouble. The serious players in the gold industry probably find it completely absurd that anyone might conceivably have that much gold in their possession. Then there's the problem of trying to amass enough money to pay for that much gold. From the thirty million dollars from wikipedia, this is a six hundred billion dollar transaction. That's three times the GDP of Israel, where the people who amassed the vast fortune of gold are.

Saturday, September 19, 2009

Commodity Trading

I've been seeing a few commercials that really make me wonder about public perception of investment markets. The ad I keep seeing portrays one person who is down and concerned about his investments talking to another who exudes confidence because she's in commodities instead of stocks or real-estate. The commodity market has been advertised as being an easier place to invest because apparently p/e ratios are confusing and price speculation is an easy road to profits. Maybe I'm ignorant on the subject but you're either dealing with contracts for delivery at a later date, or the cost of storage. The possibility of losing money is there and I'd be surprised if it's any simpler.
I wonder why I never see bonds pushed as a less confusing and less risky alternative to stocks or real-estate. While there are some questionable bonds out there, there are also plenty of bonds out there that offer a reasonable measure of security. You can also predict your return easier since they have a stated interest rate and maturity. It's also much easier to make guesses as to whether or not a company will still be in business in two years. It doesn't need to grow for you to make money, it just needs to not be distressed between the purchase date and the bond maturity date.

Sunday, September 13, 2009

Budget blown, but for a good cause

Well, I said that I'd exclude family items, so I'll shrug this off. Since I'm expected to be part of the family while I'm sharing a place with them, family expenses aren't always avoidable. This one though was. I went along with my brother to go check out a place for a possible location for his wedding. It was a pretty nice formal place, good food. I probably wouldn't go there again for no reason. Just doesn't seem worth it to me.

Tuesday, September 8, 2009

Forgotten items

Seems that I have forgotten something in my estimate of how much money I could make by the end of the year. I forgot to take into account that I'm going to be attending a wedding in November. Thus, I suppose that makes the target roughly $9,000. Still a sizable amount, and still short of what I'd like to be capable of.

Monday, September 7, 2009

New Goals

After looking over the numbers, I’ve decided to set two small goals for the rest of the year. The first is to cap my recurring spending to $20 a week excluding my bus pass. That should probably curtail spending by quite a bit. Though I suppose I’ll leave family related spending in the open.
The other goal that I’ve set is to buy $10,000 in new investments. Based on my best estimates, that seems to be a maximum, which is depressing in a way. Not that I’m not grateful for the progress I’ve made so far, I would greatly appreciate faster.
Finally, on the verge of starting another work week. 141 days down, going on 144.

Saturday, September 5, 2009

The correlation between the stock market and the real economy

In his classic book "The Intelligent Investor," the great money manager Benjamin Graham wrote that "the investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances." If you can't exercise that kind of emotional control, then by Graham's definition you aren't an investor at all.

I recently came across yet another article expressing concerns that the stock market may be over valued at this point. It does point out that during a lot of economic recoveries, the stock market doesn't necessarily go the same way. Coincidently, I saw another article regarding how during some economic crisis, the stock market doesn't always collapse, which I'll have to try to find for this. This is another article that ties into this regarding how GDP growth and stock market returns don't correlate.

Apparently, it ain't so. There is no relationship between a country's high GDP growth and stock market returns, especially not in the long run and only weakly in the short run. In Economic Growth and Equity Returns from SSRN, professor Jay Ritter calculated that there was in fact a negative relationship between economic growth and stock returns in 16 major countries (including Canada and the USA) over the period 1900 to 2002 - this chart is taken from the paper.

Overall, I'm concerned that the stock market could go down further, however, I do feel that the economy is starting to turn around. At the same time though, I'm also expecting unemployment to trend higher for a little while longer. Question of the day though, do I get excited by sizable gains and concerned over significant declines? I get concerned any time anything looks irregular. Watching Al Gore's Inconvenient Truth gets me worried for the simple fact that if he isn't right the temperature isn't going to rise and disaster isn't upon us, correlation has broken down. There are unknowns challenging our understanding and I don't like that. After all, it's not what you don't know that screws you over, it's the things that you're certain of that are wrong that make you look nuts in the eyes of history.
With regards to current times though, I will be happy if cash flow is maintained and news releases don't cause me to wonder if declines are on the horizon. Though a significant decline right now would probably cause me to pause and re-evaluate my options and cause me a little bit of worry. Probably a healthy response.

Closing doors

I was thinking of how I want to leave the past behind and start over. For some reason, I was reminded of how we regularly discuss the pros and cons of destroying the last known remaining samples of smallpox. I haven't heard about that in a while. After a bit of research, I found out that smallpox is still kicking and we're due for another discussion on the topic later. While the world will go on with or without smallpox, I don't feel that I have the luxury of living in an uncommitted state indefinitely. I feel a considerable deal of apprehension about it. The time isn't right yet though.

Friday, September 4, 2009

Little bit of overtime

I got a little bit of overtime this week. Only 15 minutes to help clean up some stuff. This is what I got for it.
0.25hr x $16.75/hr x 1.5 (overtime) x 0.7 (taxes) = $4.26
It adds up.

Tuesday, September 1, 2009

August month end

deductions/gross pay 21.6%
gross pay saved 59.8%
take home pay saved 76.3%

spending/gross 10.5%
spending/take home 13.4%

loan payments/gross 8.1%
loan payments/take home 10.3%

total outflow/gross pay 40.2%
savings $1675.61

This has been my most expensive month so far this year. I spent close to $300, which isn't inherently obvious in my summary. I'll put off changing the look of my spreadsheet till next year though. Overall though, I think I'm still doing well. As a percentage of my income, I am still saving more than half my gross pay and more than three quarters of my take home pay. Took the family out for lunch once, took my sister out for lunch once, and collected a set of Olympic sports water bottles. Overall, nothing too unusual. I have no good excuses like renewing my driver's license this time.
Finally as of the end of the month, I worked 138 days. As of this post, 139.