MUNY: Mental “lock in” … or … training elephants!

Friday, June 30, 2006

Interesting conversation with the car wash lady yesterday. Obviously a J&J retiree. Worried about the FED rate increase. And, tells me her portfolio is heavy into J&J. I gently remind her of the FIVE PERCENT RULE (i.e., never more than 5% in ANYTHING ever). She tells me that the capital gains taxes would kill her!

Now there’s a “cognitive bias” in action. I have seen it before in my own family.

One can focus so much on the impact of taxes that one loses sight of the objective reality.

I have seen an elderly relative take a million bucks and make it into zip in less than five years. AND, not for lack of me trying to “help” them.

It was an 80 $ per share stock. 100k+ shares! Virtually all gain.  So the proceeds would have been 680k. She was frozen by the thought of paying 120k in taxes. Instead, she rode it as spun crashed and burned into the countryside.

Arghh.

I tried sell half, sell quarter, or options.  I drew pictures. I cited experts. I vcred an executive of the company talking about the fundamental change of the company from “widow & orphans” to a “high flying tech stock”. (What an idiot!)

The lesson is that 5% rule is for your own sanity.

The poor person cited above was offered an option strategy that would have preserved the gain at a modest cost. Like Fire Insurance for stock certificates. I paid attention during my time on the Street. Don’t fall in love with any thing!

Arghhh arghh

Our self-imposed limits are the most devastating.

Young elephants are captured. A large rope secured to a huge treevis attached to one of the animal’s legs. Over time, the elephant learns it can’t break free and begins to struggle less. As the elephant becomes more docile, the massive rope around its leg is replaced with a dog’s leash. The elephant learned to be weak!

So, we can “train” ourselves into weakness.

When that weak muscle is our brain, we are in big trouble.


MUNY: Buy index funds using dollar cost averaging

Friday, June 30, 2006

http://tinyurl.com/f9tyj

***Begin Quote***

He acknowledges that the way he invests isn’t right for everyone. In fact, that’s what he tells people—including his four children—who ask him how they should invest.

“Most who ask don’t really know much about investing, and even though I actively manage my investments and own actively managed funds, I recommend they buy index funds and use dollar-cost averaging,” he said.

***End Quote***

Not bad advice for a Bull Market. In a Secular Bear, I’m not sure if that’s good advice.

There has to be some recognition of the Secular and Cyclical trends.

Auto-piloting your money is a good way to fly into the mountain. I have paid tuition at that “school”. Lots of tuition!


LIBERTY: The gubamint claims the Miami terrorist cell … …

Friday, June 30, 2006

http://www.informationclearinghouse.info/article13782.htm

… is more than a bunch of fools. Jon Stewart has an excellent point: no weapons, no plans, and clueless.

Hmm, is this the equivalent of Clinton’s aspirin factory?


TECH: VWBBIE and LUGGABLE come thru

Friday, June 30, 2006

Yesterday, a lot of my technology delivered nicely.

LUGGABLE is a power pig. Without an umbilical power cord, it will only run for at best an hour. So, recently I bought a auto lighter to ac plug at WalMart labeled Black&Decker. It says a 100w. I know that LUGGABLE insists on 130w to boot from the ac adapter. If the plugs not in all the way or crimped in a certain direction, ng.

So yesterday morning, I “did” my morning scrum for work by cellphone from a parking lot.. Their blackberry cellphone was strangely out of power so I had to use mine personal one. Arghh!

Then, I booted LUGGABLE from the battery. And then plugged it into the cigaretter lighter. It worked.

I went up on VWBBIE, after fighting off all the public wifis who wanted to service me. I should have tried them, but I was not into lab work. I had deadlines.

So, I tapped out my notes. Put them into the corporate email. Watch them come, via bcc, into my retail email account dedicated to work.

Shut down everything. Locked LUGGABLE in the trunk. And, went about my sad duties of the morning.

But all in all VWBBIE performed well. LUGGABLE was good. AND, my new BDPOWERPLUG was a great addition.

YMMV


RANT: A visit from one of my favorite socialists!

Friday, June 30, 2006

Amid yesterday’s activities, one sorrowful, one depressing, and one “fun”, we hare being visited by one of our favorite socialists. So clearly, this will provide a lot of material for this blog over the next few days. We intellectually crossed swords last night about education. After all the gubamint skools do an excellent job of leveling the playing field and homogenizing the sheep. The best statement of the evening is that “it’s not fair for wealthy parents to have advantages over poor parents in providing education for their children”.

You could pay someone to lob you softballs like this.

Oh yes, the current system does such a great job of indoctrinating “the chillren” now. By the gubamints own stats, the do a crappy job now.

Oh yes, eddykation is too valuable to be left to the parents. That didn’t work well in the past. It didn’t enable us to get into the folly we have now.

Oh yes, don’t leave people free to solve their own problems and supply their own needs.

Oh yes, don’t recognize the fact that poor people were educated in the past by mechanisms that they didn’t pay for. The assertion was that poor parents, working for minimum wage to support their families, (as if there are any of those), couldn’t afford to educate their children! Guess their were no free Catholic schools prior to the gubamint takeover of eddycation in the 50s. Poor people had nowhere else to go but Mommy Government and Father State.

Sigh, it is amazing that he can’t see that freedom works. Poor people, left to their own devices, and without the gubamint siezing their assets by force, will amaze us. Yup, poor people are robbed by the gubamint. Sales tax, Ponzi (social security insurance) tax, and the Employment Tax (the hidden employer’s portion of ssi tax) are  just a few on the income side. The poor person’s costs are raised when real estate taxes are high, the supply of rental units is restricted by “zoning”, and the landlords are harassed by the petty clucks who enforce all manner of stuff. AND, just in case the poor person gets a buck a head, inflation silently seizes 95% of it over 30 years.

My now departed father in law used to have a folded up fifty dollar bill in his wallet. He had carried it their since he was a young man, so that he’d “never be broke”. He was blue collar working guy. Salt of the either. Raised his family, paid his bills, and did the best he could. He was poor! BUT, he never realized, (I didn’t tell him cause he wouldn’t have believed me! I was just a child in his eyes.) that HIS beloved DEMOCRATIC (not that the R’s are any different), silently stole his “fifty in sunken city”. Yup, when he put that Fifty in his wallet if could buy lots of stuff: A hundred gallons of gasoline. Feed his family for a week. Ffity cartons of his beloved Lucky Strikes. Pay an entire hospital bill for an accident. It had value 60 years ago. After 60 years of inflation, I didn’t have the heart to tell him that his beloved Fifty was really was worth about 13 cents. Sad isn’t it.

The gubamint is an addict hooked on the twin drugs of power and money! We have to take the rampaging 800 pound gorrilla, put it in a straight jacket of limited powers, put it on a fiscal diet, and return it back to its role as servant, not master.

Should be a fun week for gathering material.


RANT: Went to a wake tonight … a barbaric custom

Wednesday, June 28, 2006

There HAS to be a better way. Visiting with relatives isn’t bad. And, now that my asthma, or whatever it was, is cured, the flowers don’t send me into spasm. It’s just the deceased. And, no one ever looks “good”. Argh.


GUNS: Today’s bad idea … bullets with built-in encryption … arghhh!

Wednesday, June 28, 2006

http://it.slashdot.org/article.pl?sid=06/06/27/1544203&from=rss

***Begin Quote***

holy_calamity writes “A patent has been filed for bullets with built-in encryption. Pulling the trigger sends a radio signal to the cartridge in the chamber, but the charge only goes off if the right encryption key is sent. The aim is to improve civilian firearm security.”

Not sure I’m quite ready to trust the average techno-gadget failure rate on something like this just yet.

***End Quote***

I agree. This is a dumb idea. Next somebody will suggest guns that need keys. Oh yeah, they have “trigger locks”.  That don’t work.

If some one has a two legged or four legged varmit that needs killing, then the last thing they need or can afford is a misfire.

Gun is a simple tool. Only an idiot would make it more complex. Complexity leads to failures. Failures in a life or death situation are unacceptable.


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