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| Slacker Wealth |
| About a slacker's attempts to have a liquid, inflation adjusted net worth of one million dollars with as little work as possible. Includes broker reviews, investing newsletter reviews, reviews of other investing sites, and general thoughts on various investing strategies. |
| Language: English |
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| Total Unique Visitors: 6148378 |
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| Total Visitors Out: 90006 |
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| Stock Splits: much ado about nothing |
| 2012-02-07 19:10:00 |
There are lots of people talking about stock splits nowadays. “Will Apple [AAPL] split, do you think? I hope so, cause that'll make me rich!” “It would be so awesome if KMP [Kinder Morgan Energy Partners] did a stock split so we could get more shares and a bigger dividend!”
These kinds of statements, rife on the various finance message boards, make me shudder and put in stop loss orders. And not just because KMP has units instead of shares.
It's because stock splits are mostly meaningless. And when people who don't know this invest in the same things I do, I get nervous.
A stock split occurs when a company divides each of its existing shares into more shares. For example, suppose that corporation XYZ declares a 2-for-1 split. This means that if you own 100 shares before the split, you own 200 after.
Many people are unfortunately under the misapprehension that if this were to happen with the shares of a company that they own, they would double their money. And that if the co...
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| Buy and Hold Forever Dividend Stock Update |
| 2012-01-02 11:13:00 |
After a couple of years I've finally gotten around to updating the Buy and Hold Forever Dividend Portfolio.
To refresh your memory as well as mine, the idea was to find a couple of dividend stocks from most industries, on the basis of familiarity rather than research. That is, the criteria for stocks making it into the portfolio were: the stocks were in the news at the time and/or their products were ubiquitous. Absolutely no research was done other than to make sure that the stocks picked paid a dividend.
The point of this exercise was to see how well a relatively uninformed investor could do if his investment thesis was that buying and holding dividend paying equities forever isn't dead, as most of the talking heads have been telling us since the financial crisis began.
At the time the experiment was initiated, SPY was designated an alternate and benchmark buy and hold forever dividend portfolio.
Changes to the portfolio since the last update
Verizon (VZ) spun off shares of Front...
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| Useful Idiots |
| 2011-10-08 09:49:00 |
What do we want? We don't know!
When do we want it? Now!
The way the protestors on Wall Street and around the country are acting, that's pretty much what they're chanting. They're organizing via Facebook and social networks. They're antagonizing the cops and filming themselves getting beaten with their iPhones. They're drinking Starbucks coffee and smoking cigarettes made by Big Tobacco. --All while they're complaining about corporate greed.
In San Francisco protestors aren't really sure why they're protesting:
Organizer Anthony Bondi said he has what he referred to as a “message team” working on the primary goals of the local protests, which he admitted “was kind of vague.”
“That message team will reveal that tomorrow [Friday] morning,” Bondi said.
“So you guys are in the process of forming the reasons why you are here?” asked CBS13 reporter Tony Lopez.
“Exactly correct,” Bondi said. In Washington DC people are getting paid to protest, and also don't know...
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| Amazing Media Hype Over a Tropical Storm |
| 2011-08-28 09:01:00 |
Yes, Irene was (is for people now in it) dangerous. Yes, it resulted in the unfortunate loss of life.
But Irene made landfall as a tropical storm while the media insisted "hurricane! hurricane! hurricane!" It wasn't a hurricane because if you actually looked at the wind measurement data (not the articles or TV and radio reports, but the actual data) there were no sustained hurricane force winds.
As I'm writing, the sun is out in NYC. It's still windy, but it has stopped raining. The forecast on Weather.com says there's a 50% chance of scattered thunderstorms between 12 and 1 PM. But what does the Associated Press say? "Unusually quiet New York waits for Irene's worst," is the headline. The lead paragraphs read like a bad novel instead of a news report:
Waterlogged and silent, New York awaited the worst of Hurricane Irene as an unsettled dawn broke over the city Sunday. Wall Street and the labyrinth of cables and pipes beneath the nerve center of global finance were at risk from c...
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| A Way to Raise Cash and Still Participate in the Market |
| 2011-08-08 12:16:00 |
Most investors get caught with their pants down when markets top out and crash. As a result, they have little cash to buy the significant dips and have no cash at all when the market finally bottoms.
Here's a way to raise cash without losing out on potential gains if the market suddenly turns around: Sell your stocks. Use a portion of the proceeds to buy deep in the money calls that are at least several months from expiration date. Buy one call for every hundred shares you sold (provided that every call in the security you sold corresponds to 100 shares).
The idea is to get cash into your account (to decrease volatility, pay the bills, take advantage of the higher yields that dividend paying stocks will pay if they fall some more, etc) while still being able to profit if the market turns around and goes up.
Example
Let's say the cash balance in your portfolio is essentially zero. SPY, the ETF that corresponds to the S&P 500, is trading at $116.37 at the time of writing. Let's s...
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| Complete and Utter Failure |
| 2011-08-01 08:39:00 |
Congress is getting ready to vote on the raising the debt ceiling after Obama and leaders in Congress agreed on a deal that will cut the deficit by $1 trillion over the next ten years. This would be laughable if it weren't so sad.
First, the trillion dollar figure depends on a rosy picture of economic growth. If we have a recession in the next ten years, which is very likely, the trillion will be reduced to billions. If interest rates rise, the cuts will be reduced even more.
Second, even if all of the government's optimistic projections come true, they are only cutting the deficit by $100 billion a year. This year's budget deficit is estimated at $1.5 trillion. Next year's budget deficit is estimated at $1.1 trillion. So, if they start cutting the deficit right away by $100 billion per year, the national debt will increase by $2.4 trillion by 2013 instead of $2.6 trillion. Wow! Congress is saving us a lot of money! Not. Why do they even bother?
Third, it is important not to confuse...
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| A Question for the Raise the Debt Ceiling Folks |
| 2011-07-27 15:34:00 |
Just to get it out of the way, let me note that I think of course they're going to raise the debt ceiling. Whether all the wrangling is scripted or not, our elected representatives want everyone to see how hard they are working.
In the end, whether Congress passes a bill and Obama signs it or if the President invokes a clause in the 14th Amendment (which had to do with Civil War debt and nothing to do with the President being able to borrow--remember that Congress has the power of the purse and this power is one of Congress' most important tools in checking and balancing the power of the President), we'll end up with the worst possible law, as always. That's just how the government works.
Now to my question for everyone who says that we must raise the debt ceiling. Senator Al Franken, of Saturday Night Live fame (I think the funniest moment of his career was when people actually voted for him), has listed what the government can and can't pay if the debt ceiling isn't raised.
Frank...
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| Here's an idea to save money |
| 2011-07-26 11:25:00 |
Corporations have been outsourcing American jobs for decades now. The reason is simple. Foreign workers are willing to work for less and there are no minimum wage laws to worry about.
So why don't we US taxpayers try to save a small bundle by outsourcing Congress, the Judiciary, the Executive Branch, and the rest of the government?
I'm sure people in China and India will do the same horrible job we've come to expect. They'll be just as corrupt and incompetent. And we'll have pretty much the same dumb freedom and wallet robbing legislation.
But they'll do it for less.
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| Cupcakes coming soon |
| 2011-07-13 10:48:00 |
One last bout of gorging before the heart attack?
Bernanke: Fed May Launch New Round of Stimulus
No one saw it coming!
Federal Reserve Chairman Ben Bernanke told Congress Wednesday that a new stimulus program is in the works that will entail additional asset purchases, the clearest indication yet that the central bank is contemplating another round of monetary easing.
"They’ll continue to print money. Maybe they’ll call it QE3, or Cupcakes, or something else." -- Jim Rogers, May 2011.
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| Happy Fourth of July! |
| 2011-07-04 12:33:00 |
I saw an interesting article in The Weekly Standard. A couple of lines made me laugh, and cry:
the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job. In other words, the government could simply have cut a $100,000 check to everyone whose employment was allegedly made possible by the “stimulus,” and taxpayers would have come out $427 billion ahead.
I like to cite statistics to point out incompetence as much as anyone, but this gave me pause. Yeah, cutting a $100,000 check to 2.4 million people would have cost less money and been more stimulative in the short term, but what about the long term?
The $100k payment would be a one time deal. The job created by forking over $278,000, on the other hand, will hopefully be there for a long time. It is conceivable that the people hired or spared might, after some period of time, however long it is, produce ...
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