Christmas Done Come Early

This is IT! Day One of personal freedom is dawning! I need the help of everyone that loves, hates or barely tolerates me!! Go take a peak at the 400 PLUS entries in the Ft Worth Star-Telegram Serial Novel Contest, and before you leave, if you wouldn't mind dropping in a vote for entry #038 (have to use three numeral format on the voting form, which is a pop-up), then I won't have to come to your place of work and tell all of your co-workers and friends about the shameless little display down in Mexico last summer, the terms of your probation from the last Las Vegas trip, or why you still have nightmares about showing up for grade school nude...


Voting ends Feb 7, and with 400 entries this is more about marketing than writing, so call in any favors you have, call your girlfriend, call your mom... hell, call your girlfriend's mom. Just show a little love...

Advanced Consumer Econ Pt IV - Greybeard U

Before we thump our chests, and start chanting about putting the women and children to bed in advance of our little hunt and kill expedition, there are a few more basics to cover before we go balls to the wall and start spending your children's inheritance on off-shore, pyramid, fractionally owned, currency traded, China-Googled get rich quick investments. These are simple rules, the advice is free, you get what you pay for...

I read somewhere once that managing your invesments/retirement is a necessary part-time job. Swell. I have been working 12-15 hours a day since the first week of January as it is. I already have a part-time teaching job. The sweetness of nitromethane powered drag racing begins next weekend. I have children scattered across the DFW metroplex. The newest chapter to the rest of my life starts in a few short hours. All I need is one more part-time job. In order to keep your pieces o green in your investment account, it makes sense to keep the universe of potential investments limited.

Rule 1: Select a number of stocks that you want to track on a regular basis. 10 may not be enough, 75 may be too many. You probably won't be invested in all of the stocks in your pool at the same time. Inevitably you will read about some wonderkind emerging stock that you will want to take a look at, and there will be a drowning victim in your pool that you want off the list. Out goes the room temperature ballast, in goes the new stock. Think of it as window shopping for stocks.

Rule 2: Stick to what you know. Refuse to by any razor except Gillette? Does your pantry look like a show room for Coca-Cola and Duncan Hines? Do you work for a Fortune 500, and find that you like your job, believe in your product, and your customers love you? Have a pretty good handle on the ebb and flow of retail, or you are certain you understand how Google generates its massive income? You just established the foundation for your pool. If you constantly find yourself bitching about the cost of a tank of gas, only to be greeted by airy commentary on the car radio about how MobilExxonShellBP mega oil just posted record profits again, yet you keep going to the SAME branded gas station for your weekly poke up the ass, guess which oil company you need to invest in...

Rule 3: Open the package. Over the remainder of this course, we will talk about some very simple concepts and vocabulary words that will allow you to simply and easily monitor the health and saftey of your favorite swimmer. You will need to find a library or other public computer so that you can visit the SEC on a regular basis, without the black helicopters hovering over your house in "Silent Mode" ala' Blue Thunder. For now, with your super-secret SEC log-in, all you need to know is WHAT does the company do, WHERE does it do it, HOW does it do it, and does it have to have a lot of DEBT to get it done?

In an earlier post, I mentioned that Blockbuster had found a way to punish its current customer base AND delay bankruptcy for another 6 months, by jacking up the monthly fees on its "FastPass" or "Passport" or whatever the hell where you could take two movies and keep 'em forever, or alternatively, spend all day picking out two movies, walking through the door, and getting two more... the clerks love it when you do that 30-40 times on a busy Saturday. Point is, Blockbuster has been having a bit of trouble keeping banks, bondholders, and other investors happy. (Forget for the moment that they have not been able to stay out of court due to their practices regarding late fees). Just like Aunt May, who had to file bankruptcy last year, or the federal government that files a psuedo-bankruptcy every time it jacks up taxes, or issues more T-bills, companies that rely on credit to operate get themselves in trouble. They lose flexability, they lose the ability to quickly jump on emerging business opportunities, and their credit costs (think of those credit cards in your wallet that will all be at 30% APR's by July) eat into the profit margins they have to produce to keep you, as a potential or actual investor, happy. When Blockbuster raised its monthly fees, I shut off my account. Netflix for me all the way baby (unless Blockbuster wants to bring its bankruptcy bidness to me, then we can talk).

GM claims it has 19 billion in cash, but then you gotta figure in the 3 billion and change that they are sloughing off to Delphi, and you gotta look at that little issue of having lost 4 billion in the last quarter. (Just once, I would like to blow 4 billion in 3 months....). Until GM uses some of that money to design a car that doesnt look like the by-product of a monkey humping a football, there is little chance that they can stop the nose dive. Without access to truly "free" cash, or cheap credit, GM just don't stand a chance with the current line up.

For a while, Sturm Ruger was a great invesmtent. They were debt free. They were closely aligned to their core business. Papa Bill was still at the helm. Liberal activists hadn't started their attempts to pervert a legal system that already has its hand up the girls' skirts by trying to sue gun makers out of existence. Dont expect to find a bushel basket full of debt free companies, but if a member of your pool cannot take a corporate crap without Moody's or Standard and Poor issuing a flurry of press releases, maybe that stock should be on the Dead Pool list.

That is enough for tonight beloved. Scour the home, find 5-6 items that you or your loved ones purchase on a regular basis, start building your pool. Next class, someone remind me to tell you why Starbucks may be a better buy than Burger King...

Dateline Detroit - GM announced today, in a last chance attempt to save North American operations, that it will take a two pronged approach to realign its business model with market demands. In an admission that GM has been whore-mongering its "other" lines, GM will revive Oldsmobile, and at the same time will completely spin-off Oldsmobile and Pontiac so that they can stretch their wings and create some truly unique, muscular opponents to Ford and Dodge. Even more shocking, GM announced a special racing option that will be available for all of the current GM lineup including the Corvette, the Solstice, the GTO and the "Oh we dont know if we will build it or not" Camaro concept. Departing from previous numbering systems, the new racing package will be designated the L69, but your local dealer will know it as simply... Formerly Living.

Nuclear Iran, and other Modern Disappointments

Perhaps the end is near after all. The other day at lunch, my cellmate and our paralegal shared an elevator with a bunch of accountants from a temporary office on our floor. In the time it took to descend 120 feet to the ground floor, I came to understand how exactly the emergence of the Metroplexual will indeed spell the end of Western society, and perhaps all of civilization as we have come to know and despise it.

Young Metro #1: "Gosh, where should we eat. You think we can get into El Guapo now?

Toying with being neighborly to the temporary residents, I almost pointed out that El Guapo is impossible to get into after 12:15, especially with a group as large as theirs. Before this rare display of common courtesy could escape from my grips, the other hairy girls from next door chime in...

Young Metro #2: "Now hold on, silly. Where did you eat last night?"

Playful pause.

Young Metro #1: "Ooooh, that is right. I just don't think I could possibly eat there again today. Where should we eat then?

Young Metro #2: "Hmmm. I don't know. Where do you want to eat?"

Metros #3-6, in satiny unison: "Gosh, dunno...what about you? Isn't there a tea room nearby? I just dunno, where do you want to eat?"

In between the mindless exchanges, there was scattered chatter about television commercials, clothes, Golden Globes, how Aunt Sally got the blood spatter off the wall and the brain material out of the carpet.

Come on girls! Get yer hands out of yer pants, and drop those purses already. Why the hell don't you get right to the nut-cutting, skip lunch, pile into your compact hybrid, and go to the shoe store, or get facials together. Its bad enough that I gotta have a similar conversation with my wife at the end of the day, who, despite being home all day long hasn't had a single brain cell to devote to deciding where I am going to pay money to have a stranger feed me and then do the dishes, thereby releiving her of that duty as well. You boys wanna wear your girlfriend's lace panties, or momma's hairnet, take that shit to American Idol, don't bring it to my elevator.

This close to the Super Bowl, we should be warming up our smacking hand, chilling the beer, and selecting the finest cheese and other half-time snacks. Saunter your dainty asses to the vending machine, get a 40 ounce can of Cajones, or maybe an extra shot of testosterone in your smoothies, and make up your damned mind. Brokeback Mountain my ass... bring them cowboys down off the fence, put khaki's and a goatee on 'em, put em in an office and call them accountants... Brokedown Metroplexuals is more like it.

Last week, of all the countries in the world, France said they would nuke Iran if they had to in order to keep those towel-wrapped little devils in their place. France didn't immediately retract the statement and surrender, so I was a little worried.

Monday, Credit Suisse and UBS Warburg said they were sending the Iranians packing, and telling Iran to take their uranium soaked lucre else where. Both institutions claimed their relative holdings were small, just over a billion dollars in one instance. Beloved, I don't care if it is ten cents or ten billion, when banks walk away from money, THAT scares me. Gold is undervalued until it hits $685. If the Israelis hit Iran this calendar year, gold is undervalued at $850. If the Israelis don't hit Iran's nuke facilities this calendar year, gold is a bargain at a grand.

Both children from wife #1 have now committed themselves to having a relationship with my checkbook, but not me; without much planning or forethought and an abundance of willful, wanton and malicious intent, have now apparently alienated all of my siblings; sitting at office right now working on this sub-par post while the wife is at home by herself with two infant boys that have some rare, deadly form of flu/bubonic plague... The tri-fecta is in play.

Took up a collection from co-workers, about to go purchase the winning lottery ticket and abscond with the winnings. If I can't get paid in gold specie, I will just get a cashier's check made payable to the order of... Formerly Living.

Advanced Consumer Econ pt. III - Greybeard University

Some time ago, I shot off my mouth about investing specifically, and the state of corporate America in general. Rather than get right to the nut cutting about investing, there was a little discussion about consumer debt, and another very basic course about keeping one's own donuts on one's own extendable donut holder. Finally, as promised, is the end all and be all of investing on the 21st century (sort of, this will be a multi-part presentation).

Just need to clean up two matters from before. Federal law now entitles you to a free credit report every year. It is possible to request your free report on line, but here are two cute tricks. You can't hardly Google your way to the correct web site, which is www.annualcreditreport.com . The link is accessible from Experian, but you cannot get the free report directly from the bureaus, gotta go through the link. Trick number 2... when you go to www.annualcreditreport.com don't ask for reports from all three bureaus at once. Make it a habit every four months to go to the web site, and rotate who you request report from. For example, pick Experian today, go back and get Equifax 4 months from now, TransUnion 8 months from now, and start the cycle again next January with Experian again.

If you do this, you can continually monitor and correct your credit year round, without being out any dough. Also, it takes a couple of months to clean up your report, so if you correct something on Experian now, the correction should show up on Equifax 4 months down the road.

Bonus trick! Also, you gotta understand that your Transunion score is usually the lowest of the bunch. TransUnion tends to report more of your bad behavior than the others. That is why you need to put it at the end of the cycle, you give yourself 8 months to start clearing up erroneous credit reporting before you get to those weasel-nuts.

One more house cleaning matter. Earlier I extolled the virtues of gold, but even when the Dow hit 11,000 the other day, gold was at its highest point in several years. If, like me, you believe that the US housing market is about to rollover and heave like a coed at Mardi Gras, gold is still a good buy even at today's price. There is a series of gold coins that is a bit undervalued right now... they are commonly called Coronet coins, made in the mid-1800's through the early 1900's. Most of the coronets minted 1877 and afterwards are a helluva bargain right now. If you have a good local dealer, go see him. If not, try this guy . His collector coins are a little pricey, but he will do you right on the gold.

Also, keep in mind that other precious metals have more industrial uses than gold does (and therefore more intrinsic value). Platinum comes to mind...

Either way, I still fear the Chinese... I meant to say, I for one welcome our new Chinese overlords. In 1995-ish, the US only had enough currency to physically embody 8% of the total "wealth" held within the economy. All of the rest of the "money" was nothing more than electronic transfers and bank ledger entries. In short, the money didn't exist, you only had money to buy things because the bank said you did; even if there was cash to be had, it is only worth anything because Uncle Sam says so. Gone are the days when you can belly up to the Federal Reserve with a fistful of sweaty singles, and exchange it for gold. Once the Chinese bend us to their will, the only tender that the US dollar will be good for is kindling to keep warm while all the world's oil goes to China and India. Soooo, gold may be a bargain today at any price.

With that upbeat message, on to today's lesson.

Investing, unfortunately, means more than socking some cash into a Mason jar or picking up some lottery tickets while grabbing a drink for the evening. Modern day investing is little more than an updated form of alchemy. It largely consists of giving your worthless green stuff, cash, to someone else in the hopes they will give you more green stuff, cash, back. Lead to gold, cash to cash...

While there are many ways to have people give you cash, the alchemy of choice today is the stock market. Because there is so much money being dumped into the stock market now, there are 18 different kinds of hucksters, used car dealers, pimps, lawyers, brokers, bankers and shunned dentists trying to separate you from your paper lead. What result is a complex trading system that benefits from your ignorance and inaction.

Since we have all agreed, for the time being, that those funny looking green sheets of toilet paper can be exchanged for goods and services, then we gotta figure out a simple way to suck as much cash out of the system as we can. The odds are stacked against us. The rules are complex, or out of date. The alchemists use big words, sliding through ambiguities and slipping through cracks they help create. A swift kick in the nuts ought to slow them down long enough for us to get ours too.

So if you are gonna play in the alchemists' lab, you need to understand what the rules are.

Hypothetically, one could use a green piece of paper, cash, to buy another piece of paper, a stock certificate. One piece of paper says "In God we Trust", the other piece of paper says "Owner and Holder of 1 Share of Infinitegtr, Inc., and entitled to all rights and appurtenances therein." Taken by themselves, one piece of paper is as useless as the other.

If you show up at the locked, gated entrance of Infinitegtr, Inc., with stock share in hand, you ain't getting in to see the President, no chance in hell will the guards let you into the control room and pull the red handle with the placard saying "Do Not Touch!". If you try to drive one of the company vehicles around the corporate campus, somebody is gonna Taser your ass. Even though the new piece of paper in your hands says you are a partial "owner" of Infinitegtr, Inc., no body is gonna jack with you or listen to your great idea about how to generate more of the green paper.

The only way that the front gate lets you in is if you have lots and lots of green pieces of paper, and exchange that paper for lots and lots of stock certificates. Even then, although you "own" lots and lots of Infinitegtr, you still cannot fire the smart-ass, slack-jawed lackey working the guard house because he is picking his nose with one hand and using his "crotch-hand" to maintain his ihateinfinitegtr.com website.

Instead, there are at least two layers of other people between you and your company. The first layer is the Board of Directors. Every so often, you get to vote on who is on the board, and who is off. You also get to vote on suggestions that the Board makes regarding how the company is run. Voting for directors, or the directors' suggestions, is worse than voting for politicians. Political elections, at least, give you months and months to see what kind of asshat you are dealing with. Directors stay below the radar, and they have lawyers and other liars draft the suggestions being voted on, so you Mr. Owner Man, don't know what the hell you are voting for anyway. Most boards are like politicians, in that they really don't do anything of great importance, other than soothe their own sense of self-importance.

The second layer are the officers. These are the folks with the offices on the top floor of Infinitegtr, they fly the corporate jet all over the place, have big parties, and give money out of your corporate coffers to charities like Jack Abramoff.

The officers and the directors try to keep you happy while keeping themselves wealthy without going to jail. This is usually done in two ways: growth or income.

Growth means that you use 1 piece of green paper to buy you stock certificate; and 6 months later you sell that same stock certificate to someone else for many many pieces of green paper.

Income is the uglier, but more interesting, sister to growth. Instead of selling the stock certificate for many many dollars, you keep the stock certificate, and every so often Infinitegtr sends you a couple dimes and and cents for every stock certificate that you hold in your sweaty hands. Your paper turned into coin. You get to keep the paper AND use the coins to obtain goods and services. Modern alchemy.

When the system works, it is a good thing.

If the officers and directors don't succeed in that sweet voodoo magic of turning nothing into something, if they can't help you sell your paper or turn paper into coins, the directors can fire the officers, and you and all your shareholder friends can fire the board. If they screw the deal up, you may decide to trade your certificate for green paper, but for less green paper than you originally traded. If the folks at the helm really screw up and have to put Infinitegtr into bankruptcy, then you are sucking wind. You and your friends with the stock certificates will get paid last, if you get paid at all. (The term "getting paid in bankruptcy dollars" may be the most honest assessment of modern currency yet).

The next class will focus on finding a good company that might provide growth and/or income. The suggested reading for next class is here.

This morning, Infinitegtr, Inc., rebounding from sleazy scandals that submarined the ailing company, announced that in order to clean up its corporate image, cleanse its corporate soul, avoid a moral bankruptcy and relieve itself of growing and unmanageable shame, the company is selling its largest, high profile division...Formerly Living.