Blog Buffet

Ruminations on various topics…

Instead of raising and lowering our U.S. flags, keep them at permanent half staff. We are having daily shootings, acts of terrorism and other violence. The half staffed flags are a symbol and a constant reminder of how this country has fallen into shame and disrepute.

Choose your martyrs and outrage carefully! Not every police shooting is an unjustified act or murder.

A five second slip of the tongue can undermine 20, 30, 50 years of exemplary behavior and reputation OR can propel you to a career at Fox or Newsmax.

The line between flirtation and harassment often falls on the perceived interest level of the person receiving the attention.

I think it’s very possible that what we don’t know about what we don’t know is greater than what we know about what we don’t know.

Anyone else notice that any UFOs captured on photos and films are not the same? They differ in size, speed, shape. It’s as if the aliens have compact, economy and luxury space crafts.

Maybe the reason that aliens don’t make landings on earth is the same reason championship sports teams did not stop at the White House between 2017-2020—-they did not like the company.

To the best of my knowledge, there has been only one sore Presidential election loser. Not even Richard Nixon in 1960, who could have easily contested disputed votes in Illinois, raised an objection. Nixon also certified John F. Kennedy’s election.

Those who try to persuade by faith alone are poorly armed against those who persuade or argue with knowledge and facts. An argument made without knowledge or facts is like firing a gun without bullets.

2021: Athletes and celebrities acting or wanting to be political leaders. Politicians content to be celebrities.

Everything we were taught about money, not that long ago, including the conventional financial advice to avoid debt, keep your money in a bank savings account, and invest long term in blue chip stocks has been swept away by bitcoin, NFG and cryptocurrency. There are now two types of financial investors: those deceived by the magic and those that understand the sleight of hand.

 “Generalissimo Francisco Franco is still dead.” 

Common Cents (12 Observations on Money)

I believe that every state should mandate a high school course teaching students personal financial management. Normally parents are expected to pass down their knowledge on this subject but just like sex education, the message does not always get passed or understood. Students would be taught the following lessons:

  • How and where to save money
  • Building an emergency cash fund
  • How to create a budget
  • How, when and where to apply for debt
  • How to maintain an excellent credit rating (FICO)
  • Principles of smart shopping (car, clothes, etc.)
  • Student loan programs for college (qualifications, terms, costs)
  • Paying personal Income and other taxes
  • Mortgages and Home Equity lending
  • Purchasing Insurances (car, renters, health, home)
  • Principles Of Investing (Stocks, Bonds, Gold)
  • Retirement Planning

In lieu of the course, this is the type of financial guidance I would offer young people about to graduate high school or college. These observations also apply to  those who are a bit older:

  1. For many young people, a university education may not be worth the costly tuition in terms of return of your investment, and like a new car leaving the dealership, may become a depreciating asset.
  2. Often the person most responsible for your financial success or failure is not your banker, your financial advisor, Jim Cramer or your accountant. It’s your spouse or life partner, so choose wisely!
  3. The same foolproof strategy applies to both successfully investing in the stock market and gambling in a casino: Luck 
  4. In investing, the only “sure thing” is that there is no sure thing.
  5. The best skills for financial management in business or personally are the abilities to first, create a workable budget and second, keep to the budget.
  6. Before retirement, your focus should be on stoking your retirement funds with contributions and a smart investment strategy. After retirement, you should be focused on your burn rate (how quickly and smartly you spend your retirement dollars). A controlled burn rate can mitigate shortfalls in your retirement strategy.
  7. The smartest career strategy in terms of financial independence is to transition from getting a paycheck (employee) to either issuing paychecks to your employees (as a business owner) or collecting receivables (as an entrepreneur)
  8. The most satisfying experiences are gained from, as a businessman, turning around a failing company and from as a caring person, turning around an individual who needed help and guidance.
  9. Buy lifelong experiences as opposed to buying things whose pleasure is transitory.
  10. The greatest investment of your time and energy should be in your health not your wealth.
  11. Despite their advertising, banks are not your friend or your “neighbor”. They are in business to make money off of you. They collect your deposits and pay you .01% interest while charging you 100+x more for interest if you borrow for a mortgage or car loan.
  12. You should be as dubious about the accuracy of the numbers on a corporate balance sheet as you would the age of an actress or the net worth of President Trump. 

Zero Interest Rates, Zero Confidence

Disclaimer: I am not an economist nor possess any special knowledge of economics or finance.

As I write: the number of coronavirus infections worldwide is 169,552. 6,516 people worldwide have died. In the United States, approximately 3485 people have been infected with coronavirus. 65 people in the United States have died. Widespread testing has not taken place in the United States so the infection rate numbers are expected to rise dramatically.

The Dow Jones average is 23,185 or about a 21.5% drop from its high in February. The S&P is 2711 and has declined 20.1% from its high in February.

The federal reserve has reduced interest rates to 0%.

The following analysis represents my thinking and should not be used as a guide for investing etc.

What does this interest rate cut mean?

  1. It is the last remaining bullet in the Fed arsenal and intended to bolster the faltering stock market and economy, as I indicated in the summary above, Both indices have dropped over 20% since their highs last month. Many financial experts are expecting another 20-25% drop given the projected rise of the coronavirus infections and further disruptions to businesses and the U.S. economy in general. There are some financial analysts insisting that the stock market will come roaring back by the end of the year and recover much of its 2020 losses. I doubt it. One also needs to see the rate of recovery accomplished in China and Europe. If you have pulled out of the stock market and are now in cash, you are very limited as to how you can earn a return.
  2. Reflects the politicization of the Fed. President Trump has insisted on lower interest rates and just yesterday threatened to remove Chairman Powell from his job. The president is ever mindful that the November election is less than eight months and how a recession will adversely affect his chances of being reelected. Trump has done a very poor job of communicating what measures need to be taken and has miscommunicated the severity and urgency of this emergency. I would not be shocked that Trump would not be re-nominated as the GOP candidate if the country experiences higher than projected infections and death within the next four months. Seniors and retired people (part of the Trump base) will be panicked when their investment funds settle to significant losses.
  3. Trump’s priorities are investors and stock prices. He is leaving the dirty work of dealing with managing the pandemic and health issues to state governors and local communities. He has no choice. Trump has no bench of competent leaders or administrators to guide his actions. His “by the seat of his pants” decisions on travel bans have angered our allies and American citizens caught in Europe.
  4. Reflects the realization that the coronavirus emergency is not a two week or one month issue. There are no quick fixes and this virus will not disappear overnight. It is going to have a bad long term effect on the economy, corporations, small businesses and workers.
  5. Confirmation that the economy is not well and that strong measures were needed to prop it up. Seems obvious to me that many businesses are going to require bail outs in order to survive if the length of the coronavirus bands continue past May. Due to lower sales and cash flow issues, businesses will be forced to access available lines of credit creating capital and risk management concerns for banks and financial institutions. Airlines and the cruise industries are looking at 3-6 months minimum of travel dislocations and cancellations. Regrettably individuals who will become unemployed will also be accessing their available credit card lines of credit but they will not be receiving any bailout money from the government other than temporary unemployment insurance.

Stock Market Graph.jpg

6. The country is seeking a hero, someone who displays competence, communication skills and leadership. Don’t be surprised if the next serious Presidential candidate comes from a governor who protects his state and ensures that the necessary medical care and resources are available. (Cuomo from NY??)

 

A Bit of Nostalgia

I have maintained a journal since college (1970). A reader may be amazed and amused by entries I wrote forty to fifty years ago about purchases I made or prices that existed decades ago. Below is a brief sampling of entries…

August 9, 1973

Pair of glasses cost me $44.

Friday, March 22, 1974

Bought an $85 suit on Monday. Pretty snazzy!

Tuesday, April 17, 1979

It’s very hard to find encouraging news. Gasoline prices are close to $.80 for unlimited, $.74 for regular. Many gas stations are gouging consumers and raising prices higher than what the government guidelines call for.

Tuesday, July 31, 1979

Prices:

Flounder $2.29 a pound

Eggs one dollar a dozen

Bread $.53 a load

Steak $2.49 a pound 

Pepsi 64 oz. $.99 

Lettuce $.59 a head

Milk $.86 for a half-gallon

Hamburger $1.99 lb.

Movies $3.50

Saturday, April 12, 1980

Price trivia:

Gas $1.27 per gallon unleaded

Egg McMuffin, hash browns, OJ $1.94

Sunday Inquirer $.60

Sunday Courier $.35

Gatorade $.69 a bottle

Thursday, January 15, 1981

I paid $1.49 for a 45 RPM record today. Only a couple years ago, you could buy a 45 for $.79.