The Curious Cat Investing, Economics and Personal Finance Carnival is published twice each month. We find useful recent personal finance, investing and economics blog posts and articles to share with you.
- 2 Billionaire Brothers’ Insider Buying At Colfax by Zack Miller – “[In] the Danaher Business System… management believes its found a demonstrable, repeatable recipe for success, and it drives both culture and process at the company and its acquisitions. DBS is a form of Japanese kaizen, comprising 4 components: 1) People 2) Plans 3) Processes 4) Performance” [I own Danaher and have it in my 12 stocks for 10 year portfolio - John, my management blog focuses on such management systems]
- Apple’s Impossibly Good Quarter by John Hunter – “You can’t grow quarterly sales from $26.7 billion to $46.3 billion. $26 million to $46 million, fine that is possible, billions however – not possible. Except Apple did. You can’t grow a $6 billion quarterly profit to $13 billion in 1 year. Except Apple did. You can’t generate a cash flow of $17.5 billion in a quarter. Except Apple did. You can’t have a stockpile of $100 billion in cash. Except Apple does. These figures would not have been seen as unlikely just 3 years ago. They were impossible. But Apple achieved them.”
- How to Save the Euro by George Soros – “the cuts in government expenditures that Germany wants to impose on other countries will push Europe into a deflationary debt trap. Reducing budget deficits will put both wages and profits under downward pressure, the economies will contract, and tax revenues will fall. So the debt burden, which is a ratio of the accumulated debt to the GDP, will actually rise, requiring further budget cuts, setting in motion a vicious circle.”
- Japan’s Trade Figures: Some Perspective by Eamonn Fingleton – “In a typical maneuver, goods might be shipped to China via Hong Kong. The goods are exported from Japan at heavily discounted prices and a Hong Kong subsidiary takes a huge profit in selling to China. Such profits constitute hidden export revenues that are not caught in the visible trade numbers. The maneuver makes sense because Japan’s corporate tax rate is one of the world’s highest.” [This is one, of many things, that make economic data difficult to rely on - you have to pay close attention to the details - John]
Welcome to the Curious Cat Investing, Economics and Personal Finance Carnival: find useful recent personal finance, investing and economics blog posts and articles. The carnival is published twice each month. This carnival is different than others in two significant ways. First, I select posts from the blogs I read (instead of just posting those that submit to the carnival). I think this provides readers a better selection of valuable material (many of the best blogs don’t take time to submit to carnivals). And second, I include articles when I think they are interesting. I figure the primary purpose is to provide links to good recent content, so just because something isn’t a blog post doesn’t exclude it from inclusion.
- Recovering Adam Smith’s ethical economics – “He justified commercial society for its tremendous contribution to the prosperity, justice, and freedom of its members, and most particularly for the poor and powerless in society.” [This post covers a topic I think is very important and have written about several times - John]
- A Man. A Van. A Surprising Business Plan. by Zoe Chace – “Adam had tricked out the van to be a mobile solution to Chinese bureaucracy. There are a couple of Mac laptops and a printer, plus an old couch, Christmas lights and bamboo mats. It’s as cozy as a dorm room. And confused visa applicants line up outside.” [wonderful - John]
- Chart of Manufacturing Output from 2000 to 2010 by Country by John Hunter – “Europe has 4 countries in this list (if you exclude Russia) and they do not appear likely to do particularly well in the next decade, in my opinion. I would certainly expect Brazil, India, Korea and Indonesia to out produce Italy, France, UK and Spain in 2020. In 2010 the total was $976 billion by the European 4 to $961 billion by the non-European 4. In 2000 it was $718 billion for the European 4 to $343 billion (remember all the data is in 2010 USD).”
- Ultimate Sustainable Dividend Portfolio – “I would expect the Ultimate Sustainable to do better in difficult times and worse in great times. Why? The USDP is a more stable portfolio that will fluctuate less over time…”
Welcome to the Curious Cat Investing, Economics and Personal Finance Carnival: find useful recent personal finance, investing and economics blog posts and articles. The carnival is published twice each month.
The new year starts with markets still highly uncertain due to the after affects of the too-big to fail credit crisis and the Euro-zone crisis. Job markets leave many people’s personal finances is trouble and those that are in good shape have a much greater challenge determining what are optimal personal financial strategies.
And markets embody the uncertainty. Investing strategies are also made more difficult by the current uncertainties. Continuing with long held strategies seems wise, but less comforting in these troubled times.
- 32 Best Dividend Stocks for 2012 by Shailesh Kumar – “The following table lists the best dividend stocks for 2012 based on dividend yields, dividend growth rate and dividend sustainability. All the stocks in this list have a P/E ratio of 15 or below.”
- How I Switched to Long Term Thinking – “I started spending some time each day thinking about the decisions I made that day, particularly ones I would often see myself repeating. Outside of the moment, I’d look at the short term benefits of my options as well as the long term benefits and I’d decide independently what the best long-term choice was.”
- A Country In Denial About Its Fiscal Future by Robert Samuelson – “Political leaders assume that financial markets won’t ever choke on U.S. debt and force higher interest rates, stiff spending cuts and tax increases. At best, this is wishful thinking. At worst, it’s playing Russian roulette with the country’s future.”
Top 10 Countries for Manufacturing Production in 2010: China, USA, Japan, Germany… by John Hunter. China took over first place from the USA in manufacturing output in 2010. From 1980 to 2010 China increased output 1345%. The total top 10 group of countries increased output 302%. From 1995 to 2010 China increased output 543%. The group increased 64%.
Welcome to the Curious Cat Investing, Economics and Personal Finance Carnival: find useful recent personal finance, investing and economics blog posts and articles.
- Why Financial Literacy Fails (and What to Do About It) by JD Roth – “‘For years, I struggled with money,’ I told my interviewer today. ‘I knew the math, but I still couldn’t seem to defeat debt. It wasn’t until I started applying psychology to the situation that I was able to make changes.’”
- Get ready for the three big financial crises of 2012 by Jim Jubak – “So in 2012 Ireland—and Greece and Portugal—are going to face a huge choice. They can either try to grind out more austerity in the midst of a EuroZone recession or they can try to renegotiate some of that debt. If you remember, the battle over Greek bank debt almost scuttled the euro this year. Well, we’re going to see the same problem again in 2012…”
- How Long Would It Take To Build A $5000/Year Dividend Cash Flow? – John is able to investing $1000 per month in a portfolio now yielding 2.86% and dividends increasing 9% a year (under historical level for the stocks included)… a bit over 7 years…
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Mark Cuban, invest in yourself. Keep your cash – wait to get a bargin based on the cash your have which allows you to take advantage of market opportunities.
Welcome to the Curious Cat Investing, Economics and Personal Finance Carnival. Investing markets continue to move in seemingly haphazard ways. The risks from excessive debt, failure to regulate financial institutions, political weakness (both of politicians and of populaces electing such incapable politicians), financial fraud and more make this a very difficult time to invest. We hope to help find useful recent personal finance, investing and economics blog posts and articles.
- The Unemployment Plan – “I just found out that I’m being “downsized” at the end of the year. While I have a small emergency fund, I do have a mortgage and a bit of credit card debt. I also have three kids at home. My wife will continue to work, but she has only a part-time job with minimal benefits. I am receiving a pretty good severance package, though.
Rather than panicking, I’m trying to be calm and rational about figuring out what’s next…” - Choosing Between An Annuity And A Dividend Portfolio – “Personally, I consider the choice between an annuity or a dividend portfolio to be a no-brainer. I think a systematic, sustainable and disciplined approach to dividend investing will outperform in almost all cases and while it will require a bigger time investment, that is a small price to get more flexibility, better returns and a much stronger growth potential.”
- From the webcast (see above) with Jim Rodgers. He sees a difficult period worldwide the next 2 years. He is short many shares everywhere (including emerging market). He also owns some shares. But overall he sees a difficult few years for stock markets.
He says China has a price bubble in real estate and many bankruptcies will take place. But it is not as bad as the USA problems where there was a credit bubble (you have to have a job to get real estate loans, while in the USA and UK you didn’t have too). Chinese banks are is less bad shape than the USA and Europe. - Manufacturing Employment Data: USA, Japan, Germany, UK… 1990-2009 by John Hunter – “Compensation in the countries currency is remarkably consistent across all countries from 1990-2009. Japan shows the only significant divergence in the period of 2002 – 2009 actually decreasing pay in real terms (a small amount – from 100 to 98) while the average increases to about 110.”
Welcome to the Curious Cat Investing and Economics Carnival: find useful recent personal finance, investing and economics blog posts and articles.
- How the Plummeting Price of Cocaine Fueled the Nationwide Drop in Violent Crime – “But it’s not only a growing supply of product that led to the collapse of the cocaine market. Newfound competition in the form of locally-produced methamphetamines and prescription narcotics would continue to drive business away from cocaine… At a certain point the decision matrix for entering a life of drug-related crime collapses for all but those with no other alternate financial sources or for those with a personal interest in the craft.”
- Eight Reasons to be Bullish on the US Dollar by Steen Jakobsen and Michael Shedlock – “58% of the US dollar index is the Euro, and the Euro is a basket case. European banks are in worse shape than their US counterparts, and a breakup of the Eurozone that I expect will certainly exacerbate the problem.”
Video: Bogle says Market are About Fairly Valued Today- Investing in an Engineering Degree Provides a Lifetime Advantage of $1,090,000 by John Hunter – “the lifetime advantage ranges from $1,090,000 for Engineering majors to $241,000 for Education majors”
Welcome to the Curious Cat Investing, Economics and Personal Finance Carnival: find useful recent personal finance, investing and economics blog posts and articles. If you want to have an post considered for the next carnival please submit it to quixperito: money.
- How I live on $7,000 per year by Jacob Lund Fisker – “If I had to venture a guess, I’d say I’m more frugal (the way your grandparents were frugal—in fact what I do wouldn’t be considered very extreme by your grandparents or great grandparents—I’d probably be average from their perspective) and I adhere more to a do-it-your-self ethics.”
- Invest in Communities to Advance Capitalism by Howard Schultz (CEO of Starbucks) – “It is no longer enough to serve customers, employees, and shareholders. As corporate citizens of the world, it is our responsibility — our duty — to serve the communities where we do business by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects.” [similar to Dr. Deming ideas from decades ago on the purpose of organizations, which I share - John].
- My dad taught me cashflow with a soda machine by Rob Fitzpatrick – “The vending machine didn’t magically make me want to be an entrepreneur. I wanted to be a video game designer, then an engineer, then a video game designer again, and then an academic. I get the impression kids are a bit slippery in that regard.
But when I stumbled into the startup world two decades later, the dots began to connect. Cashflow wasn’t a new concept.” - Disability Insurance is Very Important by John Hunter – “When I would have had gaps in coverage from work, I have purchased disability insurance myself. I am all in favor of saving money. About the only 2 things I don’t believe in saving money being very important are health and disability insurance.”
- What Other Dividend Lists Exist Besides the Dividend Aristocrats? – “companies that have increased their annual regular dividends for at least the past 10 consecutive years and have met specific liquidity screening criteria… The members of the Dividend Champions List include, those stocks (not limited to the S&P 500) that have increased their dividend for the past 25 years.”
- Buying a New Home and Converting Your Current Home Into a Rental Property by Philip Taylor – “By refinancing our mortgage, we reduced our mortgage payment by enough to allow us to rent out the property by at least a hundred more per month than all of our expenses: mortgage, property taxes, insurance, home owners association dues, repairs, and property management fees.”
- The perils of near monopoly by Joshua Gans – “Had Qantas had market shares akin to airlines in more competitive markets, the shut down would not have had the external spillovers, publicity and also the ability to shield Qantas — both managers and workers — from personal long-term consequences of such brinkmanship.”
Forest Glen Preserve, Illinois, Illinois by John Hunter
We collect useful recent personal finance, investing and economics blog posts to help you find useful information.
- How to Create a Million-Dollar Business This Weekend (Examples: AppSumo, Mint, Chihuahuas) by Tim Ferriss – “Don’t get me wrong–I’m not opposed to you trying to build a world-changing product that requires months of fine-tuning. All I’m going to suggest is that you start with a much simpler essence of your product over the course of a weekend, rather than wasting time building something for weeks… only to discover no one wants it.”
- The True Cost of Commuting – “In other words, a logical person should be willing to pay about $15,900 more for a house that is one mile closer to work, and $477,000 more for a house that is 30 miles closer to work. For a double-commuting couple, these numbers are $31,800 and $954,000.”
- Looking for Dividend Stocks in the Current Extremely Low Interest Rate Environment by John Hunter – “A huge advantage of dividends stocks is they often increase the dividend over time. And this is one of the keys to evaluate when selected these stock investments. So you can buy a stock that pays a 4% yield today and 5 years down the road you might be getting 5.5% yield (based on increased dividend payouts and your original purchase price).”
- I Stand With the Protesters by Lee Adler – “Stop the fraud, return to the rule of law, prosecute the bankers, punish the guilty, figure out what our assets are really worth and pay us a fair return, and most importantly, return basic standards of fairness and ethical behavior, something that many in society must relearn.”
- The Depression: If Only Things Were That Good by David Leonhardt – “In the short term, finance, health care and housing provide jobs, as their lobbyists are quick to point out. But it is hard to see how the jobs of the future will spring from unnecessary back surgery and garden-variety arbitrage. They differ from the growth engines of the past, which delivered fundamental value — faster transportation or new knowledge — and let other industries then build off those advances.”
- Banks Have a Right to Make a Profit; Customers Have the Right of Choice by Ryan Guina – “I encourage you to explore your options and find the bank which meets your needs, and won’t nickel or dime you with fees. I use USAA, which is an incredible bank. And there are a variety of fee free online savings accounts, free checking accounts, and hundreds of credit unions which don’t charge as many fees as some of the larger banks.”
- Remember when rare earth stocks were hotter than magma? Well, they’re 50% cheaper now by Jim Jubak – “The growing demand for rare earths from new technologies plus China’s moves had two immediate effects. First, prices for rare earth minerals, especially the rarer heavy rare earth elements soared with prices for some rare earth elements climbing ten times from 2009 into 2011. Second, the scramble was on for alternative sources of supply. Suddenly there was plenty of capital available to restart mines that had closed because of low prices and stricter environmental regulation outside of China.”
- Fighting Civil Forfeiture Abuse – “The net effect of these three factors [profit motive, standard of proof, innocent owner burden] is to increase the use of forfeiture by law enforcement agencies by incentivizing forfeiture through making it profitable for the agencies that engage in it, by making it easier to keep seized property (by lowering the standard of proof) and by making it more expensive and difficult for owners to challenge the action (by shifting the burden of proof to the innocent owner).”
Penang, Malyasia by John Hunter
Welcome to the Curious Cat Investing and Economics Carnival: find useful recent personal finance, investing and economics blog posts.
- A 401k With Employer Matching is More Liquid Than You Think by Kevin McKee – “If your employer offers 401k matching, it’s simple: max it out. The one thing you’ll want to check is when the money is vested. All 401k money is immediately vested at my company, so once the match is in the account, it’s yours.”
- Potential Euro Collapse & Rapid Redistribution Of Personal Wealth – “When we look at these two situations, what we can plainly see is that there is a massive redistribution of wealth that goes on when we have monetary crises. Millions of innocent people who’ve been playing by the rules and responsibly saving and investing are financially devastated. Other millions of people are enjoying lucrative profits and tax-advantaged surges in their personal net worth.”
- 3 Dividend Growth Stocks selected by Gordon Model by Norman Tweed – “What this tells you is that constant future dividend growth is additional yield. Gordon speaks about earnings growth also in the paper. However, this is a highly conservative usage, leaving out pure growth stocks and concentrating on yield only. It is most applicable for utilities and slow growth rate stocks.”
- 6 Online Retirement Planning Tools You Need to Know by Ryan Guina – “if your situation is more complicated, then it may be worth looking into a tool such as Maximize My Social Security, which costs $40 annually. This tool can help you determine the best strategy for maximizing your social security benefit. This tool can be especially helpful when you may need to decide when to collect retiree, spousal, survivor, divorcee, parent, or child benefits.”
The global economy continue to be fragile and chaotic. At the same time companies continue to make large, and often increasing, profit. Here are some good blog posts on investing, personal finance and the economy.
- The Economy is Weak and Prospects May be Grim, But Many Companies Have Rosy Prospects by John Hunter – “the prospects in emerging markets look incredibly good to me. Yes they will slow their growth a bit if the large economies stall, but I think it is foolish to avoid investments in China, Singapore, Brazil, Korea, India, Ghana, Malaysia, Indonesia. In fact that is where companies like Google, Tesco, Apple, Toyota and Amazon are going to be making lots of money. Emerging markets are volatile and the companies in them are too. This will continue.”
- Extreme Early Retirement in Practice: How Two People Did It by Robert Brokamp – “We recently spent three months in Guatemala nestled between three volcanoes, on the shores of beautiful Lake Atitlan, and our average spending was $40 per day for the two of us, which equates to $14,600 per year. Our hotel price included daily cleaning, wi-fi, room service, cable TV, and a view.”
- Are stocks cheap yet? Not if the economy is slowing, these numbers say by James Jubak – “A 20% drop in forecast earnings—the rough equivalent of an economic slowdown instead of a recession—would put the price-to-earnings ratio of the S&P 500 at 13. That’s below the average of 15 but not really very cheap given the degree of economic risk that an investor is taking on right now.”
- Private Pensions: Another Gradual Catastrophe by Evan Tarte – “Despite the arguably noble intent of defined benefit plans and the PBGC, these plans demand crippling contributions from employers and inevitably the taxpayer, and make little sense in today’s market environment. PBGC’s current deficit stands at $22 billion”
- Emergency Savings: is 6 Months Still Enough? by GE Miller – “with the average unemployment duration at 40.4 weeks, 6 months (or 26 weeks) is no longer enough, particularly when you take into account the possibility of medical emergency, pet operations, or other unforeseen circumstances. What is a good length these days? 1 year, at a minimum.”