by Joe
on December 24, 2009
On March 13th (a Friday) I posted “Have We Hit Bottom?” and it seems we did. While the return on the S&P since then, a 49% rise from 750.74 to its 1220.59 close last night. But if we learned anything from the tech crash, it’s that not every company goes bankrupt after a major decline, most survive returning to some semblance of normalcy. To be fair, there were quite a few stocks that went belly up in 2001, many of which never had a viable business model in the first place.
In this past cycle, what would have been our reward had we put our money where my thoughts were, back in March? Let’s assume $2000 per company in invested among 10 different stocks and use the closing price on March 16, so you had the weekend to read my post of the 13th.
GM – $2.52 to $0.49Â $389 (left from $2000)
Ford – $2.10 to $10.08Â $9,600
CitiGroup – $2.33 to $3.29 $2,824
Bank of America – $6.18 to $15.19 $4,916
Beazer Homes – $0.50 to $4.99 $19,960
Pulte Homes – $9.52 to $10.06 $2,113
Exxon – $66.97 to $68.26 $2,038
Sunoco – $28.12 to $25.52 $1,815
Merck – $26.21 to $37.25 $2,842
Johnson & Johnson – $50.73 to $64.57 $2,546
This basket of stocks chosen from 5 industries returned $49,043 or a gain of 145% from the March 16th date. Note, the bottom for each of these stocks was even lower than this. CitiGroup was under a dollar, Ford had an intraday low of $1, Beazer, 24 cents. If only we can learn to recognize and act on that bottom, we stand to be well rewarded. To be successful at profiting from such market moves one needs a cash reserve, steady job, and a very strong stomach. Also, I’m not suggesting that anyone make such moves with a large part of their portfolio. Most of my own retirement account is in a combination of index funds and ETFs.
Joe
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by Joe
on December 22, 2009
Recently, I’ve read a number of posts that discussed whether or not one should give to people on the street with their hands out. I have my own thoughts to share on this.
On a business trip to Chicago, in the late 80’s, I passed by a number of homeless people, each time I’d pull out a dollar and hand it to them. The guy I was with asked me how I could hand a dollar to every homeless person I passed. I looked him in the eye and said that to me it was remarkable that he could walk past so many homeless and not reach into his pocket even once.
Years after that, I heard this story. There are two men of the cloth (pick a religion) and as they pass a homeless man, one of them hands him a dollar. The second man says, “I donate to organized charities, I won’t give the street beggars money for fear that one on them will buy alcohol or drugs with it.” The first man responds, “I understand your position, but you see, I give a dollar to every man with his hand out in the hopes that one of them will spend it on food.”
For me, part of giving to the person on the street is certainly for the good feeling it gives me. Donating to an organized charity is great, and I do that in a fair amount, but it’s also a good feeling to not walk by someone asking for a handout. In the big picture, handing over a dollar or two isn’t going to hurt me, and sets an example for my 11 year old. We have an annual New York City visit coming up and she’s already told me she plans to use her allowance from the last few weeks so we can take turns helping out.
What is the image above? A platter that my wife got me last year. When I lived in the city (I left NYC 25 years ago, but if I can steal a delivery style from Kanye West “New York is the greatest city of all time.”) one of the things I loved the most was Broadway. Even as a young man I was always impressed by the juxtaposition of the theaters, then selling $100 tickets, and the people on the street with their hands out as soon as you stepped outside. These are the singles I accumulated over the past couple months, so I don’t have to make change for the city. I hope to bring back a story or two from our trip.
Joe
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by Joe
on December 20, 2009
Kelly at The Centsible Life wrote about America’s cutest tax deduction & year end tax tips for parents from Turbo Tax. As a mom of four, I’m sure she’s an expert on the topic. A good list of tax related issues parents should be aware of for their kid’s fiscal well being.
Sherri at Serene Journey asks what Three Things You Don’t Need That You Choose To Hold On To. For me, it’s a combination of books, old memorabilia, (concert ticket stubs, theatre Playbills, etc.) and old electronics. Gotta keep hacking away at that clutter.
The Roth conversion continues to get press, and this week’s IRA to Roth IRA: The New Conversion Rules at The Writer’s Coin was an excellent overview of the rules due to kick in starting January.
My Life ROI offers Personal Finance Lessons From Some Board Games. A fun read, bring back memories. Do not pass go, do not collect $200.
Mrs. Micah warns us to Beware Gift Theft. In this last week before Christmas some sage advice. A bit of diligence, putting purchases in your trunk, making sure you lock the car, etc, can help keep the grinch away from your family this year.
Last, this week, is The Wealthy Aren’t Who You Think They Are at Free Money Finance. No, they’re not. The guy driving the expensive car is likely to have financed it, and the guy in the older car, saving that money and adding to his net worth. The post reminds of the latest Thomas J Stanley Book, Stop Acting Rich.
Have a great week.
Joe
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by Joe
on December 19, 2009
A thought about those less fortune.
Joe
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by Joe
on December 18, 2009
The Christmas Edition
photo credit: Stuck in Customs
It’s a bit unfortunate that for some, this holiday has turned into a stressful time when the lack of money becomes the main focus. Now is the time to focus not on things, but on the people around you, those who are close to you not just one day, but every day of the year. This is the recurring theme of BeingFrugal’s 50 Frugal Christmas ideas. Reading the Christmas Story together, going around the neighborhood to see the lights, baking cookies, all things that bring the family together, yet cost very little. J.D. at Get Rich Slowly published The Amazing Frugal Christmas Savings Spectacular! back in 2006, with loads of advice on how to have a great holiday without breaking the bank.
Among the common ideas I found; Use a Secret Santa process if you have a large group you’ve always exchanged with, set a budget, pick a name, and now you have one gift to buy. The other recurring theme was that one the kids turn 18, no gift exchanging for adults. This way the adults work at keeping the spirit of the holiday alive, but the kids don’t feel like they’d just lost something.
The next post I’d like to share with you today is 63 Gift Ideas for Under $10 – For Any Occasion of the Year! at Better Budgeting. This is a great list with ideas for low cost thoughtful gifts that work not just for Christmas, but year round. With a list so large, you’d be hard pressed to not find a few good ideas here.
Last, All Things Frugal offers a Saving Money on Christmas articlethat had too many links to count, with ideas on gifts, decorating, organizing, adding to your holiday traditions, and many, many more.
We’re down to the last week, many of us starting some well deserved time off, the kids ready to get out of school for a nice break. And me, still working on a few more posts before the year is over.
Enjoy the weekend.
Joe
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