Sunday, February 22, 2009
Saturday, February 21, 2009
Particularly of interest to me was the study of incentives. What motivates people to do things, and how can you provide the right kind of incentive to get the outcome you want. It offers an unconventional look at conventional wisdom, and often comes up with some surprising answers.
This really is a light, entertaining read and if you enjoy the book, the authors also have a Freakonomics blog.
Saturday, February 14, 2009
Happy Valentine's Day everyone! Rather than sending flowers or chocolate, Experian has decided to send Joe Public as nice big slap in the face! In its infinite wisdom, Experian has decided to pull out of its agreement with Fair Isaac and will no long allow them to sell FICO scores to consumers. Lenders will still be able to get FICO scores based on Experian data, but consumers will not, putting us at a big disadvantage.
So, if you want to check your FICO score based on Experian data, I'm afraid that your chance has gone. If you want to apply for credit from a lender that uses Experian’s data to determine credit worthiness you will not be able to check your score before you apply. This decision came into effect today, sorry.
Tuesday, February 10, 2009
1) Spend more than you earn.
Well, this first one is something of a no-brainer really, but you'd be surprised how many people fall into this trap. In fact, looking at the state of the economy right now, many businesses seem to fall into this trap too! It doesn't matter if you earn minimum wage flipping burgers, or you are the CEO of a multinational conglomerate, if you follow this rule, sooner or later you're going to end up poor.
2) Buy what you can't afford.
Another somewhat obvious statement, but once again a trap that many people fall into. It's not a bad thing to want to have nice stuff, but it is important to have the discipline to wait until you have the means to pay for it. I could write a whole series of posts about the dangers of debt, but just look at the state of the economy right now! Think of all those people that bought property valued way higher their earning capacity. All the cars, big screen TVs, extended vacations. It's all nice stuff, but if you don't keep debt under control, sooner or later you'll be a slave to it.
3) Invest in things you don't understand.
A good way to become poor is to invest your hard-earned cash in things that quite frankly, you just don't understand. If you don't understand options trading, you'll probably lose your shirt. If you don't understand how a business operates, how can you truly know if they are any good at it? There are many excellent, easy to understand opportunities out there, why take the risk on something else? You'll be better off with a lottery ticket in most cases!
4) Sit back and dream.
Sit back and dream. Watch life pass you by without a care in the world. Don't put in any hard work or effort of any kind. Be lazy and carefree without any form of discipline. This is a good way to end up poor. There is no such thing as a free lunch, if you want something you need to be a doer, not a dreamer. Otherwise, you'll end up falling into a cycle of debt that will stop you from ever building wealth.
5) Don't plan for the future.
After all, Uncle Sam will take care of you, right? Er... maybe! Well, the pessimist in me says that Social Security and Medicare will probably not even be around by the time I make it to retirement, but even if they are that may not be enough. Another really good way to end up poor is through a lack of planning. Why think about retirement planning now? You're still young, right? Well, that's a good recipe for poverty! Living below your means now gives you the prospect of a much better future. It also gives compound interest a chance to work its magic. But hey, live for the moment, you want to be poor right?
6) Don't don't where your money goes.
Another good way to be poor is to have no idea where your money goes. Just spend it. Don't get receipts, don't budget, don't worry about it! After all, there's another paycheck coming next month... right? But what if there isn't...
Sunday, February 1, 2009
So, without further ado, here are the performances for 2009 to date.
My Long Picks for 2009, with 01/31/09 closing prices
Anadys Pharmaceuticals (ANDS) - $5.21 (+231.85%)
Quicksilver Gas Services LP (KGS) - $14.00 (+47.68%)
Natural Resources Partners LP (NRP) - $23.39 (+34.04%)
Dorchester Minerals LP (DMLP) - $19.00 (+19.72%)
Himax Technologies (HIMX) - $1.68 (+4.35%)
Urban Outfitters (URBN) - $15.58 (+4.01%)
Ecology & Environment (EEI) - $12.41 (+3.59%)
UFP Technologies (UFPT) - $5.30 (+0.19%)
Chase Corporation (CCF) - $10.91 (-3.37%)
Raven Industries (RAVN) - $21.81 (-9.50%)
Versar, Inc. (VSR) - $3.68 (-10.68%)
Yanzhou Coal (YZC) - $6.50 (-13.56%)
Hugoton Royalty Trust (HGT) - $13.06 (-18.63%)
Highveld Steel and Vanadium (HSVLY) - $5.112 (-33.44%)
A wide range of performance from my picks this month. Shares in Anadys Pharmaceuticals (ANDS) skyrocketed following the release of promising HCV data. Also strong movement in the natural gas sector helped lift picks Quicksilver Gas Services LP (KGS), Natural Resources Partners LP (NRP), and Dorchester Minerals LP (DMLP). The performance of Highveld Steel and Vanadium (HSVLY) prompted me to pick up a few shares at $5.48. I still believe that this company will be a major player in years to come, but right now it is holding up the bottom of the table.
My Short Picks for 2009, with 01/31/09 closing prices
Ann Taylor Stores (ANN) - $4.92 (-2.38%)
Mercantile Bancorp (MBR) - $9.85 (-6.64%)
Build-A-Bear Workshop (BBW) - $4.20 (-13.58%)
LaCrosse Footwear (BOOT) - $10.76 (-13.78%)
Converted Organics (COIN) - $2.80 (-20.90%)
Office Depot (ODP) - $2.16 (-27.52%)
Red Robin Gourmet Burgers (RRGB) - $12.18 (-27.63%)
Citigroup (C) - $3.55 (-47.09%)
Bank of America (BAC) - $6.58 (-53.27%)
La-Z-Boy (LZB) - $0.97 (-55.30%)
Smurfit Stone Container Corporation (SSCC) - $0.0331 (-87.27%) - Bankrupt
Circuit City (CCTYQ) - $0.006 (-95.38%) - Bankrupt
Well, my short picks fell across the board, although some more than others. Circuit City (CCTYQ) and Smurfit Stone Container Corporation (SSCC) both ended the month in the bankruptcy court, and both Bank of America (BAC) and La-Z-Boy (LZB) fell more than 50%. I fear that the economy may not recover in time for La-Z-Boy (LZB) who may also find themselves in the bankruptcy court before year end. After all, who is going to opt for a new recliner over a mortgage payment?
Well, I will review the list again at the end of February to see how my picks and pans are performing. Until then, happy investing!
Disclosure: At the time of writing the author held shares in Highveld Steel and Vanadium (HSVLY), Himax Technologies (HIMX), Hugoton Royalty Trust (HGT), UFP Technologies (UFPT), and Versar, Inc. (VSR).