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Tom Armistead
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I'm a well-informed retail investor and post on SA in order to expose my thought process to critical examination and comment from readers. It makes me a better investor. I'm particularly proud of bullish macro articles posted in 2009 and later, in which I presented ideas that encouraged me to... More
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Tom Armistead's Instablog
  • Investment's Too Slow 7 comments
    Apr 2, 2012 11:02 AM
    In the words of the old song (Rye Whiskey):

    For work I'm too lazy,
    Investment's too slow.
    Train robbin's too risky,
    So gamblin' I'll go.

    Too slow is a serious problem. You take dividend growth investing, a 3% dividend, then compound that by a some paltry rate of growth, and it just plain takes too long to double your money.

    Bonds is the same story, 2% on ten years, 36 years to double, you could die before that happens. Plus by the time you go to spend it the dollar you doubled will only be worth a dime.

    The whole problem simply gets worse as time goes by, by the time you get to retirement age, if you hit a couple of speed bumps on the way, you need that money to start doubling pretty quick just to catch up, let alone get ahead.

    Warren Buffett really pisses me off: the older he gets, the longer his time frame is. When he was in his twenties, he figured he had 50 years or more, so why rush? Now the 50 years is gone and he figures maybe he can get lucky and live as long as Methuselah.

    When I was a teenager they were making us read the book 1984, I might still be around by then, too far in the future to even think about it. As for Haley's comet, that ain't never gonna happen. Well it did happen, I saw it with my own eyes. As for 1984, that's long gone, although big brother lives on.

    Well at this point I'm willing to cave in, 20% per year will be OK, I see where Warren gets by on that.

    As far as gambling, I've tried it, visited the Indians at Foxwoods and the Mohecan Sun. Money becomes radioactive, with a half life of about 1 hour. Put a couple of 20 dollar bills into a penny slot and how much you take back out depends on how long you stay there. As I say, the half-life of your money might be about an hour.

    Train robbing is a no brainer, there's no future in robbing with a six gun, you'll wind up in jail. On the other hand, stealing like the big boys do on Wall Street is very good work, if you can get it, they steal 10 times as much as a lawyer can with his briefcase. Of course the lawyer can steal 10 times as much as the crook with a gun. So the factor is 100 to 1 in favor of being a Wall Street crook.

    I will say this, Wall Street is the only casino where you can leave your money on the table for ten years and have more than when you started. If you can just tune out the riff-raff in the Red Room and stay in the Green Room you will do fine.

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Comments (7)
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  • JeffreyLangBoyd
    , contributor
    Comments (663) | Send Message
     
    Boy can I relate to this article. I hate that I can relate, but I do.
    2 Apr 2012, 06:28 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5410) | Send Message
     
    Author’s reply » Jeffrey,

     

    Thanks for your comment. The instablog doesn't get too many readers but I'm pretty sure there were others who didn't want to talk about it.

     

    Actually I had quite a bit of fun writing it, enjoyed a laugh at my own expense, etc. A sense of humor helps.

     

    Anyway I've made some progress doing what I think I should be doing in this market, which is to trim my positions, raise cash, and be prepared to watch the train pull out of the station without chasing it, if that's what happens.
    2 Apr 2012, 08:42 PM Reply Like
  • Economic Analyst
    , contributor
    Comments (2526) | Send Message
     
    Thanks Tom. Once again, both educational and entertaining.

     

    If it's no fun, why bother anyway? QED
    2 Apr 2012, 09:20 PM Reply Like
  • 1987 wise
    , contributor
    Comments (16) | Send Message
     
    I always learn something when I read you. Thanks for the entertainment also, this time.
    4 Apr 2012, 02:55 AM Reply Like
  • mlajolla
    , contributor
    Comments (25) | Send Message
     
    Tom,

     

    Brilliant! Best piece of writing on SA by far.

     

    Of course, not everyone relates to Haley's comet (now renamed Halley's) or the "distant" spectre of 1984.

     

    As for Buffett, money may not buy happiness but it seems to buy longevity. Here's to your next 50!

     

    Mark
    17 Apr 2012, 12:27 PM Reply Like
  • Tom Armistead
    , contributor
    Comments (5410) | Send Message
     
    Author’s reply » Mark,

     

    Maybe I got confused with Bill Haley and the Comets, they did "Rock around the Clock."

     

    Big discussion on Roger's Nusbaum's article, whether you should take 4% per year or 5%, it gets to be about how long are you going to live, you talk about scary, soon I will be a Strudbrug.
    17 Apr 2012, 12:47 PM Reply Like
  • mlajolla
    , contributor
    Comments (25) | Send Message
     
    Tom,

     

    I always remembered it as Haley's, but somewhere along the way the spelling changed. Sort of like when Peking became Beijing?

     

    Immortality -- that's the "be careful what you ask for" principle.

     

    I follow the 4% rule, but I'd probably enjoy it more if I'd been a venture capitalist and had amassed a $20 million IRA.

     

    Dickens' Mr. Micawber had it right: "Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

     

    Mark
    17 Apr 2012, 02:04 PM Reply Like
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