DollarTalkNet

Freeport-McMoran: Dead Money Until Copper Prices Recover

I echo the surprise of the author at the complete cessation of the dividend. I've written about this stock and fully expected a dividend cut, but the cancellation honestly seems like an overreaction.

Obama's 2.5 Million Job Stimulus: We Need a Scalpel, Not a Shotgun

According to a NY Times article just yesterday, This program will "be the largest public works program since the inception of the interstate highway system" and will also include new Internet infrastructure projects, since "every child should have the chance to get online," according to our incoming President. His new team is already working on a package that will cost between $400 billion and $700 billion. No doubt, it will be closer to the larger number or higher. As part of this package, the governors of our states have weighed-in with $136 billion worth of infrastructure work that needs to be done "as soon as money becomes available." (What have they been doing with their own infrastructure money?) This is insane. More on my blog.

IBM Drops Two Bombs on Microsoft

It has definitely been my experience that we use Windows because most of us don't feel we have a choice in the corporate world. Either we are dealing with older software that needs to be upgraded and compatible with Windows, or we are dealing with a corporate headquarters that only supports Windows based applications. It doesn't take much imagination for me to see Microsoft's market share falling to 85%, because consumers would be happy to purchase a superior PC OS with applications. More on my blog.

The Manipulation of Gold Prices

Wow, this author is definitely a gold lover. But valid points on the Fed having to do something about the money supply when all is said and done. In the past they have been forced to raise rates, which may happen again sooner rather than later, unless they create another market for treasuries, which is part of the plan being considered by congress in January (at least they said they were going to postpone it in October to January) to restructure the 401k market, which would force treasury purchases (more on my blog). The short selling risks with gold are interesting (I've written about the stock problems), especially given the lack of oversight by the governing body. This is like having police officers who never show up for calls and is not helpful for our financial markets.

Entrepreneur Journeys: A Review

Well, I just went ahead and bought two copies. One for me and one as a Christmas present for a fellow entrepreneur. I was happy to see that this is actually labeled as volume one.

Entrepreneur Journeys: A Review

This is a well written review. So much so that I am going to buy this book. I have written about this before on this site and on my site, but our nation is in desperate need of more entrepreneurs, not more government handouts. I'm looking forward to reading this book and hope it will inspire the creation of more capital in our country.

How To Beat Buffett at His Own Game

Ouch! Those numbers hurt, but are indicative of the market in recent months. Unless you guessed 100% cash sometime before September, then you've probably been hurt some like Mr. Buffet. So, is now the time to pick up those cheap shares of BRK? That's the real question.

Will the Dollar Rally Survive?

This is a very well written and presented argument. I would only want to add that I believe the recent strengthening of the dollar has been due to China's decrease in spending since the Olympics ended. This only adds to the argument that this strength may be temporary, since our national debt is going to sky rocket over the next two years at a minimum, and all China has to do is start spending US dollars again in the international marketplace.

Who Might Benefit From Detroit's Failings

Alright, this is definitely a complicated issue, but it is fairly clear that these companies have been mismanaged for decades and that the unfunded pension obligations will continue to be a difficult burden to bear. What I honestly don't understand is why the UAW doesn't just buy GM and Ford. Their combined market cap on 12/3/2008 was less than $10 billion. This also begs the question of why the government would be loaning them between $25-34 billion (depending on the report). What bank would loan any of us double to triple the current value of our home in order to help us get out of a tight spot? More on my blog.

Wall Street Breakfast: Must-Know News

Falling with a thud is mild. We definitely have a higher volume of day trading profit takers in this market compared to past bear markets, in addition to the increased short selling and lack of the uptick rule. But we also still have investors selling off gains when the market creeps up because they don't want to pay gains in 2009 and following.

The Fed already commented in their minutes from October that they expect this "slow down" to last through the 2Q of 2009, so no surprise on the "Great Recession" news above. Lowering interest rates below 1% seems painful, but rates were below that during the "Great Depression", so we shouldn't be surprised by this.

Ultimately, it doesn't seem that globalization has paid off for the U.S. economy, as we have continued to lose our industrial backbone and now even outsource service jobs, like bookkeeping and call centers. The auto industry has a hard argument to make today, as we've also become accustomed to their competition's level of running businesses within our own borders. It seems this could be ugly for quite some time.

Three Financial Stocks Worth Holding

I believe this article presents the three big banks that will be left on a national level when this "crisis" is all done. They all seem to have more money than we think and just when it looks like they are done buying they take over something else. As long as the Fed and TARP keep treating these big banks favorably, which they have been doing, we should see a nice return, eventually.

Lock in Low Gas Prices

This article is really just a shameless plug for UGA. Okay idea. Poor execution. The fund was just formed this year, so the theory has hardly been tested, which is another point that was not mentioned, on top of all the other problems with the idea mentioned before this one.

The Way Smart Money Diversifies Risk

I have found that 68 year old retirees who have some pension income and a portfolio worth about $1million don't like to bother with managing it themselves, nor do they like to "complicate" things by having to come up with their own ways of creating certain guarantees which pre-packaged investments offer them. Now, this may not make financial sense, upon which we may agree, but it makes emotional sense to the 68 year old. The companies that offer these guarantees understand this. They simplify what seems complicated to the investor, and this is why these companies keep making money, whether we like it or not.

The Way Smart Money Diversifies Risk

Wow, a comment by one of the authors. I'm very impressed. I also appreciate the explanation, as I was feeling compelled to say something about the distinction between asset classes and investment vehicles.

I would like to say, however, that I have personally experienced the benefits of variable annuities, in both the guaranteed income and guaranteed death benefit categories. If the only benefit to a variable annuity was the tax shelter, then the costs would certainly not be worth it, but there are many additional reasons for using them. Of course, the costs should still be weighed in comparison to the benefits, but many older investors are turning to these benefits today because of their need for lifetime income (without annuitization) and the desire to guarantee something to their heirs.