Wednesday, April 30, 2008

Work environments can make jobs miserable



Like I mentioned in my last post, I am doing seasonal tax work again this year. As much as I love the work itself, I am actively seeking other forms of employment, because the job environment is simply unbearable. The reason I failed to update this site from January 22 to February 22 is because I was spending most of my waking hours in the tax office. I completed a hundred or so returns, and I also had to schedule dozens of appointments, file a mountain of paperwork, distribute a bunch of checks, and handle the problems of disgruntled and angry clients for hours on end. I worked 197 hours in a month of what is supposed to be a part-time job.
Things have tapered off quite a bit in the past ten days or so, but the incredible stress of the weeks before that won't be soon forgotten. And a lot of my stress could have been mitigated by effective management and proper training of our staff, as well as the thoughtful use of a temp during our busiest times. Here are some of the biggest problems:
  • Our manager never bothered to give us any sort of office orientation. In previous years, the office managers have required an hour or two of paid office orientation, wherein they explain the filing system, the office policies and procedures, where to find things and what to do in the event of certain problems. Here this was never done and evidently hasn't ever been done. As a result, both old and new preparers are clueless about how the office runs, which leads to a lot of wasted time and dissatisfied clients.
  • Where I work, payroll is king. The #1 goal of all office managers is to keep the personnel budget as low as humanly possible. It's a noble goal but it results in some stupid decision-making. My manager tries to save money by not hiring a secretary, and instead relying on tax preparers to answer the phones and schedule appointments. During our peak season this is a terribly short-sighted move, as this causes most preparers to quickly reach overtime, when we become more expensive than a minimum-wage temp. With the overtime my office has paid me alone, they could have hired a secretary for 28 hours. Even having someone around to answer the phones, help with the filing, and scheduling appointments during the busiest three hours of the day would have helped maintain a lot of sanity. Saving them a few bucks on payroll seriously backfired this year.
  • I have a dreaded micromanager boss. Have you ever worked with someone who hyper-scrutinizes everything you do in an attempt to hide their own incompetence? This is the exact type of person my boss is. He knows very little about much at all, but more than makes up for it by driving me (and everyone else in our office) crazy. His philosophy seems to be that of a headmaster, where he looks and looks for the tiniest mistake, which was probably made due to a lack of proper training in the first place, and then rails on you for it. I'm pretty good humored and turn a deaf ear to it, because I know he's crazy, but he's driven a lot of my co-workers to tears. It will be interesting to see what the retention rate is going to be for next year. I really enjoy the work and am good at it, but even I am hitting my limits with the abuse.
  • Despite being a micromanager, my boss does not delegate tasks well. Generally, delegation seems to be, "Make Dimes do it because she knows how." A lot of things don't get done because people either don't know how to do them or that they are supposed to do them. One preparer steadfastly refuses to answer the telephone, label and file tax returns, call clients, or do anything besides write returns. While not very team-oriented, that behavior was acceptable for peak, but now that business has slowed down, he needs to contend with a lot of other tasks aside from writing returns. Instead, he tries to leave during slow periods instead of checking to see what non-return-writing activities need to be done. I suppose at this point it's appropriate to add that this particular preparer has completed the most returns in the whole office.
  • Climate control in our office is horrible. Our customers are constantly complaining about the temperature in the office, and a lot of preparers have a difficult time working because it is so cold. Fingers get numb, leading to typing mistakes, and the cold is actually a major distraction to workers and clients alike. If we turn off the AC, the temperature soars 15 degrees in an hour, and the office gets terribly stuffy. There doesn't seem to be a workable compromise.
There are other problems, but they're a little more abstract. The point though is that I love the work I'm doing, and I'd like to keep doing it, but the garbage I have to deal with in my working environment is making it not be worthwhile. I don't imagine every company is this bad, and I am willing to try my hand elsewhere to see if I can't find a more enjoyable environment with an equally or more enjoyable job.

It Can't Always Be Great--A Not So Good Article On Retiring Rich



Pretty much the same old stuff from this article about retiring rich--your expenses will stay about the same in retirement, inflation eats away at your money, Medicare doesn't cover all medical expenses, and so on. But read it anyway, mainly for the last sentence.



Retire Rich: Learn From Someone Who Did



by Walter Updegrave/Money Magazine



When Henry "Bud" Hebeler was winding down his career at Boeing nearly 20 years ago, he was appalled at the advice he got from retirement planning software.



"The assumptions about returns, inflation, longevity and expenses were highly simplistic," says the 74-year-old Hebeler. With his engineering degrees from MIT and his experience - first as Boeing's chief forecaster and planner and later as president of Boeing Aerospace - Hebeler figured he could do better.



He has. His Web site, AnalyzeNow.com, is a compendium of advice and tools (mostly free) that can help you tackle topics ranging from how to create a retirement budget to whether to buy an annuity.



What distinguishes Hebeler from the typical retirement "expert" is that he combines a strong quantitative background with real-life retirement experience - his own and that of fellow retirees.



Hebeler took time out from his hectic schedule of skiing, golf, travel and running a site to share his thoughts.



Q. What's the most popular misconception about retirement planning?



A. That your spending will drop as you age and you become less active. My father played golf until he was 95. My wife and I are in our seventies and we ski the expert slopes at Park City, Utah.



My friends who have reduced their spending didn't do so because of lack of energy or physical ability. It doesn't take much effort to get into a taxi and go to the theater. They're cutting back because they know they're going to live longer than they thought they would. They spent too much too early and now they're worried about running out.



Q. So what can you do to assure that your money will last?



A. If you have enough savings to live on, consider delaying taking Social Security until full retirement age or even later. Holding off can be especially worthwhile if you have a spouse who didn't work or had a low income, since the higher payment you get by waiting can be passed on to your spouse when you die.



I also think retirees should consider putting some, but not all, of their money in an immediate annuity. Look at inflation-adjusted immediate annuities, since they provide a lifetime income that, like Social Security, goes up with inflation.



Q. How did your work at Boeing influence the advice you give?



A. It made me more conservative. In business you see how often things don't work out as you planned. Projects cost more to complete than you estimated.



The same is true of retirement, but retirement plans seldom call for setting aside reserves for unforeseen events. There are a lot of surprises, usually more bad ones than good.



Q. What kinds of surprises?



A. For one thing, your expenses are likely to be very different in retirement than during your career. Things that were probably covered by your company insurance - dental work, vision care, a variety of medical tests - typically aren't paid for by Medicare. My hearing aids alone cost $6,000, which wasn't covered at all.



People also don't anticipate the impact of inflation. In the first 10 years of my retirement, the purchasing power of my company pension declined by 30%. And then there are obligations people rarely plan for, such as having to help parents or adult children who are struggling financially.



Q. If you could advise people to do just one thing to improve their retirement prospects, what would it be?



A. People who aren't retired need to know how much to save. My father used to tell me that you should always save at least 10% of your income.



That's more like 15% to 20% today because you're less likely to have a pension.





Monday, April 28, 2008

2008 CONUS COLA rates



A few months ago, I posted about CONUS COLA, as it was a new entitlement for Mr. Dimes. For the uninitiated, CONUS COLA is a taxable income supplement for living expenses in an area (as opposed to housing expenses, which are covered by BAH). It increases or decreases every year, and can appear or disappear altogether for certain areas. For 2008, a handy calculator is available at this site. An official list of sites receiving COLA as well as the percentage rate can be found on this Pentagon site, where the list is a PDF file. If your location is not listed, you are not eligible to receive CONUS COLA. A handful of locations that were previously receiving it lost it for 2008, though they may get it again in future years.

Sunday, April 27, 2008

Debt Consolidation: Easing the Burden



There's no doubt that while having a certain amount of debt is normal and a way of life for most of us who live in North America, some of us have gone over the line where we can pay back what we owe in monthly payments. Before any further discussion of this unfortunate situation can take place, it’s necessary to note the facing a debt burden is something that can happen to anyone. It’s not just the people who don’t know how to manage their money that can get into trouble, but those unfortunate ones among us that are faced with the loss of a job, a family illness, or a host of other unexpected circumstances that find themselves falling behind.


Types of Debt


It matters what kind of debt you have, and as you might have guessed, there are several different kinds although most of the debt that the average person finds themselves facing is what’s called unsecured debt. This includes the one that most of us struggle with in one way or the other—credit card debt. As well there are those unpaid student loans that have a way of gathering interest like a stone rolling down a hill gathers moss, and tax debts as well as medical or legal bills that have gone unpaid.


It happens more and more that people find themselves unable to see over the mountain of debt that they’ve created for themselves. Most of them are good people who would love nothing better than to find a way out and there’s help out there. Debt relief agencies like?Delray Credit Counseling?are experts at studying people’s individual debt circumstances and then helping them find a way out.??

What to Do About It


?The best option is to speak to a professional that can help. A certified debt counselor is the right choice. Professionals like those at http://www.delraycc.com are the people that can listen to your situation and help you find a plan to get you back on track. To start, all you need to do is apply to a local debt consolidation program—they are either usually private or non profit agencies that will supply a free quote on the time and interest that will be required. It’s really quite simple and once a plan is in place, you stand to save a substantial amount of interest on the payments and shorten the time it will take to pay the money back. The debt consolidation company that you select works with your creditors to design a repayment method that will both satisfy them and start you back on the road to financial freedom.


There’s a good reason that this is the best option and it’s simple. By consolidating you debt, you avoid having to claim bankruptcy. While bankruptcy does erase many of your debts, it does not take away some of the ones that can swell to large proportions like child support payments and student loans. As well, once you’ve filed either the Chapter 7 or Chapter 13 versions of bankruptcy, you credit rating is affected for up to ten years and you will find it considerably more difficult to get a personal loan, a mortgage or even a job.???



I lied... 2008 BAH available now!



Maybe it is Wednesday already in Japan, but anothernavywife has informed me that 2008 BAH rates are now available!
We got a pretty good bump around here; the Hampton Roads area seems to have had an increase of approximately $100-125/mo., fluctuating slightly based on paygrade, of course.

Hooray!

Saturday, April 26, 2008

Inmate 57



Admit it, if you were Wesley Snipes and facing 3 years in prison for a tax evasion scheme, you'd try to bribe the prosecutor too. Well, not bribe, but maybe a big payment, you know... pay a... fine. $5 million in a lump sum might do. Or maybe not. It sort of reminds one of an encounter with Mexican police.



"You, vandalizing that payphone, you are under arrest."



"What are you talking about? I was calling my girlfriend."



"You've been drinking."



"Uh, yes."



"You're under arrest. Public intoxication."



"Uh, maybe I can... just pay a fine? Right here? How about, say, $5 million?"



I think it works better in Mexico.



One comment that alarms me came from the prosecutor:



This case cries out for the statutory maximum term of imprisonment, as well as a substantial fine, because of the seriousness of defendant Snipes' crimes and because of the singular opportunity this case presents to deter tax crime nationwide.


Am I the only one uncomfortable with the prospect that nationwide deterrence would be a legitimate cause for augmenting criminal penalties?



Apparently, the argument was at least somewhat compelling. Snipes got 3 years. Ouch.



Wesley Snipes Gets 36 Months In Prison [WSJ Law Blog]



Friday, April 25, 2008

APRIL 22: A No Good Terrible Bad Day



Well, I’m sure y’all all know by now, the Washington Capitals lost in sudden death overtime to the Philadelphia Flyers, 2-3 on Tuesday. It kind of sucked to watch that, but it was an exciting game nonetheless.


But the real kicker was in the morning at work. First, you have to understand that I work for a consulting firm. Second you have to understand what ‘being on the bench’ means and how it’s basically death for consultants. Being on the bench is when you’re not working on a client’s project. You’re not being productive and your billable hours goal for the year will be missed, so you want as little bench time as possible during the year.


Tuesday morning, I get to work, run get a little breakfast with some of my teammates, and return to find out that my project has come to an untimely end, a bit like CleverDude in the link above. Next thing I know, I’m laughing mildly hysterically at the situation and at the slight edge of panic in the room.


I find it damned ironic that I need to find a new engagement at work in a hurry because the day before, I was at an internal corporate event trying to network so I can line up the next gig in a few weeks at the planned close of my project. A friend of mine who’s been at the firm for almost a decade introduced me to someone who needs staff in the next 2 weeks. but I won’t be released till midsummer so that isn’t going to work for me.


But how much do things change in 24 hours. You can bet your bippy the first person I called after being axed in the morning was the one staffing up soon. Although I probably won’t end up on that particular project, I was hugely relieved to have a place to turn right away for help.


The moral of the story is to seize your opportunities to network, internally and externally. I can’t say that enough. It’s the reason I guess why us DC PF bloggers like to meet for happy hour. We try to do what we can for our network. It’s a bit of a quid pro quo though. I mean, if I’m willing to take someone’s resume and pass it along, then hopefully they would do the same for me, right?



Thursday, April 24, 2008

Titan Machinery (TITN)



Stock of the Day

Titan Machinery Inc. (TITN)

Friday’s Closing Price: TITN - $23.97


Sector: Retail

Industry: Retail/ Wholesale Building Products

52-week Price: $9.18 - $24.09


February 25, 2008: TITN - $19.70


Three stocks are catching my eye while making multiple screens over the past couple of weeks. MTL is up over 13% in less than two weeks since I highlighted it in a post titled Basic Materials (Oil) Stocks Making New Highs


Trading momentum is paying-off in the current market environment. Swing trading breakouts making new highs on volume at least 100% larger than the average is king. It’s working so pay attention and be smart while putting on trades. MTL is no longer a buy since it has become extended but TITN and RIO may be setting up for new 52-week highs.


April 14, 2008: TITN - $22.39


TITN – 22.39, solid young stock with an ideal entry point near $20 (looking good)



Fourth quarter earnings are scheduled for Monday, April 28, 2008. I would not be a buyer until after earnings are released (this event will shape my view on the stock and a potential position). Last quarter’s net income rose to $2.7 million, or 36 cents a share, from $0.8 million, or 13 cents a share, a year ago (sales increased 67% to $132 million).


My ideal accumulation area is between $19 and $22 with the best entry coming along the 50-day moving average, which seems to be providing support. The weekly chart is showing clear accumulation by institutional investors as most up-weeks are happening on larger volume while down-weeks are happening on lighter volume.


I will definitely be interested in a position since this stock has been making my nightly screens and scans since February. I have learned that the best stocks are the ones that continually make these scans (that is fact since I started investing with this method in 2001).


Potential Trade Set-up:

Entry: $21.00

Risk is set at 1.0% of total portfolio or $1,000 of $100k

Stop Loss is 10% or $18.90

Number of Shares: 476

Position Size is $10,000

Risk is $2.10

Target is unknown (too little information)


Institutional Analysis:

Held By Institutions: 42.75%

Total Held by Institutions: 62

Money Market: 43

Mutual Fund: 18

Other: 1


New Positions: 60

Positions Sold: 0

Shares Held: 7.43M

Shares Held Previous Period: 0.13M


Shares Bought: 7.3M

Shares Sold: 0

Value of Shares Bought: $134.1M

Value of Shares Sold: $0


Top Institutional holders; Shares Held:

Systematic Financial Management, L.P.; 711,600

Trafelet Capital Management L.P.; 528,500

Heartland Value Fund; 350,000

Heartland Advisors Inc.; 350,000

Wasatch Advisors Inc.; 325,000


Key Fundamental Numbers:

Market Cap.: $320.3M

Outstanding Shares: 13.4M

Float: 6.0M

P/E (TTM): 46.02x

PEG Ratio: 2.09x

EPS Growth (MRQ): 229.23%

Revenue Growth (MRQ): 66.99%

3-Yr Earnings Rate: 54%

3-Yr Sales Rate: 34%




Net Income (thousands):

FY 2007: 3,720

FY 2006: 2,746

FY 2005: 1,270

FY 2004: 164

FY 2003: 416


Revenue (thousands):

FY 2007: 292,987

FY 2006: 193,758

FY 2005: 135,781

FY 2004: 79,269

FY 2003: 54,189


Earnings:

FY 2009: $0.77

FY 2008: $0.90


Company Summary:

Titan Machinery Inc. owns and operates a network of agricultural and construction equipment stores in North America. It is a retail dealer of Case IH Agriculture equipment and a retail dealer of New Holland Agriculture, Case Construction and New Holland Construction equipment in the United States. The Company sells and rents agricultural and construction equipment, sells parts, and services the equipment operating in the areas surrounding its stores. The agricultural equipment it sells and services includes machinery and attachments for uses ranging from large-scale farming to home and garden use. The construction equipment it sells and services includes heavy construction and light industrial machinery for commercial and residential construction, road and highway construction and mining applications. In January 2008, the Company acquired Avoca Implement and Greenfield Implement, two CaseIH farm equipment dealerships in Southwest Iowa.



Wednesday, April 23, 2008

Watch those dollars roll in not out!



Earlier this month, a fellow personal finance blogger, The Simple Dollar, wrote an excellent piece about how he and his family was defining themselves by stuff up until two years ago.? They were buying five DVDs every week along with the latest gadgets, golf clubs, and other stuff on whims.


;


He nearly had a financial meltdown, he says... until he got smart about debt, money, and what's really important.? He started selling off excess junk that he had accumulated, and seriously watched his spending.



Read how The Simple Dollar made life-changing habits to make his debt shrink instead of grow.? Now he and his wife celebrate multiple streams of income and feel financial satisfaction–something completely foreign to them before.



Check out The Simple Dollar for this inspirational story and suggestions for your own transition into control over money.


Thanks To Our Sponsor: Pod6r Media Network Blogging pods are about to take on a whole new name.




LifeCell Surges on Buyout - Another One that Got Away




The inevitable happened today, and Lifecell (LIFC) was bought out today by Kinetic. The stock had already been on a run of late and capped off its path with a 17% gain on today's news to $50 per share. LifeCell is a top supplier of tissue based products for reconstructive and other medical uses and its financials combined with lack of viable competition have provided shareholders with a masterful return over the years. Unfortunately, although I posted and recommend on multiple occasions as far back as June of 2007, LIFC didn't make it in to the Everyday Finance portfolio. This was an old investment club favorite back at $7 per share. I hope some readers were turned on to the stock and got to participate.




Tuesday, April 22, 2008

All's Well At SHLD



Eddie Lampert lost about $475 million yesterday when shares of his Sears Holdings fell $7.24 to close at $97.48 (now at $96.61), after Bank of America temporarily closed a billion dollar line of credit. Lampert, a close personal friend of DealBreaker, told us that he’s not too worried about the drop, and shareholders shouldn’t be either. To prove his point, Big E sent out a quick letter to the interested parties last night. Find it after the jump.



Monday, April 21, 2008

Eee!



OK, so I know I keep seesawing back and forth on this issue of should I buy a house. I had thought about it but eventually decided that I couldn't afford anything that was in the area that I wanted and had the amenities I wanted (like not sharing a damn wall with a neighbor) so I started looking at renting a larger place instead. Today we even went to see a potential new place to rent which was pretty nice.

Well, I got home from that tour and visited the Craigslist ads as I always do, and then for a lark went on the Prudential page that I use to look up local properties. And..

There is a great house for sale. It is a wee bit more than I wanted to pay, but I can afford it on my salary, not counting any CashDuck money or contribution from Boyfriend. It needs work, but I do have money coming in that I can use (plus if I put a nice downpayment down, I can take it back out as home equity in the short term.) It used to be a rental, so all the guts work, it just isn't terribly pretty. Very nice big backyard (which is pretty rare for the area) and a big deck. Plus, it is empty right now, which is important because I only have three months (approximately) to get this done. Boyfriend doesn't have intensive classes during the summer, so he'd be able to oversee the work a little bit, and my mom is retiring in June and really wants to help out too.

So.. I put in a request to see the house tomorrow, and for a quote from a mortgage broker (an Upfront Mortgage Broker, thanks Searchlight Crusade!) and maybe we can get this puppy going. Although it is a bit higher priced than I would like, it's going to be the only thing we can get a mortgage for in this area - and I'm pretty much guaranteed to get back all the money I put into it when we sell as all the other houses in the area are at least $50k more, and most are pretty nice houses.

As my mom said, you were meant for this house! But then, as I said, I just have to make sure no one else is meant for it too. :) Definitely be updates on this soon.

Edit: I just pulled my credit reports and scores, I have a 697 (???) at Experian, but a 749 from Equifax and a 740 from TransUnion. So I feel pretty damn good about that.

Sunday, April 20, 2008

Fried Tofu Cubes



So frozen tofu turned out to be way better than I thought. It’s pretty darned versatile. We’ve thrown it into curry for an entree, boiled in soup, and now I’ve tried frying them.


There’s a fried tofu appetizer at Bangkok 54, one of DC’s best Thai restaurants, that I love. I haven’t figured out the dipping sauce yet, but the main thing is that I have a more than acceptable alternative.


Since I usually freeze whatever is leftover from making dinner out of a 14oz block of tofu, it’s usually a log about 1.5 inches square and about 3-4 inches long. I freeze it, and then thaw in boiled water for 20 minutes as I was instructed by my tofu cookbook. Once that’s done, I drain it really well. It’s kind of spongy, so I end up squeezing it just a little bit over the sink to drain it even further. After that, I cut it into half inch slices and spread them on a paper towel to dry.


I then mix up a tablespoon or two of flour, add garlic powder, curry powder and cayenne pepper. I put in enough to make the flour brown like light brown sugar, but not enough pepper to burn my tongue. I suppose you could dump everything into a bag and shake up the tofu cubes to coat. Shake off the excess and let them dry out a little bit. Then deep fry them. I pour in just enough canola oil into a pan till it’s about a half inch deep. Then fry the cubes. I flip them when they turn brown on one side and drain on paper towels. I like them to be really crispy on the outside, but still squishy in the middle.


I also tried this without flour and then drying the tofu cubes for a few hours. They come out MUCH crispier that way. Feel free to experiment and leave your results here. The main issue is driving the seasoning into the tofu for lots of flavor. I’ve also been using Goya Adobo seasoning as well, but the curry and cayenne flavors come out the most.


For a dipping sauce we’re experimenting with soy-sesame for a more Korean style sauce. We’re also investigating fish sauce for a Thai style sauce, and a sweet and sour type sauce too.


I like them really hot, fresh out of the pan, but they are pretty good room temperature too. It’s a pretty quick appetizer.



Saturday, April 19, 2008

Riviera Maya & Cancun, Mexico



I must say that the Caribbean beaches along the Yucatan peninsula are absolutely beautiful. The water is crystal clear with a blue – turquoise tone that I have never seen. I have been to Hawaii and to Caribbean islands but this water was more beautiful. I would still choose Hawaii over Mexico for a total breathtaking experience but the color of the water here ranks with the best of them.


We relaxed on the beaches, played volleyball, visited the Mayan ruins, shopped in the villages, enjoyed the local dancers, tasted the Mexican cuisine and enjoyed a few coronas (and cocktails). And best of all: swimming with the dolphins!


Enjoy the images. Regular posting will return this week. I see that GU and BX started to move while I was away. I bought and sold GU earlier in the year but will be looking for a possible position after I start to run screens again.


The Next Chinese IPO - GU

Gushan (GU) Making a Move



Create Your Own



Create Your Own



Friday, April 18, 2008

Cut My Hair Off



And no, I didn’t make a donation. I just cut it off and it got swept away.


For the last 6 months, I’ve wanted a haircut, but I didn’t know how I wanted it cut. So the best option was to do nothing. Then, like a bolt of lightning, I decided to bob my hair. Coincidentally, I think one of my former co-workers has the same haircut. Basically I haven’t had my hair this short since 8th grade. It looks great, but I think for $80, it could have been a better cut. I got it cut in Boston while I was killing time waiting for my girlfriends to check in before a bachelorette party. It was a good debut. But no, I didn’t donate it. I wasn’t going to carry a ponytail on the plane with me from Boston back to DC.


At any rate, yes, I do use a LOT LESS shampoo and conditioner. It’s funny. I actually use it in even amounts. Before, when my hair was long (past the elbows long), I used about 2x conditioner over shampoo. Not any more.


The only drawback to all this is the need to maintain the hair. I figure I am going to wear this short style through the muggy summers in DC. This wombat really can’t stand the humidity. As the colder weather returns in the fall, I’ll probably grow it back out into a blunt cut like I’ve always done.


Short hair isn’t really frugal if you are getting a good salon cut every 6 weeks, but for now, I’ll take it just to shake things up with my appearance.



Thursday, April 17, 2008

Opening Bell: 4.17.08



merlynchlogo.jpgMerrill Lynch posts steep first-quarter loss on write-downs (AP)
At first blush, Merrill's earnings don't look so good, though who knows how these things play out during the day. The company posted another wide loss -- $2.14 billion -- which was deeper than analysts estimated. Revenue also came in below expectations, which may be the real story here. Here's the actual release. While the headline gives the basic numbers, the subheadline trumpets: "Record Quarterly Net Revenues in Global Wealth Management." Well that's something. Another something: 4,000 jobs are expected to be cut, says the company in the report.



U.S. Proposes Auctioning Runway Slots to Curb Delays at La Guardia (NYT)

This is interesting: The US Department of Transportation, in hopes of finding some way to ease flight delays, is looking to trial a system of auctioning runway slots at La Guardia. We're not sure how well it would work, and it's just a modicum of the regulatory reform we'd like to see, but we like it. Why not go for it. If you can find some way to determine a market price for something that's not being priced on a market, then we're all for it. Of course, the response to the proposal has been laughably predictable. Governor Paterson called the proposal "woefully misguided", while saying it would end up costing consumers more (as we say, better to pay in money than in time). While the president of an industry group said: "It is truly mystifying, with the airline industry in a financial meltdown due to overwhelming fuel prices, that D.O.T. decides now is the time for a costly economics experiment at La Guardia.” Dumb.



SLM Has Loss as Student Loan Business Looks `Broken' (Bloomberg)

Another horrendous quarter from Sallie Mae, which remains unable to sell its portfolio of student loans. How come though. Do they really think the bright eyed college kids of America will one day turn out to be deadbeats. Well, they're probably right. At least everyone we know is.



Yahoo-Google Deal Advances (WSJ)

A week later, and Yahoo's search ad test with Google is going well... so well that the two are closer to signing a real deal, whereby Yahoo would outsource search ads to Google on some ongoing basis. It's not exactly clear how that would work, nor would such an agreement necessarily thwart Microsoft. Nor would this necessarily pass anti-trust muster. But the trial is due to an end in a week, but there'll probably be movement before then.



Wednesday, April 16, 2008

DC Internship Housing: A Brief Guide



Ah… Internships. All of DC runs on the nefarious slave-practice of the unpaid internship. It sucks. Personally, I’ve never done it. I’ve always taken paid work, but being a grad from a local school, I have plenty of pie-eyed friends whose idealism for public policy, civics and government work ended up in DC working for free.


Don’t get me wrong, I lived in ‘intern housing’ myself. I took a language class in DC one summer through my university and when I wasn’t in school, I was working at Express on Pennsylvania Ave, across from the now infamous “Client 9 hotel”, The Mayflower. If my cousin and his best friend, who was my boyfriend, didn’t subsidize my living with food, drinks and entertainment, and my folks weren’t covering my rent, I would have been screwed financially. Heck, I still was since my parents didn’t cover tuition that summer in an attempt to financially blackmail me to come home that summer. Can you say ‘credit card tuition payment’? But I digress.


My own experience for housing was a DC insider secret. I lived at a George Washington University fraternity house with a girl with green hair and a lot of tattoos. It was relatively cheap. I spent about $250 a month for 3 months back in the 1990’s. Of course, it was originally $300 a month, but they refunded a little money because they didn’t have a working kitchen all summer due to renovations. The link above is for a GW (Say ‘G-Dub”) housing website. It looks like a much more formal program than before. But the housing looks much nicer too. I think I heard about it through word of mouth originally.


GW also has dormitory housing for interns. But I find it to be ridiculously expensive. It’s got all kinds of requirements and rules, but a friend of mine used it about 5 years ago and the rooms were decent quality for sight-unseen housing. She was from Texas and it was the most convenient way of getting reliable housing without knowing anything about DC.


Try also the off-campus housing offices, or summer housing offices of other major universities in the area like:

Georgetown (No metro, but a shuttle bus to metro)

American (Red line metro)

Catholic (Red line metro)

Howard (Green/Yello line metro)

George Mason (Commuter school, in Northern VA)

U DC (Commuter school)

Marymount (Orange line metro, in Northern VA)

Gallaudet (Red line metro, deaf community. Might not be an option if you can’t deal with deaf roommates.)


Now, for more creative options:

Craigslist sublets - I think these are expensive, but they are more flexible than the dorms and you can live nearly anywhere in the city. This is probably the most popular way of finding housing if you are from out of town, but try the regular roommate search section as well. If you are willing to pay slightly more than they are asking to compensate for the second search they need to do after you leave, it could work out well for both of you since they can take longer to find the perfect roommate and still have rent coming in.


Ask your family and friends for help - You might be able to live for free in the spare room of someone you know. Of course this could mean that you need a car if you aren’t near public transport. Because traffic in DC sucks and gas is slightly more exspensive than in other east coast cities, that might negate any fun or savings you might have with this option. (Gas is exspensive here because a lot of people are exspensing it to their companies/contractors. But certainly cheaper than in California.)


Call your internship and ask for help - I admit I am now going to give you the most unusual arrangement that I know of. Usually places that have interns keep some resources on hand to give their interns so that housing isn’t a deal breaker. If those resources don’t work out, you could try doing what one of my friends did. She lived with someone from the office. I think she lived for free in a spare bedroom. In exchange my friend was a house/baby sitter for her hosts. The host family had two kids, one was about 12 and the other about 5. There was a maid/cook who came in daily, but wasn’t really a babysitter or au pair. The family left for a month on a European style vacation (diplomatic corps types so they had way more vacation than us Americans) and she had the house to herself for a month. Of course, my friend had to suffer with a metro that was really far away and had no car, but she commuted in the morning with the mom and was allowed to use the car while the family was away. My friend walked a lot that summer.


Later this arrangement worked out for her as she lived there an additional summer or two even when she wasn’t working with the mom at the original internship office. She got great recommendations for future jobs and strong friendships. I know this is really unusual, but be open to a creative solution like this. It could have serious upsides.


Try your local alumni club - Many people have done the intern track and are sympathetic. You might find a local alum who is willing to host you just because you go to their alma mater.


The thing is to broaden your reach here and be clear about what you can or cannot afford. Budgeting is crucial when you’re unpaid or on a stupidly small stipend. Most interns work during the day, and again at night/weekends as waitstaff or retail.


Be safe and vet your hosts/roommates. Get your own phone if you don’t already have a cell phone. Living in a group housing situation in DC can be a lot of fun. I met a lot of really nice kids at the house in GW and later when I lived in Georgetown as a working adult. You want to stay on their good side and in contact if you eventually need a security clearance. (One of my old G’town roommates is a drinking buddy and reference.) My friend in the weird housing situation lived in Georgetown another year in a sublet and those roommates were at her wedding. So it can be a rewarding experience. (Trust me though, yes, it can be crappy, as in having no kitchen. There are downsides, just be aware of them.)


Some other advice:

Do not ignore the cost of food and transport when making your budget. Again, THE METRO IS NOT CHEAP. Let me put it in terms that college kids can understand.


One round trip during rush hour = Cost of one beer


Food is also very expensive here due to the dining tax of 9+%. DC’s tax base is driven by consumption taxes like the dining tax, so keep that in mind if you want to dine out. It is not cheap.


Bring a bicycle if you can. It makes for cheap transport and entertainment. The metro is expensive here. Plus you can ride all over town on the C&O Canal, the Tidal Basin and Rock Creek Park for fun.


One great thing though is that there is a plethora of free entertainment all summer long on the Mall. There are summer film festivals that are screened for free. (Try Screen on the Green) Smithsonian’s folk life festival, the 4th of July, free Kennedy Center concerts, etc.


ps- This post was inspired by a reader at Madame X’s blog.



Tuesday, April 15, 2008

$115,000



leeiacocca.jpgThat’s how much money you and I and every household in the good old USA owe toward the National Debt (according to Leah Iacocca)..


Think of it like a credit card the government used for spending.? This is in addition to all the money we sent them let me mind you.


Here’s the best part:


All of the money you and I send in for taxes this year will pay the interest on our $115,000.00 share.


When we look for our next president this year.? Let’s look closely on how they plan to handle this problem.


It’s a big problem indeed!



5 Cents



As I was doing my taxes this weekend, I thought about a post I wrote long ago to commemorate the first interest payment I received from my very first savings account: a whopping 15 cents.

Though I didn't know it at the time, that 15 cents, that tiny step, was symbolic of a huge shift in the way I approached my finances. It was the start of my savings, the start of what will soon be a downpayment on a house or condo, and the start of a wave of financial learning that I hope will bring me stability and security for the rest of my life.

This year, I made more than $500 in interest from my savings account. It may not seem like a ton, but when you remember that it all started with a 15 cent interest payment, it's a sign of huge growth both personally and financially.

As I reflected on this growth, a nickname from my childhood flashed into my mind. When I was born, my grandfather couldn't pronounce my name. Every time he said "Nicole" it sounded like "nickel." My mom tried again and again to correct him, but he was simply baffled by her. To him, the pronunciations of Nicole and nickel sounded identical. So family, in all their sarcastic glory, began calling me "five cents." As in "Hey! Five cents! What's happening?" It's a nickname that stuck with me throughout my childhood.

The irony, of course, is that a girl who grew up with the nickname "five cents" grew up to become "The Budgeting Babe." In retrospect, I wonder if it was meant to be. Regardless, I know my grandparents - all of them - are looking down and laughing right now.

Thanks guys. You set me on the right course :)


Sunday, April 13, 2008

The Stock Market--What To Watch Out For



Uncle Bill is always looking out for your well being and as the credit crunch heads west and out of sight, I think, there are some real things to worry about and they are---



1) politicians



2) the Supreme Court



3) the Fed



As the guys over at MarketMinder.com (full disclosure--I am a client) are often more articulate than moi, I'll let them do the talking--I've got a house to get built.





The Real Risks



10/9/2007





Story Outline


  • “Credit crisis” headlines are being replaced by economically insignificant headlines, signaling a lack of legitimate negatives to report.


  • Legitimate market risks are few, and unlikely to impact the market much at this point. The risks for aggressive legislation and a major monetary policy error remain low.


  • Positive fundamentals currently far outweigh potential market negatives.


Anyone else notice the “credit crunch” headlines are starting to go away? They’re still out there, but no longer occupy top billing, chased off by Britney’s child custody saga, Pamela’s quickie Vegas nuptials, and harrumphing over stores gearing up for Christmas in October. This is front page stuff from allegedly “legitimate” news sources! Very bullish. (For more, read MarketMinder commentary “What a Week,” 10/05/2007.)



We spill barrels of virtual ink at MarketMinder underscoring why now’s a great time to be bullish and pointing out glaring flaws in popular bearish views. As we’ve covered here, popular concerns such as the credit crisis, a weak dollar, allegedly slowing US growth, trade deficits, debt, and even terrorism don’t have the market impact folks think. (For more, you can refer to our commentary archive.) But that doesn’t mean we’re blindly bullish. Rather, we see that legitimate risks are unlikely to develop into major market negatives right now and are far outweighed by positive fundamentals.




For example, we’d view an aggressive legislative reaction to perceived subprime problems as a legitimate risk. Our senators vow to “solve” subprime by forcing banks to tighten lending standards in order to protect the “little guy.” (Pardon us, but who is going to protect the “little guy” from the Senate?)




In our view, any attempt to limit credit access could have negative economic and market consequences—perhaps serious. Is it time to pack it in, go to cash, and safely watch the political melee from the sidelines? Not at all. As we’ve discussed here in the past (“Veto Power”—10/04/2007, “A Political Punch”—05/31/2007) third and fourth years of presidents’ terms are famously feckless. We nearly always see the president’s party lose relative power in the mid-terms—donkeys and elephants alike—setting up the perfect recipe for political gridlock. The political furor over subprime is likely to devolve into nothing more than inane investigations and name-calling—a very good thing if you’re a fan of rising stock prices.




The same goes for rising protectionism—another legitimate market risk. Though congressional cries to “save American jobs” may increase political contributions in the near term, efforts to hinder globalization will likely have an ugly economic outcome. But for now, third- and fourth-year politics should keep ill-considered protectionist legislation to a minimum.




What about a case the Supreme Court is hearing today—being called the Roe v. Wade of securities law (i.e., unique in its far-reaching significance)? In StoneRidge Investment Partners v. Scientific-Atlanta, the plaintiffs argue investors have the right to sue third parties—accounting firms, investment banks, consultants, vendors—if a public company commits fraud. If the plaintiffs succeed, it could mean open season on big business and an exponential increase in frivolous lawsuits. (Great news for plaintiff’s attorneys! Bad news for pretty much everyone else.) Imagine what companies would have to do to protect themselves from litigation. CEOs would become prohibitively risk averse—which would likely reflect in lackluster earnings growth and stock prices.








However, we agree with this article’s assessment that the Supreme Court is highly unlikely to rule in favor of the plaintiffs. A 1994 precedent and two recent lower court decisions make it easy for the Supreme Court to rule against the plaintiffs and in favor of capitalism. Another risk moderated. (Though we’ll watch the Court carefully on this.)




Another risk we see is a massive monetary error—like the Fed aggressively tightening or even dropping rates dramatically. We view this risk as slightly higher now, though still unlikely. Mr. Bernanke will be the first Fed head up for reappointment in the first year of a president’s term, as opposed to the fourth year (thanks to term limits imposed on Mr. Greenspan). Ben’s recent cut might have been a signal to presidential candidates, “Hey! I can be accommodative! You want to get reelected to a second term? You need a pleasant economy in the first—and I’m your guy!” If he is indeed auditioning, he may very well cut rates again. But, we still don’t see a few rate cuts as a major deal. First, they take a long time to be felt. Second, inflation has actually been dropping over the last two years. We can’t see how another cut or two will ignite inflation radically from here. File “major monetary policy error” under “still highly unlikely.”




None of these seem likely to flare into major market conflagrations at this point. And they pale in comparison with healthy fundamentals like a growing global economy, strong corporate earnings, and attractive equity valuations. Add to the mix a historically unique positive gap between earnings yields and bond yields globally—which contributes to shrinking stock supply—and a lack of economically significant headlines, and the bears don’t stand a chance. Neither does Britney’s custody case, by the way, but as long as she hogs headlines and fundamentals remain positive, we’ve got a nice ride ahead of us.




Should I get a paying job or not?



We've been living here for about two months now, and I've had a couple of job interviews but haven't heard back from them, and at this point I am wondering if I should even bother with trying to get paid employment. It may not be worth the hassle. It might. If I get hired with either the company I interviewed with two weeks ago or the tax preparation firm I worked with in Virginia (surprisingly, employment is NOT as portable as they'd have you believe), I'll take the position, but I'm trying to decide if I should even try for more.

Reasons I should get a job:
  • Boredom! I have quite a bit of free time on my hands, and while I am engaged in volunteer activities, I could easily handle a part-time job and not sacrifice any family time or fail to accomplish any of my regular errands.
  • The gap in my working resume is only getting longer with every day I fail to work. Same thing with my salary history.
  • A supplemental source of income would provide Mr. Dimes and me with greater ability to fatten up our short-term and long-term savings (and a matched 401k would be totally awesome if I could get it). We've got the three-month emergency fund taken care of, but a car-replacement fund or home down-payment fund would be great to get started on.
  • My student loans, which I have earnestly been paying off with my income, are now starting to become my husband's responsibility with no earnings coming into the household from my efforts. Even earning $200/month would enable me to fully cover the loan payments.
Reasons not to get a job:
  • Potential lack of flexibility. I am doing hundreds of practicum hours for my AFC certification, and a full-time job would cut off my ability to do those at the pace needed to complete them on time. A part-time job is ideal, and what I'm looking for, but even some part-time schedules are unworkable with my volunteer commitment.
  • Interference with family planning: Mr. Dimes and I are thinking about starting a family within the next year or two. It would be difficult if I were to start a job and then immediately get pregnant, as I have no plans to work after giving birth.
  • Possible relocation. As I mentioned a few posts ago, we might be relocating onto base housing. Currently we live about 20 miles away from the base. If I had a job close to where we currently live, it would be just as far from our new residence as his workplace is from our current one. In that case, we'd just be trading commutes. My car gets better gas mileage than his does, but do I want to drive so far every day for supplemental income?
  • Allegedly, there is a lot of nepotism in this area for jobs. I've heard that a lot of people get passed over due to internal hiring decisions or choosing friends or acquaintances instead of the most qualified applicants. While this wouldn't keep me from applying for jobs in general, it would probably cause me to throw in the towel sooner than if I weren't thinking the process was rigged.
So I'm not sure. I guess another thing to keep in mind is that Christmas is coming, and a new job might keep me from being able to go and visit family in December, though I'm not sure that's necessarily a bad thing. ;-) We'll see what happens.

Saturday, April 12, 2008

Welcome back!



I gather that some new visitors are discovering the site, or maybe just some old friends are bellying up to the bar again. Regardless, welcome! It's an absolute pleasure to have you here.

Let me recommend a few ways to catch up on what's been going on with me.


  1. Look up in the upper left-hand corner. See that search button? That will shift through all 300+ posts that I've accumulated here during the past four years (FOUR YEARS! Ridiculous, I know). I recommend searching for a random word or topic and seeing what comes up. (Like bridesmaid or ocean or friends or cat.) It's a really fun way to explore the craziness that's been my life since I started the blog.
  2. I started tagging my posts into categories, which you can find on the left if you scroll down the page (ok, really far down). I haven't been able to do all the posts, but there are a lot of good topics to reflect on.
  3. I've also kept every single post on the archive, so if you want to follow my journey chronologically, start at the oldest post and work your way up.
While I'm leaps and bounds ahead of where I started, I still have a lot to learn. And you all have so much to teach me! So from the bottom of my heart, thanks for joining me and supporting me for all these years. I'll keep posting if you'll keep reading. You guys are my inspiration.

PS-- I would like to give a special shout out to all my new friends in Toluca, IL... I'll see you on Labor Day for the Bocce Tournament! And another to my 22 readers in Belgium. I don't know how on earth you found me but I hope to one day come visit!


Friday, April 11, 2008

Getting A Bit Worried



The stock market is doing great and I'm a big bull but I'm getting a bit concerned. As we enter another silly season of presidential politics the Dems are making noises about taxes. Bush's tax cuts disappear in 2010 if nothing is done to make them permanent and the Dems, sorry to say this, rarely show much sense when it comes to taxes and the economy.



If the tax cuts disappear, you can probably bet on a recession. The stock market will smell this out before the fact and the market could tank, big time, in 2008 or 2009.



Never happen? Maybe but let's look at some tax facts courtesy of Investors Business Daily. Tax cuts are fairly far and few between--Coolidge in the 1920s, Kennedy in the 1960s, Reagan in the 1980s and Bush in 2003.



Here are the facts--since the Bush tax cut in May, 2003, real GDP has grown 13%, about 3.2% a year. Pretty good. Compare that to Clinton's last year in office-1.5%.



But not just Bushie. After Coolidge cut taxes, real GDP rose 59% from 1920 to 1929. After the Kennedy tax cut, real GDP rose 42% from 1961 to 1968. Real GDP rose 31% during the Reagan boom.



Other factors? Of course. But tax cuts work and tax increases don't. So all the rumblings on the campaign trail are starting to make me a bit nervous.







Thursday, April 10, 2008

Reversal and a Follow-Through Day



I am not getting overly excited about the 3.55% move in the DOW, the 3.98% move for the NASDAQ and the 3.71% jump for the S&P 500. Today’s action does raise some interest but trend reversals and new bull rallies can’t be confirmed after one day of action. All major bull markets started with a reversal and then a follow-through within the next four to ten trading days.


This idea was first revealed by William O’Neil, the founder of Investor’s Business Daily, and became a cornerstone in his CANSLIM investing method. I believe this theory to be accurate but it is not an exact science. Before I describe this method, I would like to be clear that my indicators are still pointing down and my screens are still focusing on shorts. It’s a good time to write about reversals and follow-through days even though I don’t think this rally has legs but my opinions must be checked at the door.


The key to understanding this follow-through philosophy is that reversal signals usually occur after a significant market correction, not a minor market correction. The reversal and follow-through in 2003 was classic and one I like to refer back to when looking at the present market. Both the reversal and follow-through days must move at least 2% to the upside on above average volume.


031108_nas_daily.png


If today acts as day 1 of a possible reversal, then the next two days are not very important except for one fact: the market must not undercut today’s low as that would kill the start of a new rally. As long as prices stay above today’s low, the rally attempt is safe.


The follow-through day should come within four and ten days of today’s reversal although O’Neil’s original rules stated that the follow-through should come between day 4 and day 7. One of the major indexes must move higher by 2% or more on larger volume than the previous day to qualify for a follow-through. Multiple indexes participating with a follow-though shows conviction that the market has sustainability to move in the new direction.


(more...)



Wednesday, April 9, 2008

Writing Off 2008 Already



The new year has a rough start. Will it continue? Who knows but historically the beginning of the new year has little impact on what happens for the rest of the year as shown in the following article from Marketminder.com.





January Ineffect
1/7/2008







Story notes:




  • January’s rough start has many investors invoking the old saying, “So goes January, goes the year.


  • Statistically, this belief isn’t supported. History shows negative starts can be followed by positive years and vice versa.


  • Market volatility is normal, no matter when it happens, and doesn’t mean a prolonged downturn is at hand.


_________________________________________________________________________



January has commenced with gray weather, record snows, fierce storms, already broken New Year’s resolutions (stupid leftover pumpkin pie), and the usual post-holiday gloom—not to mention a continuance of December’s volatility. Most major market indexes are negative so far this year, leading many investors to invoke the old saw “so goes January, goes the year.” Already, we’re seeing stories highlighting the long and widely held belief that a rough start to January portends trouble ahead.



The Stress Is Just Beginning
By Tomoeh Murakami Tse, Washington Post
http://www.washingtonpost.com/wp-dyn/content/article/2008/01/05/AR2008010500149.html




This article states, “If the first three trading days of the year are any indication, 2008 is bound to test the nerves of even the most poised investors.” Fair enough—volatility always “tests nerves.” Except the first three trading days are never an indication of what’s ahead. Not ever. Three days of any month, no matter the calendrical significance, tell you nothing. Investors wouldn’t make a stock forecast based on the Ides of March—there’s nothing about any one day or group of days’ returns that tells you anything about what to expect looking forward.




Statistically, this is easy to disprove by checking historical data to see what happened each January and the annual results. Throughout history, negative starts to January have been followed by all sorts of combinations of positive and negative returns. Positive start, negative January, positive year. Negative start, positive January, negative year. On and on. Looking at the six worst first 10 days for the S&P 500, you see US stocks ended positively four of those times—one year up a big 42%! Another up 26%! What does that tell you? Nothing—beyond stocks are positive more than negative. And the third best start ever ended the year down 15%. Not so great.




Fundamentally, this makes even less sense. What do a few days in January tell us about investor demand for securities? Markets don’t obey a calendar. There’s nothing magical about January’s start suggesting markets must suddenly begin “behaving” themselves. Markets are volatile. They can be volatile in January, July, on Tuesday, the day after the Fourth of July—pretty much any time. Markets don’t have neat steps-and-stairs increases, and if they did, you wouldn’t be happy with the return you got. If you want that kind of steady appreciation, you’re going to have to be satisfied with what you can get by buying US Treasuries and holding them to maturity (i.e., not much).




We call the market “The Great Humiliator” (TGH for short) around here for a reason. Its sole purpose is to humiliate as many people as it can for as long as it can for as much money as it can. Scaring investors out of superior long-term returns with a bumpy start to the year is one way the market robs otherwise rational people of their senses.




We remain confident the world is altogether too dour. Don’t let TGH humiliate you out of the market with a bumpy start to the year—that’s just what that filthy trickster wants


Tuesday, April 8, 2008

Military personnel probably not eligible for RALs this tax season



The Military Lending Act came into law on October 1, 2007, with the intent to stop predatory lending to military personnel, their spouses, and their dependents. The primary target of this law was to protect military families from payday lenders and to protect the nation from the risks of servicemembers with high levels of debt and out-of-control financial situations. The law caps interest rates on all short-term loans (defined as loans of less than 91 days in duration) at 36% APR. One provision of this law deals specifically with Refund Anticipation Loans, or RALs, which are short-term income tax refund advances. With RALs, customers of tax preparation companies forfeit a portion of their refund in order to get it in one or two days instead of the 8-15 days normally required with an IRS direct deposit. The interest terms on these loans are usually right at 36% APR, since the major tax preparation companies have known about this impending legislation for awhile. That should make the fit within the parameters of the law, right?

Not necessarily, and if you live in California, the answer is definitely no.

Aside from the APR, these loans have an origination fee which cannot be waived for anyone.* The origination fee (or account creation fee, or check fee, depending on where you go) added to the interest charges on the loan bump the loan's interest charges well above the federal limit of 36% APR. This means the loans are considered too predatory to military families under the Military Lending Act and are therefore unavailable. Therefore, as a servicemember, you need to plan ahead and realize it will be a couple weeks before your refund is available.

Are there any loopholes? Not as far as I know, short of committing perjury. A wife filing separately from her servicemember husband is not eligible for a RAL. A child who has received more than half of his support from a servicemember for the 180 days preceding the loan request is likewise ineligible for a RAL. Major tax preparation chains will have their software programmed to recognize certain EINs as belonging to military divisions and will invalidate the RAL option on that basis alone.

This will probably prove to be one of the more frustrating aspects of the new legislation, as many people who don't bother with payday lenders still request income tax refund anticipation loans. Many may not be pleased with the longer wait time, even if it does save them some money.

*Specifics here might vary by state. If you're interested in one of these loans, contact your tax preparation company of choice to inquire. They will know, and more likely than not, they will not be able to offer this product to any member of the military, their spouse, or their dependents.

Monday, April 7, 2008

Just Be Glad You Are Not In The Newspaper Business



Very early in my career, like at the beginning, I had a boss who was not the happiest guy on the planet. He had about an hour and half commute by train each way which for me explained everything but so did a lot of other people but they seemed kind of normal. Not Dick, he was miserable.



Then one day he wasn't. Everyone noticed but put it down to exception. Until it happened again the next day and the next and the next. What was going on? As the junior guy with the most to lose, I was selected to ask about the reformation.



I did. Dick's answer--"I quit reading the newspapers."



Here is an article with a lot of references to newspaper articles which you may want to read but you should probably ignore if you want to be a successful investor.





Flaming Kamikaze Squirrels! (And Other Anomalies)



10/19/2007





Story Highlights:


• A true, prolonged bear market can’t be forewarned or foreordained by the mass media.
• This week’s market volatility is perfectly normal, not a specter of ghosts past—stocks remain a great value for investors




Discounting an anomaly is impossible. What are the odds a squirrel catches fire and ignites a car? Like zero, right? Whoops…it happened!




Flaming Squirrel Ignites Car in Bayonne
By N. Clark Judd, Hudson County Now
http://www.nj.com/hudsoncountynow/index.ssf/2007/10/flaming_squirrel_ignites_car_i.html




Flaming squirrels are uncommon…but fiery car-igniting squirrels are downright anomalies! As a car owner, there really is no way to protect against such an event, is there? (Do most car insurance policies cover flaming squirrels, or is that just geckos? If so, does that fall under “acts of god,” “collision,” “arson/vandalism,” or what?) We’ve written on the nature of market anomalies before:








On the 20th anniversary of Black October, today’s market drop (S&P 500 shed 2.6%) has some folks wondering if it’s déjà vu all over again. But this is no new bear market and no downside market anomaly. This is barely a bump in the road.




Why? Many reasons. An important one is Black Monday took just about everyone by surprise. It’s extremely difficult to have a true market crash everyone expects because that expectation will be baked in to stock prices a priori.




A true crash today would not come as a surprise—too many folks are worrying about it:




Crash and Quivers a Lesson, Not Guide
By Annette Sampson, Sydney Morning Herald
http://www.smh.com.au/news/business/crash-and-quivers-a-lesson-not-guide/2007/10/19/1192301043459.html


Watching for the Next Black Monday
Bryant Park Project, NPR.org
http://www.npr.org/templates/story/story.php?storyId=15436281




20 Years Later, Could Markets Crash Again?
By John Waggoner and Adam Shell, USA Today
http://www.abcnews.go.com/Business/PersonalFinance/story?id=3750809&page=1








As a matter of fact, the so-called ills frightening today’s markets are the oldest of this bull market!








We quote: “Stocks slump, with Dow down 300 points on credit and housing sector woes, earnings fears, record-high oil prices, slide in dollar, questions about the Federal Reserve.” Not a new worry among them! That’s great evidence this is mere short-term investor psychology.




On Monday we gave our thoughts on why twenty years later a new Black Monday is highly unlikely:








Keep in mind, the week’s market drop is not even the largest one week drop of the year. This is still well within the confines of normal market volatility.




Don’t fret stocks too much—their prospects for the immediate future are still stellar. This was just a rough week. But if you require further solace, here’s some sense about 1987 and today:




The Truth About the Crash of 1987
Donald Luskin, Poorandstupid.com
http://www.poorandstupid.com/2007_10_14_chronArchive.asp




Have a great weekend…and watch out for those kamikaze squirrels.




Sunday, April 6, 2008

Dual-Class Shares Unloved But Don’t Write Them Off Too Quickly



By and large, dual-class shares are unloved by investors and PF bloggers because the structure creates a double standard that gives one class of investors unfair voting power over another. ThickenMyWallet recently wrote a post on dual-class shares titled “You're a fool if you buy...“:


The primary disadvantage of a company with a dual-class share structure is there are no effective checks and balances to management excesses such as excessive executive compensation... The larger issue is that companies with dual-class structures tend to be poorer performing stocks than their single-class structure counterparts (ask someone who invested in shares of Ford).


Yesterday, The Dividend Guy followed up with “Dual-class shares suck“:


From a statistical perspective, it would be better to hold the single-class stock in the industry you are looking at, compared to the dual-class company.


Both bloggers singled out controlling shareholder, Conrad Black, whose extravagant lifestyle single-handedly brought Hollinger International down to its knees. While both bloggers put forth rationales with strong merits, ThickenMyWallet did offer a glimpse of hope suggesting good stocks do exist in the dual-class structure.


Admittedly, I haven't paid much attention to dual-class structure although I may have to adjust my stock selection process. So far in my endeavor, I've found no reasons to shy away from *all* dual-class stocks even though the door is open for management to act in their personal interests. My view is that result should speak louder than share structure, so I tend to stick with management with a strong track record of delivering excellence.


There are many profitable dual-class Canadian stocks with smoking-hot cashflow, and management teams aren't afraid to share the wealth with generous dividend policies. Reitmans, for example, is a debt-free high quality retailer with a long history of dividend increases. Another one is Teck Cominco which hiked their dividend 10-fold since 2004. AGF Financial also recently boosted their payout by 25%. All three stocks have so much money, at least 3 years worth of dividend is parked in cash or cash equivalents.


Perhaps dual-class structures do raise some eyebrows, but a meticulous screening process should weed out the looters.



Saturday, April 5, 2008

DMWT featured in WSJ Blog Watch



As I was finally catching up on my reading today, I got a pleasant surprise: Don't Mess With Taxes received a very nice mention in the Wall Street Journal's Blog Watch column.



Beckey Bright, an editor for WSJ Online, included the ol' blog along with two other tax blogs, TaxProf and TaxVox. I am honored to be in such esteemed company.



You can read Ms. Bright's comments on tax blogs, as well as several that focus on other topics, here.



In case you don't have a subscription to the WSJ, here's the blurb about DMWT:

This blog by Texas journalist Kay Bell aims to provide
tax and personal-finance tips and advice "that will put more money in
your bank account, not the government treasury." Ms. Bell, who
previously worked for the House Ways and Means Committee in Washington
and now writes about taxes for Bankrate.com, offers different approaches to make taxes less taxing.



She often puts advice in a social or historical
context. For instance, in honor of Alexander Graham Bell's birthday on
March 3 -- and while lamenting the recent bombardment of calls from
candidates soliciting votes -- she discussed the scenarios in which
U.S. taxpayers can get a break on phone use. In other recent posts, she
breaks down the economic-stimulus rebate with information that pertains
to families with children, the elderly and state-by-state variations
that residents should watch for.


Now I know why I had a nice bump in traffic today!



Friday, April 4, 2008

Gotta Quit Singing The Blues



The market hits an all time high but most people think the world is coming to an end. In addition, lots of people say 'so what?' because the market is getting a bit ahead of where it was seven years ago. Number wise, yes but economically no. Seven years ago we had the dot.com nonsense with PEs so out of whack that the bottom had to fall out and it did.



Check out this MarketMinder.com article on the new high. It has one line that should be imprinted on your investing eyeballs so you see it every day which is---Pessimism and undue worry are the stuff of bull markets; euphoria is the bane.



Remember that and read on.





Happy Anniversary!



10/10/2007





Story Notes:


  • Yesterday the bull market celebrated its fifth anniversary, but you’d never know it by reading financial headlines over the same period


  • Fears about stocks gaining “too much too fast” and “too many years of an up market” aren’t based in reality or logic


  • Strong economic and market fundamentals supporting stocks’ climb are still in place—making the immediate future look bright


MarketMinder doesn’t like to dwell on the past because it can’t tell you much of anything about the future. But we feel it’s incumbent upon us to highlight a scarcely recognized fact: The bull market for global stocks is five years old. Here’s one of the few acknowledgements we found:



Happy Birthday, Bull
By David Landis, Kiplinger
http://www.kiplinger.com/features/archives/2007/10/bullmarket.html




Five years ago yesterday, the S&P 500 closed at 776.76. Today, it sits around 1560…over a 100% recovery in five years. Good times!




According to Standard & Poor’s, in those five years Energy stocks were the winner, gaining over 236%. Other economically sensitive sectors also flourished, including Materials with 157%, Industrials with 124%, and Technology’s 144% gain. Traditionally defensive sectors like Consumer Staples and Health Care lagged, each with about 40% gains. An outlier was Utilities, which racked up a whopping 168% rise in the period. On balance, that’s very close to what you might expect from an economy experiencing sustained expansion and high demand. And these are merely US returns—foreign stocks fared even better.




Perversely, such a big recovery scares many—they proclaim it’s been “too much too fast.” But history tells us this recovery wasn’t all that big. The current bull is actually the second weakest of seven post-World War II bull markets that lasted five years or more, according to Standard & Poor's.




The “aging bull” argument doesn’t fly either. It’s a strange thing to believe stocks should go down just because they’ve been going up. This is a perversion of the mean reversion theory, which simply doesn’t pertain to stocks. There’s no mathematical, economic or financial law that says earnings, economic growth, or stock prices must revert back to any kind of average. Trends can last as long as underlying fundamentals support them. (See our past commentary “Vector Investing” 9/27/07 for more.)




To wit, the fundamental drivers propelling this bull remain intact: Better than expected corporate earnings and global GDP, high M&A and share buyback activity, and relatively dour sentiment (among many other positives out there) are all very much a reality today.




Yep, it’s been a good five years. We hope you enjoyed the ride, but we suspect most didn’t. Thinking back, folks fretted over everything from dollar doldrums, energy prices, terrorism, trade and budget deficits, carry trades, credit crunches, inflation, and consumer spending (to name a few). At one time or another each was hailed as the Apocalypse, yet NONE had the potency to slay the bull. We think that’s a great thing: Pessimism and undue worry are the stuff of bull markets; euphoria is the bane.




Today’s real risks (yes, there are always risks) are minimal and well contained. Deleterious government regulation, protectionism against free trade, and monetary or fiscal policy errors are remote. (For more, see yesterday’s commentary, “The Real Risks.”)




Looking back, it’s apparent stocks reflected reality—not media hype—over the past five years. And while it’s crucial to remain vigilant, don’t forget to step back once in awhile and appreciate the positives of this dynamic and wealth-creating global economy. More gains are just ahead.




Thursday, April 3, 2008

House Flipping In The Real World-Part 6-Fixing Things



When we last left the smashed up house, Cynthia was working away, scraping and painting the inside of the house. Alice was having tests for liver cancer and things weren't looking good. I was reduced pretty much to buying supplies and staying out of Cynthia's way.



I got a few calls generated by the dyslexic 'For Sale' sign in the front yard. Two separate individuals wanted to see the house, set up appointments and neither showed. Then two Sunday afternoons ago I got two calls. One from my realtor handling another house (I have three) saying we had an offer and then a call from Marion. Marion sounded like 'Mame' and wanted to see the house that Cynthia was working on. Made an appointment and they showed up--three generations of Mame. Marion, her daughter Patricia, and Patricia's daughter.



In the real estate business, you indulge in some rental profiling and can size up your customer pretty fast. Given my track record, I wasn't very good at it but learning fast. Marion, late 50's, loud, no ring, no husband, Toyota, pretty well dressed but not my style. May have a few dollars laying around. Patricia, blond, young, 23-25, four year old daughter, no ring. She was a nanny. Not exactly Bill Gates but then I figured out I didn't really need to care because I was not going to carry the credit risk. No more playing banker for me. If they didn't get financing, no sale.



I stood outside and let the trio take a look around after I told Marion the price. They came out and I told them about everything that had been done within the last three years--new electrical service, basically new plumbing, heating and air conditioning (originally the house had space heaters--stay away from those), new paint in and out, and all new windows. Marion indicated they had seen every house in the neighborhood and the price was right and they took it, full price. Patricia wrote a check for $500 as earnest money and we agreed to sign some document later.



Patricia called three days later and we met. She had a document that basically said everything would be working in the house when she took possession. I xed out a few things and signed. Patricia looked concerned but signed it. Sue assured Patricia that the house would be in order.



Later I told Sue that I think I gave away the store to Patricia. Sue said, "She's just a nervous kid that knows nothing about houses or buying a house. You were pretty nervous when we bought our first house." I said I had a lot of reasons to be nervous. (See Category 9-Buying a House for 30% Off.)



So that's were we stand. I have a check for $500, a one page contract, and Patricia is working with her lender. The good news is that the lender called yesterday to discuss the closing. We traded messages. So if the whole thing goes through, great. If not, not really out anything since Cynthia is still working. As for the $500 I'll just give it back if the deal falls through--I'm not that big a jerk.



Tomorrow, we'll figure out the financial return.



Wednesday, April 2, 2008

Head above water



This month has been a particularly crazy one for CashDuck, hence the long silence. But I am doing pretty well with it all, though it does mean I don't sleep quite as much as I'd like. Or blog, or clean the house, or feed the cat. (Sorry, cat.) Recent thoughts:

Taxes - Ouch. I paid about $4,600 between federal, state, and local (plus I paid some 2007 estimated taxes for local). H&R Block decided that I should pay a penalty for underpayment of estimated taxes - however yesterday I got a letter from the IRS (which did cause some consternation when I saw it) in which they stated that I didn't actually need to pay the penalty and they were going to send it back to me. Awesome! Albeit in 30 to 60 days. Still essentially free money. I signed up for the federal estimated tax payment website, and am waiting for my packet on that, and attempted to sign up for the state program but it is rather confusing so I need to sit down and try to figure that out. Local taxes, I just fill out a little coupon and mail that in with a check, there doesn't seem to be an online method. If the state and federal systems weren't so massive that I'm afraid that a paper check would get lost, I'd do it there too as it's simple, but unfortunately doesn't leave much of a record.

Housing - I am really getting the itch to get a bigger place. Our current apartment runs $695 per month plus electric/gas which is another ~$115, so it's pretty easy for me to swing. This is a two bedroom apartment and currently Boyfriend has the small bedroom (it's pretty small) as his office, and I have the remaining space in the large bedroom that isn't actually taken up by the bed. I would really like to have my own room though (especially since then I could take a larger home office deduction if I had a whole room instead of a 5x8 area) and I really need more storage space for all the duck stuff. Second, I would really like a backyard that is fenced in and that dogs haven't been pooping in so I can take my guinea pigs outside. I used to do that all the time when we first moved here but then our second year here several dogs moved into the neighboring apartments and their owners allow them to crap right off the pathway, so I can't let my guinea pigs eat that grass for fear of getting an infection. So some space outside that I can absolutely know dogs haven't crapped on would be great. Third, we need more storage space - we had a great big closet that fit everything, but then (although this is both good and bad) our landlord put a washer and dryer in it. Plus, I am storing most of the unpacked CashDuck duck stuff on a giant shelving unit which is oh-so-lovely right in our living room. So I am really thinking about moving, but have to weigh more room and nicer space against paying at least $400 more per month for what I want. I found a nice place that's a block away, but despite the fact that I walked by this morning and the rent sign is still up, the landlord said it had been rented already. So I've emailed about another place that's a little farther from where I live now, but closer to where I work, but is available in May (and our lease here is not up till August). It won't be a tragedy if we have to stay here a little longer, and then maybe our current landlord will have something that I want available, since we really like our landlord. But I am just getting a little frustrated with how crowded our house is - the rooms are all pretty small or full of furniture.

Savings - I have successfully put Plan Not Living On My Actual Salary into effect. I will get paid $338 on Monday, split 80/20 between the bills bank account and the fun stuff bank account. I already sent off the rent check from my ING checking account (hopefully it will get there on time as I forgot to do it till yesterday so it won't go out till Monday) and transferred some extra money into my bills account. I also didn't get around to making my normal $500 Roth deposit in March so I will put in $1000 in a couple of days for March and April, and my 403(b) will get the $2500 from my salary, plus my regular nonnegotiable contributions, so I am pretty excited about this massive influx. I will also probably put some more money into the Fidelity SEP IRA that I set up - I put $4600 in during early March sometime, of which only $1000 was for this tax year, so I should really put some more in. Part of the logic of not living on my salary is that pretty much one way or another there is not any way for me to get out of paying self-employment tax on my CashDuck earnings, and how much I can save of that is limited to 25% of profit, so I might as well sock away as much as I can with my 403(b) and then put away whatever I can in the SEP afterwards. Also because I can continue sending in money for 2007 to the SEP until Apri 2008, but I can't do so for the 403(b). If I continue not living on my salary for the rest of the year, I'll nearly max out the 403(b) and 457.

MBA - I've been thinking about what kind of advanced ed I should get (as I have intended to get something or other all along) and I'm really leaning towards getting an MBA. The university where I work has a really great part time MBA program which you can get done in as little as two or as many as five years, and is very flexible, and all the classes are at night. The thing that worries me though is whether I will really have the time to do it with both working full time and doing CashDuck. I finally broke down and got someone to help me with CashDuck, but I would really need more help or more time to be able to do this. So the options there are, hire someone else to help me, or go to 32 hours or less per week at my full time job. Option 1, I don't know how helpful that would be because there is so much that would be really hard to spin off, and would require a lot more sophisticated of a structure in order to keep all of the gears running together. The person who helps me now is doing tasks that can be done anytime and don't really intersect with other operations, so it doesn't matter that I don't keep tabs on her. I have a few other things that could be spun off that are similar, but she doesn't have unlimited time or unlimited space for duck prizes at her apartment. :) Option 2 might be the way to go but I think I will wait until I have been there long enough that I am too valuable for them to say "no" to me going 80% (since it would then be 80% of me or 0% of me.)

In the back of my mind there is also option 3 which is to get a different, less demanding or less than full time job, because where I work now seems pretty dysfunctional and unless things improve I might leave too. I do like the work but the management stinks. Everybody keeps asking me why I haven't quit my job to work CashDuck, but the short answer is that I would become very neurotic working at home and having nothing else to think about. Plus I need the psychological security of having that income (even if I'm not living off it) and I wouldn't feel safe quitting my job without having large, large sums of money stashed away. Third, I'm young enough that having that kind of gap in my resume might be disastrous later on. ("You were in research and quit to run a website and now you want to do research again?") So I don't feel it's wise. I mentioned this to Boyfriend the other day and he told me that he would think I was nuts if I quit my job to run CashDuck, for pretty much the reasons I outlined above, but mostly the neuroticism.

A parting thought.. Anybody else notice that ING put in a total deposits amount at the bottom, that shows how much money you have among all of your accounts? I find this to be dangerous as I am practically a compulsive saver now, and I am going to be very unhappy to see that number go down when I have to pay CashDuck estimated taxes soon (since I park CashDuck tax money and general savings money at ING), but I do like seeing that nice big number (though more than half of it is CashDuck's money anyway.)

I will try to keep to a once weekly blog update as I feel very squeezed for time right now - if you saw my house (and desk) you would understand.