Comments for Mad Money Machine

Comment on MMM-115: Fashionable Frugality by thmk49

thmk49 — Fri, 20 Jun 2008 20:44:25 +0000

Comment #2
I think the trend is to accept that 70 is the new 60 and keep on working at a job you like and think is worthwhile, slowing down gradually over a “decade of retirement” from 60+. My version of frugality.

Comment on MMM-115: Fashionable Frugality by thmk49

thmk49 — Fri, 20 Jun 2008 20:39:32 +0000

Who’s the bra-less young lady?
Seriously, watch your knees if you are road-running at (our) age. Don’t tear a cruciate. $1 says that you’re not still doing it in 1 year.
Love the show

Best Ian CM

Comment on MMM-115: Fashionable Frugality by ravjim

ravjim — Mon, 16 Jun 2008 12:58:42 +0000

Paul,

I will see your running (which kills the knees) and raise you the extremely uncelebrated Schwinn Airdyne bike, a television, and a set of wireless headphones. After having lost close to 35 pounds this year, consistent exercise has made me a believer in this product and it is only the cost of 3-4 pairs of expensive running shoes.

Comment on New look, does it work? by ReadBuySleep

ReadBuySleep — Thu, 15 May 2008 16:11:46 +0000

The new look is more ‘lightweight’. I like the fact that Ads and navigation stuff is on one side of the screen only. Looks fine on Firefox 2.0 on a PC.

Comment on New look, does it work? by Paul Douglas Boyer

Paul Douglas Boyer — Tue, 13 May 2008 03:19:41 +0000

OK, as of 11:19pm EST does it work *now*?

Comment on New look, does it work? by Paul Douglas Boyer

Paul Douglas Boyer — Tue, 13 May 2008 01:24:57 +0000

IE was my 2nd test. Firefox is my main test.

Comment on New look, does it work? by roblight

roblight — Tue, 13 May 2008 01:01:08 +0000

Forgot to say thanks for the podcast – keep up the good work!

Comment on New look, does it work? by roblight

roblight — Tue, 13 May 2008 00:52:55 +0000

Well, not looking so great in Safari 3.1, FF 2.0, or Opera 9.23 on Mac. The top lines of text are pushed up too high so that they’re on top of the masthead.

And it’s not valid:

http://validator.w3.org/check?uri=http%3A%2F%2Fmadmoneymachine.com%2F&charset=%28detect+automatically%29&doctype=Inline&group=0

But let me guess, it looks great in IE.

Comment on What’s Up With Our Money? by ReadBuySleep

ReadBuySleep — Tue, 08 Apr 2008 16:26:09 +0000

I find all this Gold talk troublesome. For the average American, who buys Index Funds, what is this Gold Fever supposed to mean? Are we to start buying Gold at this point in time? One look at the 10-year price chart of Gold tells me NOT to do that. If Gold were to go back to its price just 3 short years ago, one would lose 50%.

10 year gold chart:
http://www.goldprice.org/gold-price-history.html#10_year_gold_price

The alternative is, I call my Congressman and start lobbying for going back to the Gold standard. Trouble with that is, for every expert that likes the Gold Standard, there will be another equally reputable expert who DOESN’T:

http://web.mit.edu/krugman/www/goldbug.html

In conclusion, I’m sticking with my self-made SMILER portfolio of Index funds and trusting in the Greenback.

Comment on What’s Up With Our Money? by wizkid

wizkid — Mon, 07 Apr 2008 16:43:54 +0000

I think going back to the Gold standard is probably not realistic. Better to discuss the investment strategies relative to inflation (as the video does a great job of demonstrating with fuel and cars). Gold is only one hedge against inflation.

Decade Assumption:
http://inflationdata.com/Inflation/images/charts/Articles/Decade_inflation_chart.htm

If you assume the next decade 2010 – 2020 matches the 1980′s of 5.55% what investment strategy would you take?

Long Term Trend Assumptions:

http://inflationdata.com/Inflation/images/charts/Annual_Inflation/annual_inflation_chart.htm

Are we 4 years (starting in 2004) into a 15 year trend of rising inflation? If so the target Fed line of 3% or less is now in danger. What inflation assumption should the average investor now use in place of 3%? How about 5%?

To complicate it more – Your inflation rate is different than my inflation rate (based on consumption patterns, age etc.). So can we even trust the CPI charts published? Each person should keep track of their own personal inflation (gas, beer, food – you know the staples). And DONT FORGET TAXES!!!

Finally the brain teaser- from Edelman’s “The Truth about Money”. What must you earn to maintain your money’s purchasing power at 5% inflation and a 35% tax rate to break even?

Answer: See the entire table (Figure 1-18) in his book

a> 3.1%
b> 4.6%
c> 6.2%
d> 7.7%
e> 9.2%

If your answer was d then you better retake the Risk Capacity Survey

Comment on Write Your Congressman About Our Coins by Paul Douglas Boyer

Paul Douglas Boyer — Sat, 15 Mar 2008 14:47:40 +0000

Nope, it works both ways: WalMart is not going to round prices up from $14.95 to $15.0. They will mark them as $14.9. So in that case we save money.
If the gobmint stops printing pennies and nickels (and quarters), then stores will have no choice but to price things in only one decimal place. A 7% tax on $14.9 would be $1.0 (actually $1.043) but just like we now drop the .003 from the price, we would then drop the .043 from the price. Total price = $15.9
There is nothing in natural law that says we have to have two decimal places. I’m sure in Zimbabwe they’ve dropped decimal places by now (and probably even a few thousand numerical places as well).
Thanks for the comment bodotdot.

Comment on Write Your Congressman About Our Coins by bodotdot

bodotdot — Fri, 14 Mar 2008 19:01:56 +0000

I think there is more involved in abolishing pennies than simply discontinuing their production. The sales tax where I live is 7%. I think you’d need a universal rewrite of the sales tax code (or whatever it’s called), as well. Something tells me that those in power wouldn’t choose to round it down, either.

Comment on Where Do We Run When the Dark Clouds Come? by Paul Douglas Boyer

Paul Douglas Boyer — Thu, 13 Mar 2008 01:51:19 +0000

Thanks, I needed a good cold hard slap in the face to wake me up from this monetary nightmare.

Oh, wait a minute, I *am* awake.

Seriously, thanks for the link. I’m subscribed to its RSS now. I need more cheerful sites to counter-balance the one’s I’m reading.

Yes, I’m also subscribed to LOTS of other gloom and doom sites, such as GloomBoomDoom.com, Naked Capitalism, RGE Monitor, Calculated Risk, Chronicle of the Conspiracy, on and on. The weird thing is, they’ve all mostly been right so far.

Comment on Where Do We Run When the Dark Clouds Come? by wizkid

wizkid — Wed, 12 Mar 2008 17:16:27 +0000

Paul – It’s dangerous to read too many gloom and doom books at one time – and especially if your read too much of the Daily Reckoning (or even John Mauldin’s newsletter) right during a downturn/recession. Creates too much emotional response to questioning your long term feeling/risk capacity for investing. They say “don’t go grocery shopping when you are hungry – so don’t fill out the risk capacity survey after reading a gloom and doom book during a recession.

On the debt and “the US is falling apart” issue – may I recommend the following site:

http://www.optimist123.com/

Regards, The Contrarian Investor

Comment on Americans for Dimes Only by Paul Douglas Boyer

Paul Douglas Boyer — Wed, 27 Feb 2008 20:27:48 +0000

Leave a dime, take a dime?

Comment on Americans for Dimes Only by olivr2

olivr2 — Mon, 25 Feb 2008 13:48:51 +0000

I don’t mind only having a dime but I would not want 9 dimes as change. You know, like when you have to break a dollar for a penny (3q + 2d + 4p = 9 coins) and they fill your pocket. Do you think we should bring back that half dollar?

Comment on Some Lazy Portfolio Entries Backtested by Paul Douglas Boyer

Paul Douglas Boyer — Sun, 10 Feb 2008 02:32:46 +0000

Oh excellent! Love a 2nd pair of eyes.

I started with August 2000 because if I went back further in time, VIPSX (Vanguard Inflation Protected Securities) didn’t exist prior to that (at least according to Yahoo). And it is used in several portfolios.

I pull monthly “Adjusted” historical stock quotes from Yahoo finance (using that free tool RCHGetYahooHistory) These presumably account for reinvested dividends and for things like splits.

I calculate but do not report the annualized return and annualized risk for each fund. Then I also calculate and report the total portfolio’s return and risk, as below:

Five columns are used in the spreadsheet for each fund:
Date, Adj Close, Normalized, Gain, Value
Date = the first trading day of each month
Adj Close = the funds value brought back from Yahoo including (subtracting) reinvested dividends
Normalized = first month, fund value starts at 1. Each subsequent month therefore shows the total gain
Gain = delta in the value between each month. This is used to calculate the annualized standard deviation.
Value = this fund’s contribution to the total portfolio. Basically, multiply the Normalized column by the fund’s percentage in the portfolio

Then to compute the returns and risk on the total portfolio, I add up all the Value columns for each month, calculate another monthly gain difference column for the total portfolio, compute the total annualized standard deviation, and report the annualized return as:

=+(Last value/First value)^(1/((End date-Start date)/365))-1

I calculate Annualized Standard Deviation as
=STDEV(RANGE*SQRT(12)) where RANGE is the gain column (each monthly difference in value).

It takes about a minute for the spreadsheet to load as it draws all the stock histories from Yahoo.

I DO NOT PERFORM REBALANCING. I should probably do this, huh? Will have to think about how to code it up in Excel.

Suggestions for improvement greatly welcomed.

Comment on Some Lazy Portfolio Entries Backtested by wizkid

wizkid — Sat, 09 Feb 2008 21:26:17 +0000

OK – Ready to audit the calculations.
Please define the calculation of Return and Risk using the multiple periods.
Is return – average annualized return, compounded return with reinvesting dividends, rebalanced annualized return, etc. etc.
Is the risk based on monthly returns, monthly rolling etc.

Explain the reason for the timeframe – why Aug 2000 as the start date?

Great job on comparing the portfolios!

Comment on Lazy Portfolio Smackdown Update Jan 2008 by wizkid

wizkid — Thu, 07 Feb 2008 04:52:24 +0000

Low Return = 3% plus (Risk/2)
High Return = 4% plus (Risk/2)

Anything within the 1% band is “efficiently” on the frontier. All others are either outstanding or requires improvement.

PS – The latest 5 yr Treasury auction yields 2.9% (e.g. the risk free rate)

Comment on MMM-096: Bear Market Medley by Paul Douglas Boyer

Paul Douglas Boyer — Fri, 25 Jan 2008 23:20:11 +0000

You are correct to point that out. Buying and holding the S&P 500 could be a great portion of one’s portfolio, but as I said, if that is one’s primary investment then one is not adequately diversified. Admittedly a tangential relationship to active investing (not active trading) in that one is “picking” the US Large Cap sector to be the best performer versus a larger investment in the whole world and in more heavily weighting small value stocks. Thanks for the comment.

Comment on MMM-096: Bear Market Medley by ReadBuySleep

ReadBuySleep — Fri, 25 Jan 2008 22:13:01 +0000

Hi Paul, great show as usual. One question: You say in this episode:

“Are you primarily invested in S&P 500 thinking this provides adequate diversification? [...] Then you’re an active investor”

Isn’t this the strategy that launched passive investing, with the 1976 launch of the Vanguard S&P 500 index fund? I guess, you could say that you could diversify some more, but is it really Active Trading?

Comment on When worlds collide by jwadethack

jwadethack — Thu, 27 Dec 2007 19:22:41 +0000

Ron Paul’s political views seem interesting (although at time bit cowardly when he says he’s not in a position to vote to spend money for a Rosa Parks medal like you mentioned and other issues that would extend the government’s reach too far…. isn’t that why he was elected??.. to vote on issues in the way his constituents would want him to? if they think a medal is worthwhile he should represent them and vote for it.. ). And, after doing some reading on his views, i’m beginning to think that it was more than simply spending the government’s money for the Rosa Parks medal… ( a couple of blogs to read are http://media.www.dailycampus.com/media/storage/paper340/news/2007/12/03/Commentary/Paul-Right.To.Vote.Against.Rosa.Parks.Medal-3128419.shtml and http://www.dailykos.com/storyonly/2007/5/15/124912/740 )
anyway, i’ve been a long-time listener and hope that this doesn’t turn into an even bigger Ron Paul political stump than it already is.. with the views he has on racism your wasting your time because there is no way he’d be elected. Besides, I (and I assume your other listeners) would prefer to hear about other, financial-related topics anyway. If we want to hear about politics and RP, then we’d be listening to a political podcast, not this one.

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by phish43

phish43 — Fri, 21 Dec 2007 14:40:53 +0000

I have enjoyed the Mad Money Machine for two years running now and have gained quite a bit of knowledge from the show. I have also found it quite entertaining. Paul is a very fun person to listen to and he works hard to put on a good, accurate and educational show every time. For Christmas this year I am making a donation to the Mad Money Machine. I know that it is just a small gesture in the scheme of things but I feel compelled to do it. It indicates a real appreciation for what Paul does and hopefully will be another push to keep him going to show 200 and beyond. In any case, lesser content on ITunes sells for $.99 each. Think about that. Maybe you too will feel compelled to donate.

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by Paul Douglas Boyer

Paul Douglas Boyer — Fri, 21 Dec 2007 11:43:57 +0000

Yeah, let’s say one portfolio per person. And yeah, since it is a LAZY portfolio, no changes.

As to stock tracking sites, I like Yahoo historical prices and stockcharts.com specifically the perftool. Both include dividends.

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by ravjim

ravjim — Fri, 21 Dec 2007 04:25:56 +0000

I have a question for everyone.

Which stock tracking site do you use and why do you like it?

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by vancwa1

vancwa1 — Thu, 20 Dec 2007 00:32:33 +0000

I’m assuming one portfolio per entrant and no changes (buy/sells) throughout the year.

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by Paul Douglas Boyer

Paul Douglas Boyer — Wed, 19 Dec 2007 18:26:13 +0000

Thanks for listening.
Would you read “Blowback” by Chalmers Johnson and let me know what you think? (You can probably get it from the library, I did.)

I think the main idea is that our economy is in REAL TROUBLE. So, what is a big way to possibly fix it? Stop spending money, obviously. Where? Elsewhere.

And, right, I want to stop talking about politics!

Paul

Comment on New for 2008: Play the MMM Lazy Portfolio Smackdown Game! by sirscof

sirscof — Wed, 19 Dec 2007 09:54:50 +0000

Dear Paul,

I have been listening to your podcast for nearly a year and a half now. I had been listening to Jim Cramers podcast and was looking for an objective analysis of finances and investing when I stumbled upon your podcast. Overall, I have been very impressed with your motivation, opinions and questions on proper portfolio diversification. You should be happy to learn that of the 30+ hours per week of podcasts I listen to, yours is the podcast I most look forward to. Which brings me to the reason of my posting this comment. While I value your opinion on finances, I ingest my fill of politics from the other 29 some hours of podcasts. I have deleted my following comments many times trying to find the right thoughts to share. I value your passion for am improved America, but I do not share your trust in a presidential candidate that believes America is at fault for the terrorist attacks on 9/11. If my opinion has an effect on your decision making processes, please consolidate your opinions to financial specific topics. Thank you, AS

Comment on MMM-089: A Dynamically-Adjusted Risk Capacity? by Triple Hash

Triple Hash — Sat, 15 Dec 2007 03:21:16 +0000

Ron Paul on Mad Money…

Ron Paul on a segment of Cramer’s Mad Money. Cramer looks to be a big Ron Paul supporter!…

Comment on MMM-089: A Dynamically-Adjusted Risk Capacity? by vancwa1

vancwa1 — Mon, 10 Dec 2007 17:38:16 +0000

“Dynamically adjusting risk capacity” is a fancy word for plain old market timing. Maybe it sounds better, or feels like something more sophisticated but that is what it is.

Comment on MMM-089: A Dynamically-Adjusted Risk Capacity? by wizkid

wizkid — Mon, 10 Dec 2007 17:11:58 +0000

I think the Law of Diminishing Marginal Utility is the singe biggest factor in the individual’s Risk Capacity which changes dynamically with perception of wealth and life events and correlates well to the individual’s age. So naturally the emotion of pending 2008 recession would cause someone to change their risk capacity. However this tempation shoul be avoided as short term “noise”. If you could graph an individuals risk capacity over time, I would guess the result might be like a reverse S&P 500 index with lots of volatility and short term noise but long term trend of lowering risk like the IFA portfolios choices provide. I wonder if IFA recommends when, how often, and what circumstances should an individual re-take and change their risk capacity survey.

Great show to think about a very complex topic. Keep them coming

Comment on MMM-089: A Dynamically-Adjusted Risk Capacity? by ravjim

ravjim — Sun, 09 Dec 2007 06:47:42 +0000

Could the IFA 100 lose? If so, then what?

Comment on Book Review: Jim Cramer’s Stay Mad for Life by ravjim

ravjim — Fri, 07 Dec 2007 14:42:10 +0000

It also seems to be an interesting pattern. The choice of words in his book titles

Addict, real, mad, stay

Hmmmm…. maybe not the best recipe ‘for life.’

Comment on Book Review: Jim Cramer’s Stay Mad for Life by Trueohioplaya

Trueohioplaya — Fri, 07 Dec 2007 11:21:08 +0000

From the excerpts that you pointed out, it definitely looks like Cramer is flip-flopping all over the place. No different than when he says to sell a stock because it is way over valued and then when it is $10 higher 4 months from his initial statement all of a sudden it is a “buy”.

With the way this market has been lately, being in specific stocks and having to check them daily is a nerve-wrecking place to be.

Comment on Book Review: Jim Cramer’s Stay Mad for Life by wizkid

wizkid — Thu, 06 Dec 2007 19:36:32 +0000

Paul – You forgot to put the time allocation pie chart to accompany the Your Portolio Chart. Jim Cramer implies we should spend 99% of our invetment time (e.g. Jim Cramer’s homework) on the Purple slice of the Portolio chart.

It’s ok to use your time like that – just remember your return on time may not achieve your life/time objectives.

Great review. I will probably still read the book (when it hits the library).

Comment on MMM-088: Lots of Books by ravjim

ravjim — Wed, 05 Dec 2007 16:26:49 +0000

While all this political talk is interesting, there is more to government than just a stock market and the value of one’s checking account. The wealth of a country has to be measured not just in terms of how the investors are doing but also how all the citizens of a country find a “more perfect union.”

Comment on MMM-088: Lots of Books by Triple Hash

Triple Hash — Tue, 04 Dec 2007 03:59:23 +0000

Glass Booth…

Yet another “Candidate Finder” for you. Try Glass Booth.

(Thanks to Paul Douglas Boyer at the Mad Money Machine financial podcast for the link.)…

Comment on My Response to Cramer’s Response to Farrell’s Response by recoveringTrader

recoveringTrader — Thu, 29 Nov 2007 19:51:21 +0000

The fact is that Cramer’s investing approach is dangerous to your wealth. He recommends literally dozens of stocks every month. Unles you have unlimited capital, you cannot buy all of his recommendations.

Others have put his winning picks at around 60% (even that success rate is open to debate). So you have a 40% chance of losing money on his picks. Not the kind of odds to build a future on.

Comment on My Response to Cramer’s Response to Farrell’s Response by ravjim

ravjim — Tue, 27 Nov 2007 22:12:07 +0000

Perhaps the best response to JC would be to send a box of tissues.

“When I read Paul Farrellâ€™s screed on MarketWatch the other day, the one where he listened to â€œMad Moneyâ€ once, it savaged me. He didnâ€™t talk to me and wrote my show off as a waste of time at best and pernicious at worst. It reminded me how misunderstood both my show and my viewers really are.”

Haven’t many other also ‘misunderstood’ JC and (like your’s truly) paid the price? If JC is misunderstood it is because his presentation creates it, and we know who is responsible for JC’s presentation…don’t we?

Comment on Win Jim Cramer’s New Book “Stay Mad for Life” Here by ReadBuySleep

ReadBuySleep — Wed, 21 Nov 2007 15:12:49 +0000

I used to be a “passive” Jim fan, and still occasionally watch the show, but to be honest I have no desire to read his new book. I don’t understand why ANY indexer would?! Just reading the product description on the Amazon page makes me cringe:

> Cramer tells readers where to find the bull markets of the future

Indexers don’t think this is even possible.

> he chooses twenty stocks that could be long-term moneymakers

Ha, I love the “could be”. I remember last year this time Jim was saying the housing bubble had seen the worst, and that we should buy homebuilders like Dr Horton. (Check the ticker symbol DHI for a laugh).

> he identifies the mutual funds that are proven winners

Christ! How many books does John Bogle have to write to debunk this?

Comment on MMM-087: A SMILER Portfolio by wizkid

wizkid — Tue, 20 Nov 2007 15:05:38 +0000

Very Creative – SMILER and yet another great show.

I was not one of the 20 Smackdown participants but joined later. Found that I had fun but “ran out of gas” (as many do in active investing). I like your idea for 2008. Since there would be multiple winners (e.g. anyone on the highest point of the efficient frontier), I would suggest some tie breaking rules:
(1) Who is the laziest – that is weight the winners by number of index choices. If someone has only one index and have the highest return for the lowest risk with the least expense – they win.
(2) Limit the number of trades. Since timing is a no-no in index investing – he who has the least trades wins! Or maybe even the game limits the number of rebalancing to 3-4 times.

Keep those great shows coming

Comment on MMM-086: Maybe I’m Amazed at Jimmy by vancwa1

vancwa1 — Thu, 15 Nov 2007 23:40:14 +0000

I really enjoyed it!! The pitch ended up somewhere between Weird Al Yankovic and Alvin the chipmunk.

Transitioning to Sir Paul’s voice in the last chorus was pretty slick.

Comment on MMM-086: Maybe I’m Amazed at Jimmy by Paul Douglas Boyer

Paul Douglas Boyer — Thu, 15 Nov 2007 22:11:18 +0000

Yep, you caught me. A couple of octaves probably! Sorry if it hurts the ears too much. Your dog will love it! I should stick with nursery rhymes I guess.

Comment on MMM-086: Maybe I’m Amazed at Jimmy by vancwa1

vancwa1 — Thu, 15 Nov 2007 22:07:31 +0000

Nice job on “Maybe I’m Amazed”. Is that your voice digitally shifted up an octave or so? Sounds more like a soprano than a baritone.

Comment on Lazy Portfolio Risk Analysis by rokmiller

rokmiller — Wed, 14 Nov 2007 23:32:39 +0000

Would you be willing to share the spreadsheet you talked about (or at least tell my how you created it)?

I have recently been reading about “lazy portfolios” and am would like to be able to analyze potential retunrs/risks over time for portfolios made up of different holdings. It sounds like the spreadsheet you created would be a huge help in that.

Thanks.
Robert

Comment on MMM-086: Maybe I’m Amazed at Jimmy by Paul Douglas Boyer

Paul Douglas Boyer — Tue, 13 Nov 2007 19:43:46 +0000

Email me ticker symbols and percentage holding of each to

Feedback [AT] MadMoneyMachine [DOT] com

Comment on MMM-086: Maybe I’m Amazed at Jimmy by nicksnow

nicksnow — Tue, 13 Nov 2007 19:31:09 +0000

what is the email that i can email the tickers of my portfolio to, for a risk assement?

Comment on MMM-086: Maybe I’m Amazed at Jimmy by ravjim

ravjim — Sun, 11 Nov 2007 22:12:09 +0000

Is it just me, or is it nothing less than laughably ironic that Ron Paul dollars can be purchased with a . . . bankcard?

Comment on MMM-085: It’s Like Christmas All Year ‘Round by Mark

Mark — Tue, 06 Nov 2007 13:26:53 +0000

lhttp://online.wsj.com/public/article_print/SB119396588032780031.html

ETF’s successors? Very interesting article

Comment on Lazy Portfolio Risk Analysis by vancwa1

vancwa1 — Wed, 31 Oct 2007 21:58:20 +0000

That answered it.