Mad Money Machine

Backup Solution? HP MediaSmart Server perhaps

I’ve been doing a lot of reading about various backup strategies. It is one of my 2009 New Year’s Resolutions, remember? Here are my requirements:

1. OS Agnostic. Don’t want it to be tied to Mac or Windows. Want it to be able to do anything.
2. Yet, I want it to be Apple Time Machine compatible to take advantage of its ease of use.
3. Must be automatic. Don’t want to think about it.
4. Don’t want large recurring costs, no large monthly fees. $5 a month at most.
5. Must be large enough to hold everything.
6. Want to be able to access resources from any computer on the home network and store stuff on it not just backups.
7. Failsafe!

• External USB or Firewire hard drives, both with A/C plugs and those with only USB power
• Mirrored hard drives
• Drobo backup system
• Online web backups like Mozy.com, Backblaze.com, GetDropBox.com, Mesh.com, etc. (Must encrypt the contents)
• Network Attached Storage systems

The one solution I am attracted to at the moment is the new HP MediaSmart Server. It just won the MacWorldMagazine Best of Show award. The attractiveness of this device is that it can solve items 1, 2, 3, 4, 5, 6, and hopefully 7 above. I do not know how failsafe it is. I think that is a key feature of Drobo: you can actually remove one of the hard drives in the thing and your data is still there. I don’t think the HP does that, instead I think it allows you to do mirroring. 

But, you can also sync the MediaSmart server with an online backup solution, such as Amazon S3. So you have both network attached access to your data as well as an offsite backup. Having worked in information security, I appreciate these things. I am looking at the EX487 model which starts with 1.5TB of capacity in two hard drives. I think I can probably find one for about $725. Another neat thing about it is that supposedly I can move my iTunes music (and podcasts?) to it and access it from any PC on our home network.

Lord of the Rings

We are in the middle of watching the entirety of the Lord of the Rings trilogy, super-duper extended director’s ultra specuatcular release. Nine hours of DVD bliss. Watching all of those dark battle scenes, sword swing after sword swing accompanied by those “schwiing” and “chiing” sounds, then arrow piercing’s thwoosh.

Hours later the big screen darkens and I return to my small screen and read about how China may cease purchasing more US debt and how the dollar may fall. I hear the echos of schwiings and thwoosh sounds still.  Will the “one currency to rule them all” be thrown into the fires of Mordor? What then of our gold rings and gold coins?

“Make haste my lord. The hour is drawing neigh. The battle begins at dawn.” May the battle for Middle Earth be won!

Still searching for the perfect outliner

I’ve been using outliner software since the 80’s. What’s it do? It helps you keep lists. Nested lists as outlines.  Like this:

1. Things to buy
   1. Milk
   2. Eggs
   3. Fish
   4. Backup software
2. Things to do Today
   1. Wash car
   2. Mow lawn
   3. Go to the store
3. Books to get from the Library
   1. Index Funds
   2. The Revolution
   3. The Left, the Right, and the State

I’ve found Mac outliners, web outliners, iPhone outliners, PC outliners and some combinations of these but I cannot think of one that does three and certainly not all four. Yes, if I could find one I would trade Federal Reserve Notes for it!  I will keep checking http://www.outlinersoftware.com/ for ideas.

I like Bonsai on the PC. I like OmniFocus for the Mac. I like Google Docs for the web (even though it does not do outlines). I have not found a really great web-based outliner. The iPhone outliners don’t seem to show enough rows of data on their screens; I’d need to see more than a half dozen things at once.

Is anyone out there developing such an application? Please email me and let me know, otherwise I may have to write them myself!

How do you get your news?

How do you get your news? Newspaper? TV? Radio? Magazine? I’ve tried all of these and none of them work as well for me as the Internet. Newspapers are too much chuff (and advertising) to fool with. TV is too much fluff (and advertising) to fool with. Radio is too much bluff (and advertising) too fool with. And magazines are just too much sluff (and advertising) to bring anything one would call “news.”

The Internet, on the other hand, gets me what I need faster, with less chuff, fluff, bluff, or sluff. And the fastest and best way I get news on the Internet is to us a “news reader” to subscribe to the topics I want. For example, if you want to get the news from a trusted source, subscribe to their news feed. Sometimes it is called an RSS feed, for no real good reason other than some guys needed a unique acronym for their new invention. Really Simple Syndication? Puh-leese. But often if you visit your trusted source’s web page you’ll see a nice icon  telling you that you can read their content in this “news reader” that I’m talking about.

So, what’s a “news reader?” It is kinda like email in the way new messages arrive, but it is also kinda like folders of articles in the way they are grouped for you. The best way to describe it it to have you try it. And it is easy to try because the software is free and can be used right inside your web browser. My preferred news reader is Google Reader. The web address is simple: Google.com/Reader. If you don’t already have a Gmail account or other Google account, you’ll need to set one up. Then once you do, Google Reader is there ready for you to subscribe to news feeds you want to catch. 

Let’s say you want to be kept informed about postings here at the Mad Money Machine. Instead of going to the web site to check if there is something new, you could use your Google Reader to subscribe to the Mad Money Machine news feed and it will go bold when a new article is posted. Then click on the article and read it right there. So instead of visiting tens or hundreds of websites daily, you just open your news reader to check what has gone bold.

There are two ways to subscribe to a feed that I can think of: 1. Click on the feed’s icon or link and your browser should help you subscribe using your preferred reader or 2. Go directly to Google.com/Reader and click the button labeled “Add a Subscription” and type or past in the link to the feed. In this case, you would enter “http://madmoneymachine.com/feed/” and press OK. The reader will go out and pull in the most recent articles from that feed and let you read them.

As it turns out, a lot of web sites don’t like the idea that you won’t visit their web page to read their content, so what they do is just post the first few lines of their article in the news feed. (I’m looking at you LewRockwell.com and SurvivalBlog.com and AppleInsider.com.) And while this is less than ideal, at least it notifies you there is something new and you can click on the header there in Google Reader to be taken to that site to read the whole story. Oh, and most of what I read has very little, if any, advertising.  In upcoming posts, I’ll try to list some of the news sites I subscribe to in order to help get you going.

I encourage you to give Google Reader a try and try getting your news from trusted sources on the Internet rather than newspapers, TV, radio, or magazines. And if you’ve tried Google Reader but have found something you like even more, I’d be happy to hear about it and why. Drop me a posting at drop.io/MadMoneyMachine or try the newly-reinstated Comments link below.

Tags: media, news, RSS

Two Informative Podcast Episodes

Tags: Austrian, Gold

Lazy Portfolio Smackdown 2008 Winners Announced

I have updated the Lazy Portfolio Smackdown page to show the preliminary results for 2008. Note that after a few weeks the results will be updated once again after Yahoo! gets their dividend data included in the historical quotes for each fund. I do not think that the dividend data will alter the results though.

The game started one year ago. I asked people to create a buy and hold portfolio of index funds or ETFs that would exhibit the best return-to-risk ratio in 2008. This would be measured by “top-leftedness” on a plot of Return on the Y axis and Standard Deviation on the X axis. For positive returns, the Sharpe Ratio accomplishes this nicely. But when all returns are negative, the Sharpe Ratio gets screwy (a technical term) and I had to reset 0%  to be at -50% to make it work. Even when all returns are negative, we still want to be top left on the chart.

Winners were to be selected from each of three risk bands: 0% to 8%, 8% to 16%, and then 16%+. Funny how the game worked out. Last year was a RISKY year. Only one person had a portfolio with a Standard Deviation of less than 8%. Congratulations Cosmo, you had a STDEV of 3.5% and a return of 5.1% with your portfolio holding a single fund: the Vanguard Short-Term Bond Index (VBISX). You are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner. And if you actually had your net worth invested in that portfolio, you had a great 2008.

Next up, the medium risk band. As it turned out, nobody had a positive return here, as you can see in the following chart. Which one is top left? The one who lost the least amount is Ariel with a return of -12.6% and a STDEV of 8.2%. Ariel also put the entire net worth in one fund: Vanguard Wellesley Income Adm (VWIAX). Congratulations Ariel, you too are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner. 

Finally the guys who took great risk. This one is a littly silly because here you can gamble on something extremely risky and come out the winner if your number comes up. I should have limited it to something reasonable like 25% or something. Nonetheless, the winner is mudfud who invested in one fund: the China Bear 2X Fund (which was closed on November 14th by the way). Now who in their right mind would really put 100% of their portfolio in this fund? That wasn’t the idea behind this game. Still, if you could handle a risk of 56.1%!!!! OUCH!!! then you got a return of 42.4% for your gamble. Congratulations mudfud, you too are the winner of Index Funds: The 12-Step Program for Active Investors by Mark Hebner.

You can see all of the other entries at the Lazy Portfolio Smackdown page and you can see the portfolios of the so-called “Professionals” — those who make a living recommending portfolios to folks like us.

I’ll be talking more about the results on the Mad Money Machine podcast. Please load it into your iTunes or visit MadMoneyMachine.com to listen on your computer.

Computer Rescued, Now What?

My plan worked. On show 140 I told you about my crashed computer. When we left for a Christmas vacation for a week, I shut off my computer. It had been having some boot up problems before. Those problems turned out to be an early warning signal for something more major. I should have listened. Instead, I did what my gut told me not to do and that was to turn off the computer for the whole week. Yeah, save ten cents of electricity. But come back home to a non-functional computer.

This has happened to me before. One of my old Gateway machines a few years back suffered “stiction.” The basic idea is that the hard drive spins so long and gets warm, that when it cools down the head sticks to the platter when you try to turn on the computer. Sometimes a sharp slap will actually fix it. It did not fix the Gateway and I lost data.

So I learned a lesson: have a duplicate copy of the data. A backup. I ordered my Dell with a mirrored hard drive. Two identically sized disks with one simply copying the other. If one fails, take it out and boot off the other one. I also have an external hard drive in the event that the whole hard drive controller fails. 

In this case, something else failed. The computer didn’t even try to come on. Hit the power button and after the fan ran for one second, it shut off again. Very frustrating. But not to panic because I have the data in three places, right?

Yeah, but try to get at that data. See, my other computer is a Mac, remember, so hooking up the external hard drive to it won’t restore the applications that are necessary to get at the data. Yeah I could run Parallels and run Windows on the Mac (which I plan to do someday). Or take the comptuter to Geek Squad and have them fix it (while copying out my personal data? I think not.) Best solution I came up with is to buy an identical computer from eBay for less than $400 bucks and swap hard drives. Five days later, Fedex shows up with the box.

Guess what? It worked! I’m typing on the new computer with my old hard drives right now.

Still, I’m leery of having to do this each time. I want a living backup solution where all my data is immediately accessible, including the applications needed to get to the data. Like Google Mail and other cloud applications.

One solution I’ll be looking at is the upcoming HP MediaSmart home servers. They appear to be moderately-priced computers that you put on your home network and use as backup servers. They even say you can put your iTunes music there. I wonder if that is slow over the network though. I’ve considered Drobo and online backup websites too. I’ll let you know what I decide…

In the meantime, I think Hallmark should create a line of sympathy cards for those who lose their hard drives.

Planning to visit DC? Some tips.

We thought today would be a good day to visit the Museum of American History in DC. Newly renovated with more light. We were wrong. Everyone had downtime today and went to the museum. I dropped everyone off and hunted for a parking space. I found one on the street pretty close by after about 30 minutes of circling. The meter is reasonable: 25 cents for 15 mintutes. But the hours are not. You must move the vehicle by 4:00pm or risk being towed according to the sign. The museum closes at 5pm. So I left the museum early and sat in the car and waited. Most of the other cars on the street were still parked there at 4pm too. 

At 4:15 I look up and there is a man in a dark blue coat with an electronic gadget in his hand and he is looking at my license plate. Are you kidding me? An electronic parking violation perhaps? No longer do they write pieces of paper and stick under your windshield wiper.  I start the engine and pull out, but I have a feeling I will be getting something in the mail from our friendly DC gobmint.

This is the kind of thing that makes one irate at those in power. In a small town, you would probably know the meter maid and she would wave at you and you’d chat and she’d say you need to move along now. These days in the big city, everyone is faceless. Everyone just punches buttons on a computer to make someone else pay.

When visiting DC, pay the money and park in a building.

MMM-140: Crashed Computer

Make $400,000 in one month. Resolutions. Christmas doings. Cramer outs biggest Ponzi scheme. Capitalism! Crashed computer. New tire warranties. Speed camera hacking. Keynes. 2008 market wrap-up.

I ENCOURAGE you to Download this show thru iTunes!

But, if you just cannot deal with that then go ahead and Play the new show right now

MMM-140: Crashed Computer [ 33:16 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to advertise Index Funds Advisors at ifa.com

Topics in this week’s show include:

• Happy New Year! Resolutions:
  • Lose 30 lbs thru diet and exercise
  • Backup my computers even better
  • Read Mises
  • Maximize your pleasure, minimize others’ pain
  • Podcaster:
    • Blog every day
• Yes, we did go to Huntington after all. Did geocaching. Went to Steak and Shake. ATE.
• Boardgame: San Juan, Set,
• Went skiing to Seven Springs. -3 degrees
• LEARNING EARNING: IFA Investment Principles #1: Capitalism Works
• Computer crash: LPS will be delayed
• iPhone podcast downloading is kludgy
• Write an iPhone app, make a $million ?
• Something I don’t like about MacBook: keyboard keys: beginning/end of line, previous word
• Cockroaches… Let’s say you are running a hedge fund. Why wouldn’t you claim that you had invested millions with Madoff’s firm and that is the cause of your losses. You’re a victim not a bufoon.
• Cramer says Social Security is a Ponzi Scheme
• Car tire warranty: is it worth anything?
• Santas covering up speed cameras
• Students speeding past cameras with someone else’s license plate. What a great game!
• Is Europac good to invest with?
• Conquering the Spirit of Debt sermon.
• GURU: John Maynard Keynes of Keynesianism
• End of Year Market Statistics

Got feedback? Leave it at drop.io/MadMoneyMachine

Music from music.podshow.com:
Runaway Train – Under Feather

Email me: feedback at Mad Money Machine dot com or call the Mad Money Machine voicemail line 206-734-4763

Madoff Ponzi Scheme: Cover for Other Frauds?

By now you’ve heard about the alleged multi-billion, multi-year Ponzi scheme by Bernard Madoff and how so many other hedge funds were invested with him and how they lost money. Here’s the question: Are we sure those hedge funds lost their money by investing with Madoff? Maybe they did lose some money but maybe they are inflating their losses. Were they running a Ponzi scheme of their own and simply used the Madoff scandal as a scapegoat? Sounds like good cover to me.  How many other cockroaches will come out of the woodwork claiming their losses were due to Madoff? Hat tip to my wife for the idea.

MMM-139: Christmas Cucaracha

Cockroaches? Never just one. Ponzi again. Cramer: Market is crooked. Leveraged ETFs cause volatility. 3 year anniversary of MMM. How mutual fund distributions work. BAD NEWS. Guru’s beautiful mind says we need a gold standard.  Flip throws
  

I ENCOURAGE you to Download this show thru iTunes!

But, if you just cannot deal with that then go ahead and Play the new show right now

MMM-139: Christmas Cucaracha [ 39:41 ] Play Now | Play in Popup | Download

The Mad Money Machine is proud to advertise Index Funds Advisors at ifa.com

Topics in this week’s show include:

• Cockroaches… there’s never just one. La Cucaracha by Kumbia Kings.
• Bernie Madoff. Wow, now THAT’S a Ponzi scheme! Who can you trust? Index funds!
• Cramer: market is crooked. What’s up with 3:00? Mad Money is such a different show now that he has no stocks to pump. Cramer talked about it. Says you cannot rely on SEC. That’s a rouse. There shouldn’t be an SEC.
• Cramer says leveraged ETFs are to blame for market drop, especially after 3pm. So does WSJ .
• I’ve been doing this show for 3 years now. The world was so easy back then. Invest and relax. Now that we’ve awakened, it is another story…
• LEARNING EARNING: How Mutual Fund Distributions Work
• US auto bankruptcy, bank bailouts, $50 billion Ponzi scheme, T-Bills yielding 0%, FED selling its own bonds, rising unemployment, layoffs, gold backwardation, Cramer saying markets are corrupt, inflation, deflation, Illinois govenor,
• Comment from John in Omaha: Conquer the Crash . Thank you! But I don’t buy into Elliott Waves or Kondratieff Cycles. Pseudo-scientific mumbo jumbo.  Read pg 129.
• Payoff your mortgage?
• GURU: Beautiful Mind guy says we need a gold standard
• One World Currency: GOLD!
• One World Government? not so much.
• Beggar thy Neighbor?
• Michael Phelps story
• Maryland Won. UNC girls won.
• Soccer flip throw ins. First watch this
  http://www.youtube.com/watch?v=HzHwHIJF20c&feature=related
  then watch this
  http://www.youtube.com/watch?v=ewqy5EDrenw
  then this
  http://www.youtube.com/watch?v=rVAD8Zl5ngg

  I love the part when they yell, “THAT WAS INTENTIONAL!”

• SUBSCRIBE TO IFA QUOTE OF THE WEEK
• TOOL: Night Stand for iPhone

Got feedback? Leave it at drop.io/MadMoneyMachine

Music from music.podshow.com:
Runaway Train – Under Feather

O Holy Night – Eoin Harrington

Email me: feedback at Mad Money Machine dot com or call the Mad Money Machine voicemail line 206-734-4763