Cramer says the stock market is rigged. TJ says watch nothing. Philly. Yu Yongding: the collapse. Stanza, the iPhone ebook reader. NY Fed survey. Money in Motion. Why active managers under-perform. IPhone stories. Gary North predicted falling commodities. Do it Yourself portfolios.
I got THREE emails asking about Do It Yourself portfolios. First, take a look at the Lazy Portfolio Smackdown and also the Professional Lazy Portfolios. Then take a look at IFA’s comparisons against iShares and Vanguard portfolios. I hope to put together a full web page on this topic soon.
List of books and movies: Stephen King On Writing, James Kunstler World Made By Hand, Batman A Dark Knight, Juno, Kung Fu Panda, The Bank Job, Matilda.
US Constitution: Preamble.
How’s your predicting skills?
Our Guru is Nouriel Roubini. Here’s the article from NYTimes called Dr. Doom. Also check out his web site.
Learning Earning sponsored by IFA.com. Observe how an individual stock exhibits higher risk at the same reward than index funds:
Compare the single, large cap stock of General Electric to Index Portfolio 100. Which one should you buy? Higher return at less risk, Index Portfolio 100.
Everybody Loves a Happy Ending – Tears for Fears
Music from music.podshow.com: [ALTA PLAZA – XRAY DOGS] The Pop Culture – DJ Top Shelf Money Control – Voide Runaway Train – Under Feather
Email me: feedback at Mad Money Machine dot com, or comment, or Call me on the Mad Money Machine voicemail line at 206-734-4763
Fri, August 8 2008 » Podcasts » Comments Off on MMM-123: The Awakening
Investing is risky. Cramer calls this the bottom. Bogle’s take. What’s on every coin? The Philosophy of Liberty. Standard Deviation as a risk measurement. Return to Risk ratio. Watchless. Foliodex no workie. The Grossman – Stiglitz Paradox.
Investing is risky. Don’t invest unless you are prepared to lose money. Of course if you don’t take risk you’ll be stuck with low returns.
We begin our study of Riskese.
Last Wednesday, Jim Cramer called the bottom in the market. Dmcmahon, Xenogear3, and MTWC all respond at Bogleheads.org.
John Bogle says this is his 10th bear market. And although it would be great to be able to jump out of stocks at the high and get back in at the low, but in his 55 years in the business he doesn’t have any idea how to do it.
This week’s Learning Earning segment looks at Standard Deviation as the way we measure an asset’s risk. How much return did an asset have per unit of risk?
Which stock was the better investment, Disney or Hewlett Packard? Don’t forget to look at the risk. But hey, neither stock is a good choice because the S&P 500 index had an even better return to risk ratio. And look, the IFA Index Portfolio 100 had an even better return to risk ratio than the S&P 500.
Quotes from the Depression. Dollar coin? More IRS snooping. Rothbard. Rockwell. 4th branch of government? iPhone waste. Gold standard? Total World Stock Index Fund. Check your bank. Walker: Everything is not fine.
How about a 4th branch of government? This one simply a up or down vote over the Internet of “Is It Constitutional?”
Michael emails about the waste of lining up to buy an iPhone. He also wonders what a “Cramer Contrarian Fund” might look like.
Richard emails about The Fed and a gold standard.
Learning Earning: A Silent Partners Quiz.
Chip emails to say WSJ print is only $10 more if you subscribe to the online.
Frank emails to ask how much international exposure we should have. I suggest looking at Vanguard’s Total World Stock Index (VTWSX) or the equivalent ETF (VT).
Our Guru is David M. Walker. Watch one his videos! Also be on the lookout for the movie and book I.O.U.S.A. I say, “Who cares? The Chinese are paying for it all anyway!”
iShadenfreude defined. Cramer makes money from charity? Warren Buffet Rap. Investing in taxable accounts. XBOX 360 gets Netflix movies. Lew Rockwell laughs at Bernanke. Frontier Market ETFs. Mark Hulbert looks at stock pickers. Zweig vs. Cramer in guru smackdown.
An iShadenfreude story about waiting in an iLine for my iPhone.
Are you having fun watching Bill Miller shadenfreude?
Gold bugs relish the dollar’s pain.
Michael emails to say that Cramer has other flip-flops such as the one on Amazon last fall. He reaffirmed his love for the stock one day then decapitated a hobby horse to signify his rejection of Amazon the next day.
Also, Michael exposes Cramer’s exploitation of his charitable fund to make money on subscriptions.
How do I inform newcomers of the basics while not boring the old-timers?
Warren Buffet answers a Girl Scout’s question about new investors. (hat tip CrossingWallStreet.com)
The Learning Earning segment sponsored by Index Funds Advisors explores the silent partners in mutual funds. Be careful when investing in your taxable account to choose a tax-efficient fund.
Philip emails to say that the Dave Ramsey course was helpful.
My XBOX 360 is going to get more valuable this fall. The are going to redo the dashboard to look more Wii-like and Apple coverflow. Also, it will be able to play Netflix streaming movies. Need to be a Netflix subscriber and XBOX Live Gold subscriber to get it.
Mark Hulbert points to a study showing that stock picking ain’t possible.
Guru Smackdown! Our Guru is Jason Zweig who writes in a recent article, “TV pundits [e.g. Cramer] who shriek out trading advice as if their underpants were on fire.” Here is Cramer’s response.
Bank failures. iPhone Day. New Learning Earning segment sponsored by IFA.com. SplashID password locker for iPhone. My theory of death. Teaching money in school. Tool is Deluxe Fund Screener. Your feedback.
Does this sound familiar: Starting in July …, the government and the [banks] began to see what dire straits they were in; the enormous inflation of money and credit…, had put the [banks] in danger of going under and illegally failing to maintain… payments. Over the next year, the [banks] began a series of enormous contractions, forced curtailment of loans, contractions of credit… The contraction of money and credit swiftly bought the United States [a] widespread economic and financial depression. The… Nationwide “boom-bust” cycle had arrived… The result of this contraction was a rash of defaults, bankruptcies of business and manufacturers, and a liquidation of unsound investments during the boom. [Rothbard – The Mystery of Banking, pp 204. He’s talking about 1818 not 2007.]
Today is iPhone day. ITunes 7.7 upgrade is released, giving the ability to download software applications to the iPhone.
I’m eager to install SplashID to keep my web logins.
Had any Jalapeno peppers recently. Uhhhh, I don’t feel so good.
My theory of death: as we baby boomers get older, we are going to recognize a lot more names in the obituaries every week, not just local folks, but people all over the media. (And now, sadly, Tony Snow.)
Frank in Vancouver says money should be taught in high school.
Brian says he had a pretty good course about money in college. Here’s the textbook he used.
Avoid non-systematic risk. Where money comes from… you will be surprised. Inflation… then deflation. Lunch with Warren. Online outline tool. Stocks are on sale.
Mark Hebner explains William Sharpe’s definitions of systematic and non-systematic risk. The difference is that the risks inherent in owning individual stocks are not rewarded to investors.
Where does money come from? Simply, it is created when someone takes out a loan. It did not exist prior to that event. And when the loan is paid back, the money disappears.
So, because of fractional reserve banking, when money is created, what is it that you are paying interest upon anyway? And why are the banks so sad when loans go into default?
With all of the credit expansion of recent years due to low interest rates, lots and lots of money was created. More money means inflation. Inflation results in higher prices. But now that money is being destroyed through tightening credit, will we experience the effects of deflation? Lower prices. Maybe a few years down the road. Maybe stocks are being deflated currently while other things take longer to feel the effects.
Lunch with Warren Buffet. Cheaper to read his annual report.
Our Tool this week is LooseStitch.com an online outliner. Something I’ve been seeking for years now. Would be great to merge Natara Bonsai with LooseStitch and have them sync with each other.
Are you glad June is over? 10.2% loss for the DJIA. Congratulations to those of you who are still in the accumulation phase of investing!
Yikes! Where do we put our money? Warren Buffet says inflation is bad. Myrtle Beach stories. Survey results. Tool: Google Spreadsheet stock quotes. Suze Orman says get active. Russ Roberts buys a new car. Style Drifters.
Myrtle Beach stories. On the Wealth of Nations by P.J.O’Rourke. The Singularity by Ray Kurzweil. The 4-Hour Workweek by Timothy Ferris. Lights out. Get some sun.
Chick-Fil-A had individually wrapped coffee stirrers!
What happened to the iTunes Investing category?
I toned down the colors. Less orange.
Survey results: you guys are old.
Cramer’s flip-flopping
PTO has had a tough few weeks.
Tool: Google Spreadsheets and the =GoogleFinance() function to get stock quotes.
Like a weathervane, Cramer points toward where the winds are blowing.
Like a chameleon, Cramer adapts to the current environment.
Like a stock picker, Cramer follows today’s trend and picks what worked.
Like a cheetah, you should turn and run from his advice as fast as possible.
Here’s why…
I’ve witnessed this flip-flopping so many times, I’m just tired and weary of it. Please just take the Risk Capacity Survey, select an appropriate portfolio of Index Funds, buy and hold them, and then invest and relax.
133 People have taken the MMM Survey so far. If you haven’t taken it, please do so now.
But here are results at this point:
So nobody’s interested in soccer? C’mon dudes, it is the one true international sport. Get globalized (before it is too late). Anyway, you guys (and I do mean guys… see next chart) liked talk about money, inflation, index funds, ETFs, lazy portfolios, and Warren Buffet but sadly not Paul Boyer, XBOX, Libertarianism, iPhone, or Ron Paul. I guess this is an investing show after all.
When I say “dude” I really mean DUDE.
Folks generally aren’t interested in DEFINITELY subscribing to another podcast, but a daily, news-oriented one would be most considered.
Again, you listen for investing tips, economic insights (and a little humor thrown in). Mostly nobody is just listening to check out the competition (or will admit to it).
Hey, this isn’t a music show, so Paul please don’t play full songs.
Almost everybody makes over $50K a year.
The average age is 40. Wow, I had no idea you guys were so old. (Hahaha, me too.) But obviously these surveys are what they call “self-selecting” meaning that the results of the survey are skewed toward those who are willing to volunteer to take the survey. Maybe young people aren’t willing to volunteer to take it? Maybe really old folks aren’t willing to volunteer to take it? Maybe women don’t like to volunteer? Yeah, that’s it. And where are all the teenagers? Oh, playing DS.
But I like that Age vs. Index Portfolio chart. It kinda shows the general tendency to take less risk as one gets older, doesn’t it? The chosen Index Portfolio is on the left axis with Portfolio 100 at the top. Age gets higher going from left to right. Nobody will admit to a less than 25 index portfolio.
Well, do it then! And tell them Paul Douglas Boyer from the Mad Money Machine sent you!
I have more results from the survey that aren’t as easily shown on a graph, such as what you are doing while listening and the general comments question. I’ll try to cover some of these on upcoming shows. I do want to thank you for all the kind words and even for the critical words. Doing this show is great fun for me. If you want to see everyone else’s entries, click on the survey link again and they are at the bottom of the page.
Thank you for taking the survey!
Wed, June 25 2008 » Announcements » Comments Off on MMM Survey Results (So Far…)
Topics in this week’s show include: 
In the Learning Earning segment we learn one reason why active managers under-perform the indexes. 
Topics in this week’s show include: 
Topics in this week’s show include: 
Topics in this week’s show include: 
Topics in this week’s show include: 
iShadenfreude story about waiting in an iLine for my iPhone. 
Does this sound familiar:
Topics in this week’s show include:
Topics in this week’s show include:
Like a weathervane, Cramer points toward where the winds are blowing.
Like a chameleon, Cramer adapts to the current environment.
a stock picker, Cramer follows today’s trend and picks what worked.
Like a cheetah, you should turn and run from his advice as fast as possible.
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