Monday, January 11, 2010

Thoughts on Confessions of a Shopaholic

I have a few thoughts after watching Confessions of a Shopaholic with my girlfriend yesterday. For those who aren’t already familiar with the title you probably won’t ever be and that’s OK. I’ll give a brief synopsis: this is a movie of a journalist with a shopping problem who lands a job as a personal finance columnist. She falls in love with her boss while combating her problem and evading her debt collector. Eventually all of these pieces collide and make a big mess, but the heroine perseveres through the adversity and the leading man comes and sweeps her off her feet. It is a happily-ever-after romantic comedy written and directed by the book.
1.) This movie debuted in February 2009 right before the market’s crater-y bottom (right after the bottom if you go by the movie poster at right). Despite this unusual timing, I don’t think that it is an ill-timed allegory praising consumerism. Rather, I feel that it is a parody that mocks the excesses of mid-2000s in a light-hearted fashion, e.g. the main character says “When I shop the world gets better, and the world is better, but then it’s not so I need to do it again.”
2.) I realized that I’m probably similar to the main character in that I love accumulating things, but different in that these things aren’t tangible, they are financial. I have financial goals and I know the path to reach them involve heavy saving, no debt, and smart (and hopefully low-risk)investing. I'm taking that path. Many negative behaviors are curbed just by their conscious realization and this one is no different; which is why I decided to slow my stride down my financial goals-path and as a result I took my girlfriend out to a Sunday night sushi dinner and bought some books I’ve been wanting after I thought about my obsessive saving.
JDW

Haiku - Warren Buffett

Berkshire Hathaway,
large value created by
sage, Warren Buffett.

Don't watch actor list:
Tom Cruise, who better watch out-
Zooey Deschanel.
-Right? I mean, come on, she plays the zany, spontaneous, and odd character in every role.
-JDW

links of the day 01-11-10

John Taylor responds to Bernanke's Jackson Hole remarks (WSJ)
-Personally, I think that Mr. Taylor is right. And I would bet that Mr. Bernanke agrees with him as well - interest rates were held too low for too long. But as THE wielder of monetary policy in this country, Mr. Bernanke is not allowed to be fallible. Ex post he cannot be wrong, so I can see why he chose to defend his policies 2002-05 at the summer conference in Jackson Hole.

What would be the effect of the Fed discontinuing its purchase of MBS? (Calculated Risk)

The economics of virtual worlds (The Walrus) with a hearty hat-tip to Marginal Revolution

I'm not a technical guy, but I like reading their narratives:
Here is a write-up of a new pattern that has been occuring lately (InvestingwithOptions)

Friday, January 8, 2010

Haiku - Market's fuel

I seem to have created a semi-regular thing here of writing a little poetry mid-day. Ah-hem:

This market is high
fueled by hopes of good earnings
I hope it comes true.

I'm really busy
Stop yelling, I'm doing it
Six-pack, here I come.
JDW

links of the day 01-08-10

ETFs that beat their underlying index have investors' interests at heart (WSJ)

Roubini says yes to the carry trade, Bill Gross says no (naked capitalism)

The Ultimate Guide to 2010 Outlooks - a meta list of investment reports (Pragmatic Capitalist)

Read this post, you'll be happier that you did (Penelope Trunk)

Thursday, January 7, 2010

Haiku - ROE

Return on assets
times financial leverage
equals ROE.
-JDW

links of the day 01-07-10

An interview on investments with Tariq Ali (Simoleon Sense)
-My favorite part is:

Q. Which investors do you admire? Besides these investors who else has influenced you?
I think that when we study investors, we should look for certain unique qualities that they possess and seek to learn whatever we can from them.
The best investor to study is Warren Buffett. Buffett basically has had two careers, his partnership and his time at Berkshire. The ways he invested differed between those two careers and they are appropriate for running different amounts of capital. So if I were to open a $1M partnership today, I would focus on Buffett’s partnership time, when he was running a similar amount of capital and hunting for microcaps and special situations/workouts.
Then, if I am ever fortunate enough to run a multi-billion dollar company I would study the Warren Buffett of today and try to reverse engineer recent purchases, BNI, his preferred deals, and so on.
The problem I see with most people looking at Buffett is that they forget the partnership days and instead try to emulate the Buffett of today. I do not believe that is the right course of action for most investors.
Ten shocking ETF stats (ETF Database)

The George Mason economists have been blogging a lot of advice lately but this one is the best:
Tyler Cowen answers a reader's question on the value of time (MR)

R&D spending on cancer research is money better spent than we previously thought (Freakonomics)


Wednesday, January 6, 2010

links of the day 01-06-10

Peter Larsen: what is an acceptable ROE for the banking industry (Breakingviews)

Inflation troubles investors (FT)
-and I think it should. With rates on the floor people are taking on more risk than they really want to in order to generate return because they are worried about high inflation coming on. And rightly so. A number of economists at the AEA are talking about 5% in 2011 or 2012. 1% on a money market just won't cover that.

The Visa fees debate filtered through Coase's theorem (MR)

How the mind works with regards to time (NYT)

Tuesday, January 5, 2010

Haiku - Commuter Hell

Inspired by recent events (hmm-hmm this morning), I bring to you an original haiku that I wrote while I was being off-loaded my morning train:

In commuter hell
I just want to get to work
Red line is broken.

JDW