PaulBBrown

The Hybrid Car Theory of Investing

I am a late adapter. For example, I only just started using my cell phone for just about all my calls, so it is probably not surprising that I haven't ever driven a hybrid car until now. But, I rented one this week--I didn't seek it out; it is all that the people at Hertz had--and I love it. Yes, sure, I like the fact that I am helping to save the environment, but the appeal to an old cheapskate me is the gas mileage. I am getting about 50 miles to the gallon. What has this to do with investing? A lot. More…

The 90%-10% rule

Because I have the world's most annoying accountant--the man has absolutely no sense of humor about meeting deadlines and filing accurately; he is in favor of both--I have already started getting my papers together to help prepare my 2008 tax returns. Here is something I have noticed in going through my files. I divided by savings/investings into two buckets: Some 90% went to my retirement. The rest to things like my emergency fund and general savings. I didn't consciously plan it this way, but I think it is a good way to go. Like you, I am not getting any younger. (I am 54.) And like you, I saw my retirement accounts get hammered last year. (Even with making contributions, I was down 30% year to year.) So, my retirement accounts are a priority. More…

One New Year’s Resolution

For most Americans the New Year really starts today. Everyone is done visiting for the holidays and is returning to work or school. I am a not a big believer in resolutions, but here is one I plan to keep. I will continue to save aggressively for retirement. Yep, 2008 on Wall Street was a disaster. The Dow was down 33.8%. The S&P fell 38.5% and the NASDAQ was even worse—off 40.5%. Even with that dismal performance, over then last 85 years or so, stocks have outperformed every other investment there is. If you want to have enough money to retire the way you want, you have to keep investing in stocks. I plan to. I hope you will too. And, of by the way, “Happy New Year.” More…

To all you last minute shoppers

I will be driving some five hours today to get where I will be spending the holidays. I will pass six major shopping malls along the way. (I have done this drive a lot.) To all of you whose cars I will see parked there I say: Good luck. My guess? Yep. You will find serious bargains. And because of that extremely crowded stores. Enjoy the experience....and the holidays. More…

3 End of the Year Moves

In “The Prize Winner of Defiance, Ohio,” a movie that more people should have seen, the lead character (played by Julianne Moore) has a wonderful line. At the end of a particularly awful 24-hours, she says, “I am going to bed. I am tired of this day, I want a new one.” Well, we are all tired of this year. But before we say good riddance to 2008, there are three things you should consider doing. 1.Write an extra mortgage check. If you make your January 2009 mortgage payment this month, you will be able to claim the January interest on your 2008 tax return. (The only down side? You will need to pay January 2010’s mortgage next December as well in order to deduct 12 months of interest during 2009.) More…

Enough with the bailouts!

Possibly later today--and certainly before Christmas--President Bush will announce that he is bailing out the nation's automakers. Let me see if I have this right. The dogs (American consumers) won't eat the dog food (buy American cars in sufficient numbers) and so we are bailing out the dog food factories. Why? More…

Inflation worries

I am extremely happy that the value of my stocks went up yesterday as a result of the Federal Reserves decision to cut its target interest rate to historic lows. But I do have a question. At some point, all these various stimulus ideas are going to start to work. When they do, won't inflation soar? More…

Full disclosure all the time, please

"Analysts suspect GE's Jeffrey Immelt may announce at his annual state-of-the-company address a decision to stop offering quarterly earnings forecasts," the Wall Street Journal reports this morning. I hope that is not the case. Yes, I believe in investing for the long-term. And yes, I believe that the pressure of having to hit Wall Street's expectations can make companies focus more on the short-term than they should. But the quarterly announcements: a) let investors (like us) know every three months where the company stands; and b) imposes a real discipline on firms. More…

A Home is Not a Piggy Bank

One of the reasons we are now officially in a recession is, of course, because of the meltdown in housing prices. In some places, especially on either coast, home prices have fallen 30% from their highs. All those people who were counting on the rising equity in their homes to keep them afloat--they planned to take out ever increasing home equity loans to pay for things like new cars and college for the kids--are now in serious trouble. More…

If you haven't finished your Christimas shopping...

...it could work to your benefit this year. This is just a guess on my part, but given the economy I think the mark downs you saw today, "Black Friday," will continue to Christmas Eve. That's the good news. The potential bad news (other than the fact that all the mark downs mean the economy is in trouble) is if retailers are smart, they will have cut back on their ordering. So, I wouldn't wait too long. The item you want could be gone. More…