Rant about the weather

"We had another 8-inches of snow that dumped on us again a couple of days ago. Man, I am tired of all this crap that we are getting this year. Anyway, this time we got a decent amount of rain which froze underneath the snow. So today being payday, and riding on empty, I went to get ice. Guess what. My dang, gas tank was iced shut. I cut my knuckles trying to chip the ice away (without damaging my paint). To top it off my city, doesn't blade the roads. Because they don't want to damage the roadway. So they just throw salt and sand down and call it good. Then the cities police issue their annual press release reminding citizens are to have their sidewalks and driveways shoveled within 12 hours (or 6 hours from sunrise) to avoid getting a $100 ticket (plus $71 court costs). The gall of the city to expect private citizens to do what they refuse to do on the streets. It is even worse then that. I live on a side street, and I may never even see them come down the street with salt and sand. " source Kevin

Read more!

Japan stocks rise on Microsoft factor

Shares in Softbank soared as much as 16% and Yahoo Japan was untraded due to a flood of buy orders on Monday in Tokyo, on hopes a potential Microsoft acquisition of Yahoo would boost the Japanese firms’ competitiveness, reports Reuters. Microsoft’s $44.6bn bid for Yahoo announced Friday was priced at $31 per share - a 62% premium to Yahoo Inc’s Thursday close. Internet and mobile phone service company Softbank owns 3.9% of Yahoo Inc in terms of voting rights. Yahoo Japan is owned 41% by Softbank and 33% by Yahoo Inc. The deal, if realised, would be highly positive for Yahoo Japan, said one analyst, as Microsoft’s financial prowess and technological expertise would help Yahoo Inc and Yahoo Japan compete better with Google in internet search services. Meanwhile, a weekend report in the Nikkei business newspaper said that a Microsoft acquisition of Yahoo Inc would likely result in an alliance among Microsoft, Softbank and Yahoo Japan.

Read more!

Stock market woes hit hedge funds

January was the worst for hedge funds since the August 1998 crisis that presaged the collapse of Long Term Capital Management, according to data from Chicago-based Hedge Fund Research. The average fund tracked by the HFRX index lost more than 2% in January, with event-driven funds, which include activists, the worst hit with a 3.39% loss. Equity long-short funds – which also tend to be exposed to declines in stock markets – were badly hit too. Funds that had long positions on stock markets lost out as UK blue-chips fell 6.6% and the S&P 500 fell 6% over the month. For example, the computer-driven RIEF fund from Jim Simons’ Renaissance Technologies, one of the best-respected hedge funds, was down about 4%, as it is structured to be long the market.

Read more!

Microsoft + Yahoo = Microsoft - $44.6 billion

NEW YORK (Reuters) - Microsoft Corp (MSFT.O: Quote) has made an unsolicited offer to buy Yahoo Inc (YHOO.O: Quote) for $44.6 billion in cash and stock, seeking to join forces against Google Inc (GOOG.O: Quote) in what would be the biggest Internet deal since the Time Warner-AOL merger.

In its boldest-ever acquisition move, Microsoft said on Friday it offered $31 per share for Yahoo, or a 62 percent premium over the Internet media company's closing stock price on Nasdaq Thursday.

Yahoo, whose shares jumped to $30.75 in premarket trading, said it would evaluate the bid.

Microsoft shares, which have a market capitalization of about $300 billion, fell 6 percent to $30.78.

Read more!

20% Return

INVESTOR 1

Investor 1 wants to do right by herself and her money. She’s worked hard to stash away $1000, and she’s determined to maximize her return. So over the course of a year she spends much of her time online researching stocks. She keeps up with all the news, trades often, and is alternately exhilerated and stressed with every volatile turn in the markets.

She does well and earns a 20% return – even after taxes and all those trading fees! At the end of the year her $1000 has turned into $1200. She smiles and pats herself on the back. Then she flips on CNBC to see if she can pick up some tips on how to duplicate that return next year.

INVESTOR 2

Investor 2 also worked hard to stash away $1000. She too wants to do what’s best for her financial future by making that money grow as fast as possible. Therefore she sticks her $1000 in an index fund. She knows this will minimize fees and taxes and - more importantly - that she can just let that money sit there without having to spend a lot of time tracking the markets, trading stocks, or doing research.

She’s diversified, and at the end of the year she has returned 8% on her money with little to no effort. She smiles, satisfied, and knows that over time she’ll probably end up averaging that return.

AND THE WINNER IS…

Investor 2! [trumpets blare] So wait–why is Investor 2 better off than Investor 1!? No, not because she’s taking the slow and steady route to win the race, and not because she appears to be more sensible than Investor 1 or because she better manages her time and values balance in her life (although those are all good reasons).
Investor 2 wins simply because she ended the year with over $1,700 while Investor 2 only had $1200 in her account. “What?!” you cry. “But Investor 2 only made 8%; how can she end up with $1,700??–that’s a 70% return!” Good catch by you. I left out one detail: Investor 2 managed to put away an additional $50 a month during the course of the year. She used her extra time not to chase returns on the latest booming sector but rather to make lunches for work, learn to effectively grocery shop, mow her own lawn instead of pay the neighbor kid, and cook dinner more often.

The Moral of the StoryOK, so if she actually did all those things she could have saved a lot more than $50/mo. She could have spent all her free time playing Guitar Hero 3, but the point is that putting away more money is a whole lot more effective than trying to maximize your return.

source: allfinancialmatters .com

Read more!

Spending money on personal luxuries

I've read a few articles about the philosopher Peter Singer, who, if I understand his ideas correctly, believes that all life has equal value, and that consequently we should all be vegetarians, and to take things to an extreme, that it's amoral for anyone to have luxuries while others are suffering. It's an interesting idea-- if you assume that each person who works as hard as they can, to the best of their ability, is equally deserving of rewards, how do we justify the different levels of luxury enjoyed by CEOs vs. teachers vs. people who work in factories in China? And are any of those people, all of whom have an income that can probably meet their basic needs, morally obligated to donate the rest of their money to better the lives of people for whom self-sufficiency isn't an option, and that only once all those people have been taken care of can anyone justify spending money on personal luxuries?

Read more!