Get Rich Slick

It seems like an eternity since I started my MBA program and I’ve just completed another semester, at this rate I should be done in 2013 but I can already tell you that having completed about 70% of the program I clearly understand why the global economic crisis arose despite having more Ph.D’s, MBA’s and undergrads in the world today than ever in the history of humanity.

Problem #1 – Normal Distribution fantasyland – Academic professors preach normal distribution theory as the solution to all problems.   There hasn’t been a financial class that I haven’t taken where normal distribution formulas are used to guesstimate what will happen next which is completely absurd when it comes to financial instruments because those numeric valuations are based on human thinking activity, prejudices and greed not innate characteristics such as height, weight, hair color, etc.

Problem #2 – Head in the sand  attitude – Academic professors are under constant pressure to make a name for themselves and their university by coming up with some new theory that will transform the world so the obvious net result is the head in the sand problem where academic theory is justified and rationalized despite the clear and apparent failure of such theory (see problem #1 for example).   I took an international finance class whereby the professor insisted that stock charting, technical analysis, fundamental analysis, etc really worked.   I argued helplessly for the entire semester and ended the argument with a simple question:  if these systems work well for making money then why aren’t you a wealthy billionaire baron?  (Discussion ended).

Note: I’ve read a few articles where well known egghead Ph.D’s were brought in to devise these bundled crap mortgages and if you haven’t guessed by now, normal distribution was used as a basis to guesstimate the default rate.  Hmm…it ended up being completely wrong, how did that happen? (for answer see Problem #2).

Problem #3 – If everyone else is doing it, it must be right.  My biggest criticism and complaint of my MBA program is that it isn’t unique.   I checked around and the curriculum is pretty much the same as most other universities and I think this is a huge failing.   We need to get to a point where more “niche” education is taking place around specialization around certain fields of study but there is wide reluctance to do so and I’m assuming because it’s probably viewed as too risky.  I would love for each university to develop “ecosystems” around specialized learning just how Apple built their iTunes model for music, video and entertainment then simply build on it.   Here are three areas universities should build niche’s around:  energy, health care, technology.

I am personally debating hard whether the investment in time and money has been worth it.   On the one hand, the MBA program has validate much of what I already knew and the confirmation will be the piece of paper I get at the end of the program with “Degree” stamped on it.   On the other hand, I spent a great deal of time doing pointless research largely so professors can find the next big thing (I have no doubt some professors skim off of their students) research and ideas and made too many sacrifices along the way.

Bookmark to:

Hide Sites

So I recently purchased a new 27″ iMac fully loaded for a nice chunk of change and I looked back on my blog to figure out how long I had waited.   It turns out I had initially intended to buy it in 2008 but held off then in 2009, I got sacked because of the financial crisis and it’s now been two years and a month since that time and I’ve finally restarted to make large purchases.

To be fair, financial confidence actually happened sooner with a nice vacation to the east coast this summer but it’s interesting that financially prudent people really don’t dive into big expenditures until cash reserves and emergency reserves are fully replenished before taking a plunge back into the consumerist lifestyle.    Things are very different for me though because I’ve paid down almost all debt including mortgage and now have excessive cash reserves so it’s seemed appropriate to spend some cash.

This year I’ve taken two nice vacations, purchased an iPad and iMac and just purchased another iPad as a gift for someone special .   So where does that leave us now?   If we do hit another recession or dip deeper into more malaise then there possibly can’t be any economic boom until at least late 2013 or even 2014.  In the meantime, cash keeps tumbling in on my investment activity so I’ll keep chugging along.

Bookmark to:

Hide Sites

What’s a recession wedding you ask?   Well, it’s a wedding that takes place during one of the worse economic recessions in modern history.   Arguably, we may be in a quasi-depression but life goes on.    So what was different about a recession wedding versus a regular wedding?   Well for starters, the guest list seemed to be very limited to immediate family members which whittled down the guest list to less than 100 people.    When I got married during the dot com boom, I had 500 people at my wedding and spent at least 17k on all the stuff associated with it.      I would guess that this wedding probably was done at a cost of less than $3,000.

There was food served along with a bottle of alcohol at each table, however there was no open nor cash bar.    There was a DJ but not traditional singers.   The wedding took place not at a church or reception hall but at a friends estate by a river.    The scenery was marvelous but there were no major decorations nor were chairs furnished with your typically covers.   The table covers were simple, plain and effective for obvious use.   Guests, myself included, were asked to help move tables and chairs around and a few of us acted as ad hoc photographers.  We were served a delicious dinner and the food was great.

The groom and bride didn’t weren’t registered anywhere and asked for a cash gift instead however nominal it may be.

Although I have no evidence of this, I suspect that cash gifts were the norm and probably low.   My wife and I flew down for the wedding and stayed at a hotel, by the time we added all of our expenses we easily spent $800 for a weekend event.    In retrospect I wonder if the bride would have preferred the cash instead of us being there…

Despite the low budget however we all had a GREAT time dancing, talking and meeting with family we hadn’t seen in years and it goes to show that money (or lack thereof) makes no significant difference in the joy of celebrating a two lives joining together.

If any bride to be has any lessons to learn here I think it is that love shouldn’t wait for money.

Bookmark to:

Hide Sites

I have not yet had the fortune of being molested or manhandled by TSA at airports this year despite my many business trips and rather than continue to take chances at molestation roulette, my family and I have decided not to do any air travel this winter.   Normally we’d go skiing in Utah during Thanksgiving and somewhere warm (Hawaii) in December or elsewhere but that’s not happening.  Hotels won’t make money, ski resorts won’t make money, car rental places won’t make money nor will restaurants.    All part of the economic ecosystem that will continue to collapse because some idiot in Washington decided it was time to molest Americans at airports.

And why the hell are pilots being given a free pass? I know what you’re thinking, “hey the pilot is flying the plane so he can crash it, he doesn’t need to blow it up.” Well that’s where you are WRONG because a pilot could sneak explosives in his crotch, go to the airport bathroom, take it off and HAND IT TO A TERRORIST that has already passed screening. The assumption that the pilot is willing to die is WRONG as he may just be a pilot wanting to make a few extra bucks. Perhaps the pilot makes additional bonus money by purchasing puts on the airline stock that’s about to get blown up and he knows first hand when it will happen. Hell, terrorists now just need to find a pilot to bribe, blackmail or otherwise cajole into doing their bidding and presto plane goes boom!

Before any idiots post comments about “keeping planes safe” please keep your bullshit nonsense to yourself.   The next logical evolution for terrorist is to pack explosives in body cavities so what will TSA do next?  Require gynecological and rectal exams before boarding an airplane?   If the U.S. government has been unable to keep 200 tons of cocaine from crossing the board every year much less hundreds of thousands of illegals, it doesn’t stand a damn chance of catching a well organized and determined terrorist.

I have no doubt that no matter what the TSA does, a bomb will eventually go off somewhere and people will die.  Ironically, 50,000 people get killed in drunk driving incidents each year -- where’s the outrage?   According to the CDC, the leading causes of death are as follows:

• Heart disease: 616,067
• Cancer: 562,875
• Stroke (cerebrovascular diseases): 135,952
• Chronic lower respiratory diseases: 127,924
• Accidents (unintentional injuries): 123,706
• Alzheimer’s disease: 74,632
• Diabetes: 71,382
• Influenza and Pneumonia: 52,717
• Nephritis, nephrotic syndrome, and nephrosis: 46,448
• Septicemia: 34,828

Wow, I don’t see terrorist attacks anywhere on the list, perhaps instead of TSA thugs we should hire medical doctors to do screenings at airports because that may actually save some lives.   It seems cancer and heart disease kill over 1 million people each year and that’s like having a city like Salt Lake City, Utah disappear every year but I don’t see anyone interested in solving that problem; I thought it was all about saving lives?

Oh well, if this keeps up, I will take the train or boat on my next vacation or I will just opt to drive even if it means losing a day or two commuting back and forth.  I simply will not tolerate my family being molested by government employees but the hopeless sheep don’t seem to have too many problems with it.  Never forget, most Germans didn’t have any problem with making Jews put star of David symbols on their clothes the first year around and we all know where that led.

As usual, there are a few people that stand up for logic, reason and freedom…

Bookmark to:

Hide Sites

So I have a serious growing dilemma, since I’ve returned to work, the cash has started piling up and I don’t know what to do with it anymore.  Sure, I could go out and buy another new car which I don’t need or perhaps buy a bigger house that I really don’t need but at the moment that seems wasteful.   I know the conventional wisdom is to save it and keep it in the bank or the stock market or perhaps US Treasuries or government back bonds but the truth of the matter is that I no longer trust any of those institutions given the trillion dollar deficits, crooked banks, dumb Fed, and crooked traders.

I read recently that Wall Street plans on axing 18,000 jobs over the next year so that can’t be good for business or money management “experts” either.   So while I’ve written on and off again about paying my mortgage, I may actually be forced to do it in the upcoming next 12 months because cash will just be sitting and piling up in bank accounts that I don’t trust.   I would hate to do so because of the ridiculously low 3% interest rate on my mortgage but I don’t dare buy another house in this housing market because house values may drop further if the economy continues to deteriorate.

Once I figure out the game plan, I’ll write a follow up…

Bookmark to:

Hide Sites

Although this blog is primarily focused on finance related topics, I have mentioned my side hobbies on occasion, one of which is the study of mythology, prophecy and astrophysics.   Perhaps it’s a crazy coincidence that the day of the big oil spill, a large field telescope named LUCIFER was brought online to see distant stars and galaxies.   You can read about it here.

Large Binocular Telescope (LBT) partners in the U.S, Germany and Italy announced April 21 that the first of two new innovative near-infrared cameras/spectrographs for the LBT is now available to astronomers for scientific observations at the telescope on Mount Graham in southeastern Arizona. After more than a decade of design, manufacturing and testing, the new instrument – dubbed LUCIFER 1 – provides a powerful tool to gain spectacular insights into the universe – from the Milky Way to extremely distant galaxies.

So a new powerful telescope will allow humanity to see distant stars.   Perhaps one was found that will be named Wormwood soon?   Why Wormwood?  Because according to end of days prophecy, a passage reads that a star in the heavens named Wormwood will be the harbinger of 1/3 of the water on earth becoming bitter.

Although the passage reads, “And the third angel sounded, and there fell a great star from heaven, burning as it were a lamp, and it fell upon the third part of the rivers, and upon the fountains of waters;  And the name of the star is called Wormwood: and the third part of the waters became wormwood; and many men died of the waters, because they were made bitter.”

Often, something gets lost in the translation and it may be that simply seeing the distant star’s light land upon earth’s telescope is sufficient to reveal the silliness of the things man does on the planet to seed his own destruction.  It is ironic that the new telescope is named LUCIFER after all.

Read the prior two verses and you’ll easily see global warming fit in nicely along with the recent rash of volcanic eruptions in Iceland, Guatemala and the Pacific.   I could relay more correlations but that would be too spooky…

Bookmark to:

Hide Sites

Well here’s an interesting story… I received my property tax appraisal document in the mail this week and thought it was interesting that my home value has been assessed 20k lower than last year.    I certainly don’t mind the lower valuation as it means I’ll be paying less in property taxes but while I received a lower valuation, I also received notice from the city that water & sewer rates would rise over 15 percent.

Worse than the 15% hike is the fact that the city has continuously cut back on picking up garbage.   At the rate the city is cutting services, we’ll have to soon resort to burning garbage in old drums like I remember people doing in my childhood neighborhood over 30 years ago!

Along those lines, I received a letter this week from Chase stating that one of my credit cards would be “upgraded” to the new Slate Chase card provided that I met their new credit worthy standards.   Sorry Chase but I have my own new “Ethical Worthy Standards” and you don’t make the cut.   I closed another Chase account this week and I am now down to one checking account and two credit cards – those will all be gone by June or July if I am able to meet my transfers and schedule for complete severing ties with all big banks.

Many people were talking about the consumer credit dropping in February and I’m not surprised:

U.S. consumer credit unexpectedly tumbled in February, reversing the prior month’s surprise increase, as households refrained from taking on new debt in favor of deleveraging.

February’s total consumer credit outstanding dropped $11.51 billion or at a 5.62 percent annual rate to $2.45 trillion, the Federal Reserve said on Wednesday.

I’m not surprised because banks are still cutting credit lines or imposing new standards on consumers so accounts will continue to drop off.  Additionally, some people (like me) continue to be disgusted with big banks and are purposely closing accounts.   By the time I’m done moving my money and closing accounts, I will have shut down over $100,000 worth of credit lines with big banks.   I am currently 40% of the way there and I’m replacing those credit lines with credit union credit lines and other debt instruments.   Someone has to take a stand and I’m doing my part…

Bookmark to:

Hide Sites

It’s amazing what the web has done to retail sales but more amazing is how my buying decisions are impacted by reviews I read on Amazon.   I’ve been in the market for so many new gadgets and gizmos that I’ve often gone online to read reviews and do some research.   Often, after reading a few reviews I usually make the decision not to buy something because of users opinions.

For example, I wanted to purchase a Kindle at one point but after reading this negative review I opted not to buy it.  “Gadget Queen” makes some serious and valid points that would have really irritated me if I had encountered those same problems.

Next up is a storage solution that I’ve been looking for and this is just one review of a product that convinced me to keep looking.   I am close to finally buying either a Synology or Thecus box and loading it up with 5 to 10 TB worth of drives to store my video, photos and music.

There are plenty of other items which I won’t cover but you get the idea.   It is no longer good enough to read reviews of products as I’ve come to expect actual user feedback on a product.   It’s great to review a product in a laboratory but real world use gives you the real picture.

Ironically, this level of thorough online review is needed because otherwise I wouldn’t be shelling out thousands of dollars for products that I would prefer to buy at a local store in the event that I needed to return it.  Clearly, if the vast majority of users/reviewers have little or no problems with the product then it’s a good indication that it’s a solid product.    I just don’t get why more online retailers don’t get the power of these reviews!

Bookmark to:

Hide Sites

I’m halfway through my second semester at MBA school and one thing is becoming fairly apparent.   MBA programs seem to be entirely geared to creating worker drones than independent thinkers.   The course work I’ve had so far has not been challenging but rather tedious.   From calculating statistical ratios to creating common size statements and analyzing balance sheet statements to writing management reports on mundane topics with narrow scopes have all proven to be fairly useless in my line of work.

I honestly feel sorry for the young kids in there thinking that they are learning valuable skills for their future roles as executives because they’re not teaching much beyond how to be a worker drone accountant or worker drone low level manager or worker drone analyst.   My conundrum is that I’m addicted to low cost nearly interest free student loans otherwise I’d bail out.    My other conundrum is that employers want to see this degree on resumes which is the biggest farce ever!

I’ve decided that I will definitely not take any summer classes since I plan on taking a long vacation to Europe or elsewhere this summer.   I need a break from all the tedious and pointless busy work.

Bookmark to:

Hide Sites

There should be a show on TV called “Banking Makover” along the lines of the Home Makeover show.   The premise of the show should be normal everyday struggling Americans being freed from the shackles of big banks and being moved to small community banks and credit unions.   Personally, I’ve begun my own bank make over journey.   Unfortunately it’s going to take at least 30 days if not more to move all of my accounts.   I’ve already sent letters to Bank of American and HSBC advising them of my displeasure with their little cartel and my intention to shut down all my accounts.

I’m in the process of slashing and burning my accounts at Chase but I’ve got so much money and things tethered to those accounts that it is going to take a while to undo but once done, I won’t be going back.   Hopefully, I’ll post an update by the end of the month but to give you a taste, it takes two payroll cycles to move from one bank to another and although I only had a small amount of my paycheck going to Chase, it’s going to take a whole month to unravel that process!

If you’re angry about the bank bailouts, bank bonuses, and the fleecing of the American taxpayer, I would encourage you to move your money to a credit union or community bank.   So far, my credit union has given me a credit card with a low 7% interest rate compared to the ridiculous rates at the big banks.  It’s not a bad deal altogether.    As an added bonus, my credit union offered to move my remaining auto loan over to the credit card.  This will create two bonuses for me:

1. The title to my car will be released to me -- I’ve switched from a secured loan to an unsecured loan.

2. I ended a business relationship with a big bank and will not be paying them any more interest.

Before you fret about paying the credit card interest rate, I don’t plan on paying interest on more than a month or two since I’ll pay that off once all my money has settled after all the moves.

Bookmark to:

Hide Sites