It’s time to sit back, relax and enjoy a little joe…
Blogs I’ve Been Following This Week
Happy 2010 everyone!
Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week… (In honor of one of my favorite cousins, I gave bonus points this week to bloggers named Kevin.)
Financial Samurai – The honorable Samurai has put together a very clever idea called the Samurai Fund – a composite index of 18 companies that has been assembled based upon logical permutations of bloggers’ names or site titles. For example, my stock component in the Samurai Fund is LEN (Lenar Corporation). Truth be told, it wasn’t my first pick; I believe the housing sector is going to be a loser in 2010 and I said as much in the outlook I provided to Sam, who is out to prove a theory that says luck plays a big part in performance. We’ll see if he is right. As for LEN, on Thursday it was the Samurai Fund’s leading performer, gaining just over 21% (!) for the week. Yep – like I said, housing is a loser’s game! I’m not worried… I’m running a marathon in my bare feet. Yes, I’ve started strong but it is only a matter of time before the blisters take me down.
No Debt Plan – Kevin had a very interesting story about steak and customer service. The moral of Kevin’s story is never – and I mean never ever ever – be afraid to ask a question. Obviously Kevin has never tried asking the Honeybee to get up and fetch him some beer nuts and a cold frosty one while he’s watching a game on the television.
Big Fat Moneybags – For a while there I thought Mr. Moneybags had skipped town with all the earnings from his own Gutman Fund which, legend has it, has earned annual returns of over 6000% since the turn of the century. (Or something like that.) Thankfully, I was relieved to learn that he only had a case of, well, something that I don’t think you can normally catch by simply touching a doorknob. Then again, I’m not a doctor. Actually, I’m not a financial expert either but that ain’t stopping me from masquerading as a financial blogger. It’s good to know Mr. Moneybags is all better now. In fact, in his first post back he managed to refer to me as the “mighty Len Penzo.” As I told Mr. Moneybags, I think that was the first time “mighty” and “Len Penzo” have ever been used in the same sentence.
The Smarter Wallet - Guest poster Matt Robinson had a very informative article this week on some tax credits for the 2009 tax year that you may be able to take advantage of when filing this year. How many will I be able to take advantage of this year? Uh, that would be zero.
Today’s Economy Blog – Kevin has posted what I consider to be a fairly rosy set of 10 predictions for 2010. I hate to rain on everybody’s parade but I am going to focus on item 10 in his list. Kevin notes that the potential exists in 2010 for an asset bubble in China, triple digit oil prices, and the collapse of the dollar, among other financial disasters. My two cents: I think the asset bubble in China has a way to go yet, triple digit oil will be here soon (more on that later), and the dollar will be severely tested late this year. In fact, I consider the Scotia Capital prediction he referenced suggesting the Canadian dollar will be worth $1.03 USD by the end of 2010 to be conservative.
Hope to Prosper – Bret and I have a little friendly bet going on based upon whether or not the Dow will reach 13,000 this year. I think that is preposterous and, depending on the outcome, one of us is going to be buying the other guy lunch. Now maybe it’s just coincidence, but I see Bret has written a nice little investment primer on a stock market phenomenon commonly known as The January Effect and how we can profit from it. Personally, I think this is just a futile attempt by Bret to try and “prime the pump,” so to speak. That’s okay though. Next week I’m starting a 12-part series on the Stock Market Crash of 1929 and the seemingly never-ending secular bear market that followed it.
Fiscal Fizzle… Wojo, who officially becomes a new father today, put together a composite set of opinions regarding the economic outlook for 2010 from 10 personal finance bloggers, including yours truly. Wojo then closed out the article with his own thoughts. I think the collective opinions of the group, when placed side by side, provided some very interesting food for thought. Unfortunately, it also made me look like a complete idiot.
Brain Dead Simple! Financial Organizing - A couple months ago I encouraged Susan to come up with a title for her very creative and unique personal finance soap opera. Well, two weeks ago she finally revealed the new name. Here are a couple titles I suggested to her but didn’t make the final cut: 1) The Young and the Reckless, and 2) All My Finances. I won’t spoil it for those of you who have yet to check it out but, rest assured, I think the final title is absolutely perfect!
Monevator – With heavy snow hitting the suburbs of London this week, The Investor asked his readers if businesses should be responsible for paying employee wages if they are unable to get to work due to the bad weather. I’ve recently put a lot of thought into this question. The more I toss it around, the more I am beginning to think businesses should pay their workers anyway and send the bill to Al Gore.
Credit Card Chaser – Meanwhile, Joel recently unveiled an awesome credit card calculator that automatically calculates the cash-back savings you can earn with each of the best cash-back credit cards! By using this handy dandy tool, you can find the best cash-back credit card offers based upon your personal spending patterns depending upon how much you spend each month on gasoline, groceries, travel and other products.
Out of Your Rut… This week Kevin had a very interesting post highlighting seven ways to improve the success of your business. Kevin’s first item on the list: Pick a business you know. Now, ladies and gentlemen, you know why I will never ever be able to make a decent living writing this blog.
Credits and Debits
Debit: With crude oil hovering at $82.50 per barrel, which is just a hair under its 14-month high, CNN is lamenting the return of $3 per gallon gasoline here in the United States. Did you ever think you’d see complaints about $3 per gallon gas again? Especially when you consider in the spring of 2008 gas prices were running well over $5 per gallon in California.
Debit: Meanwhile, Jeff Rubin, the former chief economist of the Canadian Imperial Bank of Commerce, believes conventional oil production has already peaked and as a result, triple digit oil prices will be returning soon. Rubin is the man who correctly predicted that oil would first reach $50 per barrel in 2005 – five years before the fact in 2000. Then, in 2005, Rubin predicted oil would first top $100 per barrel in 2007 – it did. In June of 2009, Rubin stated that triple digit oil prices would return during the early stages of recovery from the Great Recession. Rubin believes that crippling recession can be directly attributed to oil reaching $140 per barrel in 2008.
Debit: So how high can we expect oil to go? Well, if Rubin is correct, oil will reach $225 per barrel by 2012. Rubin details what the new global economy will look like with the disappearance of cheap oil in his latest book, Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization.
Credit: On a positive note, in an interview with the Financial Times this past summer, Rubin explained that competitive advantage used to be all about finding the lowest wage rate. However, he stated that the disappearance of cheap oil means things aren’t so simple anymore because the physical separation from producer to market becomes a bigger factor. Rubin believes that the rising price of oil will require a return to local economies. He states that isn’t entirely bad – just different. It will have its benefits too. For example, Rubin foresees the end of globalization leading to a resurgence of the American Rust Belt.
Debit: Before you get too giddy on the return of the American Rust Belt, you should probably know astronomers this week revealed that a star is primed to explode in a blast that could wipe out the Earth. (Detroit can’t ever catch a break.) The star, called T Pyxidis, is gearing up to self-destruct in a supernova explosion with the force of 20 billion billion billion megatons of TNT. T Pyxidis is a mere 3260 light years away; just a hop, skip and jump in galactic terms and close enough to ensure the destruction of most life on this planet should it go kaboom. Environmentalists are blaming T Pyxidis’ instability on the free market and, in order to avert disaster, have called on all world governments to impose punitive taxes on their public corporations in order to fund a series of studies by academic intellectuals.
Credit: No word yet on whether Al Gore has decided to sell supernova offset credits to environmentally conscious corporations that want to help with the greening of the universe – not to mention the lining of his pockets.
Credit: The markets don’t appear to be too worried about T Pyxidis going supernova. They also don’t seem to be concerned about Rubin’s predictions about the end of globalization due to the end of cheap oil. On Thursday, the S&P 500 closed at a 15-month high and is up 65% after reaching a 12-year low last March. I fail to see how the underlying economic fundamentals can support a continued rise in the markets. But then again, who ever said that the markets were rational?
Credit: When it comes to cats and dogs, I’m a big dog fan. Always have been. The unconditional loyalty dogs display to their owners and extended family is a noble and attractive trait that I find absolutely irresistible, not to mention commanding of my respect. Apparently a lot of people agree with me, if one is to believe an Associated Press-Petside.com poll of almost 2,000 adults. The results: 74 percent like dogs a lot, while 41 percent like cats. Sixty percent of people said they like both dogs and cats. What our politicians wouldn’t give to have those kind of approval ratings.
By the Numbers
More results from the Associated Press-Petside.com poll on dogs versus cats…
74 The percentage of pet owners polled that owned dogs.
59 The percentage of all people polled that owned a pet of any kind.
47 The percentage of polled pet owners that owned cats.
34 The percentage of polled dog owners that said they disliked cats a lot.
15 The percentage of all people polled that disliked cats a lot.
5 The percentage of polled cat owners that said they disliked dogs a lot.
2 The percentage of all people polled that disliked dogs a lot.
Letters, I Get Letters
Josie writes: “Are you related to Peter Landers? I saw your picture and you look A LOT like him!”
No. But give Peter my condolences and let him know that there are plenty of good plastic surgeons out there who can fix him right up.
Just for writing in, Josie is going to get an autographed wallet size school photo of me from when I was in the 8th grade.
If you have a question you’d like to ask, or a comment you’d like to make regarding some of my irritating opinions, please feel free to drop me an e-mail at: Len@LenPenzo.com
I’ll feature the most interesting question or comment I get each week here on Black Coffee – assuming I get one, that is. If you’re lucky enough to be the only question in the mail bag I’ll highlight your letter, whether it’s interesting or not.
Other Useless News
The Top 10 referring personal finance blogs to Len Penzo dot Com for the month of December were…
I really appreciate the links, folks!
The Way-Back Machine: Past Posts You May Have Missed
From April 2009:
Believe It: Sometimes It Pays Not Buy Stuff On Sale – A coworker of mine told me about how he saved $400 off the price of a plasma television set. But the more questions I asked, the more I realized this guy would have been much better off passing on this particular sale. Check out the mistake he and millions of other consumers often make when they buy things on sale.
This week I had articles featured at the following carnivals:
- The Carnival of Clueless Hockey Linesman? at a Hockey Rink Near You
- The Festival of Sorry Soccer Fields at an Archery Range Near You
- The Carnival of Crazy Fines at the Newcastle Tramway