Itís time to sit back, relax, and enjoy a Little Joe.
(No, a little joe. Donít be silly.)
In a stunning display of hubris, Len thought he could hand the Black Coffee reins over to yours truly and that his readers would enjoy the finished product. That was last summer. This week he decided to do it again, what with him being in Maui, and Hawaiíi not yet having the Internet (and even if they did, theyíd probably charge him in Hawaiíian dollars to use it.)
Speaking of Hawaiíian dollars, letís dispense the …
Question of the Week
Blogs Weíve Been Following this Week
Oblivious Investor – If parents and teachers could explain financial concepts half as well as Mike Piper does…well, the average American wouldnít be holding obscene amounts of credit card debt, for one thing. This week Mike debates the merits of standard index funds vs. exchange-traded ones.
Financial Uproar – Nelson Smith writes from Drumheller, Alberta, a hamlet east of Calgary. Heís almost as funny as me, and he doesnít suffer fools gladly. This week, he reiterates that itís foolish to focus on small changes to your finances (the infamous ďlatte factorĒ) when you can make painless big changes. Case in point, his fatherís rusted-out ex-car.
You Have More Than You Think – Why donít you have her bookmarked yet? Shawanda Greene is intelligent, erudite, and not without attitude. She uses a non-financial story featuring a birdís corpse to make a point about how delaying the inevitable is never worth it. Quote: ďI traded a short period (less than a single second) of severe mental anguish for a long period (days) of moderate mental anguish.Ē
Mr. Money Mustache – The eponymous man behind this blog is equal parts bold and sage. Iíd been reading him for a few weeks before discovering this week that heís an engineer, which makes perfect sense (and probably makes him a man after Lenís own heart.) This week, MMM details the logic behind his safety margin in staggering detail. Bonus: unprecedented use of the word ďcomplainypantses.Ē
Those are the good posts. If you want to see some the Internetís bottom scrapings, interspersed with the occasional diamond, check out the Carnival of Wealth on Control Your Cash during this or any other week.
The Way-Back Machine: Past Posts of Lenís You Might Have Missed
From January 2009:
Condition Yourself To Hate Paying Interest – Most personal finance sites blow chimp. (Yeah, I said it.) One thing that got my attention about Lenís was that he was unafraid to state unpopular opinions, and back them up with data. Len couldnít understand why people who marvel at the magic of compound interest insist on paying it. Me neither.
Debits and Credits
Credit: The Honeybee and Len, who are currently on what Cond√© Nast Traveler magazine has named the best island in the world 17 times. (4-way tie for worst island in the world: Elba, Devilís, Alcatraz, Manhattan.)
Debit: The National Basketball Players Association, which couldnít be handling the current labor talks any worse if Paris Hilton was their chief negotiator. The players are losing $80 million in salary every 2 weeks, and for what?
Credit: The NBA owners, who are reducing their losses without lifting a finger. Granted, theyíre reducing losses by cancelling games, but any bad PR the owners are encountering will be forgotten once (if) we resume play. Fans have short memories, and no one but me and a dozen other people care about the league before Christmas anyway.
Credit: eBay member ebtago, who bought my Garmin Oregon 450t GPS receiver for $330 as Iím typing this. Lucky so-and-so got herself a unit for about one-third off retail.
You do price items on eBay before making any big purchase decisions, donít you? Even if you never buy or sell anything on there, itís an amazing informational resource. Donít sell your old iPhone back to Verizon when you can get twice as much for it through a private party.
Debit: My girlfriendís ex-husbandís wifeís daughter. Got that? Sheís 28, single, lesbian, and decided to go hetero for one night. Well, guess what happened?
Never mind that sheís unequipped to have a kid. Sheís thousands of dollars in debt, wonít be able to work for a few months (sheís a cop), and recently bought a $350 cake for her baby shower. I didnít know $350 cakes existed. Now that sheís being idle for two, she needs to be more frugal than ever. But instead sheís going in the other direction.
Credit: Google, whose quarterly financials beat some already exospheric projections. According to analysts, the company was supposed to profit by ďonlyĒ $8.76 a share. Instead, Google earned $9.72 a share.
Debit: Investors jumping on the Google bandwagon. In the 24 hours after the financials were released, the stock price rose $36.41.
Huh? That 1-day increase represents almost a decadeís worth of additional profit. Google is a crazily successful company, of course. But all growth eventually recedes, or reduces its rate of increase. The sudden increase in stock price is a killer example of irrational exuberance. When everyone else is hopping and skipping, be cautious.
Credit: Speaking of which, people who bought BP last summer. Remember when the American public considered the petroleum manufacturer to be Stalin, Hitler and Pol Pot all rolled into one? Last June, 2 months after the Deepwater Horizon spill, BPís stock bottomed out at $27. Now itís trading around $40.
Debit: Every last unwashed protester on Wall Street. If they could articulate one semi-rational point of contention, they wouldnít be on the list. But a series of demands that stops just short of unicorns riding on vanilla-scented rainbows tells the rest of us (you know, the 1% who rule the world) that the protesters would rather get TV face time than be taken seriously.
Credit: President Obama, who has somehow managed to continue his predecessorís m.o. of choosing winners and losers instead of letting the marketplace do it, invite the chairman of GE to preside over his (Obamaís) ďjobs councilĒ, and use his political muscle to lend $535 million to a defunct solar cell manufacturer, yet not have the protestors † hold him even indirectly responsible for major corporations having undue influence on our political system. I donít know how he does it.
Credit: Mitt Romney, who has managed to jut out his chin and look presidential enough to have become an overwhelming favorite for the Republican presidential nomination. A month ago Rick Perry was a slight favorite on InTrade at 4-to-1, with Romney just behind him. Today, Perryís at around 9-to-1, and struggling to keep ahead of Herman Cain. Meanwhile, Romneyís at 2-to-5.
Wait, youíre saying youíve barely heard Romneyís name mentioned lately among those of the other candidates? Exactly. Regardless of his positions or pedigree, Romneyís managed to play an unsympathetic media just by keeping quiet and, when he absolutely has to open his mouth, reciting platitudes. People claim they hate politics as usual, but theyíre lying. They canít get enough of it, and the 2012 presidential election will be no different.
By the Numbers
67,305 LenPenzo.comís current Alexa rank.
68,532 Official football capacity of Lincoln Financial Field, home of the Philadelphia Eagles.
68,532 Number of lashes weíd sentence Lincoln Financial Fieldís most famous denizen, Michael Vick, to if we had our druthers.
81,915 Control Your Cashís Alexa rank, conditional on whether you click on this link.
1 million Incredibly rough estimate (or incredibly unlikely exact total) of the number of Apple iPhone 4Ss sold on October 14, its first day on the market.
145.8 million Number of jobs President Obama is ďpreservingĒ at this very moment. The measure used to be ďjobs created,Ē then it got reduced to ďjobs saved,Ē whatever that means. So we thought weíd lower the bar a little more. As we define it, if a job existed 5 minutes ago, and still exists now under the administration, thatís a preserved job. Yang dipilih* deserves some credit for that.
203 million Dollars Apple spent to create those iPhones, if you believe CNETís estimates.
950 million Number of your dollars ďborrowedĒ by Lincoln Financial under the Troubled Asset Relief Program.
953 million Dollars Apple expects to gross on said iPhones, by the old-fashioned method of selling a product that thereís demand for.
Other Useless News
October 21 is National Nursesí Day in Thailand. Thatís the best I could come up with, meaning that October 21 is possibly the least interesting day on the calendar.
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Letters, Len Gets Letters
This oneís from Li Park, who seems forthright: “Get back to me if interested for details as regards the transfer of $44,500,000 to you. This money initially belongs to a client who died and had no next of kin in his account-opening package. In order to achieve this, I shall require your full name, and telephone number to reach you. Most importantly, a confirmation of acceptance from you after which I shall furnish you with the full details of this transaction. Reply via this email only : email@example.com”
Thatís an email from Hong Kong. Special Administrative Region or not, youíd figure the Chinese government would cut off your thumbs for stuff like that.
Heís Len Penzo, and he approved this message.
*Indonesian for ďThe Chosen OneĒ