Economic Musings of a Bleeding Turnip

Rule #1
If I know about it, it's already too late.

This correllates to any type of economic insight and financial planning. I (maybe you, too) chase the markets on the advice of "experts" and popular hype (money honies?) and buy high, -think tech boom- hold,(buy and hold, don't you know - can't "time" the market)and then watch my little dollars evaporate into thin air as the stocks or mutual fund I invested in suddenly implode. But, the CEO's and Fund Directors make out anyway, regardless of how well I did. I could have taken the same money and invested in Slim Jims and dried fruit for the coming hard times and had a higher net gain.


Rule #2
If I brag about it, take immediate cover

When my prole friends and I give hot stock tips to each other and brag about how high our Disney stock has gone - divest immediately. This correlates to real estate as well. When everyone stands around at the neighborhood bar-b-queu bragging about how much in value their homes have increased in value, reflect a moment. Does the schmuck next to you in the "Kiss the Cook" tee-shirt strike you as a financial wizard? The UPS guy has a hernia from unloading QVC schlock at their house daily and HE'S giving you advice on equity lines?


Rule #3
If I think but don't act, good things will happen to others

You, know - that oceanfront lot I could have bought in 1979 for $22.95 that now sells for $600,000? I also called United Technologies a million years ago (what's good for Dick Cheney is probably good for me, too) but couldn't bring myself to share a prospectus with the Prince of Darkness. Is it possible to experience schadenfreude about yourself?


Rule #4
If EVERYONE likes it, I must too. The moment I get it, it will be passe.

Think granite countertops. When the quonset hut re-do behind the burning tire dump has a sign in the yard that proclaims "granite countertops", it's time to break away from the pack.

If your vocabulary is filled with "house porn" - get a grip. The term you throw around so lovingly today -"travertine tile" for example, will be the leg warmers of next year.



Rule#5
The inverse of Rule #4 - If NO ONE likes it, then I must champion it.

Betamax, anyone? I ALWAYS pick the wrong technology. The day the wheel was unveiled, I would have gone for the square model over the round.



Well, it's off to the salt mines. Hi ho, Hi ho.

what percent they made on their stocks. The choices were less than 5%, 5 to 10%, or more than 10%. About 75% of the people responding made less than 5% and less than a quarter made over 10%. Most people can't get it right either. It is safer to keep your money in a bank (up to the federally insured amount). You make about the same interest and you don't have to worry about losing it all.

I do have one more rule.

GAINS ARE NOT GAINS UNLESS YOU HARVEST THEM!

So, lately, when I noticed something has actually gained significantly, I sell and put that gain into something considered "safe" even if it's just a money market fund until I decide where to replace it. I have quite a bit in my 401K that I have "harvested" and then sheltered.

But, here is another question. That sheltered money is in a Money Market FUND, which is not technically FDIC insured.

Why do not more 401Ks offer people the simple choice of buying bank CDs or treasuries?

Is the actual answer the obvious one? That the fund managers would not make money if that were the case? I think this is shocking. The old payroll savings plans of buying bonds at work would probably work better for most people who do not have the sophistication or time to understand the myriad crap choices intheir 401ks.

You sound like you're blessed with the same "luck field" that I am.

c'mon - I know you're out there.