CommenTerry

Can the Stock Market Really Be Predicted?

The stock market goes up on good economic news, the stock market goes down on good economic news; the stock market goes up on bad economic news, the stock market goes down on bad economic news; the stock market goes up on news of higher unemployment, the stock market goes down on news of higher unemployment; the stock market goes up on news of lower unemployment, the stock market goes down on news of lower unemployment; the stock market goes up when interest rates are raised, the stock market goes down when interest rates are raised; the stock market goes up when interest rates are lowered, the stock market goes down when interest rates are lowered; ...

Wide Net Leaves Children Unprotected

An article in USA Today points out something I've been concerned about for quite some time. Our knee-jerk reaction to all the recent highly-publicized cases of child molestations/murders has been counterproductive. We have cast too wide a net in pursuit of people who might hurt children. In fact, some of the laws we've rushed to pass in order to protect children from predators might be having the opposite effect and making them less safe.

The problem lies in the way many states define sex offenders -- those who are required to register and are forbidden from living or working within a given distance of schools, playgrounds, etc. Often included among those who get this dubious distinction are people found guilty of nothing more than urinating in public or indecent exposure and older teens convicted of having sex with their younger teen girlfriends or boyfriends. Often, no distinction is made between these people and those who rape children.

There are now so many people on some sex offender lists that police and prosecutors are finding it impossible to keep up with all of them. As a result, many of the real predators are falling through the cracks and harming children over and over again. People who do not present serious risks or dangers to our children should be promptly removed from these lists. This would free up our law enforcement officials to go after those who do. The time has come to get this done.

A Viewpoint Not Represented in the Mainstream Media

The news media will regularly present views from Democratic (liberal), Republican (neo-conservative), and independent (moderate) perspectives. However, I rarely, if ever, see my point of view represented in the mainstream media.

Let me begin to sum up my politics by saying that I believe our most fundamental right as human beings is the right to not be bothered if we don't want to be. Supreme Justice Louis D. Brandeis got it right when he said, "The makers of the Constitution conferred the most comprehensive of rights and the right most valued by all civilized men -- the right to be left alone."

I am somewhere in between a Goldwater Republican and a libertarian. I do not go along with the agenda of the neo-cons who currently control the Republican Party nor do I completely adhere to the Libertarian party line. In fact, people often become exasperated with me because of my stubborn refusal to genuflect to any of today's standard ideologies.

I believe in small government whose only functions are to do what we cannot logically do for ourselves as individuals. I don’t believe in a “nanny state” that tells adults they must wear seat belts or motorcycle helmets.

I believe we should fight wars only when our national security is directly threatened and only after all other means of resolution have been exhausted. I believe in pre-emptive strikes in certain cases, but never pre-emptive wars. When we do have to go to war, I believe we should use a take-no-prisoners approach, with the ultimate goal of vaporizing our enemies. I don't believe a military draft should ever be imposed. I do not believe in nation building.

I believe in legal immigration and would increase the quotas for most countries if I could, but I think illegal immigrants should be treated like the criminals they really are -- not given special rights or handouts.

I do not believe in attempting to legislate morality (or immorality). I believe people should be allowed to do what they want, as long as their actions do not adversely affect or directly threaten someone else. Just because something is vile is not alone enough to make it illegal. I do not believe in policing thoughts, i.e., if someone is reading, hearing, or watching something that might cause them to think negative thoughts, it's none of my concern.

At the same time, I believe in accepting personal responsibility for one's own choices and that each individual must bear the natural consequences for his or her actions, e.g., don't say you didn't know smoking causes lung cancer and don't blame the government when you get HIV due to your promiscuous, careless, and/or perverted behavior. I believe tobacco, alcohol, and pot are equally bad for a person’s health, but should be equally unrestricted.

I believe the rights of speech and expression, no matter how offensive or inciting, should be completely unabridged except for direct, explicit threats or speech that directly endangers others, e.g., yelling "fire" in a crowded theater. I believe implied threats should be protected speech for the simple fact the implication could easily be misunderstood. I don't believe so-called "hate speech" by one person should be blamed for a violent act committed by another.

I don’t believe pornography, indecency, or violence in the media should be blamed either. If given the chance, most convicts will blame anything, everything, and everyone but themselves for their own actions. That’s human nature, so I don’t put much credence in studies that say outside forces like that cause people to rob, rape, or murder.

I believe abortion, except in cases of rape, non-consensual incest, or endangerment of the mother’s life or health, is murder.

I believe it's proper to use the death penalty against those who are beyond any doubt guilty of certain types of murder. However, I believe it should be applied fairly and consistently. If not, then it should not be used at all.

I believe punishment for those who deliberately harm others and/or their property should be swift and sure, but not excessive. Punishment should never include torture or humiliation and should be applied by the penal system, not other prisoners. Inmates should not be allowed to set up a "pecking order" or have any control over the conditions at a prison or jail. The prison administration should rule with an iron fist and enforce a zero tolerance policy toward aggressive behavior.

No inmate should ever, under any condition, be left unsupervised with one or more other inmates. Any inmate harmed by another inmate should be allowed to sue those responsible for security at the facility in which he or she is detained. No arrestee or inmate should ever be subjected to a strip search unless probable cause can be established that he or she is carrying contraband on their person and is refusing to voluntarily hand it over.

I believe in absolute property rights. People should be allowed to do whatever they want on their own property, regardless of zoning laws, as long as they are not creating a hazard for anyone else. Ugly paint colors or structures do not constitute hazards. The government should not be allowed to forcibly take all or part of someone's property.

I believe anyone who is mentally sound and has never been convicted of a violent crime should be allowed to own any kind of firearm he or she wants.

I believe in capitalism in its purist form. I believe the republican (little 'r') form of government, which the United States has, is a much better form of government than a democracy. Democracy is nothing more than mob rule in which the good of the majority always trumps the rights of the minority. I believe in a colorblind society in which everyone is given equal access and opportunity without discrimination or special favors.

I believe in separation of church and state, but I'm not an extremist about it. I see no reason why the government can't play favorites with the majority religion (in our case, Christianity) when it comes to open displays, as long as those who practice other religions are free to do so without encumbrance. If someone is offended by the open display of the majority religion in our country, then they are free to leave anytime they want.

I believe no one has the right not to be offended by another person’s speech, religion, dress, etc. Being offended once in a while is the price we have to pay for living in a free and open society -- a small price indeed!

Five Keys to Avoiding Self-Inflicted Wounds

Many setbacks in life come to us through no fault of our own. We are just innocent bystanders who get blindsided by various calamities. However, we bring some of them on ourselves through our own actions or inactions. Here are five keys to avoiding these self-inflicted wounds:

(1) Don't overreact to small problems. We often become so upset or angry with the little things that go wrong that we create more serious problems in the process. For example, think of all the people who have been killed or seriously injured as result of something that began as a minor disagreement. Obviously, that's an exaggerated example, but most of us have done and said potentially harmful things that were out of character for us, after losing our temper and flying into a rage over a trivial matter.

We are plagued by little problems on almost a daily basis, as most things don't work out exactly as planned. That's a part of life we need to accept. We are imperfect people living in an imperfect world. Let's not sweat the small stuff or, worse yet, blow it out of proportion -- to the detriment of ourselves and others.

(2) Concentrate on what you are doing. We can get ourselves in trouble by not giving our full attention to the task at hand. That trouble can range from minor, like damaging our lawn mower blade by running over an object we should have seen, to major, like getting into a serious automobile accident because of being distracted by a cell phone. Any significant task we do deserves 100% of our attention while we're doing it. Avoid the potentially costly consequences that distractions, daydreaming, lackadaisical attitudes, and half-hearted efforts can bring.

(3) Don't neglect situations that need your attention. That persistent cough, that pain that just won't go away, your child's worsening behavioral problems, that strange noise coming from under the hood of your car, that funny odor in your basement -- these are all warning signs of potential problems that need to be checked out and, if need be, nipped in the bud before they escalate and become much more difficult and/or expensive to resolve. Like the old saying goes, "don't wait until your horse is gone before closing the barn door." Don't let procrastination make you pay dearly. Be thankful you had some kind of warning and take action!

(4) Don't ignore sound advice. Their insurance agent practically got down on his knees and begged them to buy flood insurance. They wouldn't listen and now they deeply regret it. Don't let something similar happen to you. None of us knows it all, so we can all use some guidance and direction every once in a while, even if we don't ask for it. It's for your own good. Don't let your pride or a know-it-all attitude be your downfall.

(5) Know when to get over it. Like the Good Book says, "there's a time for everything," and that includes letting go of old hurts and offenses and allowing bygones to be bygones. If nothing else, do it for your own health. Harboring those feelings can result in long-term bitterness and hate that can be the root cause of serious medical problems. Even if they never affect your health, they will always be an obstacle to your ability to live life to its fullest. Also, if left unchecked, they can even motivate a person to do something that they would never have imagined themselves ever doing -- something that would lead to lasting disastrous consequences.

Avoid the Three Biggest Financial Pitfalls

For the average person and/or family, the three biggest financial pitfalls to avoid are new vehicles, credit card interest, and short-term loans. Any and all of these can drain a person's or family's coffers of much needed funds. At best, they create opportunity costs, i.e., money spent on them could be better spent on sound investments like a home or stocks (both of which appreciate in value over the long term) or on college or retirement savings. At worst, they can eventually create financial hardship and even lead to bankruptcy.

Buying brand new cars, trucks, SUVs, etc. can be a real money-eater. They all depreciate in value, some much faster than others, of course. Most vehicles depreciate the most in their first year or two of life, so the person buying a vehicle when it is new will have to absorb the bulk of its depreciation costs. With the price of new vehicles as they are today, that amount can be quite excessive. On top of that, many people have the financially disastrous habit of trading them in about every two to three years for another new one. That habit will result in the piling on of depreciation and debt.

Instead of buying new, I suggest buying a low-mileage vehicle that's about one to two years old. There are services available now like Car Fax which allow you to trace a vehicle's history. If you look around, you can find previously-owned, former-rental, or former-lease vehicles of every type, make, and model which are in like-new shape and have less than 20,000 miles on them. You can even find them on EBay now! Once you have found one, I suggest keeping it for least three years after paying off the loan. Ideally, I would suggest paying cash for it to avoid those used car interest rates and then keeping it for at least seven years, but I know paying cash is not an option for most people.

If you absolutely feel the need to give yourself or a family member the gift of a new car some day, I wouldn't fault you for that. However, I suggest planning this out over several years, similar to how one would save for a college education for a child. Estimate the amount that you are saving by buying used cars instead of new ones and pay yourself that money by putting it in the bank on a regular basis. Over time that money will add up. Once you have saved enough, wait until a dealer that sells the kind of vehicle you want offers one of those deals in which you can get zero percent interest or a rebate. Pay cash for the vehicle and take the rebate. That way, you get the zero percent interest and the rebate!

Credit card interest is another item that will erode a person's or family's financial assets very quickly. The interest rates you pay are about 534,457,469 percent! Just kidding, but it does seem that way sometimes. Seriously though, they often run as high as 18 to 21 percent. A $20 meal will end up costing $36 when paid for over a five year period at an 18 percent interest rate! Paying only the minimum payment can result in an endless cycle of debt that will eventually be practically impossible to escape, outside of bankruptcy.

If you find yourself already in this situation, I suggest you see a professional credit counselor as soon as possible. If you are already paying more than the minimum payment, try to gradually increase this payment and suspend all new credit card charges, if possible, until you've paid off the balance. Obviously, the only sensible way to handle a credit card is to pay off all charges each month as they are accrued and not maintain a balance, thus avoiding all interest. A credit card is a nice convenience tool. However, if you don't have one and you feel that you could not pay off the charges each month, then you are far better off not having one. If have one or more cards and have run up balances that you have had to struggle to pay off, you would be better off getting rid of it/them.

Short-term loans are also debts to be avoided like the plague. These include those "quick refunds" offered by many tax preparers, those "pay day" loans offered by predatory lenders popping up like cancers on seemingly every street corner, and many kinds of unsecured loans. The worst thing about short-term loans is their deceptiveness. Most people don't realize what kind of wild interest rates they are paying. For example, $10 in interest paid to keep $200 for one week results in an annualized interest rate of 260 percent! Allowing a tax preparer to deduct $100 from your $1500 refund so you can get it instantly instead of waiting six weeks for the IRS. to send it to you will result in an annualized interest rate of 58 percent! I bet someone advertising those kinds of interest rates would have difficulty finding any takers, yet people take on these kinds of loans all the time as long as the interest rates are disguised.

People who are wise financially avoid most, if not all, of these biggest wastes of money. Most people who are financially independent right now got that way in whole or in part by avoiding wasteful spending.

Vilsack Should Have Stayed in the Race

Former Iowa Governor Tom Vilsack cheated himself last Friday.  He dropped out of the race for the 2008 Democratic presidential nomination when he didn't really need to -- at least, not at this point. He cited problems raising money as the one and only reason for his early exit. However, he clearly could have raised enough money to compete in the retail politics of Iowa and New Hampshire -- and that's all he would have needed for the time being.

I realize that the nomination calendar has changed dramatically, with more and more states moving their primaries and caucuses up into January and February. And I'm aware of the fact that several large states like California, Illinois, Florida, New Jersey are likely to move their primaries up to February 5, all but guaranteeing that the nominee in both parties will be selected within a short time thereafter.

However, some of the dynamics of past nominating seasons will remain the same. Anyone performing well in Iowa and/or New Hampshire will get a bounce in the polls that will ripple throughout every state. This kind of viral reaction occurs very quickly, so even with all those large states now riding the rear bumper of New Hampshire, the chance to capitalize on strong showings in Iowa and New Hampshire still exists.

For example, in the weeks leading up to the 2004 Iowa Democratic Caucuses, John Kerry's poll numbers were lagging everywhere. In fact, his numbers were dropping like a ton of bricks in New Hampshire, where he had originally expected to do well. In addition, he was quickly running out of money.

At that point, he decided to borrow some money from his wife's personal fortune, pull most his resources from New Hampshire and other states, and concentrate everything on Iowa. His gamble paid off as he won on caucus night. A few days afterward, he shot to the top of the polls in New Hampshire. Then, within a few days (not weeks) of winning New Hampshire, he shot to the top of the polls almost everywhere else, even in states where he had little or no organization. And like they say, the rest is history.

Please note that Kerry did not have a big war chest of money to spend shortly after winning Iowa and New Hampshire. He didn't need it. The publicity he got from the free media was enough to propel him to the nomination in short order. Richard Nixon called this phenomenon the acquisition of "media steroids." In 2004, it wouldn't have mattered if there had been a Hillary Clinton or Barrack Obama, each with $100 million ready to spend. It also wouldn't have mattered if California, Illinois, Florida, New Jersey, and every other state had been waiting in the wings to hold their primaries a week later. Kerry would still have won the nomination -- only much faster.

It was possible for Vilsack to do the same thing in 2008. Unfortunately, now we'll never know. Hopefully, other second and third tier candidates in both parties will fight on and at least wait around to see how they do in Iowa and New Hampshire before throwing in the towel.

The Hypocrisy of Insider Trading Laws

Perhaps I'm the only person on earth who can see the hypocrisy of insider trading laws. In my opinion, these laws run counter the notion we accept in every other aspect of society that life is unfair. In every facet of life, there are people who have access to advantages that others do not have. However, we don't attempt to make these advantages illegal except when it comes to insider trading.

I've often heard the argument that it is not so much about fairness as it is about trust of the system, i.e., that people will not invest their money knowing that others have advantages they don't have themselves. Baloney! The advantages people have in other things do not cause those without these advantages to not participate. I will cite several examples to show how the lack of similar laws in other areas of life does not cause any real problems. They will also show how hypocritical it is to create special laws just for the world of investment and not apply that same logic anywhere else.

Let's look at fraternities, sororities, and other private clubs and organizations. It's completely legal to join them even though many of them are exclusive in nature and do not allow just anyone to join. Of course, this right is covered by the freedom of association guarantees in the U.S. Constitution. However, being a member often gains one access to benefits that he or she wouldn't have by not being a member. One of these benefits is access to desirable high-level positions within major corporations. Many of these positions are not available to non-members. That's not fair but I have yet to see a law against it. Despite that, people still apply for good jobs within corporations every day. They don't sit on the sidelines and not apply just because they believe the insiders are getting all the best positions.

What about inherited wealth? It's not fair for someone to take advantage of their inherited wealth when most people don't have this kind of access. However, it's perfectly legal. Many people with inherited wealth have a brand new car given to them as soon as they are old enough to drive. They have their college tuition paid for. They usually have a nice cushy job awaiting them when their college days are over, regardless of how well (or poorly) they performed academically. They don't even have to work at all if they don't want to. How can this be fair when many other people have to work for everything they get? Until there are laws against it, everyone else will refuse to go to college, work, or pay for anything they get, right? Wrong! Most people realize that there are people with inherited wealth who don't have to work for anything. People accept that as a fact of life and go on with their lives. They go to college (for which they have to pay most of the tuition themselves), go to work, and pay their bills every day. Life goes on and no fairness laws are needed here.

What about people who are attractive and/or have charming personalities? Having these assets is just fine, but it's unfair for people to use them for personal gain when others like me, who are ugly and blunt, don't have this privilege. However, I've never heard of any attempt (in this country anyway) to make a law against using good looks and positive personality traits to one's advantage. People use these assets to help them land desirable jobs and work their way up the corporate ladder. They use these assets to help them win friends and get favors the rest of us can't get. They use these assets to attract higher quality mates than those of us who are lacking can attract. How does this make the rest of us feel? It makes us feel so discouraged that we never apply for a job, attempt to make friends, or perform any normal daily activity, right? Of course not, that would be silly. We go on with our lives just like the folks with the good looks and charming personalities. We are not going to sit out on life, waiting for laws to be passed to restrain all the pretty and charming people from getting a better deal in life.

I could go on and on, of course, but it seems to me that if insider trading is illegal because of the unfairness aspect, we ought to outlaw all other forms of unfairness as well. Sure, insider trading is unfair and very unethical. However, I doubt that the lack of laws against it would cause the markets to collapse. Other areas of our daily lives have not collapsed under the weight of unfairness that legally occurs every day. Also, when we outlaw some forms of unfairness while ignoring or even encouraging other forms of it (some of which are just as unethical), isn't that in itself unfair?

A Voluntary 100% Death Tax?

Politicians talk about the so-called "death tax" as if it were something horrible. However, for those who have no heirs, it's no big deal. In fact, for them, it's more desirable than paying taxes while they are still living. I think they should be allowed to use the death tax to their advantage.

People who have no heirs should be given the option of designating that 100% of their estate will go to the government in taxes when they die. In exchange for this designation, they should receive a lifetime of reduced tax rates from the time of this designation. For example, someone who designates a 100% death tax could have their tax rates reduced by two percentage points on all rates so that they pay 13% on the 15% rate, 23% on the 25% rate, 31% on the 33% rate, etc. They would have the option of rescinding their designation at any time in future, but they would have to pay back all the tax savings they had previously received, along with a 10% penalty, and then begin paying the full rates.

Time for a Change?

I've often heard people say that they like to make major changes in their lives just because it's "time for a change." In other words, they are willing to make major life changes just for the sake of change. While I respect their opinions and am not being critical of them, I find major changes in my life to be far too worrisome and/or expensive to be carried out just for the sake of change. In fact, I won't even rearrange my furniture unless I have a compelling reason like being able to gain more floor space. For me to make a significant change in my life, such as buying a new home or car or changing jobs, I would need to be backed into the corner and/or see the change as financially, medically, psychologically, or emotionally expedient.

I bought and moved into a new home last spring after owning my previous home for over 18 years. I wouldn't have done it then if it hadn't been for two factors that drove my decision. First, the neighborhood had significantly started to degrade and I no longer felt comfortable there. Second, the house was starting to need a lot of maintenance and, since I'm not a handyman, it was going to cost me a lot of money. In addition, my new house is 25% larger, has a garage, and therefore provides quite a bit more space for storage.  So, as much as I hate all the hassle of moving, I felt that the move was justified and finally made the decision to get on with it.

In addition, I'm 46 years old and have only owned five automobiles in my entire life. I would surmise that most people (especially men) my age have owned nearly twice that many. I want to hold on to them as long as I can because I dread the task of buying a car. I will only exchange cars when the one I have has gotten to the point where it's costing more to maintain it than what it's worth.

Random Rants and Raves #91

The United Methodist Church is now telling us to "find your own path." However, God demands that we find His path.         

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I love to be pampered and mollycoddled. Unfortunately, very few people are willing to treat me that way.  

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The reason there are difficult, long, and expensive ways to do some things is because the easy, short, and cheap ways to do them rarely work.

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I'm not all that concerned with stuff like fighting global warming and funding the arts. Other people will take care of those things. I'm more concerned about stuff that other people won't take care of -- like my retirement savings, for example.

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My version of Christianity focuses more on how making the right (and wrong) choices affects us in the here and now and not so much on some future rewards and punishment.

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If minors can be tried as adults for crimes they commit, why shouldn't they have the option to be treated as adults in other ways? If we were truly consistent, we would also allow a 16-year-old, for example, to say the following when initially denied a purchase at a liquor store: "No, no, no, you don't understand. I want to buy this as an adult!"

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Three little words at the bottom of the TV screen that can negate the contents of an entire infomercial: "Results not typical."

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I were a bank teller, there's no way I would give a potential robber any money just because he handed me a letter stating that he had a gun. I would threaten to start reading it out loud unless he showed me the gun.