Wednesday, January 30, 2013

It's Good To Buy The King?

Recently I decided to shuffle my retirement accounts somewhat. A mutual fund company I have kept an IRA with made some changes to their investment policies that I'm not particularly interested in (it's not bad stuff, it's just not a strategy that I'm using). Rather than move the funds to another mutual fund company, I've decided to put them into a brokerage account, which will give me the option of purchasing individual company stocks instead.

I'm a big fan of mechanical investing/trading systems, those being strategies that generate buy and sell signals based on simple criteria. I like these methods because, while they're not perfect, they help to avoid something I consider to be far worse: analysis paralysis

There's also the time factor. Any approach to investing you can cite other than a mechanical method will probably consume a lot of one's time. I also consider this to be a bad thing because one's time is finite, so the quicker an effective strategy can be, the better. 

Recently Cappy linked to an article that discussed this (among other things): Do This Instead of Investing Your Money...
Phil, for example, a very wealthy friend in his 40s, is an expert in municipal bond investing. But he didn’t become wealthy by investing in bonds. He got wealthy as a marketing and Internet entrepreneur and by leveraging some debts and eliminating others. Nowadays, he buys and sells bonds – but he spends only a few hours a month on it. For Phil, investing is a part-time way to increase the value of his savings. It is not – and never has been – his primary road to wealth.
It’s the same with all my millionaire friends. They all have their own investment preferences and practices. But like Phil, none of them spends more than a small portion of his working time on investing.
To paraphrase the article: work at increasing your income, keep dept in check, and put your surpluses to work for you. Just be sure that managing your surpluses (investing your cash) doesn't end up working you. Mechanical investing methods can be how you do this.

For years I've been intrigued by one such method, the Dogs of the Dow strategy. Simply stated, to use this strategy you buy the ten highest yielding stocks of the Dow Jones Industrial Average, hold them for one year, then sell any that are no longer among the ten, replacing them with whichever companies have moved onto the list. As far as annual returns go, this strategy does fairly well.

This certainly fits my criteria for being mechanical and simple, but it leaves out something that I think is important: rising dividends. Good, strong companies are able to raise their dividend payouts over time so as to return increasing amounts of cash to their shareholders. Thus, the yield on a particular stock can vary from investor to investor, depending on when each of them purchased their shares. For example: two people own Coca Cola stock. The first just got her shares and enjoys a 2.8% yield. The other investor had a lower yield when he bought his, 2.69%. However, he bought his shares in 1988 and held them so that now his yield on his cost is 33.69% annually (and that doesn't include the appreciated value of his shares).

You lose that if you sell, for once the order goes through, you're back to cash and your yield is zero. That's my big gripe with the Dogs. There's also the not-so-small point that by the Dogs methodology, a stock gets onto the buy list because it has a relatively high yield. That's something that can happen simply because of fluctuations in the price of the company's shares, which can occur even if the dividend is stagnant. If a company is not raising its dividend consistently, then you might as well just buy a bond.

Enter the Dividend Aristocrats.

I won't lay out what the Dividend Aristocrats are - I've linked to a definition of that so you can read it there. Unlike the Dogs, which qualify as buys simply due to a momentary yield, the Aristocrats only get to be on the list after having raised dividends consistently for twenty-five years and regardless of what their yields are. That's no guarantee that they always will, but it's a better place to start.

So then I could use that list instead of the Dogs list and handle it the same way, by picking the top ten as of now, hold them for a year, and adjust my holdings once each year. But, as I said, I don't want to do that because then I don't get to participate in what makes the Aristocrats what they are, companies that tend to pay their shareholders more over time.

Instead, I'm considering buying the top however many Aristocrats, then holding them indefinitely, unless any one of them cuts their dividend. Instead of selling positions that leave the top ten each year, I'll simply stop buying more of them until they return to the top, and instead begin building positions in the companies that have moved up the list.

But then I wonder, how many of "the top" should I buy? Ten is an arbitrary number. So would be nine, eight, seven, etc. But there's one number that isn't arbitrary: #1.

Why not just go right to the top of the list, buy up as much of the highest yielding Aristocrat at that moment (the "King," if you will) as I can, hold it, and in subsequent quarters, years, etc. buy up whatever other Aristocrats that in turn eventually take the top spot?

There's numerous reasons I'm aware of that some would advise against doing this, not the least of which is the possibility that something has a momentarily high yield because the underlying fundamentals of the business are crashing - a yield is only a stated yield and not an actual yield until it is paid; a stock going down in flames can suddenly gain a high yield simply because the board of directors has not yet announced a dividend cut from the prior level. This wouldn't create a diversified portfolio (at first), the value of the principal could fluctuate wildly due to being concentrated in so few positions, etc.

It's all just ideas for now. Like I said at the beginning, I like the time and effort that mechanical investing methods can save a person, but that doesn't mean that some time and effort isn't involved in getting them started. There needs to be a little thought put into the system before launching it, but if done right, the bulk of the effort should be up-front with subsequent maintenance of the strategy being relatively easy, leaving you free to get back to other stuff. In any case, the "alternative" - not thinking about it at all - doesn't work out so well:


Saturday, January 26, 2013

If You Don't Need A Gun Because We Have Police...

...then you don't need these either.


 
Really, leave it up to the professionals. You'll probably just squirt your eye out.

Thursday, January 24, 2013

How Feinstein Will Make Iran Rich

Senator Diane Feinstein, one of Commiefornia's seemingly undead representatives to the Federal government, today unveiled her latest attempt to undermine the U.S. Constitution that she has many times falsely sworn to uphold. As the headlines have it:


What exactly does that mean? 
"New York Rep. Carolyn McCarthy expressed a similar sentiment saying, 'If they’re [assault weapons] not in the stores, they can’t be bought.'"
Presumably, there simply won't be any more evil black guns for sale, existing ones will wear out and break, and magically there won't be any at all!

The stupidity of these two (and others) on this issue is very similar to how this same crowd views taxation. I wrote something about that almost exactly one year ago today, a post about tax windfalls people like these two think they can count on simply because they've raised tax rates.

Obviously taxation and gun control are two different topics, but in both cases the people who come up with this crap always forget the most important thing: people react!

If you raise taxes, past a certain point people will stop ignoring it and begin avoiding them (which is what that post from a year ago is about), and projected revenue from an increase of X percent never materializes. You don't get the result you want from a dynamic environment simply because you've made a rule! When it comes to firearms, if you try to prevent them from being available in one place, and if people still want them, they'll be made available somewhere else and people will still have them.

Drugs, anyone?

Ban all you want, Feinstein, we will still have guns, and lots of them. See, much like the myopic "thinking" that goes into those tax proposals, your ideas about making guns just go away ignores the simple fact that anything you try to ban can be made anywhere else in the world! (And, just because you've banned something, that doesn't mean you've eliminated demand for it.) Somewhere else on the globe, someone will step up to produce the firearms that we still want, and there's a good chance that some of those folks won't give a damn about smuggling them into the U.S.

Like Iran:


For six years, a group of independent arms-trafficking researchers worked to pin down the source of the mystery cartridges. Exchanging information from four continents, they concluded that someone had been quietly funneling rifle and machine-gun ammunition into regions of protracted conflict, and had managed to elude exposure for years. Their only goal was to solve the mystery, not implicate any specific nation.
When the investigators’ breakthrough came, it carried a surprise. The manufacturer was not one of Africa’s usual suspects. It was Iran.
Iran has a well-developed military manufacturing sector, but has not exported its weapons in quantities rivaling those of the heavyweights in the global arms trade, including the United States, Russia, China and several European countries. But its export choices in this case were significant...
...And for the past several years, even as Iran faced intensive foreign scrutiny over its nuclear program and for supporting proxies across the Middle East, its state-manufactured ammunition was distributed through secretive networks to a long list of combatants, including in regions under United Nations arms embargoes.
That's just one example from another continent and a different entity trying to ban an activity, but the idea is the same: somewhere, people want arms and ammunition, someone else meets that demand. There are rules in place that forbid the trade, but the folks meeting the demand find ways around the barriers and the people who want the goods don't care how they got there. Besides Iran, there are no doubt others out there that would be only too happy to keep us well-supplied with small arms and ammunition. Many of them are probably just as despicable as the regime that rules Iran, and thanks to idiots like you, Feinstein, they'll be that much wealthier.

Tuesday, January 22, 2013

Japanese Finance Minister: Government Should Let Old People 'Hurry Up And Die'

"Japan's finance minister Taro Aso said Monday the elderly should be allowed to "hurry up and die" instead of costing the government money for end-of-life medical care.
Aso, who also doubles as deputy prime minister, reportedly said during a meeting of the National Council on Social Security Reforms: "Heaven forbid if you are forced to live on when you want to die. You cannot sleep well when you think it's all paid by the government."
Read the complete Business Insider article here.

The article I've quoted and linked to goes on to describe Aso's statements as him "putting his foot in his mouth." Really? I don't think so. Then again, I'm not a politician who will say anything and/or hide any truth so as to cling to power.

This is the truth. The longer people live who do not have their own funds with which to do so, the longer someone else must pay for them to exist. The only real problem with Aso's statement, unless Japanese culture is very different in this regard, is that hardly anyone loses sleep over "the government" paying for the prolonging of their metabolic functioning (as opposed to their life - two very different things). In the minds of most people "the government" is some sort of real entity separate from the individuals who make it up, and the individuals it forcibly extracts resources from. This reification of an abstract allows many to carry on being supported by theft without experiencing a shred of guilt.

Aso's statements also reveal a further bit of truth, and that is the nature of the relationship between an individual and a collectivist society: if you're not an asset, you're a liability.

Don't fool yourself into believing that this only applies to the elderly.

A Double-Edged Sword



Funny!

Truth is, however, that this isn't how it would go in real life. Many (if not most) of the "laws" enacted in D.C. only apply to us commoners. 

Monday, January 21, 2013

Utah Sheriffs' Association to the President: Molon Labe!

"We respect the Office of the President of the United States of America. But, make no mistake, as the duly-elected sheriffs of our respective counties, we will enforce the rights guaranteed to our citizens by the Constitution. No federal official will be permitted to descend upon our constituents and take from them what the Bill of Rights—in particular Amendment II—has given them. We, like you, swore a solemn oath to protect and defend the Constitution of the United States, and we are prepared to trade our lives for the preservation of its traditional interpretation." [emphasis mine]




Saturday, January 19, 2013

Come And Take Them, If You Can; We'll Print More

"This project might change the way we think about gun control and consumption. How do governments behave if they must one day operate on the assumption that any and every citizen has near instant access to a firearm through the Internet? Let’s find out."

"Five months ago, the group of homemade gun enthusiasts known as Defense Distributed set out to create a lethal firearm that could be downloaded and 3D-printed entirely from scratch, circumventing all gun control laws. But as new gun bills have been proposed in the wake of recent shootings, creating a bootleg weapon with digital pieces may soon be far easier: As simple as printing a spring-loaded plastic box.
Over the past weekend, Defense Distributed successfully 3D-printed and tested an ammunition magazine for an AR semi-automatic rifle, loading and firing 86 rounds from the 30-round clip."
A fully functional 3D-printed firearm is still a ways off, but a while ago not even a functioning 3D-printed magazine was possible to make. The technology is on its way. This is a good thing.

As per the quote at the top of this post, that's what it's all about. Despite what the anti-gun crowd thinks, that the 2nd amendment is what gives us our right to keep and bear arms (it does not, it merely describes a right that we naturally possess, and exists to restrict governments from impairing that right) and can be legislated away, and that it's really all just about hunting deer, the truth is that our ability to possess arms is to have the means to resist tyrannical governments.

There's a quote out there often attributed to Thomas Jefferson: "When governments fear the people, there is liberty. When people fear the government, there is tyranny." There's some debate as to whether or not Jefferson actually said that. Much like the anti-gunners that think they really have something because memes attributing total gun control to Hitler are historically inaccurate, they would probably foam at their liberty-hating mouths if they discovered that this is in fact an incorrectly attributed quote.

That's what the lazy thinkers that populate the statist ranks love to do, catch people on trivial technicalities and substitute that for independent thought and truth (not to mention superficially reading the Constitution and concluding from that all kinds of restrictions on us that do not exist). So Hitler didn't disarm everyone, and in fact did enact firearms laws in Germany that actually expanded ownership. Great, right? That means supporters of the 2nd are wrong and you can go on your merry, brain dead statist way. Except for one thing: Jewish people were not included in those relatively more liberal firearms laws, nor were people in lands conquered by the Nazis. We know how that ended up.

As for the Jefferson quote, would it not be true if it were someone else who said it? Of course, it still would be. Government's power correctly comes from the consent of the governed. Governments do not always remain legitimate, as history has shown again and again, instead becoming an entity staffed by individuals who see government as an end in itself, something that exists for its own sake. Such governments derive their power from what force they are able to wield. Then, what government wants (really, what the individuals who happen to make up the government want) becomes what the government gets. Whatever stands in its way simply gets moved (or eliminated).

In a nation dominated by such a government, one that has turned rotten and corrupt, what you want in life simply does not matter. The priorities and goals for "the nation," "the people," "society," etc. identified by the elites in charge take precedence. You become the muscle that will be used to achieve those visions. It won't matter if you happen to agree or if you do not, the choice will not be yours. If you are deemed to be too troublesome, too much of an impediment to the achievement of the elite's goals, then you'll have to go.

Naturally, such a government cannot tolerate any rival power, and it will not so long as the rival power is weaker. At the first available opportunity, that government will attack the smaller, weaker rival and attempt to eliminate it.
“If [a firearm technology] is used by law enforcement or military, you can bet they say it shouldn’t be used by you.”
-- Cody Wilson, Founder, Defense Distributed


For now, possession of firearms is our ultimate backstop against our own government turning all-out tyrannical. Even so, look at how they treat us with contempt! They pass laws and create agencies that seek to harass us in our day-to-day lives. They have taken to demanding that we buy certain products as a condition of being alive. They create regulations "for our own good, for our protection" that limit the average person's opportunities while preserving their own. They swear oaths to uphold our Constitution, and then they openly mock it and seek ways to circumvent it. They constantly seek ways to undermine the integrity of our elections so as to further cement themselves in power. They recklessly incur greater and greater amounts of debt that they then demand that we repay, even as the amount becomes so large that it cannot be repaid. The list goes on.

Think it's bad now? Further restrict private firearm ownership, or even eliminate it all together. How much better behaved do you think they'll be then?

That's the beauty of this new technology. Right now, production of firearms is more or less a centralized activity - there are only so many manufacturers in the world, after all. The fewer points of production that exist, the easier it is to shut them down. Limited production also increases the cost of the end product, especially if it is in high demand.

What if the points of production literally became almost everywhere, all at once, and it were impossible to find them all?

The answer: power, in the form of physical force, becomes more widely distributed and therefore more balanced. A rotten government bent on total centralization of its power will do so to the extent that it can use its available force unopposed (relatively speaking). The greater the extent that force can be centralized, the easier it will be for said government to dominate its subjects. Conversely, the greater the extent that power in the form of physical force can be decentralized, the ability of any government, gang, mob, etc. to dominate becomes less, even eliminated. They are then returned to their proper place: allowed to exist and deriving power only by the consent of the governed.

I look forward to the continued development and success of Defense Distributed's work. This technology cannot get here soon enough.

Thursday, January 17, 2013

Ruger Firearms: Take Action Now!

Ruger Firearms has created a website through which you can send emails in support of your 2nd amendment rights to all of your elected representatives, from the Office of The President all the way down to your local representatives to your state government. It takes less than two minutes.



Forex Stuff: Japan’s Economic Stimulus Plan

"The government’s latest plan is not all about stimulus spending though. Pressure on the Bank of Japan (BoJ) to become more aggressive in its approach to monetary policy is immense. Indeed, the recent election was seen by many as a vote on this issue.  Abe, having won, wants the BoJ to take a much more aggressive monetary policy stance (the BoJ’s balance sheet has grown little since 2006).  These include setting a higher inflation target of 2%, focusing partially on employment on top of inflation, and actively intervening in the value of the Yen.
Under threat of legislative reform to its structure and operations, the Bank of Japan has already indicated that it will heed Abe’s instructions on the inflation target, even if institutionally BoJ officials feel that demographics, not monetary policy, lie behind Japan’s chronic deflationary trends."
I heard of this yesterday morning over my work rig's radio, that the Japanese government under the direction of Prime Minister Shinzo Abe, was pledging to further devalue the Yen by 2%. So, while hurtling down I-84 in thousands of pounds of 6.5L diesel-powered steel at 70 miles per hour, I tapped an order into my Android phone and bought the USD/JPY cross. Technology is fun. :)

As of this morning and as I type this, that trade is up 8.94%, with a small portion of the profit locked in with a stop-loss order; can't lose now!

This has to be the easiest, laziest way to trade Forex that I know of: listen for the Japanese government to promise to debase the Yen, then get in and wait because they will deliver on that promise.

Wednesday, January 16, 2013

Gun Control Explained

I'm tired after a long day on the road doing pest control stuff, so instead of attempting to write a whole bunch, here's a pic that explains why the obsession over firearm magazine size is dumb:


I think the people who buy into this crap must think that a shooter can't just... oh, I don't know... carry more than one magazine?!

Let's say there were such a thing as a 3,000,000 round magazine. It wouldn't do the shooter much good if he/she fired a few rounds off and was then killed when someone fired back; the remaining rounds can't fire themselves. Take firearms away from good people who would attack the shooter, reduce the number of people who can fire back, and the shooter can use up that whole magazine...

(by the way - I have no idea who made this pic, I found it on Facebook. Credit to whomever it was, don't credit it to me if you decide to share it from here.)

Tuesday, January 15, 2013

NRD: Obama's default threat bluff

Have you heard the President saying lately that Social Security and veteran benefit payments won't be made unless Congress agrees to raise the debt ceiling again? Probably, if you pay attention to the news even a little bit.
 
Turns out, he's only half lying. 
 
It's true that those payments might not go out if the debt ceiling stays where it is right now (and I hope you at least realize that this exposes the big lie about the existence of the Social Security trust fund...). 
 
What's not true is that there isn't any money to pay most of the bills:
"Out of the $2.8 trillion of annual revenue the White House expects in 2013, only about $360 billion, or $30 billion monthly, will go to paying gross interest on the debt.
That means even if the debt ceiling were reached, the government could still refinance existing debt up to the limit, and would have ample revenue to pay interest out. So, there would be no need to default.
In fact, in addition to paying interest, there would be enough revenue to pay out Social Security ($820 billion), Medicare ($564 billion), defense ($700 billion), and veterans’ benefits ($79.5 billion).
Even after that, if the Administration’s estimate of revenue in 2013 proved correct, there would still be $600 billion left over to spend on other items."
So what's the great need to blow up the national credit card even more? According to the Treasury, it's because no one has told them exactly what to do:
"So, why default? Because the Treasury views that it lacks the statutory authority to prioritize payments, according to a recent Inspector General’s report.
“While Congress enacted these expenditures, it did not prioritize them, nor did it direct the President or the Treasury to pay some expenses and not pay others,” the report states. “As a result, Treasury officials determined that there is no fair or sensible way to pick and choose among the many bills that come due every day. Furthermore, because Congress has never provided guidance to the contrary, Treasury’s systems are designed to make each payment in the order it comes due.”
I think I'm going to try this one of these days. I'm going to call up my creditors and say, "well, I don't have a spending plan that establishes a hierarchy of priority for paying my bills, and my cash flow came up $1 short this month, so instead of paying anything, I'm not going to pay any of you. Give me more credit."

Think they'll go for it?

The solution here is simple. Congress needs to pass a law prioritizing the items that are in the budgets it passes, which the Treasury can then follow. That would also force Congress to actually think about what the Federal government should and should not spend our money on. This "all or nothing" approach is shockingly moronic and it is leading us deeper and deeper into debt.

Of course, if they did that, then politicians couldn't run around threatening grandma. Can't have that.

Click here for the full NRD article.

Monday, January 14, 2013

Weapons of Financial Mass Destruction

Michael Barone: History Suggests That Entitlement Era Is Winding Down

This is a piece that I came across today by Michael Barone in which he points out that many eras in American history occurred within the boundaries of 76 year intervals:
"It was 76 years from Washington's First Inaugural in 1789 to Lincoln's Second Inaugural in 1865. It was 76 years from the surrender at Appomattox Courthouse in 1865 to the attack at Pearl Harbor in 1941.
Going backward, it was 76 years from the First Inaugural in 1789 to the Treaty of Utrecht in 1713, which settled one of the British-French colonial wars. And going 76 years back from Utrecht takes you to 1637, when the Virginia and Massachusetts Bay colonies were just getting organized.
As for our times, we are now 71 years away from Pearl Harbor. The current 76-year interval ends in December 2017."
The big changes that occurred at the end of each period brought about major shifts that undid the way things had been done in the 76 years prior:
 "The original arrangements in each 76-year period became unworkable and unraveled toward its end. Eighteenth-century Americans rejected the colonial status quo and launched a revolution and established a constitutional republic.
Nineteenth-century Americans went to war over expansion of slavery. Early 20th-century Americans grappled with the collapse of the private sector economy in the Depression of the 1930s.
We are seeing something like this again today. The welfare state arrangements that once seemed solid are on the path to unsustainability."
It would be nice to think that this is true of our current entitlement era, as Barone has named it, but I don't think this will turn out to be the case. His other examples, such as the revolt against Britain and the U.S. Civil War, came about in large part because of cultural shifts that were irreconcilable to the existing order.

What kind of cultural shift do we have going on now?

Bosch Fawstin, From Freedom to Freebies

Unless Barone's thesis is that the end of this bullshit is going to come about on its own (and it might, if it's not deliberately stopped - the math doesn't work), then the matching cultural change needed, like those that pushed the previous shifts he described, just isn't there. In fact, it seems that the cultural shift is in the other direction, toward greater dominance of our lives by these monstrosities that past generations created because of a dominant preference for redistributionism. Perhaps the end of this 76 year period and the start of the next will not be an orderly fall of the welfare state, but of its adherents all-out attempt to push it to a full eclipse of what little of a free market, capitalist society we've had up until now, the impossibility of making it work be damned. After all, Social Security, the beginning of centralized Federal welfare, is now in its 78th year and these problems are not unknown, but look at how our last Federal election turned out...

This is going to hurt.

History Repeats Itself


lol.

Sunday, January 13, 2013

A New Way To Fix Detroit: Secede!

Developer pitches $1B commonwealth for Belle Isle

"Detroit — As the broken city thinks big and radically about its future, a developer is stepping forward with a revolutionary idea: Sell the city's Belle Isle park for $1 billion to private investors who will transform it into a free-market utopia.
The 982-acre island would then be developed into a U.S. commonwealth or city-state of 35,000 people with its own laws, customs and currency."

Read the full article here.

Now that sounds like an interesting idea, something that would actually work. Set up a place where entrepreneurs can thrive, and they will. The effects of that activity will spill over into the surrounding area - Detroit - and revive it.

However...
"The idea won't go anywhere, said George Jackson, president and CEO of the Detroit Economic Growth Corp., the quasi-public agency that promotes development for the city.
"Belle Isle will get fixed," Jackson said, referring to an agreement to turn the island into a state-run park. "It won't be that plan. But it will be fixed."
Huh... A new, vibrant, economically free city-state that would be home to 35,000 motivated, wealth producing individuals, or a park that does... nothing (unless you count "suck up tax dollars" as something).

With attitudes like that, it's no wonder that Detroit is such a stunning success.

Breitbart: Oklahoma Woman Stops Robbers With Gun

Yet another 2nd Amendment success!

"She had both hands on her .32-caliber pistol when the man knocked down her door.
“And just all of a sudden, with one kick, he knock the door completely in. The frame came flying down. Things came flying everywhere," she said. "And he saw that I had the gun, and he grabbed the door handle and pulled the door shut."

You Are Not The Father!



lol.

A Petition to Keep our President Very Safe

WE PETITION THE OBAMA ADMINISTRATION TO:
Eliminate armed guards for the President, Vice-President, and their families, and establish Gun Free Zones around them
Gun Free Zones are supposed to protect our children, and some politicians wish to strip us of our right to keep and bear arms. Those same politicians and their families are currently under the protection of armed Secret Service agents. If Gun Free Zones are sufficient protection for our children, then Gun Free Zones should be good enough for politicians.
Created: Dec 23, 2012
Won't you please help? You can sign the petition at We The People by following this link. As I type this, about 5,600 more signatures are needed by January 22nd to get an official response from the White House.

Isn't this the most obvious and best method to keep this and all future Presidents safe from harm? It works so well everywhere else that it has been tried; anti-gun politicians and voters wouldn't demand the continuance and expansion of such policies if they did not, right?

If it's good enough for us lowly subjects, then surely it is good enough for those who occupy the Office of the President. Actually, I take that back. Whatever is good enough for us, politicians deserve at least ten times more (except for things like health care that we're forced to participate in, prosecution for criminal acts, suffering the effects of monetary inflation by not getting pay raises, etc.). Sign today for a safer tomorrow!

GunCite.com

Elsewhere on the web this evening I saw someone repeat a falsehood about the 2nd amendment of the U.S. Constitution that I see out there on a regular basis, that the 2nd somehow doesn't actually restrict the Federal government from barring possession of firearms by individuals.
 
Most of the time, it's not worth pointing out to people who say this stuff that they're wrong because they're not really interested in being right. They just want to remain comfortable in their beliefs and not be bothered with that pesky truth stuff. 
 
So now to save my own time, I just present them with this: GunCite.com
 
It's everything they think they know about the 2nd, firearm crimes, the utility of firearms for self-defense, etc., but actually don't know, which they probably won't want to know and consequently won't read.

Saturday, January 12, 2013

Captain Capitalism: The Shaming of John Galt

Captain Capitalism: The Shaming of John Galt
"As the "enlightened electorate" decides to ignore reality and go down the path of socialism they will once again face the annoying reality that it is against human nature to pay for other people's stuff.  And since it is their stuff that is threatened, they will have to go into overdrive to "shame" people for not wanting to become slaves.  Like the ramblings of the middle aged woman, it will not be sensical, it will not be logical, and it will theme on people who decide to work less and "go Galt" as being greedy or selfish.  It will be amorphous and intangible, assuming you somehow have a societal obligation to the country and "community" to work harder for the "larger good."  That there is something more important than the individual and only the most selfish and evil of people refuse to acknowledge the superiority of this commune.  It will also parallel (akin to feminist shaming language) is that you are not a "real man" or you are not "manning up" and owning up to your responsibilities you have to society.  In reality it is nothing more than shaming language and lies to get you to operate against your best interests.
I'd like to say most people have the intellectual capacity and independence to identify such BS or at least stand up to it.  Alas, the fact some many adult-children swallowed whole the global warming BS and now pursue "going green" as a religion (while mocking Christianity at the same time) only confirms a majority of them will actually believe they owe it to society to slave away for other people.  Just promise me a favor.  When the middle aged woman who's hopelessly brainwashed starts to lecture you for daring to only work 4 hours a day, do not be a fool and fall for it.  Shamelessly Enjoy the Decline instead."
Indeed. I've had this experience before, too. I like to turn it back on the drone who tries to heap shame on me for not wanting to sacrifice myself to the collective: I ask him/her if working to pay off someone else's debt is what they wanted to do with their life, are they enjoying it/does it make them happy, etc. Except for the hard core liars or the truly brain washed, they'll either say "no, but...", or they'll change the subject (which means, "no").  They almost never stop insisting that I should climb back into the sheep pen with them (the inflated ego/false self-esteem training people are raised with now prevents immediate admissions of error by most), but at least a trace of red pill gets into their system.

Wednesday, January 09, 2013

Dividend-Paying Companies: A Job Where You Don't Have to Work

I saw this article this morning from The Motley Fool and wanted to share it. It contains a bit about a few interesting individual stocks (I saw it because I track McDonald's stock, that being one of the companies mentioned in the piece), but it's the observation of a child quoted in the article that really interested me:
"The important thing for the investor to remember about dividends was summed up by my 8-year-old this morning. I was driving her to school and she asked about the money she got (she wants to buy a bike). I told her I'd invested her Christmas money in her favorite restaurant, McDonald's. When she asked why I told her that McDonald's would pay her to own the shares every year. Her reply? “Wow, it's like having a job without having to go to work.”
It's like having a job without going to work. Let that roll around in your head for a while."
Exactly why I prefer to invest in dividend paying stocks (including exchange traded funds, mutual funds, etc., whether they contain stocks, bonds, real estate, whatever - show me the money!). While I don't currently directly own shares in McDonald's (I sold the last time it was over $100), I do hold positions in plenty of other dividend payers, specifically because of what this little girl said - my investments are "working" for me every day, whether I'm working or otherwise.

Going beyond the basic understanding that this eight-year-old already has (and that's great - I wish my parents thought in these terms when I was growing up), I combine that understanding and action with conscious identification of what I value in life so as to focus my spending on those things (those familiar with Your Money or Your Life probably recognize that). In short, I don't spend money on crap that I don't care about, that doesn't enhance my happiness, etc. That's not just stuff I dislike, but also stuff that I can do without that I won't miss.

It's astounding how much cheaper paying for your life can get when you practice that discipline. The purpose of doing so is to shrink the gap between one's passive income and contentment-necessary expenses (yes, I think I just coined that term).When that gap is closed (what the YMYL folks refer to as "FI," short for financial independence), the thing I am aiming at with these activities is reached: ownership of my time. I want to convert work from a necessity to an option, to move my interpersonal interactions as close to completely voluntary as possible, to spend as close to 100% of my time doing what I really want to do as I can, and to be as unbound from particular places on the globe as I can be (then I could Enjoy the Decline from somewhere nice, like a beach in Panama maybe).

Working cannot get you to FI. Work is labor in, dollars out, followed by life = dollars out, rinse, repeat. Eventually you get too old to keep doing it. Work can get you passive income, if you handle your self and your cash right, which can eventually cover the life = dollars out part. 

Tuesday, January 08, 2013

Breitbart: Social Security Broke In 18 Years

It turns out that Social Security will not go broke right about the time I reach retirement age!
 
"How bad are the government estimates? The two academics claim the program will actually pay out $800 billion more in the next two decades than the government claims...Not mentioned in the article is the fact that the 2031 number is based on the Social Security Trust Fund. In reality, Social Security is a pay-as-you-go system which has no money set aside. All of its payments come from the general Treasury...As of now, the program has at most 18 years of life, assuming we can come up with the trillion dollars in additional spending we need to keep it going between now and then."
 Fun stuff, eh?

The chances of anything being about it? Slim to none:

          Yes, Obama, There Is A Spending Problem
"At one point several weeks ago," Boehner told the Wall Street Journal, "the president said to me, 'We don't have a spending problem'..."Even after the economy recovers, federal spending is projected to increase faster than revenues, so the government will have to continue borrowing money to spend..Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse."
The first step in correcting a problem is admitting that there is one. Absent that, nothing gets done. It would be nice if doing nothing meant that this idiotic program would die on its own, but as the Breitbart article mentions, the money for this monstrosity comes from the general fund. There's no way for it to go down on its own without taking everything else down with it. Despite that, it's a sure bet that most will demand blood from a stone because they "paid into it."

On a related note, I'm thinking I might scrounge up $15 and buy Cappy's new book, Enjoy the Decline.
 

Monday, January 07, 2013

Realty Income Wants to Pay Me More

I saw this piece of news this morning. Needless to say, it made me happy:

Realty Income raises bid for American Realty

Realty Income adds $55.5M in cash, higher dividend to American Realty Capital Trust bid
"Realty Income Corp. added a cash payment totaling $55.5 million and increased its annual dividend to sweeten an offer to buy American Realty Capital Trust Inc...
...[Realty Income] also said it will increase its annual dividend by 35 cents to $2.17 per share starting next month. That's up 22 cents from the dividend increase Realty Income estimated when the deal was announced.
If the acquisition doesn't close, Realty Income's board will raise the annual dividend by 10 cents per share."
The complete article can be found here.

This is great news for me for two reasons, the first one being obvious: my investment in Realty Income Corp. (ticker symbol: O) will now pay me more per month. At present, based on my cost basis in O, I receive a yield of fractions more than 5%. After this deal goes through, my yield will jump to 5.97% (and if the deal doesn't go through, then I still get an increase to 5.28%). I have this position set to compound, so over time this will just get better and better.

The other reason this is great news is that I own my O shares in my Personal Social Security Privatization Roth IRA.

So, while the account I created with funds momentarily spared from SS theft grows in value and revenue, without forcibly taking money from anyone else's paycheck, Social Security promises to pay less and less while robbing you, me, and everyone else who works in this country, all the way to its inevitable crash.

I believe this calls for (another) whiskey, both to toast this bit of good fortune, and because Social Security is still robbing you, me, and everyone else who works in this country. 

The D.C. Clothesline: If They Come for Your Guns, Do You Have a Responsibility to Fight?

"A constitutional republic protects the rights of the individual even when their ideas are very much  in the minority. If I were the only person in America who believed in the 2nd amendment, I would still be within my rights to call upon it. You would all think I was insane and possibly celebrate if I was gunned down, but in the end I would be the only true American among us."
Read the full text of this well-written piece here.

As for me, my answer is a firm "yes."

The Payroll Tax Cut Expiration: "This hurts seriously!"

In the words of Brian Sozzi, chief equities analyst at NBG Productions, the end of the Social Security payroll tax holiday "hurts seriously." 

A few stories that have appeared online in the last couple of days echo that:


Since that last headline included a hash tag, I decided to pull it up on twitter to see what's there; it's pretty entertaining: #whyismypaychecklessthisweek. Here's a few choice selections:
"Still upset w/your lower paycheck? Try this: don’t think of it as a tax, think of it as a penalty. Better now?"
"Because you are one of the many millionaires and billionaires that are earning $50-$250k ;)"
"Because you are not on Food Stamps, SSDI, Section 8 Housing, Obamaphone, or in Prison you racist conservative."
"because you get your news from The View and voted for Obama. Trust me, you deserve less pay."
That last one wasn't one of my favorites, but I included it because of my own anecdotal "man on the street" moment this evening, which inspired this post:

While standing in line at the grocery store, I overheard the customer ahead of me lamenting her reduced paycheck. From what she said, I could tell that she was one of the people I consciously avoided becoming, someone who became accustomed to having that money available to spend. For her new-found financial distress, she blamed Obama.

As far as I know, that's not quite accurate - my reading on the matter points to the expiration of the tax holiday being due to neither side of the aisle showing much interest in extending it into a third year. However, mistaken as it may be to pin this particular matter on Obama, I think it's a good primer for people who may still be suffering from hope-nosis to begin getting angry with the man. It might make it easier for them to identify the source of a lot of reduced opportunities and higher costs that they'll be facing thanks to the policies he represents.

Friday, January 04, 2013

How To Make a 278% Return from Stupid People

Town near Sandy Hook launches $25 violent video game buy-back
A Connecticut town thirty miles from Sandy Hook will give people $25 to incinerate their violent video games.

Southington, Connecticut is encouraging owners of violent video games to deposit them in a local dumpster near a drive-in movie theater, so that the games can be collected and destroyed. In return, the local Chamber of Commerce will give participants $25 gift cards to be used toward purchases of non-violent entertainment.
Read the full article here.

Step 1 - use eBay:

Step 2 - Turn in video game, receive $25 gift card.

Step 3 - Use the gift card to offset the cost of buying Grand Theft Auto 5 when it comes out (or whatever other video game you would prefer to own instead of the ones you're tired of).

Thursday, January 03, 2013

Depardieu on Punishing French Taxes: Nyet!

Gerard Depardieu, a famous French actor, was in the news recently for his move to Belgium, which put him beyond the reach of a 75% income tax that had been imposed in France (this tax was recently struck down by French courts, but will be re-written and reestablished by the folks who created it in the first place - the tendency of a leech is to hang on, after all). 

Now Depardieu may become a Russian citizen over this. Why? The article I've linked below only hints at the reason:
"The distinctiveness of our tax system is poorly known about in the West. When they know about it, we can expect a massive migration of rich Europeans to Russia," Deputy Prime Minister Dmitry Rogozin bragged on Twitter.
What's unique about it? How about a 13% flat tax on the personal income of Russian residents? That's right, just 13%.

Of course, Russia might not be the nicest place to live, as is also pointed out in the article:
Political analyst Pavel Svyatenkov told the state news agency RIA Novosti that the move was "very good, very high-quality PR for Russia" but he was didn't think it would ignite a flood of new residents.
"I don't expect a massive movement of rich people to here, for the reason that Russia remains a pretty poor country by Western measurements and here there are bigger problems with crime and corruption," he said.
However, low tax rates attract capital, and where capital goes, so too does new business, employment, and increasing standards of living. Russia is a nation rich in natural resources, which combined with foreign investment could create a massive economic boom. For how long then will the above statement have merit? As word spreads of what's going on here, probably not long.

Here's the full AP article: Depardieu, in tax fight, gets Russian citizenship

Perhaps some Russian language lessons would be a good long-term investment?




Wednesday, January 02, 2013

Two Years of Personally Privatizing Social Security

The Social Security payroll tax holiday is no more. If you had not heard (I've met people in recent months who had no idea about this thing, all the way down to the end of its second year), you have been paying  having 2% less of your hard-earned pay stolen from you before you ever receive it, thanks to a temporary reduction in Social Security withholding theft. 

I'd love to see the looks on the faces of the unaware when they get their first 2013 paycheck in a few weeks, especially minimum wage employees here in Washington state: your .15 cent per-hour increase, a 1.66% hike, will now collide with the 2% hike in SS theft, which will bring your newly increased wage down to .06 cents less per hour than it was last year after deducting SS theft. 

Winning!

Anyway, for a lot of people, whether they knew the source of the little bit of extra heft in their take home pay during the last two years or not, those additional funds made day-to-day living a little more comfortable. The money was suddenly there, they started spending it, and they got used to having it.

Not me.

Before the holiday commenced in January 2011, when it was announced in the waning months of 2010, I immediately saw it as an opportunity to do something that D.C. will never get done: privatize Social Security.

I set up a Roth IRA with a favorite brokerage, then began placing the difference between the lowered 4.2% withholding theft rate and the standard 6.2% into the account. From paycheck to paycheck, and later on when I went into business for myself, from one income statement to the next, I socked away every penny of those funds. I never spent a bit of it on my life in the here and now (sorry, demand-siders! ...not really). It was my intention to continue doing this until the holiday ended, which after a one-year extension, it now has.

I didn't want to become accustomed to having those funds in my discretionary budget because I knew they were temporary in nature. I knew that eventually the governmugger would get tired of seeing us actually keeping what we earn and come back to take it away again. Buying a bigger lifestyle with something advertised as temporary is a recipe for disappointment and frustration later. I figured, hey, I'm already used to Uncle Scam just stealing this money from me, so I won't miss it at all if I lock it away for the next three or four decades. 

The direct end result is that I have a small retirement account that now compliments my other investments. I won't say how much ultimately ended up going into this account, just that it's four figures. That right there is probably all of the "evidence" fans of that idiotic, bankrupt, demographic time bomb called Social Security will feel they need to discredit the idea of establishing private accounts, that no one could save enough to retire with, but here's some key differences that go beyond numbers:

I can look into my account and see what's there, you can't do that with Social Security because it has no equivalent.

I can alter how my money is invested in my IRA to get better returns; Social Security has you bound, gagged, and blindfolded in the back seat of a car speeding toward a brick wall of insolvency.

Politicians can't raid my IRA to pay for their pet projects, but they've already done that to Social Security.

My IRA can aid in providing my retirement income without taking money from your paycheck; Social Security can only be fueled by further theft from others.

I can withdraw my principal from my IRA to fund things I might feel like doing before I reach retirement age; that money taken from you for Social Security is just gone.

I won't be taxed on distributions I receive from my Roth IRA, but you will be taxed on distributions you (might) receive from Social Security.

I can pass my IRA on to any heirs that I designate; any payment you might get from Social Security can only be given to heirs the government approves of after you die, and only for as long as they care to give it.

As to the numbers though, I did this with about one-third of what's normally taken from me. If I had the full 6.2% to put away instead, obviously my account would be growing a lot faster and would ultimately deliver greater value (because it's pretty easy to beat an average annual rate of return of 1.23%; my investment mix already has an annual dividend rate just shy of 5%, and it's set to reinvest). I would have two-thirds more capital going into something I am in control of, rather than a pyramid scheme that already promises to pay out just .75 cents on each dollar fed into it in a few decades. It's really silly to argue against doing something like what I've done when your counterexample is a scheme that is already failing.

How about a compromise: I can go my way and opt out of this scheme, so could anyone else who wants out, and those who want to keep shuffling deck chairs around on the Titanic can go ahead and do so. Sound fair?



Tuesday, January 01, 2013

Penny Power 2012: How My Change Jar Stacked Up and Where It's Going

Another January 1st, another iteration of my annual tradition: count up the jar of loose, found change I've been collecting all year and figure out what the best use of it is among my various investments and/or implied yield from eliminating debt. This is how it all turned out last year.
 
Just a few days before now, I got a new change jar:


...and thanks to this jar, I already know how much is in it without dumping out the coins and counting them up:


Kind of ruins my little tradition, but oh well. It's a neat change jar (or at least the lid is neat). 

$11.47, not much to work with. That's ok though because the point of this has never been to get huge amounts of cash, just the little bits of value that people carelessly leave laying on the ground. I like to say, it's not worth much, but it's not worth nothing.

Funny side note about this: when I was attending Washington State U., I noticed that you could always tell that it was a new semester by the frequency of finding coins on the ground around campus. At the start of each semester, financial aid cash was flowing through student's hands like water, and the sidewalks would be littered with coins (sometimes even $20 bills, though I suspect that had more to do with the aftermath of a bar crawl than anything else). Everyone was flush, so everyone was careless. As the semester wore on, the coins became fewer and fewer until there were literally none to be found anywhere.

I digress. So last year I selected a credit card balance to be the recipient of my 2011 Penny Power jar funds, which gave me an implied annual yield (savings on future interest) of 18%. 
 
This year, I'm dumping this small sum into my Forex account, which is with Oanda. $11.47 certainly is not a great deal to work with in Forex (or any investment, for that matter), but with the way Oanda does things, it can be worked with. I'll be adding it into my existing account anyway, not trading the sum by itself, so it's just some more fuel for the fire. Currently I have that fire burning to the tune of a 66% overall account gain as I type this (mostly thanks to a Yen short I have on, since the Japanese are once again demonstrating their commitment to destroying their own currency). There's no guarantee that I can keep that up, but among the alternatives available to me, this one is the most appealing right now (especially since tonight the U.S. House of Representatives has approved the latest tax code band-aid ending the so-called fiscal cliff farce; now my "risk-on" USD short trades, particularly some daily high interest yielders, are sailing comfortably into the black).

Onward into 2013 and more free money collecting! If the sidewalks and parking lots have not much-to-nothing to give to me, then as per my old informal Washington State U. student cash flow economic indicator that I described above, I'll have another small piece of my own evidence that an Obama economy is a sucky economy!

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