Pardon My Skepticism
By JLP | July 3, 2009
Under pressure from newspaper articles uncovering congressional expenses, Nancy Pelosi announced that congressional expsenses would be published online beginning August 31.
It turns out that the date has been pushed back to mid-November due to “concerns” about security and support. I don’t quite follow the security claim, which wasn’t discussed in the article I read in today’s Wall Street Journal. The support issue lies in the expected server demand that will result from the expenses being made available to the general public.
That said, I think I know the real reason for the delay, which is mentioned in the article:
As a result of the delay, the first claims to be posted online will cover a period in which lawmakers were aware that their expenses would be made public in this way.
Interesting…
Regardless, I think the making of expenses easily-accessible to the public is a start. Let’s just hope they are accurate and not jaded by some loophole that allows certain expenses to escape mention.
Topics: Miscellaneous | Comments
Question of the Day - What’s Your Total Debt to Income Ratio
By JLP | July 2, 2009
I was looking over our financials this morning and calculated that our total household debt (including our mortgage) to income ratio is .81. By this time next year—assuming we make no purchases on credit—that number should be around .75.
I’m pretty happy with that number—especially when I hear that the average household’s ratio is around 1.3 (or 130%).
Remember, to get the ratio, you simply divide your total debt by your annual income (use gross income for simplicity’s sake).
So…
What’s your total debt to income ratio?
I’m thinking it would be relatively low for AFM readers since you guys seem to be on top of your finances. But, I’d still be curious to know (if you’re willing to share the information)
Year-to-Date Total Returns for the S&P 500 and Other Indexes
By JLP | July 2, 2009
Here is a quick look at the June and year-to-date total returns for the S&P 500, S&P MidCap 400, S&P SmallCap 600, and S&P 1500 Composite Indexes:
Surprisingly, all the indexes are positive year-to-date but are still way off from their highs. It’ll be years before we get back to the levels seen in 2007.
Topics: S&P 500 Index | Comments
Join the Jonathan Clements Fan Club on Facebook
By JLP | July 1, 2009
I created a Jonathan Clements Fan Club on Facebook. If you’re a fan of Jonathan’s work, please join the club. Jonathan’s book was also reviewed yesterday at Walletpop.
There’s also a Larry Winget Fan Club you can join if you’re interested. Larry’s pretty active on Facebook, which makes it fun.
Topics: Announcements | Comments
An Interesting Interview with Joel Greenblatt
By JLP | July 1, 2009
GuruFocus posted an interesting interview with Joel Greenblatt, author of The Little Book That Beats the Market
You may or may not remember that I followed Greenblatt’s Magic Formula for awhile here on AFM. I gave it up—not because I think the strategy is bad but because I didn’t have the time to update the numbers.
My concern with any “formula” is that as soon as it gets popular, it no longer works. So, the last question and answer bugs me:
Question 27. Is your involvement in Formula Trading an attempt to bring your Magic Formula Investing methodology to the mass? (guruek)
JG: Over the past 4 years, I have been approached many times by people asking me for a simple and cheap way to implement the Magic Formula strategy. So after I met Blake Darcy, the founder of DLJdirect, I thought we had a chance to create such a way. The result was FormulaInvesting.com and I do hope it helps individual investors pursue the Magic Formula strategy. The firm allows investors to choose from a list of Magic Formula stocks and to buy them all at once with one click or to have the firm just do the whole process for them.
When it comes to value investing…if everybody’s doing it, what’s the point?
*Affiliate Link
Topics: Miscellaneous | Comments
Watch Those Expiration Dates on Rebate Cards!
By JLP | June 30, 2009
I made a boo boo.
AT&T mailed me one of those Visa Rebate Cards for my BlackBerry Curve. I think it was originally for $99 or so. I used the card a couple of months ago but still had a balance of $8.19. I tried using it again but got the remaining balance wrong, thinking it was $8.91 so the transaction didn’t go through. I called to get the correct balance and found out it was $8.19. I put the card in my closet and sort of forgot about it until this morning.
I pulled it out and tried to use it only to find out that it expired on the last day of May!
OOPS!
I’m a little surprised at how quickly the card expired. I don’t remember for sure when I got the card but I think I received it after the first of the year. It seems like the expiration date would be longer than a few months.
Now, had it been a paper check, I would have deposited it into my bank account and the money would have been mine free and clear. I never liked paper checks. I thought the rebate card would make things easier but I found it to be a hassle—especially if it takes more than one transaction to use up the card.
Anyway, LEARN FROM JLP. Use those rebate cards quickly. Don’t allow the companies to keep your money!
UPDATE: I guess I’m not the only one complaining about the AT&T Visa Rebate Card.
Topics: Credit Cards | Comments
25% of Borrowers Who Received Mortgage Payment Reductions Fell Behind Again
By JLP | June 30, 2009
Okay, I guess the optimistic way to state that would be to say that the mortgage payment reduction program has had a 75% success rate (still that’s a “C” if you were using a grading scale). There’s also no guarantee that more recipients won’t fall behind. I think we would have been better off to just let the market work this mess out and allowed those who couldn’t afford their homes to move on with their lives instead of dragging this mess out longer.
The good thing we can take from the article mentioned above is that the housing market appears to be stabilizing. Let’s just hope that unemployment doesn’t hinder a recovery.
Topics: Housing Market | Comments
An Example of Excellent Customer Service from Sam’s Club
By JLP | June 29, 2009
A friend of mine is looking for hot dog bags for a function she is helping with. I googled “hot dog bags” and this entry for Sam’s Club popped up. I noticed that there was one one-star review for the product by someone named “Editor”:
These are represented as a “bag”. They are not a BAG. They are open on one side and one end. Very disappointed in this order. This is a waste of my money. I will try to get a refund.
Right below this review, was this response from Sam’s Club:
Editor,
In the industry this is commonly referred to as a bag, and depending on your needs, this may, or may not, be the bag for you. However, because of your review we thought it best, in order to better clarify the description, to add a picture featuring the hotdog “in” the bag. Feel free to contact us at 888-746-7726 if you’d like to return these to us. Thank you for your input!
That’s pretty cool if you ask me. That’s excellent customer service.
Topics: Miscellaneous | Comments
Poor Ruth Madoff…
By JLP | June 29, 2009
She has to face living off $2.5 million.
I really feel sorry for her. Please detect the sarcasm in that statement.
This will sound cold but I think she should be impoverished like so many of her husband’s clients were. I think we have to assume that the assets owned by the Madoff’s were acquired through fraud and should be sold off to go into the general fund to pay back shareholders.
Oh well, I guess we should all rejoice in the fact that she will no longer be living the high life. Although a lot of money by most people’s standards, $2.5 million is but a drop in the bucket for someone used to living in the lap of luxury like Mrs. Maddoff was.
Thoughts?
One last thing…do you think it was possible that she had no idea that her husband was running a scam? I’m not sure on this one.
Americans Are Saving More. Are You?
By JLP | June 29, 2009
The Wall Street Journal reported this weekend that the personal saving rate was 6.9% in May, which is the highest it’s been since 1993.
One would think this is a good thing. But, in a consumer-driven economy such as ours, saving money is a bad thing—at least in the short run because savings represents money that could be used to stimulate the economy.
The personal savings rate can be defined as…
Where…
From what I can tell from my reading, consumption is the amount spent on autos, other durables, nondurables, and services. That means that 401(k) contributions must be a part of the personal savings rate. Call me crazy but 6.9% seems like a fairly low number for personal savings if it includes retirement savings.
My family is saving way more than 6.9% of our household income (including retirement plan contributions). What about your family? Has the current economic situation inspired you to save more?
NOTE: If I’m wrong here, please enlighten me. I think I might have slept through some of my economics courses in college.