Archives For May 2008

The Price of Gas

May 28, 2008

The other day the price of a barrel of oil closed around $134. The next day gas prices close to my home raised prices from $3.64 to $3.73.

Yesterday, oil was trading around $128 per barrel. This morning my local Kroger was charging $3.79 for a gallon of gas.

I don’t get it.

I mean I understand prices going up when the price of oil increases. I just wish they would drop when the price of oil drops. It never seems to work that way (at least not in the short term).

Francis Rose sent me an email this morning informing me that Larry Winget will be on Your Turn with Mike Causey today at 10 AM EST. If you want to listen in, here’s a link to the listen live section of their website.

If you can’t listen to it live, you can listen to it in their archive section.

Why am I mentioning this? Because I’m kinda sorta responsible for helping get Larry on the show.

UPDATE: You can now listen to the show by clicking here.

Marketwatch’s Chuck Jaffe wrote an interesting article last week about a financial planner who is urging her clients to think twice before leaving money to their college’s endowment. From the article:

Delessert’s [the financial planner] problem with Harvard is a simple one; the school has an endowment that has more than $35 billion in assets, brags about its great investment returns on that money, and pays no taxes.

And yet, at the same time, the school has raised tuition costs, citing rising expenses as the need to keep the fees on the upswing.
Statistics on college endowments showed that schools with large endowments (at least $500 million) reported spending an average of 4.4% of their stockpiles in 2007. Meanwhile, those same schools made an average of more than 19% on their money. It’s enough to make the average investor mighty jealous.

At Harvard — where being a student now costs more than $47,000 per year — the school could cover the cost of tuition, room and board for all of its students for less than 1% of the endowment’s value. Tuition costs themselves are so insignificant, they’d practically be a rounding error in the endowment’s checkbook.

She makes a good point. At $35 billion, does Harvard really need more gifts? Long time readers of this blog already know my thoughts on this topic so there’s no need to rehash an old post.

I’m not a charitable giving expert but I would think that, depending on how much you want to leave to your college, one thing you could do is establish your own endowment with the focus on tuition. Or, you could possibly leave it to a particular school within the college (like the business school or engineering school).

Personally, I don’t see me or my wife leaving anything to our college. Although we liked our college just fine, we can think of better places to leave our money.

From today’s Houston Chronicle comes this advice from John Bogle:

John Bogle, founder of the nation’s second largest mutual fund company, dismisses many of products hawked these days by financial companies as largely self-serving. His advice for investors seems to square with one popular marketing pitch: Set it and forget it.

The phrase serves as a delightfully short to-do list for those who don’t want to juggle many investment decisions. And the idea of making an investment decision and sticking with it has helped the retired chief executive of the Vanguard Group and creator of the index mutual fund accumulate a healthy savings account of his own and to look past many of Wall Street’s gyrations.

Bogle said investors too often chase returns rather than adopt a long-term investment strategy that prizes broad diversity and low fees.

I think chasing returns and timing the market (due to chasing returns?) are the two biggest investing mistakes people make.

It’s not easy to walk the straight and narrow when it comes to investing. Especially when your brother-in-law and postal delivery man are making money hand-over-fist day trading internet stocks. It’s also not easy to stick to the course when the world seems to be falling apart (like right now). Here’s what I tell myself during the bad times:

1. They’re usually short run and I’m a long-run investor. In other words, the bad times usually end up looking like bumps in the road over the long run.

2. If things get really bad, not having money is going to be the least of my worries.

MSN Money had an interesting (and sad) article today about family cookout inflation. What I found interesting was this table:

The Cost of the Family Cookout (from MSN)

I found this table interesting, not so much for the information, but for the source of the information. Home Depot and 7 Eleven? I can’t remember the last time I purchased any cookout items from Home Depot. And who the heck shops at 7 Eleven?

Regardless, the bottom line is that we are paying more for the family cookout.

Jesse Cook is one of my favorite guitarists. Watch the video and in the link and you’ll see why.

Watch the entire video and REALLY PAY ATTENTION starting at about 2:28. Here’s the link:

Jesse Cook – Dance of Spring (Live)

Although the version in the video is top notch, I like the version on his live CD, Montréal (Affiliate Link), better. If you aren’t familiar with Jesse Cook, I suggest you give Montréal (Affiliate Link) a listen. If you like flamenco-style guitar, you won’t be disappointed.

Thank You, Soldiers

May 26, 2008