Archives For March 2011
The randomly-selected winner of the latest AFM giveaway was commenter # 23, Jack.
Congrats to Jack.
There are more giveaways to come. Stay tuned…
I’m reading Jeffrey Hirsch’s Super Boom: Why the Dow Will Hit 38,820 and How You Can Profit From It.
When I first read the number 38,820, I kind of chuckled to myself.
Then I did a little math.
At today’s close, the Dow is sitting at 12,279. To reach 38,820 by 2025 is a little less than 14 years (I’ll use exactly 14 years for simplicity’s sake). That implies an annual rate of return of 8.57% (or a total return over the period of 216.15%) as you can see from my graphic:
I’ve only just begun reading the book so I have no idea Hirsch’s rationale for selecting this particular number. I will say that based on the last 10 years, 8.79% seems like a high expected return. That said, I also know we tend to suffer from recency bias and expect the future to be like the recent past. Just for the heck of it, I went back and looked at 14-year rolling returns for the Dow Jones Industrial Average going back to 1929. Here is what I found out:
Out of the 69 14-year rolling periods, 31 of them had returns greater or equal to 216.15%, which is the total return we would need in order to get to 38,820 by the year 2025. So, a total return of 216.15% over a 14-year period isn’t unusual by historical standards. It just seems that way based on the challenges we face at this point in time.
I’ll read and review the book in the next week or so. It should be an interesting read.
Which website to prefer to do your internet shopping:
Amazon or eBay?
Personally, I like Amazon 1,000 times better than eBay. I spend lots of money with Amazon but nearly nothing with eBay. The eBay site seems cumbersome, and gimmicky. And I don’t like feedback system, which seems like a joke.
I’m asking this question today because the WSJ reported that eBay is buying GSI Commerce in an attempt to compete with Amazon. I found this interesting:
GSI has a service called ShopRunner that could have helped level the playing field. Similar to Amazon’s Prime program, ShopRunner charges a flat $79 annual fee in exchange for free two-day shipping from dozens of retailers. Unfortunately, eBay has decided to sell most of ShopRunner. The thinking is that eBay doesn’t want to upset its existing sellers who would be in competition with retailers in the ShopRunner network. In contrast, Amazon offers free shipping even though it puts some third-party sellers that use its site at a disadvantage.
I have a suspicion that the reason eBay sold ShopRunner is because sellers would be angry over not being able to charge what they wanted for shipping. It’s pretty well known that eBay sellers use shipping as a way to make money.
If you have a few minutes, please give this song a listen. My brother, Christopher Pritchard (check out his facebook Fan Page), has been writing music for about ten years (maybe more). He stopped for several years as work and family took a precedence in his life. But, he recently purchased a new keyboard and is working on creating a CD. Anyway, please check this out and if you feel led, please share it with your friends and through social media.
I haven’t hosted a giveaway in a while. So, I thought I’d offer something that all of you will be interested in. It’s Larry Swedroe’s newest book, The Quest for Alpha: The Holy Grail of Investing*. Like all of his books, this one’s a good one.
If you’d like to enter the giveaway, simply leave a comment below. Please remember my two giveway rules:
1. You must reside in the U.S.A. or Canada (I will not ship internationally).
2. You can only enter one time.
I’ll announce the winner on Wednesday morning. Good luck!
Sorry for the poor quality of this video. I shot it with my BlackBerry. I wanted to show you how quickly the solid state drive is on my new computer.
My 5-year old HP would take 5 minutes to fully boot up so this is refreshing.