After reading about 25 books on investing, trading and automated trading, I finally came up with an investment system. Hopefully it will help crystallize your own investment philosophy.
Although there is an unlimited amount of information available about investing, it is a real challenge to find the good stuff. What is the good stuff, anyway? I think “good” information about investing (and in general) has the following characteristics: Read more…
Like most things in life, we usually make snap decisions about buying a car. We go to a dealership to “look at cars”, and two hours later we are excited to discover we are driving our shiny new car home. Has this happened to you? It has to me.
Unfortunately, this is the worst possible way to buy a car. $250 per month may sound affordable, but nothing could be further from the truth. $250 per month does not come close to the cost of owning and using a car.
After reading this article about Hedge Funds Buying Gold, I remembered so many of the reasons that it is such a great investment. I have posted about gold numerous times in the past. Many individuals think that gold is overvalued because it has quadrupled in the last 10 years. But if you consider many different metrics, it is actually undervalued.
Gold Price 2000 - 2010
What kind of metrics would you use to figure out how accurately gold is valued? I think the best one is its ratio to the money supply. There is a relatively fixed supply of gold. When governments (like the U.S.) start printing money at a furious pace, then the price of gold is going to rise. Since gold is priced in dollars, more dollars naturally makes the price of gold rise.
As Social Security begins to collapse and the millions of baby boomers begin to retire, many will wonder where all the money went. It was only last year when would-be retirees lamented,
“My portfolio is down 50%, so I can’t retire. I don’t even open up those statements anymore”
Dow 2006 - 2010
Did you see these people on the news? I remember them clearly. But now that the market has recovered, they are long forgotten. And the lesson was not learned. Most people have their entire retirement account invested in mutual funds. As soon as the market goes down again they will be in the same unenviable position.
I just checked out Kapitall (with 2 l’s) and was really surprised to find so many new and fresh ideas. After my experience with Cooliris, I thought how wonderful it would be to find new ways of displaying the same old, boring stock data. And, just like that, a few days later I found out about Kapitall!
The Kapitall Desktop
As I mentioned before, I think that computers have come a long way in the last 30 years, but the way we interact with them has not changed much since the introduction of the mouse. And, looking at stock charts hasn’t changed either, except that they have gotten more complicated and less readable.
The Social Security system, or more accurately Social Insecurity, is a great example of government mismanagement. Instead of collecting more money than it pays out, and investing the money it has collected, the government is now paying out more money than it collects. And instead of investing to get rich, it simply spent the money to make us poorer. To the tune of $2.5 trillion.
This article on Yahoo has some interesting facts about Social Insecurity. The article neglects to mention one of the biggest problems with the system. And that is the fact that people are living longer. It is estimated that people are living as much as half a year longer with each passing year. That means that in 20 years people could be living 10 years longer. Does the government factor this in to the Social Security payments estimates? No.
After watching those financial shows and listening to a few financial “advisors”, I have come to the conclusion that they don’t really know what they are talking about. Yes, it’s true that the words are pieced together to creates some meaning, but there is no value.
Here’s a clip from Stock Watch.
Most of the time, they say something like, “If this happens, then that will happen.” And I think, “OK, that’s nice. But it doesn’t really help me.”
After playing Cashflow 101 and 102 for a few years now, I was pleasantly surprised to find out that you can actually play for free, online. Just go to the Rich Dad site and click on Cashflow.
I like Cashflow because it actually teaches people about how to manage their finances. Many people like to write off games as a waste of time, but they are actually a powerful learning tool. We automatically play games the way we play life. So, when we learn how to play a game better, it changes the way we act in life.
I found this great story on Yahoo about an octopus named Paul, who has the ability to know who is going to win each of the world cup games. It sounds incredible, but it’s true. His picks have been televised on live TV. Plus, even though he is German, he correctly chose Spain over Germany. So that means he is not prejudiced.
Is this octopus really clairvoyant, or could there be another explanation?
The Singularity is Near by Ray Kurzweil is the book that started it all. If you want to know about the future, it is the best book I've found. Absolutely fascinating.
Rich Dad Poor Dad by Robert Kiyosaki. This is one of the most popular personal finance books of all time. A must read for anyone who wants to become financially successful.
The Millionaire's Secrets is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
The One Minute Millionaire is a great book about how to become a millionaire. Written by Mark Victor Hansen and Robert G. Allen, this book combines an inspirational story with practical everyday skills.
The Art of Learning is the fascinating story of Josh Waitzkin, the world champion in both chess and Pushing Hands. His style is mesmerizing, and the strategies for learning are priceless.
The Alchemist is one of the best-selling and most inspirational books of all time. Anyone who has ever had a dream in life needs to read it. Perhaps my favorite book of all time.
Love is the Killer App is a powerful, step-by-step book about how to have a wonderful experience and spread love in any working environment. Think the office has to be a source of bad energy? Think again.
The 4-Hour Workweek is a powerful book full of strategies about how to get more done in less time. For anyone who is looking for leverage or wants to achieve success quickly, this book is absolutely invaluable.
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
