Frog Boiling – you’re in the pot!

What is the local sale price on your favorite brand of pop/soda? Here it’s 3 two-liters for $4. Last month it was 4 for $5. So the price of pop/soda is up eight cents per bottle.

Many people don’t think about this 8 cents. The pricing changes on these ‘sales’ happen erratically, and might be lower next month before going higher again the following.

Last summer this same pop/soda was often for sale at one dollar a bottle. So the recent climb is 33% higher now.

Over time consumers don’t seem to recognize the slow progression of pricing. Often hindered by another game that gets played. The size variation. There is one sale on two-liters and a different sale on 1.5-liters. Then you can only find the 1.5 liters for a while. Then they disappear and the two-liters return. But with those size changes arrive little bumps in pricing. Eight cents here and eight cents there and it starts to add up.

We’re savers. Inflation is a hidden tax on your wealth – and it adds up. Looking at one of those ‘what went on the year you were born’ birthday card stands the other day showed that one card that was for a ’40 years old’ had almost exactly 1/10th of the value of anything of today. Average car today = $20k, ‘then’ it was $2k. Salary ‘then’=$7k is now $70k.

Imagine if you retired forty years ago. Your savings is now 1/10th effective than it was back then! But then maybe you don’t care because if you retired 40 years ago you’d be 105 now. A frog boiling for a very long time.

So you think you have enough savings?

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Shameful Book Plug!

Here’s a book we find to be a really fun read:

Order it here on Amazon.com!

The Black Jewel

The Diamond Coronal

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from Seeking Alpha site

Monday, November 21, 8:40 PM The level of property transactions in China’s largest cities – down 39% Y/Y in October – has fallen well below the worst case scenario of stress tests carried out by banking regulators last April. An analyst who has seen the test documents says neither they nor the banks had enough appreciation of the extent to which loan collateral is tied to the value and turnover of real estate.

 

We interact with a Chinese team of Engineers and Managers on a daily basis plus making physical trips to China.  What we’ve learned is that over the last couple of years is that China has a simple loan approval process .. first house you can get 100% loan, second 50% loan, third 0% loan.  And that rule is for serial or parallel purchases.  It was instituted to keep a runaway real estate bubble away.  It seems to be working rather well, doesn’t it?… It does play havoc with the statistics though, caution about being mislead.

 

 

Welcome!

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Welcome to Green Horn Investor!

You probably came to check out our Investment Advice, or learn what Warren Buffett was up to, or why the markets were UP or DOWN today.

However, sorry for the skimpy posts here .. we are under a bit of re-construction.  Temporarily parking our site here at our WordPress.com account until we get back to regular scheduled updates and archived content.  We’ll soon have things restored.

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So What Happened?

A few days back we had to ask ourselves “Why is our site down?!!”

We went in checking in depth.  At first thinking some “3L33t HaK0r” (elite hacker) had compromised things.  Nope.  We found out our (prior) hosting company had changed software – without telling us!

So our WordPress software platform was no longer working .. nor available!  Good thing we keep backups.

This does allow us to revamp our look and clean up content from the old site.

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It’s like a Rodeo in blog-land some days.  But we keep coming back feeling like the clown popping out of the barrel.

Have a great day and Check out some of our older content we chased up!

Big Horn.

 

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Buffett – The Rocker

Here”s a great article and video with Warren Buffett dressed up as Axel Rose.

New York Times

Lizard ballad Geico

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Finding Angel Investors with Free Cash for your new Business [2010 Archive]

Got a business idea? Searching for Investors and Funding to get it started?

Don”t go looking for the usual suspects.

Our team here at Green Horn Investing has recently been reading the book:

“Stop Acting Rich .. And Start Living Like a Real Millionaire”

We”ve read several of these books by Stanley ..  The interesting data in this particular book, when you”re searching for Investors, is the following chart (we”ve rearranged the data to simplify the trend):

What Stanley describes is that most of the people you know in the traditionally ”wealthy occupations” more frequently do not have excess cash due to high consumption patterns (living in a fancy house but with a big fancy mortgage, leasing impressive cars, etc).  He”s trying to get you to save more – a good message that we generally endorse – play defense with your cash. 

When looking for investors to join you on your latest business adventure, his data points to looking for individuals with occupations that consume differently.  Find a Mining Engineer and they are ten times more likely to have a pile of cash to invest than your friendly neighborhood Physician you”ve been quizzing lately.

Have a business plan for a concept you”ve been thinking about?  Get in contact with us – we”re always looking for interesting opportunities and fun adventures.  Though we”re now thinking Mining or Ranching school looks pretty darn attractive.

The Dow above 10,000 [2009 Archive]

Here”s a good comic found today:

We think the 700 Trillion may be responsible for the Dow increase .. questionable that funding is working through the economy.  When it does work through, there will be inflation.  R U Ready?
What steps are you avid readers taking with that possibility in mind?

11 Basic Principles Of Investing

This was a reply we made on Reddit for the question of a beginning investor, thought our regular readers might find the discussion useful too.

“I know Nothing About Investing”

“The basic principles:

-Diversify (8 or more non-correlated stocks).  Diversification only helps you avoid an individual stock risk, it does not help you avoid market risks (like last fall stocks & bonds all went down).  Having 8 Mutual funds each with 300 stocks that turn out to be closet S&P500 trackers is not being diversified.

-Any single bet you make, use less than 5-10% of your total.  “Day trade”, “swing trade”, and be active with 5-10% of your total.  Don”t play the market with all your savings.

-Pick your exit rule before you buy anything.  Buy Ford at $8 and plan to sell if it hits $6 or $10 or whatever makes you happy/comfortable.  But pick that point before you go in.  Otherwise you watch Cisco go from $75 in 2001 to $14 in 18 months “because it might come back up” and in 2009 it still peaks only around $25 or so.

-Study an industry and understand the stocks you buy – they are companies with products – do people buy the products? 

-Read footnotes in the back of the Annual Reports, skip the pictures in the front.

-Keep an eye on the trends.  General market trends, specific industry trends, or trends for a particular company.  Ski company will have different sales in the summer than the winter.  Companies profiting from Foreclosures are doing well now but maybe not in three years.

-Watch round-trip trading and management fees.

-Think.  Back test any theory you want to try out before doing it. Be cautious listening to any ”expert” on TV or Radio or mutual funds or financial planners. It”s your money so .. Think.

-Small investors often have advantages over the big trading houses.  Trading companies have massive computer systems with microsecond trading capability, but if they buy or sell a particular security they do so in such large quantities that they move the market.  So they are forced to buy and sell over weeks sometimes.

-Read up on ”Fundamental” and ”Technical” Analysis.  Understand both because professional traders are in either one of those two camps – and trade accordingly.

-Get a discount brokerage account and fund it with just a little cash – that if lost you won”t be terribly upset.  Then trade and learn.  You can paper trade for years but won”t learn fundamentals until you actually have “skin in the game”.

-Read Buffet, Lynch, Levitt, Fisher, Graham, and Magee.

Stop by my starting investor site http://www.greenhorninvestor.com

Good Luck !”

Your Car Can Help You Retire Rich

The link below has a good take on transportation.  And in turning conventional wisdom upside down – because as we”ve heard, conventional wisdom is often more conventional than wise…

[ Normal Thinking about Cars ]

They play a little fast with the numbers – do you really get 12% from a regular mutual fund?  Maybe you thought so in 2005 but by now you might question that ”average return rate”.
Does the $475/month assume no lost work?  Surprise medical bills? “Maybe just this once we”ll take a trip” and spend some of that savings now rather than later?

This same concept works with houses.
And furniture.
And boats.
And many other things you may have in your life.
So look around and see how this concept might work with your particular situation. Have some fun ones to include int the comments?

How Do You Spend Your Cash?

We quickly noticed the part in the middle – if the taxes paid are greater than 21% of the listed income then the poor family is upside down.  Reviewing tax tables it”s not hard to get above 21% for Federal and State.

We”re curious how you”d suggest the consumer caught in the above review could alter their lifestyle and generate some savings.  Starting with Home and Transportation probably, but what are your thoughts?

‘, ‘How Do You Spend Your Cash?’, 0, ”, ‘publish’, ‘open’, ‘open’, ”, ‘how-do-you-spend-your-cash’, ”, ”, ‘2009-07-10 00:55:33’, ‘2009-07-10 00:55:33’, ”, 0, ‘http://privateproductivity.com/ghi/?p=87’, 0, ‘post’, ”, 2066), (88, 1, ‘2009-07-10 00:55:34’, ‘2009-07-10 00:55:34’, ‘

We quickly noticed the part in the middle – if the taxes paid are greater than 21% of the listed income then the poor family is upside down.  Reviewing tax tables it”s not hard to get above 21% for Federal and State.

We”re curious how you”d suggest the consumer caught in the above review could alter their lifestyle and generate some savings.  Starting with Home and Transportation probably, but what are your thoughts?