Arnie,
It is certainly believable you are outperforming the S&P 500 as that benchmark is made up primarily of large-cap stocks. I’ll bet you hold a number of mid and small-cap stocks in your portfolio and they can make a big difference in performance.

I have a portfolio, coming up on ten years of operation, where it is ahead of the VFINX (S&P 500 equivalent) by 4.7%, but it only beats the VTSMX (total market index) by 3.6%. That is still a hefty gain on a benchmark. The portfolio is weighted toward value and away from growth. In addition it holds commodities, developed international, REITs, and emerging markets. All the holdings are ETFs so the portfolio holds thousands of stocks through these ETFs.

Lowell

My dad always said “If you can’t pay cash for something, you have not yet earned it”

He lives a modest, but financially secure life.

I see the wisdom of living within one’s means. Many of my friends live from paycheck to paycheck and even a small, unexpected crisis causes them much worry and stress. If they would just learn to budget for life’s unexpected problems, their lives would run much more smoothly.

A good look at the history of personal credit (credit cards) is the PBS special, Secret History of the Credit Card:

http://www.pbs.org/wgbh/pages/frontline/shows/credit/

It shows the predatory mindset of the credit card industry. They are masters of human behavior and manipulation.

A couple of years ago I had a conversation with Dan Hess on the Compuserve Forum regarding “rebates” from credit cards.

I respect Dan and always enjoy listening to his thought.

My perspective was that these rebates were not free. As a business owner accepting credit cards the amount of money I receive is dependent upon which credit card is used. Cards with rebates are simply passed on in higher fees to the merchant. The discount to the merchant can be 2%, 3%, or even 4% for as credit card with a 2% rebate to the consumer.

This all sounds good to the consumer, but the business owner knows this game is being played so he/she simply raises the price 4% to cover all the bases. The net result is the consumer is duped into thinking they are getting something back when in fact they are only being charged more upfront.

It’s not the deal you get, it’s the deal you think you get.

Dan’s final argument was even though he knows the game is being played, he will still lose 2% if he doesn’t take advantage of it.

I can’t refute that! Are those credit card guys sharp?!

But my biggest heros now live on the TV show “Pawn Stars.”

For a secured loan (pawning you item) the star of the TV show charges 10% simple interest per MONTH! Borrow $100 today AND leave your item as security, and you can get it back in a month for $110, two months for $120, and three months for $130. I’m glad he’s not using compound interest! I guess he doesn’t need to!

You have a two month grace period in which you can stil retrieve for item. Of course that would cost you $140 for the fourth month and $150 for the fifth month.

After 5 months the pawn shop keeps the item and earns 100% interest.

So for a year that’s 120% simple interest for the short term loan or 240% interest if you don’t retrieve the item! 12 months divided by 5 months x 100% = 240%

We should be glad these guys are not running the credit card or banking industry!

I see where your link to my web page is still pointing to the old site rather than to the new site at

http://lherr.org/ita/

Thank you for making the change.

Lowell

It’s good to hear from you again on your blog.

You’re quite correct when you say the public is uneducated in matters of finance.

Just look at the level of television shows offered on any given night and I’m utterly shocked as to what the United States public views as entertainment!

I’m limited to PBS, Science, NatGeo, and the History Channel for programming these days.

And lately the History Channel has been showing reality programming like Pawn Stars and Pickers.

I confess to watching Pawn Stars after my insurance agent encouraged me.

The odd part about both Pawn Stars and Pickers is that they make a good living off taking advantage of people whom are down on their luck (Pawn Stars) or elderly (Pickers).

It first infuriates me that the people themselves have let themselves get into this position in the first place, but Pawn Stars says they charge 10% interest per month for 3 months.

You get $100 loan and in 3 months you owe $130 or you lose the item. In essence, that’s 33% interest retroactively.

Pickers is worse… Taking advantage of elderly people whom are clueless about the true value of their items.

This is what America calls entertainment! Taking advantage of others. Getting something for nothing. We can see where that has led our country.

A friend recently commented that he was offended by a comment that the government was spending money like a drunken sailor. He said having formerly been a drunken sailor on many occasions, when he ran out of money, he had to quit spending!

My brother and I have recently completed some estate planning to help keep the government’s hands off already taxed assets and the attorney, whom seemed competent at estate planning viz a viz JK Lasser’s New Rules for Estate Planning, ended the process with a 30 minute discussion on his investing services.

1.6% a year to day trade stocks and bonds. He was sure he could beat the Vanguard S&P 500 index fund.

He’s a well respected attorney and has many clients for whom he manages assets. Entry into his services starts in the mid six figures and is considered an honor even to be considered.

I see no way he can do this after taxes and his fee.

My shock is that he does this for many other people. The successful are even ignorant on financial matters.

It all boils down to people expect to get something for nothing. And it occurs at all levels of intelligence. Let someone else pay for it.

Warren Buffet had an editorial in the New York paper I believe in which he saw three solutions to our debt. 1. borrow from the citizens, 2. borrow from foreign nations, or have rampant inflation erode the value of the dollars we owe.

Of the three, he said rampant inflation was the politically correct way to solve our debt. Pay back what we owe with dollars that are worth a lot less.

It’s going to be an interesting future.

I was telling some new folks at our meeting about not crossing the barbed wire.

Your other excellent statement about thinking you know too much and it gives you a license to cross over. I have searched your site and everywhere else but can’t come up with your comment. I loaned out your Take Stock, so I can’t search that either.

Thanks in advance

Larry

Good Luck

Bill G

—– Original Message —–
From: BGowanloch
To: Mail@SchoolBusMart.com
Sent: 02/11/2010 9:18 AM
Subject: Re: 12.5 Million land purchase

Thanks for the response, Been able to get very little from the Town Website. I watched the Video of both meetings of the Town Council and I personally thought that way too little time was spent on this item. From everything I have heard it was a terrible purchase even if we needed the property.

I am trying to get current copies of the town residents email lists from the Town as they are public under the Sunshine Laws. The list I used was back from when they used to send out town hall meeting minutes in email format and is totally out of date.

Looking at the video I had a sense that some of the council members were intimidated by others and not very forceful in their opinions’. I don’t know but the whole thing just doesn’t seem right. I have had to get my water through Sunrise since I bought my house and have always paid more than regular Davie customers. However, to spend money on a maybe if project at this time seems ridiculous. To take it out of the Town reserves is more insane. Then on top of that their is broad consensus that what was paid was way over the real market value.

I would like to see the due diligence information as well as all environmental evaluations which should have been part of the process.

Bill Gowanloch
Davie, Fl

I agree I think the Council members need to explain themselves.

Subject: 12.5 Million land purchase

How about a public response….

from you and the other town council members….

Randy Mazie

poliakoff.com
Sent: Wed, Feb 10, 2010 11:50 am
Subject: RE: 12.5 Million land purchase

If anyone would like to discuss this issue with me please call me on my cell(954)559-5098

Thanks

Marlon

Subject: Fw: 12.5 Million land purchase

This land purchase deal stinks all over. We paid way too much for the property and it was pushed through with no notice to anyone. I wonder why. The three council members that voted for it won’t be reelected. The other two should have done more to slow done the process and make the deal more transparent to the residents. I am appalled. We are again the laughing stock of Broward

Bill Gowanloch

Davie paid a premium price for the land based on today’s depressed market, said Jonathan Kingsley, managing director for Grubb & Ellis Co. in Boca Raton and Miami. The town paid $12 per square foot, while today’s going rate is closer to $4 per square foot for vacant land in Broward County with that zoning, Kingsley said.
See Bob Normans Blog. http://blogs.browardpalmbeach.com/pulp/