Inquisitive about business and personal finance

NFLX headed down - how much?

2011-09-18T18:47:00.000-07:00

Recent few weeks have been disastrous for NFLX. With the peak of around $300 , the stock is down almost 50% in 2- 3 months. Competition and recent pricing of its DVD rental are two main reasons in additions to the recent pull back in the market.

I had previously written about NFLX when it was heading towards in my NFLX technical analysis blog I had written that the stock was in overbought range but never saw such a downturn.

Here is a chart from MarketClub with the fibonacci analysis of the stock since its major bull run since January 2010. Question is how low can this stock go?

Fibonacci suggests around $140 range. What do you think?

Disclosure: I am long NFLX.

Increasing gas mileage by hypermiling

2011-09-14T18:49:00.000-07:00

One of the key aspects of investing is also saving. Just recently I was driving my car when I was listening to this show on NPR. They were talking about something called as hypermiling. Never knew an official word for the term that some of us already use.

Back in 2008 when gas prices were at a rise people used Oil ETFs to hedge against increasing gas prices. If you buy Oil ETFs and gas prices move up so does theoretically the price of the Oil ETF. If gas prices take a dive you save money at the pump.

Lately gas prices are not in sync with the crude oil futures graph on gas buddy.

Of course you can go all green and get a electric vehicle. Can you do more with your car running on gasoline?

Yes here are couple of takeaways.

1. Brake less. Slow down from gas when approaching a red light. Caution: Look in the rear view mirror to see if you have someone speeding or bumping against you. Might be worth speeding up to save an extra buck or two. Also check if you can time traffic lights, you might need to accelerate in order to meet the next light. I usually pay attention to the sidewalk blinkers indicating that light will soon be yellow.

2. Start slowly: Dont accelerate and make that engine of your car work hard. Accelerate in stages with the tachometer needle not going past say "2".

Ofcourse maintain your car. Ensure that servicing is regular.
For more check out this link on marketplace.

Beware you might get some strange looks from people behind you and trying to overtake.

You might need to build up on your patience.

Need some practice to get used to the hypermiling rules.

Last but not the least check if you saved anything at the pump :).

Do you hypermile?

Weekend reads and comments

2011-08-28T13:47:00.001-07:00

I focus this article on some new terms I came across and an article I stumbled into.

1. Warren Buffett buys some BOA shares: As everyone knows . Warren Buffet bought some BOA shares and that lifted the spirits of BOA investors. While reading on, I also noticed that Warren Buffet bought some preferred shares with a dividend. Since I have been reading about dividend investing these days I looked more into preferred shares. These are a hybrid between stocks and bonds with the caveat of no voting rights including and less chance of appreciation.Investopedia and Wiki have some information on shares. Has any of the dividend investors invested in preferred shares?

2. Gold prices: Although GLD more or less accurately tracks the price of Gold I was looking at different gold miners that track the gold. Taxes for GLD are cumbersome and hence the need to look for alternatives.
I came across a seekingalpha article.
I would like to add RGLD to the mix . As Yahoo finance puts it, Royal Gold together with its subsidiaries, acquires and operates precious metals royalties. RGLD has been closely aligned to GLD than AUY simply based on end price results for various terms. RGLD has a higher P/E ratio: higher 50s. Market CAP is around $4B and average volume is less than a million.

Disclosure: I do not have any positions in RGLD as I write this article.

Dividend investing during bull markets

2011-07-20T18:37:00.001-07:00

Continuing on my series of posts around dividend investing here is another one.

With the recent slowdown in economy starting 2008, interest rates started falling short term borrowing interest rates have been near the 0% mark. Average certificates of deposit rates in the US have slumped, with current 1 year CD yielding around 0.9% average annually (according to bankrate.com) . During these times investors look for more return to their money and start investing in dividend yielding stocks. Capital /principal and steady dividend yielding is what investors look for during this time.

The purpose of this post is to check if dividend investing make sense when the interest rates are higher , the economy is doing well and CDs yield more.

Let us start with an example of the recent past. According to this source for this historical CD data Between 2003 to 2007 average one year CDs yielded anywhere between 2.0 to 5.4% annually respectively falling to 3.9%, the average being 4.0% . A CD return is one of the safest investments where the principal is guaranteed not to change.

During the same time let see the yield if a hypothetical investor had put money in the total stock market fund like VTI.

VTI started 2003 with a share price around 42 and finished around the same price by the end of 2008. During this time it gave dividends of 69 c in 2003 to a max of $1.15.
The yield on the above is anywhere from 1.6% to little over 3% and surely not beating the yield of CD. The capital / principal increase was almost negligible for this period.

The reason I selected VTI was to select one of the most stable or non risky investments in the stock market compared to the CD. I did not bring dividend re-investing or compounding interest in my calculations.Yes, one could argue that they could beat the market with another selection of stocks.

I did not compare selection during earlier bull markets however.

What are your thoughts? Are there more ways of looking at these scenarios.

Netflix: Poised to rise higher? Technical analysis

2011-07-13T17:56:00.000-07:00

Over the last few days, months and probably years Netflix stock has been touching new grounds and has been on an uptrend. When the stock broke the $200 barrier there were talks of it being overbought. Let us look at some quick technical facts for NFLX.

As you can see from the chart below the stock trades in a pattern from being oversold to overbought. MACD looks to be well in the high range and has been higher. I am beginning to think that the stock is in overbought range and we will see a pullback to the late 200s.

Courtesy: stockcharts.com

Moreover the stock trades or tries to touch is 200 day MA and seems to rise above it or go marginally below and then rebound.
Recently NFLX has been sharing some news about latin America expansion followed by change in pricing.

Is NFLX done with its run?

Disclosure: I am long NFLX

Dividends: Dividend reinvesting calculator

2011-07-08T18:55:00.000-07:00

I have seen some investment gurus always mention how good a dividend re-investment strategy could be. Recently I have been following some dividend stock blogs and am a dividend investor myself.

Always interested in mathematics I was curious how the numbers add up and what the compound rate of return would be under different scenarios. Let us start with a simple example:
Investment capital : $1000
Stock Price: $1
Yield : 5%
Dividend growth rate: 5%
Time span: 5 years.

I used the calculator here.

Total value of this portfolio without dividend reinvested would be $1580.88 and with dividend reinvested would be around $1,648.38. The net yield is 9.51 vs 10.51 respectively.

Lets play around with some numbers. Increasing the timespan to 20 years which is typically realistic with dividend or long term investors we can see the difference: 7.4% vs 10.5%.

If the stock price remains the same for 20 years with no variation one can get 5.16 vs 8.35 % for reinvested dividends.

Now if the stock price is 10% down annually in a timespan of 5 years then the ROI for the reinvested dividends is -3.43 which is lesser than -3.16. In my example if I set the stock price move to 5% down annually for 10 years then the dividend reinvestment scheme still proves better.

Overall I feel like a dividend investor should have an exit strategy just like any other investor. If the fundamentals for the company look good then reinvesting in a downtrend might be risky but worth it.

Before I forget, there is a definite tax advantage to these reinvested dividends which is a separate topic itself. But the flip side is that calculating cost basis for re-invested dividends could be time consuming.

What is your re-investment strategy? From most of the examples above it seems that re-investment does make sense unless ofcourse you want free cash flow.

To go , dine in or take out?

2011-03-21T18:02:00.001-07:00

Waiting in the line for Olive garden I witnessed atleast ten groups of people marching outside, all of whom had a take out bag with them.

The financial part of me started thinking about the comparative costs of take-outs, dine-in or the to-gos.

A typical dinner menu at a restaurant like Olive garden varies from around $11-$12 to around $20 . This might not include appetizers based on what you chose. For an average price of $15 with taxes and tip we round up around $36 for a dinner for two.

If you take do take left overs home and use it as next days lunch it counts for $36 /4 which on an average is $9 per person which is not that bad. However if your intention is to cover next day's meal with the leftovers then this is not a bad choice unless ofcourse you are too hungry or your whole intention was to spend time together and did not care about take-out.

On the other hand if you go for a buffett at a restaurant at night the pitfall is you pay the price pretty much for that meal and cannot take-out. That being said specials like the Sweet Tomatoes deals for $8.79 dinner specials still end up around the $9-10 average per meal.

Can take-outs be cheaper? Answer is it depends. If you already have some food and want something more substantial to make a meal,say like left over curry, combind with the fact that you want to watch a favourite movie at home then yes it makes sense to take out. Moneywise you might save tip if you are the kind who does not tip take outs.

This is ofcourse comparing restaurants of reasonably similar standards and not comparing fast-food or subway type of food outlets.

Ofcourse at the end it depends where you are comfortable and would like to eat.

Market correction analysis

2011-03-15T18:38:00.000-07:00

In my previous blog I mentioned that I was looking for a market correction around 12000. We did not have a correction at 12000 but we went ahead to around 12400 before make a dive and recent earthquake in Japan has left the down below 12000. If you take a look at a six month picture of the DOW we see a similar pattern in the last market correction in Novemeber 2010 when the DOW corrected from 11400 to 11000.

Should you be buying in this market dip?

Long term investors may look at this as a buying opportunity and short term traders may well think of looking to get in for few days. With previous market corrections some aggressive strategies that did well were finding most beaten down stocks in the current market correction.

Recently I have been following James Stewart from Smart Money. In his latest article he suggest these growth stocks when market makes a 10% correction which means a 2541 on the NASDAQ.

Market bears look at the volatility and uncertainty over impact of the Japan earthquake and predict that markets might go down further.

Last few days have seen some selling at high volumes and volatility which means there might be further downside potential. What are your thoughts? Will you be buying in at these levels?

Fibonacci series for this last bull run from 11000 to 12400 for the DOW returns 11544 as the 61.8% mark at which some support could be seen with the DOW bumping on these levels.

As for long investing I would add positions into my long term portfolio.

Market patterns and investing

2011-01-19T17:53:00.000-08:00

With the current bull market initiating around March of 2009 we see some dips or selling as the market continues to climb. One of the past two run ups one from February to May 2010 in which the DOW climbed from 10000 to 11200 and then from Sept to November 2010 when the DOW roughly climbed the same amount. If past is any indication of the future then will the DOW have a correction in February around 12000 ?

If you are a buyer: One theory in long investing suggests buying in an uptrend. However as everyone knows market comes down quicker and bigger than when it goes up. Should an investor take a risk in getting in the DOW ride or wait for a correction?

If you are already in a market and want to cash out you might be looking at good exit points:

Technical pundits typically will advise selling a stock when it moves below its 20 or 50 day line. Investors business daily has a small course on sell signals .

15 year vs. 30 year mortgage

2010-09-18T18:55:00.000-07:00

NPR's marketplace recently had a clip talking about how mortgages used to be 15 or 20 years and the great depression changed it.
The rationale behind this was ofcourse make house affordable, the catch - pay more interest over long term.
With people refinancing or moving this have changed recently but one is likely to end up in some other 30 year mortgage.
Hypothetically if someone buys a house at 35, and then switches to another one at 45 then the0 move could reset the 30 years till 75 past retirement age.

The goal of retirement at typically 70 is be debt free. If that's the case can someone who can afford the mortgage at 45 still be afford when 71? Who's responsbility is it to pay off the mortgage by 70 or retirement age?

One of the answers before the housing collapse would have been that in 10 years someone could have made some money in house price increase and then earn some equity in the next house. With the housing collapse this might make easier for some people who bought their houses way before the collapse and now get a good bargain for their new dream.

Thoughts?

How long will the market run continue

2010-04-17T07:39:00.000-07:00

Hard to say but one can continue to invest in this up market and have stops in the right places. Small caps might be a hit and miss , so for long term I would recommend large caps.
If you do want to get into small caps then ETFs might be worth the play.

Gold May analysis - recent run up !

2009-05-30T06:10:00.000-07:00

After my last Gold technical analysis in April gold has a run up.

Market club's monthly and weekly signals had given a buy since the 90 and 89 levels respectively. This may be mainly due to inflation concerns. 99 might be one big resistance that GLD needs to pass through.

RSI has reached around the overbought area but MACD is showing good promise. Going by last times runup ultimate top was formed when both MACD and RSI were at top.

Buy in next dip might be the right thing to do here?

Where is WallStreet headed? Commonly asked questions

2009-04-21T16:55:00.001-07:00

Everyone's cheering the upward move in the DOW, S &P and NASDAQ markets in the last few weeks.

There have been various theories as to what could happen next with the market and how long will this continue. I found a few which I can highlight here:

After a spectacular rally from the lows seen last month, the S&P, the DOW appears to be running into overhead resistance.

Click here for the video.

Investor Sajal has highlighted few key points in his blog in Seeking Alpha. Analysts are making different kinds of predictions from this being a bear market rally ready to loose steam or beginning of a new bull market to a bear market rally that will suck in more traders.

Mick Weinstein gives us a good summary at yahoo finance .

The coming few weeks are earnings weeks which is where the market swings in different directions in one-two day intervals.

In my opinion we will see some back and forth in some target area until earnings season is over. The direction of the market will be decided once the earnings season comes to a halt.

Thoughts?

Finance movies anyone ?

2009-04-19T13:45:00.000-07:00

If finance or business interests you, then probably you can relate to some movies that cover these topics. These Hollywood movies range from comedy to serious and depict how money can change lives.

1. Trading places: A rich guy and a poor guy end up swapping their positions in the game of finance. Watch Eddie Murphy and Dan Aykryod in this funny 1983 movie.

2. Office Space: This one brings the office to the movie theater. Tech programmers can relate most to this silicon valley comedy.

3. Wallstreet: This is about a WallStreet stockbroker who wants to get to the top by using both legal and illegal methods.

4. Rogue Trader: Ambitious, Nick Leeson finds himself as a futures option trader in this 1999 Hollywood movie. I have not yet watched this one. Any reviews?

5. Lost in America: Money Magazine brought this to my attention. Have not seen this movie yet . This 1985 movie depicts the life of a couple who start on a journey and lose their nest egg.

Do you have more to add to the list?

April Gold technical analysis - is Gold confused?

2009-04-11T13:56:00.001-07:00

After my GLD technical analysis in March I decided to take a look at GLD again.
Here is MarketClub's analysis.

Monthly indicator is bullish but weekly and daily are negative.

After being in an undecided territory GLD started its downward spiral making its earlier support now a resistance line.
Using some Fibo and Elliott wave theories I would guess the downward spiral might be of similar length given the one from 98- 89.
If the length of current decline is the same as the one before we would expect ten basis points from 94 which is around the 84 level before some rally.

RSI indicates oversold, MACD is in bearish territory for right now and volume is down. Need some volume to pick up upward trend. Thoughts ?

Tax time for gold or silver

2009-04-11T06:54:00.000-07:00

If you have enjoyed GLD or SLV gains in 2008, you might have had a tough time with reporting the taxes. GLD or SLV lists some monthly sells that it passes to shareholders.
They are also referred to as WHFITs (Widely Held Fixed Investment Trusts).
If you are using any software like Turbo Tax and use auto login's to your brokers website all of the above are listed as gains and added to Turbo Tax.
The issue is its difficult to list cost -basis and hence SPDRs shows how to report the gains. Please see here for details on reporting GLD.

PS: I am not a tax advisor/consultant. Please contact your tax advisor for details.

Some great shopping deals and sites

2009-03-29T11:59:00.000-07:00

I have been a fan of Fatwallet for quite some time now. Recently came through some good deals surfing around the site.

1. Cash back opportunity: Some participating stores offer cash-back if items are purchased via fatwallet. Common names are HP , Sears, hotels.com , etc. Fatwallet collects money in your account until a certain sum is earned and can then mail you a check. Recently while shopping for laptops I found this deal for HP. A 6% cash back for a $600 laptop amounts to around $36 of cash back. Not bad huh !
There are other sites like ebates.com that also offer cash backs.

2. Lending club is offering free $50 for opening an account. Lending club is an online peer-peer lending site.

3. Bank of America offering $50 on opening a new account.

4. When you sign up for veggie club in Sweet Tomatoes you can be eligible for a 15% discount while dining at Sweet Tomatoes. As I mentioned in my earlier post on Sweet Tomatoes have been known to occasionally send "buy one meal and 2 drinks and get the second meal free". I have been knowing of these deals for some time. This is not one I found through Fatwallet.

Please note that I have not personally verified #2 and #3 above.

Besides the above fatwallet lets you subscribe for alerts by entering keyword(s). For example if you are looking for a shredder you can request fatwallet to send you notification if anyone submits a new deal for shredder.

Other sites which are welknown in the world of deals are techbargains.com and slickdeals.com.

Gold technical analysis - different views

2009-03-21T16:03:00.002-07:00

Recent change in Gold price surprised some individuals who were basing their theories on pure tech analysis. Agreed that the gold chart was forming a wedge or trying to make a decision but this time the move was mainly in the up direction due to the recent news of some inflation starting to pour in the market.

Here is stock chart weekly analysis since my last technical gold analysis in early March

Looks like support is now becoming resistance. Lets see how the market shapes up.
Market club's monthly is still a buy:

Weekly is at sell since 88.

Looks like gold is starting is new bull. If it clears its previous highs of around $100 we will have a new target.

Gold technical analysis March 2009

2009-03-08T17:02:00.000-07:00

Latest gold charts and movements are here:

Marketclub's weekly, monthly and quarterly signals still signal a buy. The Daily chart which had signalled a sell now moved to a buy territory.

According to Fibonacci retracement we are in the first retracement level. Will we cross it or go down? Elliott wave chartists say this is the wave B?

February 2009 financial links

2009-03-07T06:50:00.000-08:00

Here are some cool links for February, more on the trading front since I wanted to follow the market closer. Everyone has their own theory regarding how low can the market go !
1. Carlfutia explains his daily trading lessons with his analysis theory based on George Lindsay.
2. Elliot wave and cyclic theory update in AllAllan's blog posts. The Cycles theory along with techsignal which is a specially designed software that performs scientific market prediction with spectral analysis, synthesis of cycle events, and more.
3. Miranda Professional Blogger's interview by HIB.
4. Michael Lomker trying to make his market speculations in his blog.
5. Dshort comparing bear S&Pmarkets quite nicely.
6. James B. Stewart's theory of buying when the market falls 10% and selling when it goes up 25%.

Dow to new levels !

2009-03-02T17:11:00.000-08:00

Dow breaks to new prices , what's next ? Elliott wave theorists predicts move up to wave 4 which means a rally. Robert Prechter recommends covering shorts after more than a year. What does that mean? Stocks up for a run?

How low can the Dow go?

Short Gold technical analysis

2009-02-25T17:11:00.000-08:00

We looked at the technical analysis of Gold in my last post. I was tempted to a short one today based on the latest happenings based on the ETF GLD

Recently GLD has been dropping and the close for yesterday seems to be a support for 20 day EMA and also one last high.
MACD indicators say we are in slighly overbought market.

Daily chart indicator using trade triangles gave a sell signal at $95. Weekly charts still have the green signal.

Personally I think 20 day EMA and 50 day EMA could be very short term support levels for some intermediate term fall.

Allan's recent Elliott wave blog posts have been saying we are in declining Gold.

What are your thoughts?

Quick fusion brunch food for the economy

2009-02-16T06:18:00.001-08:00

After posting about January effects and gold analysis I wanted to change the subject from the sour economy to something tastier. Here I suggest a simple brunch recipe which gives one energy to sustain and blog in this economy :).
Its called the Avocado fusion sandwich.

Ingredients:
1. 2 slices of multigrain or wheat bread or which ever is your favorite breads.
2. 1/2 Avocado ripened.
3. 1 teaspoon Salt
4. Pepper as per taste
5. Few Baby Spinach leaves
6. 4-5 slices of cut Cucumber
7. 2-3 slices of cut Tomato
8. Indian style dry peanut chutney 2-3 tea spoons

How to make it:
1. Mix the avocado, salt and pepper into a paste and apply to one side of the bread.
2. Top it off with peanut chutney, cucumber and tomato.
3. Spread the spinach leaves on the top.
4. Cover it off with the other slice of bread.

Cur into a triangle to make it look good ! Done.

Where is gold headed ?

2009-02-15T19:57:00.000-08:00

I have been doing some research on technical analysis over the past few months - using technical indicators and marketclub triangles to figure out directions of some common names.

With the decline in stock markets , Gold has become a safe haven for investors and has recently sparked a rally. I usually track value of gold using the ETF GLD.

Marketclub's weekly trade triangles are pointing to an uptrend with both the weekly and daily triangles being green. Here is a weekly chart of GLD.

Let us use the common technical analysis signals using stockcharts.com's interactive signals

The trend line in solid blue indicates strong uptrend however the MACD and ROC signals indicate almost oversold signals.
The stock chart is above the indicator for 20 and 50 day EMA. For a horizon of a month or so the stock looks to be in uptrend with dips.

For a longer horizon the charts below seem to suggest that GLD is well above its 200 day EMA and also broken a key downturn trend.

Do you think Gold is overbought?

Disclaimer: I am currently long GLD. The above indicators are the authors view of the trend from various sources and investments should be based on risk and self assessment.

2009 January effect - did we see one?

2009-02-07T18:27:00.000-08:00

In my last post at the beginning of January titled 2009 January effect we said that many investors believe that January is the month of high returns , particularly for the small caps.
Well, lets check it out:

The NASDAQ ETF QQQQQ moved from 29.46 to 29.06 closed basically flat throughout the month.
I was looking for something to track the small cap market and quick google searches yielded Vanguard Strategic Small-Cap Equity Fund (VSTCX). Dec 31st prices closed at 12.15 and at Jan 31st the fund was at 10.87 down slightly less than 10%.

The S&P 500 went from 902 to 825 down almost 10%.

Essentially looks like all the markets were down in Jan. Is that because we had a stellar December? Did people not have money to reinvest in January?

Looks like investors, still unsure about the economy stopped from putting long orders in January. Lets hope the future months will see a rebound into the positive territory.

Links and new sites for January 2009

2009-01-28T17:53:00.000-08:00

Looking back at January I would like to share some links that I gathered over in January 2009.

1. The Dividend Machine introduced by HappinessIsBetter. HappinessisBetter gives details on the interview with William Spectrino and how one could use stock dividends to achieve financial independence.

2. Interested in free technical analysis of stocks ? Ino.com owns Marketclub.com which gives free technical analysis on a stock with ratings. Sample Forex training video link provided in my previous blog entry .

3. The Wild Investor introduced me to Stocktwits where community members share stock ideas real time.

4. Tickerville. Anyone interested to knowing about technical analysis of the current market and where its headed. Tickerville gives round up of important drivers of the market every couple of days.

5. Interested in learning about Elliot waves and how its useful predicting the markets Allan gives a good insight into technical analysis and his stock picks.

6. Steve features in MyWifeQuitHerJob.com. His blog was recently featured in TV. Check this link.

7. Informed trades gives a daily roundup of technical analysis of markets along with currency trading.

8. Interested in buying stock Warren Buffet style. Mark gives his view of the market and stockpics at Buylikebuffet.com.

9. My Money Blog continues to recommend few money saving tips and some credit card offers and links to cool coupons.

10. Interested in learning about other people's opinion on a particular stock? Check out WikInvest. You can read buy and sell recommendations on a particular stock here.

11. Want to have some free stock picking links? Gorilla Trades is offering free one week access to their site.

Please share more links with me and we can all share the links or follow me on Twitter.

Forex trading explained

2009-01-17T20:05:00.000-08:00

If anyone is interested in Forex trading and wants to know how the following article from Marketclub.com explains how easy it could get.

The foreign exchange market is the biggest market in the world by far. It is traded all around the world, six days a week, twenty-four hours per day.

So today we're going to look at the Euro (EUR) against the US Dollar (USD). Here are some Market Club signals that were generated by their "Trade Triangle" technology.

This new 7-minute video explains some basics of using the trade triangle technology. It is available with no strings attached.

It is very important when you are trading in any market to be very, very, disciplined. You must also have a game plan and understand the rules of the game. If you get into forex trading just on a whim, you're going to be burned... that's almost a definite. If you approach the forex markets with respect and a game plan, you can do extraordinarily well.

The triangles have worked very well lately with the markets.

2008 invesment post-mortem and tips from investment gurus

2009-01-10T06:42:00.000-08:00

Writing up some lessons learned in the brutal 2008 investment year. The DOW lost more than 30%, the NASDAQ and S&P also in the similar or more extreme ranges.
Like most of the crowd my investments performed no much better. What are the lessons learnt and some tips from investing experts which I could have applied for my 2008 investments.
1. Buy and hold might not work all the time. I mean it can if your investment horizon is beyond the bear market zone.
2. Book your losses and help your 2008 tax returns. Once can claim up to $3000 in one tax year provided the same or similar investment is not bought within 30 days. This is the wash sale rule. A strategy suggested by a blogger and the comments there in suggest to sell the fund/stock and then buy back after 30 days . Caveat is one might lose potential gain within the 30 days lost. Other choice is to buy another investment in next 30 days.
3. Investor Business Daily(IBD) suggested cutting losses greater than 8%. Lesson learned: An 8% loss takes 10% gain to make it even. This strategy would have saved me a lot in 2008.
4. Invest in certain cyclical companies - eg. Walmart during downturn. Keep a small goal for return and book profits and cut losses. I do not hold Walmart at this time.
5. Being long in bear markets is risky. If shares are bought then buy and hold will not be a good strategy.
6. Even if I would have followed the 200 day EMA then the long term entry or exit points would have established.
7. Look out for strong sectors and stocks within these sectors (Cramer & IBD).
8. "The stock market is always looking 6-12 months down the link. Present losses are already taken into account". I partially agree with this. The market direction is set this way but day to day dips could be caused due to real time news.
9. Investor Business Daily states never average down. I am not sure if I completely agree with this. Average down with a single company stock could be bad but with a fund might not not so bad.
10. And finally do a post analysis of your buys and sells (IBD) and note them on the stock charts. As Cramer puts it put 1 hr per week per stock.

Can you share your 2008 investment thoughts?

I Bonds or I Savings bonds vs. Certificates of Deposits

2008-12-26T19:39:00.000-08:00

The other day I was wondering about long term investments , something with a horizon of 5-10 years and I came across I bonds or I saving bonds.
thanks to a friend who introduced to me these safe government protected investments.

According to ibonds.info "Bonds have a one year minimum hold time in which the bond can not be redeemed. Additionally, bonds are subject to a 3 month interest penalty if the bond is redeemed within 5 years of the issue date. Similar to other US Treasury Bonds, I Bonds continue to earn interest for 30 years. After that time, the matured bond is worth the face value plus the interest collected over that time."

The most logical comparison that arrives at one's mind is between a CD and an I-bond. How does an I bond differ from
a 5 year CD.
1. CD's rates are fixed for the entire duration of the term. I bonds are inflation protected and have 2 parts , one called the fixed rate which stays the same for the entire duration
of the bond and a variable value which is tied to the inflation core index
2. One can withdraw money from a CD even before one year with an associated penalty ofcourse but atleast its an option.
3. With most banks money withdrawn from a CD before maturity is subject to three to six months of interest. Money withdrawn
from an I bond after 1 year is subject to similar but not neccessarily same terms.
4. Current rate for an Ibond is 5.64 % which ofcourse can and will change in the next five years. CD has constant rates of maturity
5. CD is protected by FDIC values whereas Ibonds are backed by the government.
6. According to ibonds.info "The federal tax can even be waived if the bond is redeemed to pay for education costs." This definitely not the case with CDs.

I bonds rate are weighted more on the CPI or variable rate rather than the fixed part so one should typically not wait till fixed part is higher. Essentially these are inflation protected investments.

Interest accrued on I bonds is on the end of the month, so its advisable to invest towards the end of the month.

Please note that I have not compared I bonds to other available government bonds in this article. CDs are something that naturally occured to me and hence the
comparison.

Is this a safe longterm investment in this recession season?

The January effect: Lets discuss about the 2009 January effect

2008-12-21T20:22:00.000-08:00

It is believed that in January, particularly during the first few week(s) has witnessed gains not seen during other months of the year. According to Wikipedia link for the January effect it is said that this may happen due to profit gains taken in the prior
year for tax purposes and investors put their money back in the market for re-investment.
To see if this really worked lets take a look at the past few years return for the NASDAQ index QQQQ.
In Jan 2008 we saw that QQQQ went down few percentage points. 2006, 2007 saw a modest gain , whereas 2005 saw some decline. 2004, 2003, 2001 and 2000 had some gains
whereas 2002 had a loss.

This result was based on the NASDAQ index. One might need to take into consideration other indexs or stocks (NYSE for example) particularly.
AS per this article it is said that small caps have had some
noticeable returns in January.
However one needs to be extremely cautious to trade small caps such many of them are not doing perform very well.

On the contrary if one could wait till January to sell the stocks the losses could be minimized. This is just another view of the same idea.

Other theories behind the January stock rise state that a lot of people might be getting some year end bonuses or some wait till the new year to start afresh. Cash strapped investors are seen selling just before big holidays -eg. Christmas to raise cash for gifts.

We will analyze the market towards the end of January 2009 .

What will happen in 2009? Will it show a January effect or have we seen a December effect already seen we are in the oversold region already? Please share your thoughts.

Order of the rising sun

2008-11-09T08:37:00.000-08:00

Slightly away from the topic of finance and business I am dedicating this blog entrt to my father - Ramesh Divekar.

Ramesh Divekar, has been awarded the "Order of the Rising Sun, Gold and Silver Rays" (Class V- Culture) in recognition of his outstanding contribution by His Imperial Excellency the Emperor of Japan .

The Order of the rising sun is the second most prestigious Japanese decoration after the Order of the Chrysanthemum.

You can find more information in the Order of Rising Sun WIKI

The official announcement was done on 3rd November, 2008 in Japan, (The cultural day of Japan ) in Tokyo and he will actually receive the award at the Consulate General of Japan, Mumbai , India on December 4, 2008 at a special function arranged in his honor by the Consul General.

Mr. Ramesh Divekar started his career to the land of the rising sun since the dawn of the 1960s , 1963 to be precise. You can find more information in Wikipedia's link .

Ramesh Divekar is the founder of 3smartmonkeys.com.

India Rising!

2008-10-18T18:44:00.000-07:00

Recently a friend of mine forwarded me this video recorded by PBS and termed "India Rising". You can view the video at PBS's website.

The video's main focus is a town Pune, a growing educational town situated 100 miles east of the main metropolitan of Mumbai in Western India.

India's GDP is on its boom in the last few years, recording 9.1% growth in the 2007-08 timeframe according to wikipedia.

The middle class can now afford a lot of commodity items that were taken as granted by rest of the world.

Indians now are shopping in malls for microwaves or refrigerators and also buying condos and driving comfortable automobiles.

To me the above change has already been in place for a few years, but its only recently that its started making news in mainstream America.

Express India's rising food prices article gives the views of President Bush on the same.

What do these economic needs of China and India mean to the rest of the world? There is only so much in the world and one argument is "Should we not share what we have?" Is this the price the rest of the world will have to pay when The World Is Flat?

One positive outcome as depicted in the video is that it encourages innovation by the rise in competition.

Thoughts?

Dollar cost averaging - Another view

2008-10-09T17:10:00.000-07:00

Image courtesy:about.com

In my earlier post about dollar cost averaging or long term investing during down markets I had written how it was beneficial to dollar cost average during a bear market.
This morning I was looking at another article on Investor Business Daily's newspaper. They had a small article on dollar cost averaging specifically for down markets or during markets with bearish trend. This article featured under their Myth Buster title titling "Averaging down can be a poison". The author takes an example of Lehman brother's stock and how one would have suffered major losses in such a condition and instead ask to dollar cost average in bullish markets.

My takes on this and comments are slightly different. My focus would be to dollar cost average on an index vs. a stock. Thus if any particular stock is burned then my risk of loosing all my money is certainly lessened.

The article took an example of AIG and explained how an investor would take ages to get back the fortune spent. I would have rather put money in the finance sector, probably in an ETF or a mutual fund.

Of-course buying during market correction is a better strategy but then who can identify a bottom and then a correction.

One strategy recommended which I might partially agree is too sell off if losses get steeper than 7-10%.

What do you think?

Energy saving tips for today's economy.courtesy Food Network

2008-09-30T18:34:00.000-07:00

With the recent downturn in the economy and increase in gas and fuel price everyone is looking for money saving tips. These money saving tips could be energy saving tips or gas saving tips or even grocery saving tips. In my previous post I talked about a healthy and moderately priced dining out options in the rough economy and recommended Sweet Tomatoes.

Lets see some myths transform into energy saving tips.

Ever thought of cooking salmon in a dishwasher or cooking an egg over your car engine?
Recently while watching the Food Detective Show on Food Network TV I came across these crazy ideas or myths as you call it.
Ted Allen runs the show covering myths around food and drinks along with some not so usual energy or money saving ideas.

How to cook a salmon in a dishwasher:
1. Take an aluminum foil and then apply some olive oil at the bottom.
2. Lay your raw salmon on the oil and then apply some lime juice over the salmon.
3. Carefully cover it up with one more layer of aluminum and then wrap it up nicely so that soapy water does not get in.
4. Load it in your dishwasher with all those dirty dishes.
5. Start your dishwasher with the normal or full cycle.
6. Sit relax and enjoy! At the end of the cycle take out the covered foil and unwrap to see what happened to the salmon !
Food Network claims nicely cooked Salmon thanks to the heat that the dishwasher creates to properly sanitize the dishes.

Late for breakfast , got to get to work quickly? Take that egg break it up and carefully wrap in layers of aluminum foil layered with olive oil and open your car hood. Place it on an engine so that the aluminum bundle with the egg in it does not spill over parts of the engine. The car hood should hold your egg with all the aluminum is in place.

Drive to work , your egg's ready.

I have not tried any of these saving tips but thought these as being quite unusual and worth sharing.

What are your thoughts?

Dining in today's economy

2008-09-28T16:06:00.000-07:00

Image courtesy: http://www.souplantation.com

As most of us know Sweet Tomatoes is one of the famous salad chains in northern US.
"Sweet tomatoes", "Sweet Tomatoes coupon", searches are on an increase in today's economy. I made a quick google adword tool keyword search on Sweet Tomatoes. I saw the second most searched word for the keyword "Sweet Tomatoes Coupon".
Is this the result of people looking for cheap dining options?

If you are looking for a cheap option to dine out with the opportunity of eating healthy Sweet tomatoes is a great option. For around $7.5 for lunch along with a chance to get 10-15% off if you join their veggie club one gets a choice of plenty of fresh salads.

Feeling bored with eating the same salads? Sweet Tomatoes has been creative in creating an Asian week or a Mexican food week where customers get to taste some delicacy.

We recently got a chance to visit the Sweet Tomatoes Asian Week and we thoroughly enjoyed the Asian Ginger broth Soup.

Looking for some Sweet Tomatoes coupons? Type "Sweet Tomatoes coupons" or check out links like this.

If you have more of such ideas please feel to free by leaving a comment. Thank you.

Promote high traffic blog using StumbleUpon

2008-09-23T18:51:00.000-07:00

Slightly shifting from my normal finance entries this note is about promoting a blog in general. Recently I came across Problogger's how to promote young blog and have started taking steps towards the same. The big catchaway to promote young blog to become a high traffic blog is to network on StumbleUpon. I have been a passive user of stumble upon.

Leaving the "Stumble Upon" issues aside I am starting the network on StumbleUpon to attract people with similar interests.

Sane Investing in an Insane World - review

2008-09-07T09:10:00.000-07:00

Recently I have been reading this book . Definitely some takes and some "non" takes from the book. Cramer goes over different stocks to be purchased at different times in the economy. Once an industry is picked , next is the choice between various companies within it.
Here are some guidelines that are outlined in the book for comparing stocks in an industry
1. P/E ratio, this seems to be the #1 principle.
2. Growth rate of a company: Online sites like thestreet.com or reuters or yahoo finance will list the rate the company is growing. This should be in sync with the growth rate.
3. Dividend comparison: Yield is the trick, Compare yield vs. the actual dollar amount of the yield.
4. Think outside the box: Real business world. Are there some take over or other orders lurking for the company?

5. How does the company perform vs. S&P 500. A bargain is a company with P/E lesser than the industry but has better sales and earnings faster. For example in the current market non cyclical stocks would normally outperform the other ones in the market.

As an example Coke vs. Pepsi comparison is listed at http://seekingalpha.com/article/91789-coke-vs-pepsi-cramer-s-mad-money-8-19-08 Seeking Alpha

More useful tips coming up in the upcoming blog(s).

Disclaimer : Author does not hold KO or PEP at the time of writing the blog and is provided as an example.

Your money or your life

2008-08-23T16:07:00.000-07:00

Recently glanced through this book, especially the section covering the crossover point which signifies "financial independence" after mymoneyblog wrote up an article on this. This point dictates the start of financial independence when your passive income (income generated not by working at a job or business) exceeds your expenses.

The author describes the crossover point by means of this simple figure.

Figure courtesy of the book : "Your Money or Your Life" and mymoneyblog.com.

The author uses the treasury note rate of return to calculate annual return of investment.

Consider the savings invested 60% in one year CDs and 40% in stocks will earn an interest/rate of return of around 4% and 6%(typically stocks should return more) to give an average of 5 % rate of return.

$100k will earn $5k per year or $416 per month before taxes. In reality it will take a long time before which the monthly investment come will touch the line of tip over of financial independence which is the expense line.

However I see that a few milestones could be derived from this discussion. Complete financial independence is the ultimate goal but there could be minor goals on the way. One common example is grocery or eat out bills. This I call as food independence as seen in this example.

There could be other milestones built on the same fundamental idea.

Essentially an individual would like to track the performance of passive investment making some intermediate goals along the path to the final goal.

The crossover in my mind is not a single point but a range. I will discuss that in a separate post.

What happens when the dollar shrinks ..

2008-07-28T17:23:00.000-07:00

Especially when $1 = Indian Rs. 1

Over the past few months the dollar has been declining against the Euro. This spurred me to think of some discussions I had with friends a few years ago.

The talk was centered around immigration into the US and what makes an individual leave her or his country to go for better prospects in a developed country like USA.

There are various reasons why people move : better job prospects, lesser political tension, better infrastructure support and last but not the least is money driven by growing economy.

In his book "The World is Flat" Friedman talks about how jobs have moved from one country to another largely due to the growth and advancement in technology which link the developed and developing nations.

Today jobs are shifted overseas for getting the same done cheaply. What does one spot at the end of the tunnel?

Today the value of $1 is approximately Rupees 40 in Indian currency. Will a perfect flat world be considered when $1 = Rs 1 or 1 yuan or 1 pesos?

Rather than going into how this could happen lets consider if this does happen what kind of effect will it have. I surveyed a few Indian friends I have and most of them said that Indians would return back to their country since the whole purpose of them coming here was to make money and if thats no longer true then there is no incentive to stay.

That was an immediate reaction. If one thinks more about the same thing. If $1 would become Rs. 1 then will American businessmen see any point to outsource? Will that mean all centers or outsourced jobs would come back to the US?
What would that mean for the Indian economy? Will it fear to lose all these jobs or think of outsourcing them somewhere?

There are some that move to other countries to attain more freedom and just to run away from their home land if the lifestyle back home is not to their liking.

I also spoke to some of my Latin friends , one from Venezuela thought that the baby boomer generation might move back faster if that happens.

The general feeling I got was life after retirement is easier in one's home country.

These are my general thoughts thinking about the same. I will jot down more. I welcome a discussion here :)

The World is Flat or Spiky - free trade analysis

2008-07-04T12:25:00.000-07:00

Further on the analysis of "The World is Flat " By Friedman.

On the aspect of "free trade" Friedman explains how outsourcing or globalization might be good for all countries. He sites an example of "free trade" between US and China , these two being the only countries of the world. This will create additional resources in the market. If US had 100 people and China had 1000 people then the total number will be 1100 peoplewhich was described as win-win situation for both countries.
If this does happen then certain low level jobs in the US will go to China and these people will need to bump themselves up in the vertical markets which means higher education.

As globalization of flattening continues the population in the developed countries will need to prove themselves by competing with someone thousand miles away. Education will be an important criteria and we might see an increase in the number of applications for colleges.

At the same time the people in these developed countries will now be made to think to ensure they serve the higher 1100 vs. 100 people market. That is a stimulant or an incentive for business ideas.
I still think low skilled people will need to worry if education or intelligence is not their piece of cake and surviving in the flat world might require them to move to other low level skilled jobs which cannot move to China.

This movement of jobs creates a stiff competition in the developed countries. Pay rises increase in software tech industry in India is cited as an example in the book. Will it ever grow to the level equivalent to the US? If that becomes a reality will outsourcing really stop?

At this point the question that comes to our mind is outsourcing done to save money or improve quality or both?

The World is Flat can be interpreted in a few different ways. What is the true example of the ideal flat World? Is it that each person is self sufficient in their own country? Does that mean that less people will now migrate to US from Asia or Latin America since now there is a state of equilibrium established? Yes, there could be temporary assignments if this "free trade" continues.
For that to happen the first thing is that money across the world also becomes flat. Will that world be called "Money is Flat" and we just trade in one currency?

Will it happen that capitalistic minds in one country fierce in competition in the other ?

In this article on "The World is Spiky" found at http://isites.harvard.edu/fs/docs/icb.topic30774.files/2-2_Florida.pdf the author talks about the spikes in geographical concentrations of economic activities and notices the spikes at many. He also notes that innovation is concentrated in just a few countries in the world and argues that the World is Spiky. An example cited in the article is that people in urban areas of China makes 3 times more money than the same in the rural areas.

The above example cites a different angle of view for the same or similar idea of the flattening world.

The World is Flat - review

2008-07-04T11:37:00.000-07:00

Recently I have been reading the book "World Is Flat" by Thomas Friedman. One good thing about the book has been it has brought alive a lot of interesting historical events which were stored in our grey matter somewhere. Since there are so many facts brought about in the book its hard to recollect all .. a blog to share might we worthwhile

I had some interesting take aways in the few chapters I read in the book.
Take the story of how Walmart grew and does business with its "Everyday low prices". One thing that Friedman points out intelligently in one of the chapters is how the society pays for the above in an indirect way. He takes an example of how Walmart insures its employees and makes a point in saying that the society indeed pays for the "everyday low prices" through tax money whereas Costco does do the opposite but thats what a citizen in many may demand.

Very interestingly Friedman has made some points alive like "income levels of people who shop at Walmart, Target or Costco"? Why is it that some people pay more to get the same thing at other place - is it because of convinience or simply a matter of principle?

More of the World is Flat to continue in my next writings....

Long term Investing during down markets

2008-05-16T21:25:00.000-07:00

People are always looking for ways to make money. In a uptrend market no one wants to miss a boat and in a downturn is always about how can I recover the lost dollar.

Investing during down times could be hard especially around the pessimism that may surround the news. It's been said that more or most returns could be fetched by investing in a downturn.

Although past is not an indicative of the future lets take a look at examples of investing in some bear markets in the past and how investing during bear markets can have profits of its own.

The rule is start systematic investments(SIP) for every specific period in a bear period until the next positive trend or until the value at last instance is lesser than the current one.

Let us start with the oil crisis in 1973 which started around October 1973 which further led the downfall to the stock market. Assumption is that one started investing in the NASDAQ index back in June 1973 in a systematic investment plan until say September of 1974 . Between this period the NASDAQ went from 108.54 to around 59 with SIP of $100/month. For a period of 15 months this would mean an investment of $1500 with an average price of $84 for the index with roughly 17,85 shares.
courtesy:finance.yahoo.com

Lets consider the same investment plan for investments into savings account at the same timeframe with an average of an savings interest rate from 10% to 6% (source http://en.wikipedia.org/wiki/Image:Federal_Funds_Rate_%28effective%29.png ). This is effectively money wit 8% rate of return for a principal of $1500.

Lets first have an investment period of 5 years by which the NASDAQ index went up to around 130 which (not inflation adjusted) is an increase of roughly 54%. This money will now be taxed
Our initial investment now in the share market is worth around $2321 (which after tax will be $2115) whereas our money in the bank would have grown to around $2007 with the assumption that the tax bracket is 25% and the money is kept in an after tax account. The net (compounded interest) gain here is 33%.

This is money I consider good for a long term investment (5- 10 years) vs. a very long term (more than 10 years) investment.

Applying the same hypothesis to other bear markets in the past from 2001 - 2003 and the 1979 energy crisis yielded promising results. A larger bear market meant more time to stay put into the SIP but saw good yields thereafter.

There are some assumptions made in this theory: Investor is starting to invest in the fund at this point or does not already have an SIP in the same fund from an earlier time.

In my second article I will try to analyze if buying during a bull market is lucrative. Stay tuned and let me know your thoughts.

The bear market investing for longer term looks to be lucrative.

Personal Inflation - whats yours?

2008-04-27T11:05:00.000-07:00

According to the wikipedia the definition of Inflation is "a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services. In either case, it is measured as the percentage rate of change of a price index."

Inflation (to a certain degree) in general is useful for the economy as it forces spending and re-investing in the hope that prices will increase in the near future and helps one to lock down a price.

Inflation is one buzzword that one may be hearing a lot these days. The CPI (Consumer Price Index) or COLI (cost of living index) are some of the measures of inflation. COLI gives an estimated comparison between two regions and is useful when moving jobs or to different cities. Attached link provides one such comparison. Another example is CNNMoney's site.

How would you compare the inflation affecting you? One quick measure is comparing the grocery and other bills you paid vs. the one paid this year. Well, it really depends, can compare how much house prices and other things went up as well.
In general a rule of thumb would be to compare how much things that you require everyday went up. That would give you a sense of the net affect to you. Then there are indices - virtual which went up by a certain amount only if you counted them. One such example is housing cost. If you are not shifting to another house then the house price increases or decreases will not affect you directly.

I found such personal inflation calculators online as well. Taking into account one's personalized inflation one needs to observe that re-investing or salary increases are growing at atleast the same or better rate otherwise you are making a loss. vs a visual profit.

The main factor in inflation at least in the US is gasoline. So much depends on it. Often you will find just a single person driving a car unless of course one is making use of the HOV lanes. Public transport being such a scarcity people are forced using their automobiles. The real question is when will people seriously consider using the public transport more seriously and make their local cities think greener !

Bank of America - keep the change or eliminate the coins?

2008-02-17T08:25:00.000-08:00

Over the last few years Bank of America has been publicizing its keep the change program . Essentially Bank of America rounds of what you pay to the nearest dollar. Thus if you buy a burger for $3.49 , Bank of America will round it to the next logical figure of $4. Bank of America will match the keep the change for the first three months and then match proportions for the same. Interesting program!
What amount do consumers pay tax on ? $3.49 or $4.0. Bank of America might make some
I had heard of a similar thing used in the movie "Office Space" where the IT Geeks rounded off every transaction to the nearest dollar amount and won themselves a fortune.
Whats so great about this? My guess is that this is meant for lazy people who do not transfer from Checking to Savings account immediately and loose the interest OR its good for people who do cash transactions and loose cash all the time.
According to the article about 25 million people do not have bank accounts .
In relation to my earlier post about coins been eliminated - could the above be one way of starting it OR do we not need it once we get rid of those pennies or nickels ?

Small denominations - should they be eliminated?

2008-02-17T08:15:00.000-08:00

CBS 60 minutes last week talked about "Should we make cents". Here are some of the takeaways summarized

1. It takes approximately $134 million in cost to make $80 worth of pennies.
2. Pennies are made up of approximately 98% zinc the cost of which is spiraling over the last few years.
3. Its illegal to use these coins and resell them for the metal.
4. Kids used to collecting pennies or nickels will now have to search for something of greater value to start putting in their piggy bank.
5. Rounding off will cost Americans approximately $600 million a year.
6. Americans waste approximately 2.4 hrs a year counting pennies ! Is it a lot?

Some thoughts on the same:
Most of the things in US have a price tag of .99 , 9.99 or 99.99 are common examples. Will they get rounded off to the next digit ? If these are taxed items the taxes of these could be adjusted to rounded off to the next divisible by dime or 10 value !
This will be a one time inflationary hit that will be felt.
Some people have pointed out the 9/10 value thats commonly seen as gas stations. How do we account for that?

Most of the money is nowadays paid on credit or electronic media. So, that gives a lot of freedom on not producing pennies !

What do we do with our existing pennies or nickels if they are stopped ? Bring it to n exchange center where you get back the equivalent back and the change in electronic form?

OR last but not the least - make paper money for these small denominations?

taxable vs. tax advantaged accounts

2007-12-27T20:25:00.000-08:00

I've been always thinking which one should one choose if they have money after tax with them.
Should one invest in Mutual Funds/stocks in IRA (Traditional for this calculation) or in a taxed account?

Assumptions to max some sense:

Traditional IRA contributions are after tax money contributions
Principal : $4000
Gain per year : 10%
No further investments
Tax bracket : 25%

Age: Atleast 20 years away from retirement

With a 25% tax bracket and no annual increase in contributions this value will grow to $8244 in a taxable account or $10375 in an IRA account. If one withdraws from an IRA prematurely with a 10% penalty the value of the IRA will be lesser than the taxable account at this stage.Assuming a linear increase in the yearly rate of return the average is $671.5 /year = $6715 for 10 years.

10% penalty on $6715 = $671.5

10 year analysis
Total value of IRA on early withdrawal
10375 minus 671.5 minus 1678.5 = $ 8025
Total value of the taxable account = $8244

An analysis after 20 years reveals that the taxable account is still better if one wants to withdraw money. Will you need the money until retirement is the question ?
If not then traditional IRA is certainly a good investment.

One can use the tax calculator here

Thoughts?

Social security tax limit

2007-12-21T12:56:00.001-08:00

SocialSecurity.gov has this information about social security tax limits.
The limits for social security go up every year. For employeed individuals it is 6.2% on earnings up to $97,500 for 2007 and will go up to 6.2% on earnings up to $102,000.

According to the Wiki in the US "Once that amount is earned for a given year, neither the employee nor the employer owe any additional social security tax for that year."

Please refer to IRS publication 15 for details.

More searches on this yielded the fact that individuals might see " Social security limit reached" in their paycheck.

Sharebuilder from IngDirect

2007-12-20T18:05:00.000-08:00

Share builder from ING direct is the new thing. This promises $4 for stocks with automatic investment plan !
Comes in three flavours: Basic , Standard and Advantage.
I will look into this more and come back with details !

I found that someone has already done an analysis. You can find it here:
http://www.mymoneyblog.com/archives/2007/12/better-way-to-invest-with-ing-direct-sharebuilder.html

Check scan at Bank Of America ATM

2007-12-20T17:29:00.000-08:00

As I pulled into the Bank Of America ATM this evening I was amazed at their new ATM technology. I did not have to put my check in an envelope. Thats actually a double bonus for me as most of the time I forget my pen somewhere and gives me a sense of frustration. The nice thing about the check scan is it shows you the check scanned and amazingly the check value gets put in automatically in the value amount. This might have been out for a while but not at my other bank - Wachovia. Others out there - therez definitely a lot of innovation still yet to come ! As always keep thinking and be inquisitive.

Bank Of America Risk Free CDs and free trades

2007-12-20T17:28:00.001-08:00

Recently (its been a few months) Bank Of America has announced risk free CDs. These CDs give a new dimension to investing CDs. Here are the highlights - Withdrawal is free after 6 business days of opening the CD. - Minimum balance required is $5000. - Non US citizens cannot get the online 0.1% APY additional rate and must go to the bank in person. If you are lucky you might get one done on the phone - Withdrawal can be done at anytime but must be made in person. - Time limit is 9 months. With $25000 across all acounts, BOA lets you open a trading account with $0 per trade for the first 30 trades a month. I've heard that the trading account doesnt give one all the fancy tools to analyze stocks.. More to be found