Archive for March, 2012

Spring III

March 24, 2012

We’ve had another really warm week with records highs being set all over the Upper Midwest and Northeast.  I rode to work and back Wednesday and Thursday and Thursday afternoon got caught in a rainstorm but pedaled out of it somewhere between Cottage Grove and Madison as the cell was track straight North.

The plants are going nuts, loving this weather.  Even the plants along the North side of our house are emerging.  There, the shooting star has leafed but not bolted, the wild ginger’s leaves are pointing upwards but not yet unfurled, the columbines are now tight clusters of whorled leaves, and the twin leaf looks ready to flower.  In the front, the Canada anemone has formed a 60% mat and in the back the ostrich ferns are just starting to emerge.

This morning we all walked over to Olbrich gardens and saw flowering cherry trees and the crab apples look like they will be flowering within 2 weeks.  Annabel had a blast running around exploring and Zoey took a nap in the stroller.  Perfection!

I saw a Northern Flicker on the walk this morning and saw two turtles on a log in a pond at Olbrich.  Can you bask if it’s cloudy?

A Few Book Reviews for Tax Season 2012

March 18, 2012

One clear benefit of tax seaon for me is that is forces me to take a wholistic view of my family’s finances.  What are we making, what are spending and where is it going?  This then leads to questions like “what now?” which leads me to the library for some answers or at least some ideas or insight.  So here are three quick reviews, or really, reminders for me down the road.

The Investment Answer: Learn to Manage Your Money & Protect Your Financial Future, Daniel Goldie and Gordon Murray, Hachette Book Group, 2011.  This is a slim book with a load of wisdom.  The authors believe that every investor must address five major questions in order to become successful investors.

  1. Do-it-yourself or hire a pro? Hint: Independent Fee-Only Advisor.
  2. How’s your asset allocation? Or in other words, how’s your appetite for risk?  With a great side discussion of volatility demonstrating that two portfolios with an average return of 10% over 10 years can result in very different returns if one portfolio has modest volatility and the other portfolio has high volatility.  Read it to find out more.
  3. How are you diversified?  Because different asset classes can have exposure to the same sectors or market risks.
  4. Active or Passive investing?  Don’t fool yourself into thinking you can time or predict anything and fees can crush your returns over the long haul.
  5. Rebalance much? Gut check.  Buy low – sell high really means periodically selling some of your best performing investments and purchasing under-performing investments.    

The Triumph of Value Investing: Smart Money Tactics for the Postrecession Era, Janet Lowe, Pengion Books, 2010.  A terrific introduction to the concept of Value Investing and much more accessible than Benjamin Graham’s The Intelligent Investor.  A snap description of Value Investing is that good investors buy shares in good companies at good prices.  This is not about guessing, projecting, or modeling outcomes.  This is about protecting your principle and doing your homework.  Or as Warren Buffet is quoted:

“I have no use whatsoever for projections or forecasts.  They create an illusion of apparent precision.  The more meticulous they are, the more concerned you should be.  We never look at projections but we care very much about and look very deeply at track records.  If a company has a lousy track record but a very bright future, we will miss the opportunity.” 

The book ends with a checklist of how to build a portfolio.  Target thirty-ish equities with good P/E ratios, a price at or below book value, a price below previous highs, and suitable dividend yields. 

Zombie Economics: How to Slay your Bills, Decapitate Debt, & Fight the apocolypse of Financial Doom, Lisa Desjardins and Rick Emerson, Penguin Books, 2011.  This book has good advice and is not afraid to pull any punches (i.e. don’t be overweight so you won’t get diabetes which can devastate a family’s finances or tell your folks to beat it if they are dragging you under financially).  In a nutshell, create a worksheet of all income and expenses, pay bills immediately (autopay if possible), pay down debt ruthlessly (in descending order of credit card balance if you have multiple cards), under no cirumstances do you quit a job unless you have accepted a better job, put 10% of every paycheck into a savings account before ANYTHING else,  never carry a credit card, spend at least 40 hours/week looking for a job if you don’t have one, eat-sleep-exercise right, and ultimately bend the curve so there is more money in you accounts at the end of a month than at the beginning of the month.  And make sure the feds aren’t taking too much out of your paycheck as they aren’t paying you that back with interest. 

So what did I get out of all this and what will I do differently?  First, I am in the process of scrutinizing every regular input and output of our family balance sheet.  Update the W-4, refinance the house, switch internet providers, begin monthly direct deposit for the girls college funds.   Second, purchasing individual stocks is not for me when I could just slam away as much as possible every month into my 401k and other savings.  Any time I could have spent researching stocks can be used to get better at my job which might result in more $ entering the system and then going into professionally-managed investments.

Spring II

March 14, 2012

It has been ridiculously warm this past week, with temps in the 70s.  I responded by biking to work on thursday and wearing shorts at the office.  Nature responded more dramatically.  The frogs across the street were calling wednesday evening and every evening since.  Mendota and Monona are free of ice.  Crocuses appeared sunday morning and lost most of their petals by this morning.  The chives were growing so fast I could see it through the kitchen window while washing dishes.  Song sparrows have appeared across the street and killdeer are all over the landscaping at work.  This morning the neighbors forsythia bloomed.  We seeded one of the beds with spinach and lettuce seeds last weekend and if this weather keeps up they could be sprouting right now….ok, two so far.  But that’s really fast.

Thursday’s riding thought….”Greatness occurs in garages at night.”  A reference to the Palo Alto garage that served as a workshop for Bill Hewlett and Dave Packard.  Also known as the birthplace of silicon valley. 

The HP Garage in Palo Alto

We’re not all going to found industry-altering companies, but we can all turn off the tv, go work on our own projects, on our own quiet benches.  Building something, creating something, solving something, writing something, painting something.  Reversing one trend, of Americans as consumers to Americans as creators.  And another trend of work as pointlessly collaborative dissonance to work as resolute, intense, silent engagement.

 

Spring 2012

March 10, 2012

“Winter” is over and spring has arrived. This was the 4th warmest US winter on record. I didn’t go skiing a single time this year which was a disappointment after the recent heavy snowfalls of the past few years.

In the last week Cranes, robins, red-winged blackbirds and eastern meadowlarks have returned. Lake Monona and Lake Mendota are still frozen but the little pond outside my window at work thawed this week and mallards began taking advantage of the open water immediately.

I rode the lemond to work on thursday and it felt great. Cool and clear, first of the year. I definitely need to get the brakes tuned, though. Way too much travel.