The Third Pig

Over the last week or so I have been listing things to be thankful for in this market. So far I have covered three things. They are:

1. The Teachings of Benjamin Graham

2. Low P/E Ratios

3. The Inevitable Market Rebound

And now I am listing numbers 4 and 5:

4.     Black Eyed Peas, and
5.     Collard Greens

Seriously, do I really need to say more? There are few things in life that beat mom’s collard greens and pop’s black eyed peas thrown in with a little Jamaican corn bread. And with today's economy and the burden it is putting on the pocket book, a cheap meal is hard to come by. In fact, with Americans on food stamps reaching an all-time high, a cheap nutritious meal is just what the doctor ordered.

Southern folklore suggests, that a meal of black eyed peas and collard greens will bring with it good luck and financial prosperity. The peas represent coins and the greens represent folding money. Both foods are dependable sources of nutrients and antioxidants that protect your heart and maybe prevent cancer and both are great sources of folic acid.

So in the spirit of Thanksgiving and my hope we can all get a little more luck and wealth in our lives, I have decided to share a recipe from the Homesick Texan for black eyed peas:

http://homesicktexan.blogspot.com/2006/12/black-eyed-peas-for-new-years-day.html

And another for collard greens from Ms. Financial Savvy:

http://www.msfinancialsavvy.com/article.php?aId=141 

Good eats and Happy Thanksgiving!

Disclosure: I do not, nor do the clients of Brick Financial Management, LLC, own any securities mentioned in this article. But positions may change at any time.

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Posted by Benjamin Taylor at 01:25 PM |
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Perhaps you have been startled by what has been going on in the stock market this year, and in the last few days in particular. It is understandable if you have been. This is an unusual time. There’s a lot of uncertainty in the financial sector. Bear Stearns and Lehman have failed, Fannie Mae and Freddie Mac have been taken over by the government, AIG had to take accept an $85 billion loan from the government with steep terms, Morgan Stanley and Goldman Sachs converted to conventional banks, the FDIC stepped in to save Wachovia and Washington Mutual, and the Treasury Department is asking Congress to pass a $700 billion bailout of the financial system.

If you watched any news program or read any paper yesterday you know that Congress did not pass the plan proposed by the Treasury. The stock market reacted. Yesterday, the S&P 500 fell 8.9%. As a relative measure, the day the market opened after the tragedy of September 11, 2001, the S&P fell 4.9% on September 17, 2001. It was the biggest one day drop since Black Monday in October of 1987 when the market fell more than 20% in one day.

All of this turmoil is likely to leave most investors in the market biting their nails and pulling their hair out. These folks, not knowing what to do, will do nothing. Others might react by immediately selling all their investments, pulling their money out of their bank, and burying everything they own under the shed in their backyard. I understand both reactions, as both are simply human. But neither is what should be done.

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Posted by Benjamin Taylor at 02:33 PM |
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Hope everyone had a wonderful Labor Day weekend. The weather in the Northeast was great and considering how bad things could have been, Gustav thankfully spared most of New Orleans. As well as enjoying the weather I was able to watch the U.S. Open, take in the movie The Longshots (you know for the kid) followed up with a visit to the park and was able to catch up with old and new friends online (there’s this new thing called social media…).

In catching up with one of those friends, we got to talking about investing and personal finances. Big surprise right? She alerted me to a story of which I was unaware at the time. The story was simultaneously tragic and unbelievable. When I went to Google to read more about it, it then became all too familiar. What I found was yet another story of fraud and deception and the stealing of investor money.

As I read more of the details of this particular yet hardly unique story, the warnings signs seemed so clear to me. I thought to myself, “Some of these investors should have known better!” But alas, even so-called sophisticated investors can be had. No one is immune from making mistakes or getting taken by a sophisticated or savvy charlatan (like the one in the video).

All that said there are steps that can be taken to protect yourself from dishonest (or just plain bad) financial ‘professionals”. It is as important to know what makes a bad financial professional as it is a good one. In at least another two follow up posts I will cover warning signs that should alert any investor their advisor may not be on the up and up.

Have you had a not so pleasant experience with a financial professional? Share it in the comments are of this post.

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Posted by Benjamin Taylor at 06:18 PM |
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An interesting documentary called “I.O.U.S.A.” premiered August 22^nd in a few cities around the country. According to the filmmakers, the country is on the brink of a financial meltdown. I.O.U.S.A. examines the national debt and its consequences for the United States and its citizens. The subject of America’s financial woes is a subject Warren Buffett, who is featured in the movie, has tackled in the past.

Although I have not seen the movie, I will definitely check it out. In the meantime the folks at The Peter G. Peterson Foundation offer some advice on how to handle your personal financial deficit:

1. Establish a personal budget


2. Create a financial plan that considers your long-term financial objectives, major milestones in your life and what you will need in retirement.


3. Act on that financial plan immediately.


4. If you must use credit, use it responsibly.


5. Pass on what you have learned to your children.

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Posted by Benjamin Taylor at 05:20 AM |
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I recently received an email from a college buddy and former football teammate regarding our alma mater’s upcoming fall classic with our school’s arch rival. Yes, I played college ball and have the knees to prove it. About fifty of my former teammates and some boosters of the program were on the email string. Basically, along with regular guy talk and crude remembrances of embarrassing moments long gone, there was the point of the email which was to organize hotel reservations and a tailgate party for the weekend of the upcoming game.

My buddy who initiated the email, the resourceful guy that he is booked 20 rooms at a local hotel to ensure any of us who wanted to go would have a cheap room to stay. Not to mention a place to crash after too much beer and bratwurst at the tailgate. But the email got me to thinking of other ways to have fun and profit by banding together with others.

1. Group Discounts

I just mentioned one form of group discount - savings on hotel and travel. But group discounts do not have to be reserved to destination weddings and weekend hotel reservations for the big game. Discounts can be had in almost any situation. Want a little nip and tuck? Get a couple of friends together and have your surgery on the same day with the same doctor. Want to save on insurance rates? Often groups such as employers, alumni associations and other clubs have worked out group discount rates with a particular insurance agency.  You might save anywhere from 5-20% as a result of a group rate discount.

2. Investment Clubs

Joining an investment club seems so ‘90s. The costs of investing in the stock market have dramatically fallen over the last decade and financial news and information seems like it’s everywhere. This blog is a good example. However, significant costs to investing still exist. Investment clubs help to spread those costs over several individuals. However, this is not the only benefit to joining or forming a club. Besides the money cost benefits, are the educational and social benefits of the club. You may find your club mates saving you from costly investment mistakes you may have made on your own.

3. Price Clubs

Discount price clubs, like Sam’s Club a division of Walmart (WMT), BJ’s Wholesale (BJ) and Costco (COST), offer a prime opportunity to save on purchases made repeatedly. The stores essentially allow you to pool your consumer dollar with a few million of your like minded “friends”. The result is googobs of savings. I have belonged to Costco for a number of years and recover my membership fee within the first few purchases of bottled water, chicken breasts and orange juice.

You can even take this a little further by starting a bulk-buying co-op with your friends and neighbors. Basically, you can share your or share someone else’s membership. Whenever one of you makes a trek to the club, you simply double, triple or quadruple buy your items and distribute them amongst your partners. Although doing it this way may cut down on your fun quotient, it will definitely up the savings quotient.

4. Carpools

I hate carpools. Not because they don’t save money but they can be a little inconvenient. That said, I have always opted to either drive myself or alternatively, have taken public transportation to work. But for many, carpooling makes sense. If you find yourself driving 15 or more miles to work everyday and you live within 2 to 5 miles of a coworker or two, you should consider sharing a ride.

According to the Department of Energy, as of today (August 25^th) a gallon of gas is $3.69 per gallon. A quick calculation says a person that works 15 miles from work and whose car gets $20 miles to the gallon will spend almost $1,400 per year simply traveling to and from work. Feel free to check my math. With budgets tight it seems to make sense to spread those costs to three others if you can. Besides saving money and the environment you will be cutting down on the frequency of your road rage, given you will now be sharing the driving duties.

5. Team Sports

Ok, ok. Ya got me. Some of these things do not necessarily seem all that fun. But they will save you time and money in most cases. So number 5 will be all about using the money you have saved and the time you have freed up to simply have some fun. Why not participate in a team sport? Try a bowling league or a softball team. And let us not forget one of the greatest team sports there is – roller derby! With team names like the Hissy Fits, how could it not be fun?

Disclosure: I and the clients of Brick Financial did not own shares of any of the companies mentioned in this article at the time of this writing.

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Posted by Benjamin Taylor at 05:18 PM |
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