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Tuesday, February 21, 2006

Frustrating

Everyone I know, which isn't all that many people, is incompetent about personal finance.

I think the S&P is several percent too expensive, but it won't bubble for four years. Stock prices will dip by several percent, maybe 10%, from the end of April to July. Should I wait? The problem is, it's possible that this dip (due to the totally predictable fuel crisis) will be cancelled out by standard market growth. I'm predicting another 40% increase or so by 2010, when the bubble forms.

On top of that, I've sunk most of my play money into the S&P already. I want to invest in developing markets, but I only have a couple of thousand I need to get rid of for the short term. The third world has seen incredible growth since we invaded Iraq, but short term volatility does not match my investment strategy, because I'll probably be pursuing a Last-In, First-Out investment strategy, ie divesting whatever I buy in May so I can spend it on bubblegum and theme park tickets.

I suppose I could start a small business and try to sell it off for a profit, but turn around is 3-5 years for a tech company and several months for a lemonade stand. Savings accounts are barely better than checking, honestly. I don't have any debt... hmmm

There is a couple hundred dollars or so in compounding interest I could pay, for a return of 7%. Then I could buy a pizza with the earnings next year. I can't pay the principal because I need that debt to get reimbursed.

I guess I could start day trading or card counting, but I don't have time to get the skill to beat the house. Or run to Mexico and pick up some natural fibers for resale...

10% of $3000 times 3 months divided by twelve months is $75, right? In fact, the opportunity cost for writing this post would be about $.01 in lost interest alone, if the trading day hadn't already ended. But stores are still open! Value is being created! I'm not in on it!!!!!!

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