How much is today's gut-wrenching, hair-raising volatility worth? Let me ask a different way: After 40 years of investing in markets like these, how much more money would you expect to have versus investing in bonds and ignoring the markets altogether? $500,000? $1 million? $10 million? What if I told you the difference was just $40,000?

Is all this crazy volatility, nail-biting terror, and self-doubt for forty years worth just $40 grand or less?

Continue Reading Stocks Stink. Buy Bonds! ››

Somebody send Angelo Mozilo to jail. I can only think that it is a matter of time. If you think investing in stocks is as simple as looking at past earnings (or cash flow) and buying, you have another thing coming. As a silent partner in business, you have to dive into the financials and filings, and determine whether or not your management is acting like partners...or thieves.

Countrywide's Angelo Mozilo? Let's explore the tell-tale signs of a thief.

Continue Reading When To Watch Out For Insider Selling ››

This post is totally out of sync with my 1950s & 1960s Buffett discourse; however, Night ran into a problem that needs fairly quick solving. His sister gave him a sum of money to begin investing and, after explaining how the markets work, that price follows value, etc., he purchased a stock for her. In just days, she was down 15% (though it rallied again after hours to bring her loss to just 1% or 2%.

How can he convince her to stay the course over the long term? Buy her a Happy Meal!

Continue Reading Make Your Loved Ones Get It ››

I know—Enron is old news. If you don't remember the scandal, Enron was an energy and commodities trading company that went from massive to bankrupt in just 16 months. Once the largest marketer of natural gas in North America and the United Kingdom and the largest marketer of electricity in the United States, Enron was wrought with scandal and deception which resulted in a total loss to many investors.

Could investors have avoided the loss altogether? Can we protect ourselves from accounting scandals?

Continue Reading Enron: Accounting Scandal or Bad Business ››

How about a round of applause for Wall Street? Once again, they've managed to sell the dream, and are failing to deliver. Hedge Funds—unregulated mutual funds—have been the talk of the town for years. That is, of course, until their hyper-aggressive, no-fear strategies hit a market that was...volatile?

I've said it before: More risk usually means greater losses. When you focus on short-term results instead of the fine print or the strategy, don't be surprised when you can't protect your portfolio from harm. There's a new scandal brewing on Wall Street—hedge fund investors may not be able to pull their money out. I smell losses, lawsuits, and new regulation. Still, investors are to blame.

Continue Reading The Hedge Fund Debacle ››

I believe that 401k plans, in theory, are phenomenal. I also believe that Wall Street F-ed them up so bad and use them as tiny, recurring profit centers to ignore the "little guy" and sell their mutual funds. Oh, they'll call you when you're ready to roll over your old 401k; still, don't expect much help or support when you're socking away $500 a month—you're small potatoes on Wall Street and they have investment banking deals to tend to.

So, what is one to do?

Continue Reading What To Do With A Bad 401k ››

401k plans seemed like a good idea at the time. Individualized retirement plans. Personalized portfolios to replace the stogy old pension. Real growth for young, aggressive investors; safety for senior employees facing retirement.

Many years ago, there was no 401k—it simply didn't exist. Companies had pensions—giant pools of money conservatively invested to provide employees with lifetime incomes after they retired. It was a wonderful system if for no other reason than accountability.

Continue Reading The Problems With 401k Plans ››