Where's the camera? Stuff just happens, don't go there Peter ,don't go there

November 22, 2004


Hello Happy Thanksgiving,

OK…What can an out of control fight at an NBA game teach us about investing? Well I guess it pays to have extra security. A new term has been coined an “NBA” moment, but folks don’t think it applies to you and me, you have to make 10 million dollars a year and have a 12 dollar beer thrown on you from a guy sitting in a 3 thousand dollar seat so you too can act like a total irresponsible idiot. And by the way according to the NBA Players Association it is all Bush’s fault anyway. Now that I have cleared that up hey, sh…stuff happens.

So if you’re not making 10 million dollars a year or can’t afford a 3thousand dollar ticket to a game but could afford a 12 dollar beer dollar cost averaging is what it is all about. You may not have the money but you probably have the time. At first it starts up slow and seems like nothing. Over time you can apply the rule of 72; divide any rate of return into the number 72 and the sum gives you the number of years it takes to double your money. So if your return averages 5 % it takes 14.4 years to double your money. It seems long to some but given the fact that Social Security will be bankrupt in less than 20 years it is certainly worth taking a shot and getting going.

Folks investing is more practice, it is doing not talking .Investing is setting a plan and working a plan. For most of us it is more about follow through than about brilliant stock picking. Sure a good stock here and there will your boost returns, but the truth is a couple of mediocre funds or an index fund over time with follow through will breed excellent results. It is all about consistently working the plan, adding money time in and time out.

So what do investors have to be thankful for? Well for one Microsoft is finally going to pay out the 3 bucks, Kmart discovered location, no one raised taxes on dividends, short term capital loses and long term capital gains, tankers ,trucks and trains , just google it but sell it before the lock up ends.


James

Ps. Again thank you for all the referrals!