InvestorPlace Blogs is powered by Marketocracy. Marketocracy has authorized Investor Place Blogs as an official registrar for voting through Marketocracy's Investment Research Rating service. Registered members of InvestorPlace Blogs are linked with a Marketocracy account to establish voting power based on their performance of trading and posting on stocks.
I couldn't believe what I read this morning when I checked in on the MSN money page and read Jubak's article entitled, "Where's the bailout for Main Street?" I feel like I am being a malcontent here, since I just railed on Jon Markman recently, and now I turn my aim toward Jim Jubak, someone who I respect (though I have never met him) and make his articles required reading.
Here's a shout to Jubak, Markman, and anyone else who speaks up for "Joe six pack" or "Joe Investor"--- none of you speak for me, and I am tired of your assumptions on my social class. The "Main Street" you speak of is the one I live on, and I don't need your condescension.
I am Joe Investor, and you are not, so let me tell you about things here in the trenches. My wife and I make less than 75k combined, and we are doing just fine thanks to a little hard work and pre-planning. We are putting away over 35% of our income toward a fund that will help us put a down payment on a house in about a year, probably a house that someone else got overextended on due to their own irresponsibility. We have our goals, and we are reaching them a little bit at a time, one day at a time. Not everyone on Main Street blows their money on cigarettes, beer, satellite t.v. , and lottery tickets. Some do, but assuming we are all miserable is plain wrong, and I doubt I am in a small minority.
Jubak writes, "So if you think your paycheck isn't keeping up with the price of milk, bread, medicine, and gasoline, you're absolutely right. And for many American families, this isn't a recent phenomenon. The median hourly real wage has been falling for the last three and a half years. So a family in the middle of the U.S. economic pyramid knows there's a recession going on; for some the recession has been going on for three years."
When I read tripe like that, it makes me wonder if someone as smart as Jubak thinks that lowly of regular folks, or if its just an article churned out to play to some readers emotions who have it good, but feel bad for those that don't. I guess I should check my freedom in at the door and Jubak can be my dad. "Woe is me", I should say. I give up . . . let's just surrender the country to the financial elite so we regular folks don't send it to Hades in a hand basket. Paychecks not keeping up with the price of milk and bread? My wife and I compare prices each and every time we go to the grocery store. We pre-plan meals so we don't waste food. We only buy cereal when it is on sale, and if it isn't, we eat oats, which is a heck of a lot cheaper and most of the time, more healthy. Repeat that on many other food purchases. I can't be the only person that does this type of stuff!
Gasoline is too expensive? Please. We should all be writing letters to the CEOs of Exxon Mobil (XOM), Royal Dutch Shell (RDSA), BP, and the rest of them with long letters of thanks. Thank you for providing me with a product that allows me drive wherever I want for holidays, birthdays, to work, or to the mall. It sure beats hitching up the horse. I used to have a boss that whined about the price of gasoline while he and his wife purposefully bought a house out in the countryside and commuted 40 plus minutes each way to work and back. Did you catch that? There was a choice involved there! Since when did the free choice of purchasing a product become an entitlement to get it for whatever price I think is right? Now that I am on my soapbox about the gasoline price whiners, let me tell you what I did about the price of gas.
Over two years ago, before I got married, my soon to be wife and I sat down and did a cost benefit analysis of our future living and working situation. We purposefully chose to move closer to work, so that our commutes would be shorter, not only to save on gasoline, but to also give us more free time. We crunched all the numbers, (rent, insurance, gas, wear and tear on vehicles, etc) and decided to make the move based on this analysis. I now live less than 2 miles from work and she is less than 4 miles from work. I not only gained an extra 40-50 minutes of time every day, but I also haven't looked at the price of gas in months. I have no idea what gasoline costs here in central Ohio. I fill up maybe once a month. A choice was made, and it is paying dividends. And by the way the abridged version of the story above wasn't easy. Sacrifices were made. Here's some things I didn't do:
1. Whine about the oil companies
2. Demand my politicians "do something about it"
3. Demand a windfall profits tax on those associated with the oil business.
All of the things listed above aren't proactive. You need to get off your butt and do something about your own situation. People do it all the time and will continue to do it. We aren't all helpless, are we? Can't move closer to your work? Get a car that gets better gas mileage. Can't do that? Forego one night of going out to dinner, and put that money in the tank. Lose the Starbucks coffee (SBUX) every morning. Get rid of that Tim Horton's bagel. Come on, people. In the end, it boils down to the fact that no one wants to make even one slight modification of their consumer behavior to accommodate for price fluctuations. I drive a car that is paid for, and my next car purchase is already planned, months in advance. I seriously hope I am not the only one on Main Street that pre-plans purchases. That big fat economic stimulus check? Yep, a plan is already in place, and blowing it all isn't the plan. Listening to Jubak, I must be the only one on Main Street doing this. I guess that although I make several consumer choices, it must be someone else's fault I have no cash in my pocket. It's someone else's fault all the time, every time.
By the way . . . even if an oil company gets hammered with a big windfall profits tax, how does that help you? You are still paying market price! Here's an All Points Bulletin from Main Street: It'll be a long wait if you are always looking for someone else to help you.
Jubak says, "The last time we had a recession, the rather mild one that ushered in the current decade, Congress acted to extend unemployment benefits beyond the basic 26 weeks in March 2002. By that point in the recession, 1.3 million workers had exhausted their basic benefits. This time around, in the frantic effort to get any kind of stimulus package past both parties in Congress and past the White House, Congress refused to extend unemployment benefits for workers who had exhausted their basic benefits. Out of work for 27 weeks? Tough luck, we're cutting you off."
Guess what, Jim my man? I have been out of work before, and there's nothing like tough luck to put some fire under someone's rump. Doing odd jobs for months is tough, but it is one heck of a motivator. Going through pain teaches us lessons. Going through pain teaches us to prepare. Going through pain in the tough times helps us flourish in the good times. This business of always blaming someone else while our hands are extended looking to take a freebie is the problem. Time to buck up, folks. Those of us on Main Street can deal with economic problems, it just takes more economic nudging for some than others. Hand-outs don't help us, they hurt. The sooner we all realize that the better.
I have 40 or so years to prepare for retirement, but if I am to listen to any of about 12 talking heads, I may as well throw in the towel now. There's nothing I can do, 40 years isn't enough time, and it'll be someone else's fault I am not ready for retirement. I am destined to be social security poor, right? I say "social security poor" because if I get to retirement age and social security is all I have, I will be in poverty, plain and simple. (Despite this sad reality of Social Security, there's plenty of people that want to preserve this system "as is", continuing the cycle. This dumbfounds me). I guess I need to prepare today for blaming someone tomorrow.
Sports stars juice up, and it isn't their fault because of the pressure of being a top athlete.
Homeowners are losing their homes, but it isn't their fault because someone didn't tell them to read the contract, ask questions, or even think about preparing for a worst-case scenario. It's someone else's fault.
A kid commits a crime, and it's society's fault, the school's fault, or the neighborhood's fault.
A man is morbidly obese, and it's Mcdonald's fault (MCD), Burger King's fault (BKC), or Wendy's fault (WEN) for making him fat. This same man has high cholesterol, and Lipitor costs a lot. That's Pfizer's fault (PFE). Hopefully the class action lawsuit he is part of against the tobacco companies can pay for the drugs. After all, it's Altria's fault (MO) that he can't breathe after smoking for decades.
My all time favorite blame game was a subject I covered in a blog last September in an entry called "Abolishment of the Uptick Rule to Blame?" I bet you didn't know it, but the reason many company's stock prices have been in the toilet is because of those charlatans called short sellers. Since the uptick rule was abolished, short sellers have been getting a large chunk of blame. I was in the gym the other day watching Cramer on Mad Money spewing forth more uptick rule abolishment anger, and in today's Wall Street Journal, there is an article by Gregory Zuckerman laying out the case for and against the elimination of the uptick rule. Don't blame boneheaded moves by management. Don't blame the normal cycle of markets. It's someone else's fault, and that someone else is a short seller. We get constant droning on and on about how we need to view the market long term and invest long term, but at the same time these same people complain about volatility and downturns of the market.
Want to read some common sense on short selling? Go read Vad Yazvinski's "Why I think short selling makes sense", a blog post from February. While you are at it, go read his bio. Foreigners that come to this country are successful because they work hard and don't make excuses. Vad is an example of that. Immigrants aren't making excuses, they are taking the bull by the horns and making the sky the limit. They aren't used to having every type of economic safety net known to man to catch them when they fall. Home grown Americans need to learn that work ethic. My generation, the Generation X-ers, need to get our lazy duffs in gear, and you boomers need to teach us some tough lessons, not provide hand outs. I respect my elders, but you guys need to stop being soft. (I am now stepping off my soapbox).
The market tore a chunk out of me today, ripping out a good 2% plus piece of meat from my portfolio, and my cash has been deployed to beef up my short ETF positions. This rally could actually have some teeth this time, so I am glad the cash is there to buy when necessary. I have followed FXP all the way down from my last sell at $118.00, and I have no worries.
Actually, shouldn't I be finding someone to blame for my portfolio problems?
----Jonathan
| 
RSS 2.0
