Comments about private enterprise vs. government:
Wal~Mart has announced going into the prescription drug business. Caterpillar is their first customer. They will buy better than the health care companies. They will manage the business better than the health care companies. Both are better than government control. The current system is loaded with dishonest practices. The care providers bill more than they need. The insurance administrators adjust the bill down by 50% or more and then pay 70%-80% of the remainder sometimes. And, they tell you how much you might be billed. I guess if you get billed more you don’t need to pay the additional? Why not let anyone in the private sector enter into the supply of health care without government interference? Fear that the ones who try to take advantage of the system won’t be provided with health care. The taxpayers end up paying the bill any way. And, the bill they pay has the government overhead tacked on. That overhead is usually 90% or more of the cost. What is the solution? Two plans. One for the honest hardworking, able to pay citizens. Another for the ones who can’t or won’t pay. Let the public sector take care of those. There are many 501 (c) 3’s working on that now. And, they are all encumbered by government regulation and interference. There are at least 28 forms of 501 © companies “authorized by the Federal Government”. Just having to be authorized is more than enough interference. Why don’t we the people get going and take care of this health care problem? Everyone can become a volunteer. Each one can find a church or private company to work for on a volunteer basis. Let’s go for it. Let’s make this nation stronger.
Monday, March 30, 2009
Thursday, March 12, 2009
FISCAL RESPONSIBILITY (A novel idea)
Why don’t we as a nation rise up and fix the obvious problem? We are in debt. We are taxed on average more than 50 cents on every dollar we earn. We cannot tax our way out of debt. We have to bring discipline into the spending equation. Cut the National budget deficit to zero today. Just spend less than the tax income. This is the principle that leads to individual security and freedom. When our leadership example is a debt, more debt example how can we expect the people to change? If we want to rebuild the nation, we must become fiscally responsible. Just saying we will reduce the deficit is not good enough. Eliminate the deficit and begin paying off the debt. Become a nation with no debt. The people will rally around this principle. We will be able to take care of the needy in the private sector. Why not have a government that does the things it is supposed to do. Build roads and dams and infrastructure. Maintain a low level of social chaos. A police force that enforces a simple set of laws. And, a military force that protects our borders.
Wednesday, February 18, 2009
PERSONAL INVESTING THOUGHTS
Today I’ve been thinking about investment returns. When investing in an opportunity what kind of return should we expect?
There are two places to invest, your own business or a business you don’t own.
If you invest in a business you don’t own, then you can own part of it. If you buy stock, you own part of it. If you buy bonds or loan them money, you invest without becoming an owner.
How much do you expect to get back from your ownership? I think 10% per year is a good target return. But, the higher the expectation the lower the chance of achieving your expectation. So, generally lower expectation is considered lower risk, i.e. more likely to happen. Higher expectation is higher risk, i.e. less likely to happen.
The DJIA 30 index stocks have averaged a little more than 6% per year growth since 1935. The S&P 500 index has average a little less than that since its inception in 1969. At times these averages were in higher return territories. This is especially true in the period between 1985 and 2007. I don’t believe the real foundational returns ever exceed the trend lines of about 6%. But, one could venture into this financial situations and make returns greater than 6%. Many have done it.
The companies listed in the 30 Industrials do not all sustain real growth of 6%. There is a range above and below this average. Some might be as high or even higher than my target range of 10%. Others have to be below, maybe even losing money in order for the average to be 6%. And, the same company is likely to experience performance at different levels in the range over time. But. it appears that the average sustainable rate is somewhere around 6%. Always remember the companies listed in these indexes are the better companies. If one stumbles, it is likely to be replaced by a higher performance company. In the stock market, there are many companies that are not making money and some that never make money and eventually fail. The higher a company’s current return, the less likely they are to maintain or increase the level of return.
Be careful how you invest. If it sounds to good to be true it probably is.
There are many investors and investor groups who “gamble” in the open stock market. They chart the market and individual stocks trying to predict the ups and downs. Buying low and selling for a profit not based on the real performance of the companies. In this arena there are always gainers and losers. If someone makes money on the daily or periodic fluctuations, another person has to lose an equal amount.
There are two places to invest, your own business or a business you don’t own.
If you invest in a business you don’t own, then you can own part of it. If you buy stock, you own part of it. If you buy bonds or loan them money, you invest without becoming an owner.
How much do you expect to get back from your ownership? I think 10% per year is a good target return. But, the higher the expectation the lower the chance of achieving your expectation. So, generally lower expectation is considered lower risk, i.e. more likely to happen. Higher expectation is higher risk, i.e. less likely to happen.
The DJIA 30 index stocks have averaged a little more than 6% per year growth since 1935. The S&P 500 index has average a little less than that since its inception in 1969. At times these averages were in higher return territories. This is especially true in the period between 1985 and 2007. I don’t believe the real foundational returns ever exceed the trend lines of about 6%. But, one could venture into this financial situations and make returns greater than 6%. Many have done it.
The companies listed in the 30 Industrials do not all sustain real growth of 6%. There is a range above and below this average. Some might be as high or even higher than my target range of 10%. Others have to be below, maybe even losing money in order for the average to be 6%. And, the same company is likely to experience performance at different levels in the range over time. But. it appears that the average sustainable rate is somewhere around 6%. Always remember the companies listed in these indexes are the better companies. If one stumbles, it is likely to be replaced by a higher performance company. In the stock market, there are many companies that are not making money and some that never make money and eventually fail. The higher a company’s current return, the less likely they are to maintain or increase the level of return.
Be careful how you invest. If it sounds to good to be true it probably is.
There are many investors and investor groups who “gamble” in the open stock market. They chart the market and individual stocks trying to predict the ups and downs. Buying low and selling for a profit not based on the real performance of the companies. In this arena there are always gainers and losers. If someone makes money on the daily or periodic fluctuations, another person has to lose an equal amount.
Sunday, February 8, 2009
HAVE WE GONE CRAZY?
The country is going crazy. Economic activity is down from last year…down a lot. The people and businesses of the country tell vividly the state of our economy. It is what it is. Since 1985 and maybe before the country has been building a house of cards. We have been building a house with less foundation than is structurally required to hold it up. And, it has fallen to the level our more solid underpinnings.
Now congress is attempting to develop a stimulus plan to rebuild part of the fallen house. Most of what we hear about the developing plans indicates not much foundation building is included. So, the result is likely to be a big tax burden and no solid growth. The result will be a huge anchor for future generations of Americans. Some of those Americans are my children and grandchildren.
Why not admit our past mistakes and let the chips fall? Why not work on foundation and simply use the stimulus dollars to bailout the unfortunate ones who have lost their jobs and homes and need help to survive. Providing them with hollow jobs with no foundation would be a lie. We would be trying to provide hope that is hopeless. Let’s all stop living beyond our means and begin to live sensibly. Many of us can use our excess to help those in need. Will Rogers said it in 1929. “There is still the same amount of money around, its just in the wrong places.” The debt levels we have been promoting have fooled us into believing that there is more money somewhere. And, many banks and investment companies have tried unsuccessfully to turn that debt into assets and sell it for a profit. Those cards have tumbled. We should not try to build them back.
I say work together for the common good of the people and the nation. Let no one go hungry or be cold. Let’s build infrastructure and foundation and slowly but steadily improve our national strength. Let’s don’t pretend to be more than we are. Especially, let’s don’t pretend to be the savior of the world. Let’s not talk and spend beyond our means and capabilities. Let’s stop spending money we don’t have. Let’s act like America before its too late.
Now congress is attempting to develop a stimulus plan to rebuild part of the fallen house. Most of what we hear about the developing plans indicates not much foundation building is included. So, the result is likely to be a big tax burden and no solid growth. The result will be a huge anchor for future generations of Americans. Some of those Americans are my children and grandchildren.
Why not admit our past mistakes and let the chips fall? Why not work on foundation and simply use the stimulus dollars to bailout the unfortunate ones who have lost their jobs and homes and need help to survive. Providing them with hollow jobs with no foundation would be a lie. We would be trying to provide hope that is hopeless. Let’s all stop living beyond our means and begin to live sensibly. Many of us can use our excess to help those in need. Will Rogers said it in 1929. “There is still the same amount of money around, its just in the wrong places.” The debt levels we have been promoting have fooled us into believing that there is more money somewhere. And, many banks and investment companies have tried unsuccessfully to turn that debt into assets and sell it for a profit. Those cards have tumbled. We should not try to build them back.
I say work together for the common good of the people and the nation. Let no one go hungry or be cold. Let’s build infrastructure and foundation and slowly but steadily improve our national strength. Let’s don’t pretend to be more than we are. Especially, let’s don’t pretend to be the savior of the world. Let’s not talk and spend beyond our means and capabilities. Let’s stop spending money we don’t have. Let’s act like America before its too late.
Monday, December 15, 2008
ECONOMIC STIMULUS
Let’s talk about economic stimulus. Is there really such a thing and why would it be good? Economy is the way we support ourselves so we can live an obedient, disciplined life. The basics are food, clothing and shelter. Every thing after that is not a necessity.
What is the real current economic situation in the country? …in the world? I would suggest that we are about where we should be. A year ago we may have been living in a fantasy situation. I suggest that since 1935 in this country the real economic condition has been growing at about 2.5%/yr, (about the same as the population) Since 1985 we have been in a falsely created situation. We have been living “higher” than affordable. We have been living on “borrowed” money. The FED and others have been maintaining that by manipulating interest rates and other factors to “stimulate” unrealistic borrowing. The condition is sustained by borrowing more. Now we are at the point of the, so called “Credit Crunch”. We don’t have a credit crunch. We have a debt problem. We are borrowed up to our eyeballs and higher and there is no place to turn. Te bubble has burst. The house of cards is falling down. How far will it fall? …a little below the real sustainable commerce level. We are almost there. I think a Dow of 4000 will bracket the situation. The DJIA is made up of 30 good industrial companies. (well, mostly good) Their current earnings levels have stabilized the index at the 8500 mark. But, earnings in the next quarter and the next year will be 20 to 30 % lower. So, I expect the index to decline further. And, people have to get their finances back in order. They must reduce their debt levels. They have to get back into a positive savings mode. They needs three to six months of living in their checking accounts. They need four to five years of living in their savings accounts. The price of homes has to get back to realistic. Used home prices should be at or 30% below the building costs. What are the prices in your community?
To reach this stable situation reveals discomfort for some and disaster for others. We need to make provisions for those who are out of work and out of their home. Eighty or eight five percent of the people are and will be okay. But, fifteen to twenty percent are going to need some help. Some of these need help indefinitely. Others will eventually find employment and get back on their financial feet. It will take two or three years to sort this out. Obama is talking about a “Stimulus Package” aimed at 2,5 million people. He wants to spend whatever it takes and create jobs for this number. The current estimate is $1 trillion. I think that is two few jobs and too much money. And, it is an ineffective way to inject growth into our economy. We don’t need “made up” jobs. We need “real” productive jobs. We need purpose. Most of the efforts proposed and tried so far are aimed at getting us back to an unrealistic condition. We need to recognizes the folly of our previous ways and get on a new path with purpose and righteousness. We should talk about that another time. Right now let’s talk about stimulus.
How many people are in trouble? The size of our workforce is elusive. But, let’s say we have 100 million who can and should be working. So, if 85% are okay, then 15 million are not okay. That’s a bit more than the 2.5 million jobs Obama wants to create.
How much money? Let’s say we have to help all of them for a year and half of them for two years. Then there is the 5% that always need help and we already have “adequate” provisions for them. So, that means 10 million for one year and 5 million for one more year. At an aid level of $20,000/yr each that is about $200 billion the first year. … about half that amount for the second year or $300 billon for the two years. The Obama estimate is $1 trillion for 2,5 million jobs. Once again I say, too few people helped too much money spent.
What is the real current economic situation in the country? …in the world? I would suggest that we are about where we should be. A year ago we may have been living in a fantasy situation. I suggest that since 1935 in this country the real economic condition has been growing at about 2.5%/yr, (about the same as the population) Since 1985 we have been in a falsely created situation. We have been living “higher” than affordable. We have been living on “borrowed” money. The FED and others have been maintaining that by manipulating interest rates and other factors to “stimulate” unrealistic borrowing. The condition is sustained by borrowing more. Now we are at the point of the, so called “Credit Crunch”. We don’t have a credit crunch. We have a debt problem. We are borrowed up to our eyeballs and higher and there is no place to turn. Te bubble has burst. The house of cards is falling down. How far will it fall? …a little below the real sustainable commerce level. We are almost there. I think a Dow of 4000 will bracket the situation. The DJIA is made up of 30 good industrial companies. (well, mostly good) Their current earnings levels have stabilized the index at the 8500 mark. But, earnings in the next quarter and the next year will be 20 to 30 % lower. So, I expect the index to decline further. And, people have to get their finances back in order. They must reduce their debt levels. They have to get back into a positive savings mode. They needs three to six months of living in their checking accounts. They need four to five years of living in their savings accounts. The price of homes has to get back to realistic. Used home prices should be at or 30% below the building costs. What are the prices in your community?
To reach this stable situation reveals discomfort for some and disaster for others. We need to make provisions for those who are out of work and out of their home. Eighty or eight five percent of the people are and will be okay. But, fifteen to twenty percent are going to need some help. Some of these need help indefinitely. Others will eventually find employment and get back on their financial feet. It will take two or three years to sort this out. Obama is talking about a “Stimulus Package” aimed at 2,5 million people. He wants to spend whatever it takes and create jobs for this number. The current estimate is $1 trillion. I think that is two few jobs and too much money. And, it is an ineffective way to inject growth into our economy. We don’t need “made up” jobs. We need “real” productive jobs. We need purpose. Most of the efforts proposed and tried so far are aimed at getting us back to an unrealistic condition. We need to recognizes the folly of our previous ways and get on a new path with purpose and righteousness. We should talk about that another time. Right now let’s talk about stimulus.
How many people are in trouble? The size of our workforce is elusive. But, let’s say we have 100 million who can and should be working. So, if 85% are okay, then 15 million are not okay. That’s a bit more than the 2.5 million jobs Obama wants to create.
How much money? Let’s say we have to help all of them for a year and half of them for two years. Then there is the 5% that always need help and we already have “adequate” provisions for them. So, that means 10 million for one year and 5 million for one more year. At an aid level of $20,000/yr each that is about $200 billion the first year. … about half that amount for the second year or $300 billon for the two years. The Obama estimate is $1 trillion for 2,5 million jobs. Once again I say, too few people helped too much money spent.
Saturday, December 6, 2008
SATURDAY THOUGHTS
Saturday December 6, 2008
AUTO BAILOUT
So, we are going to grant big loans to the auto companies. There are some good aspects to this and some bad.
Good
1. Keeps more jobs.
2. Takes sales away from foreign carmakers.
3. Provides stronger customers for parts and other suppliers.
4. Gives relief to public shareholders of GM and Ford.
Bad
1. Interferes with free enterprise system
2. Enables bad management practices in domestic companies
3. Sets bad example for citizens who are already leaning heavily on the federal government.
4. Bails out financial speculators i.e. Owner of Chrysler.
NORTH DAKOTA:
Things are booming in this state. Maybe our DC lawmakers should take a trip up there. Might get some sensible ideas about fixing problems elsewhere. We need to have some tough decisions made and some good examples set. I would like to see some unselfish courage exhibited by our lawmakers.
CRIME IN THE U.S. AND THE WORLD:
The rapid growth of Internet crime is an indication of the rapid growth of crime in the world. White-collar crime is condoned, sanctioned even encouraged in the corporate/political arenas of the world. Clever business people and lawyers are busy finding ways to justify legal methods for gaining in a greedy fashion from unsuspecting or ignorant organizations and people. This may include lobbying of powerful political figures.
The God of creation has told us by way of His prophets and apostles that legalism will not work. It is not possible to legislate morality. None us, being born of Adam, are capable of becoming righteous through our own efforts. It is only by the death and resurrection of Christ that we can become righteous. When we know and believe that we have been crucified with Christ and that He now lives in us, we will become righteous.
How will Christ deal with the unbelievers? Since, the soul does not die but lives on in eternity. There are only two choices. Live with Christ in joy or be condemned to eternal damnation. Christ saves, we choose.
What are the believers to do? Live in faith trusting the Lord Jesus Christ. Go to work for Christ and don’t worry about tomorrow.
AUTO BAILOUT
So, we are going to grant big loans to the auto companies. There are some good aspects to this and some bad.
Good
1. Keeps more jobs.
2. Takes sales away from foreign carmakers.
3. Provides stronger customers for parts and other suppliers.
4. Gives relief to public shareholders of GM and Ford.
Bad
1. Interferes with free enterprise system
2. Enables bad management practices in domestic companies
3. Sets bad example for citizens who are already leaning heavily on the federal government.
4. Bails out financial speculators i.e. Owner of Chrysler.
NORTH DAKOTA:
Things are booming in this state. Maybe our DC lawmakers should take a trip up there. Might get some sensible ideas about fixing problems elsewhere. We need to have some tough decisions made and some good examples set. I would like to see some unselfish courage exhibited by our lawmakers.
CRIME IN THE U.S. AND THE WORLD:
The rapid growth of Internet crime is an indication of the rapid growth of crime in the world. White-collar crime is condoned, sanctioned even encouraged in the corporate/political arenas of the world. Clever business people and lawyers are busy finding ways to justify legal methods for gaining in a greedy fashion from unsuspecting or ignorant organizations and people. This may include lobbying of powerful political figures.
The God of creation has told us by way of His prophets and apostles that legalism will not work. It is not possible to legislate morality. None us, being born of Adam, are capable of becoming righteous through our own efforts. It is only by the death and resurrection of Christ that we can become righteous. When we know and believe that we have been crucified with Christ and that He now lives in us, we will become righteous.
How will Christ deal with the unbelievers? Since, the soul does not die but lives on in eternity. There are only two choices. Live with Christ in joy or be condemned to eternal damnation. Christ saves, we choose.
What are the believers to do? Live in faith trusting the Lord Jesus Christ. Go to work for Christ and don’t worry about tomorrow.
Monday, December 1, 2008
GOD AND MONEY
Study Genesis and see the lesson for money management in The Garden of Eden and with Cain and Able.
Adam ate from the tree of the knowledge of good and evil and was banished from the Garden. Cain and Able each had a farm and were required to work it (toil). Able did a good job and was being rewarded by God. Cain did a bad job and became jealous of Able. He eventually could stand it no more and killed Able.
So, what was Able doing right and Cain doing wrong? The first part of the answer is to trust only in the Lord. Trust not in our own understanding. 1Chronicles 16:8, Proverbs 3:4-6.
Listen to the Lord and He will direct your steps. A tithe goes to God because He is God. And, we learn to live on less than we receive putting away the remainder to build up Treasure in Heaven. This is required because everything we receive and have belongs to God. We are His workers and Stewards. We are asked to plant some of the seed corn every year that it might grow into a bountiful harvest. Then ever year (season) after there will be a bigger yield and the amount of heavy toil required will be reduced.
If you are given a goose that lays golden eggs, you must feed the goose and save some of the eggs. If you don’t feed the goose she will not lay as many eggs. And, with too little food she will eventually die. If you feed the goose she will lay many golden eggs. And, if you get more geese you Will have plenty. But, remember it is all God’s. He will tell you how to use it. Short selling golden eggs leads to ruin.
Adam ate from the tree of the knowledge of good and evil and was banished from the Garden. Cain and Able each had a farm and were required to work it (toil). Able did a good job and was being rewarded by God. Cain did a bad job and became jealous of Able. He eventually could stand it no more and killed Able.
So, what was Able doing right and Cain doing wrong? The first part of the answer is to trust only in the Lord. Trust not in our own understanding. 1Chronicles 16:8, Proverbs 3:4-6.
Listen to the Lord and He will direct your steps. A tithe goes to God because He is God. And, we learn to live on less than we receive putting away the remainder to build up Treasure in Heaven. This is required because everything we receive and have belongs to God. We are His workers and Stewards. We are asked to plant some of the seed corn every year that it might grow into a bountiful harvest. Then ever year (season) after there will be a bigger yield and the amount of heavy toil required will be reduced.
If you are given a goose that lays golden eggs, you must feed the goose and save some of the eggs. If you don’t feed the goose she will not lay as many eggs. And, with too little food she will eventually die. If you feed the goose she will lay many golden eggs. And, if you get more geese you Will have plenty. But, remember it is all God’s. He will tell you how to use it. Short selling golden eggs leads to ruin.
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