Category Archives: Stock Tips

Cited for walking without insurance.

Untitled

Since the advent of the car, there have been accidents — and ways to make money out of them. One of the legal ways, though some would argue more immoral ones, is insurance. And it’s easy: you promise to pay someone if their car gets damaged in a crash, and all you have to do to make money is take in more than you give out.

But, from the insurance company’s point of view, people that have accidents are losses. In order to make money, the insurance company needs people who are not getting into accidents. 

So, in the early days, insurance companies looked around and noticed that most of the people they were insuring were either a) rich or b) those at the greatest risk for accidents. In order to compensate for the at risk, the insurance companies had to raise the premiums … and they could only do that so long until people just went somewhere else, or dropped their coverage’s altogether. What they needed was a bunch of people that were not risky to purchase insurance — in other words, get people that didn’t need insurance.

Then, as if by a miracle from Heaven, laws began being passed in certain states requiring minimum insurance for any driver and/or automobile.  All of a sudden, insurance companies had plenty of low risk customers (who were forced to purchase the insurance!), and the people that owned stocks in those companies received dividends because the company had “extra” money and didn’t have any thing left to pay for. Hooray!

Now, is it ethical to force people that don’t need insurance to purchase it? Americans don’t like to be forced to do anything … so, on a personal level, I find this repellent. Is it necessary? Probably, because, we can’t know before an accident, who will actually be in an accident. Sure, statistics can tell us percentages or likelihood  but this can not be applied to an individual. So, while it sucks being forced to pay for something you haven’t ever needed, you can never tell if you ever will  need it. And, heck, if you do need it, it’s sure nice to have.

So, it may be ugly, but it’s not, as suggested earlier, immoral — at least on the surface.

So, what the hell am I babbling about car insurance for, you may be asking yourself. Well, lets look at the “system” of insurance: Receive money, payout money. Keep the profit margin by two mechanisms: Raising prices above losses and spreading the risk. If this is done properly, you will always make more than you lose. Always. There is no gamble.

This may seem attractive to you, as an investment. However, if you purchase stocks in auto insurances now, you will be paying a lot to get a little: i.e., because the insurance companies make money, and people appreciate that, people will pay more for it because of competition. Thus the price raises, but the dividends stay the same. This is called the price/earnings ratio, or P/E ratio. Insurance companies have high P/E ratios. The bottom line is, you will get very little bang for your buck out of an auto insurance company.

So, again, you are asking, what the hell am I talking about, then?

In 2014, the federal government is going to require all people to own body insurance on all human body’s driven by citizens in these United States.

Just like those proto-auto insurance companies, this will be the clarion call for healthcare insurance profits, because when people are forced to  have health insurance, the healthy will have to buy it too. Not only will insurance companies have more customers, those customers will pull down the level of risk!

Sure, insurance rates will fall, because of competition, but this will not be at the expense of profits. The insurance rates will only fall after dividends are distributed (who do you think owns insurance stocks? Why, insurance company employees, of course!)

And here is the crux: Prices on health insurance companies are not up, they are down. This means the P/E ratio is low for this sector. StockGuilt feels confident enough to purchase a mutual fund of health insurances (because we won’t be able to keep up with emerging companies, new competition, policy developments, etc.).

Don’t make me tell you, “I told you so” in ten years, ’cause I will. Look into this, OK?

street-art-healthcare-by-alec-melrose-ave

NOTE: StockGuilt is a blog about interesting stocks, and our views. We are not stock brokers, investment councilors, planners or legal advisers. In fact, at least one of us is an idiot. The rest are just folks who think about investments. This is what we think, and what we will do/did. In no way are we telling your what to buy or sell … Do your own homework.

If it works out for you, and you feel generous, well, we’ll probably get in trouble if we take your money, so …  We like Ronald McDonald houseUnicefSalvation Army and SafeNest

Advertisements

Apple: Think differently.

steve-jobs

Steve Jobs (1955-2012) was considered a genius by many, and almost supernatural by some. Others loathed him and his products. But no matter what you thought of him, he was a hell of a business man.

He brought us MP3 players that actually worked; he brought us slates (the old Science Fiction term for a tablet device. Hey! We’re living in the future!); he brought a style and a sense of cool to every product he touched. He started Pixar in his spare time, and deserves at least half of each Oscar they won, and he was gone before they got bought by Disney and made Cars 2.

Basically, this guy was Midas.

iPod touch —> *Gold*.

And now, Apple stock is down. Way down. Take a look at this link, and note the years leading up to 2012. The blue line is Apple, and it is shooting up into near Earth orbit. The red line is the Dow Jones Index (basically all the US companies combined) for context. We can see that the economy was slowing everything down, and then, POW!, Apple explodes, as the rest of the world begins dusting itself off. Then Mr. Jobs passes away, and POP!, Apple starts to deflate and the sky-diver in that weather balloon from Red Bull jumps ship. 

But, lets remember something: This is Steve Jobs we are talking about here. No matter who is running the company, this was Steve’s baby. The company did just fine the year before, when his illness was a secret. Suddenly, the products don’t sell? Take a look at three different quarters for 2011-13, for Apple’s sales/profits for yourself (hint, look at the gross earnings for Q1 for each of the last three years).

I think Steve Jobs has given us one last gift. His passing has created a drop in Wall Street’s confidence in Apple, but his vision remains. Now, we all get a second chance to believe in him.

I don’t know about you, but, I’ll hate myself if I didn’t buy when I had a chance — again!

NOTE: StockGuilt is a blog about interesting stocks, and our views. We are not stock brokers, investment councilors, planners or legal advisers. In fact, at least one of us is an idiot. The rest are just folks who think about investments. This is what we think, and what we will do/did. In no way are we telling your what to buy or sell … Do your own homework.

If it works out for you, and you feel generous, well, we’ll probably get in trouble if we take your money, so …  We like Ronald McDonald houseUnicefSalvation Army and SafeNest

I thought, “I wonder what evil costs today?”

Image

I have a problem with feeling powerless. The problem is not feeling powerless, although that sucks eggs too, but my reaction to it. I get obsessed with it — how I should do something about it, how others have taken advantage of me and this is just another in a long line of jack-boots stepping on my face. See? I get weird. I start snapping at people — coworkers, wife, kids. One thing that always gets me spitting steam like a boiled cartoon cowboy is Microsoft — the ultimate baddy. I remember one time, as a lowly college student, struggling with finances, I was required to purchase Microsoft Office (student ed.) because my professor Would Not  Open Non-Microsoft Text-files. Despite my having made the effort to save it in a Microsoft compatible format. Soon after that, my computer crashed. Guess what? It was too late to download the Office suite I had bought from Microsoft just 3 months earlier. So, I had to buy it again, and a new Microsoft OS! I spent $900 on the computer, and another $1000 on Microsoft products, just to be able to turn in my assignments for school. Then, for a statistics class, I realized I needed Microsoft Access. And guess what?

Over the years I have spent a lot of time and energy simply pondering Microsoft’s aura of evil. Obsessing, really. Oh, every time I had an interaction with a Microsoft product, like, every other second, I would start to simmer again. How I hated the feeling of being abused and used like some sort of worm hosting a wasp larva — they want me alive, so I could earn more money for them. Over and over … every few years, paying for an upgrade to a system I had just learned how to use, only to start at the beginning again.

One day, I was stewing, and  I looked up Microsoft’s stock, thinking, “I wonder what evil costs?”

It was quite reasonable, actually. And they had begun paying dividends … hmm. Then something magical happened. I said to myself, “What if I could get all of my money back from Microsoft? All of it!”

So, I bought the stock, and I had a feeling of peace. And I began to stop dwelling on how Microsoft tries to screw me and everyone I know; I began to live a life without “Microsoft Hate” eating away at my soul. I had never realized just how awful it had made me feel, all those years, brooding, loathing, hating.

So, here is a list of 6 companies I have bought stock in, because I just don’t have time to hate them anymore:

1) Microsoft

2) Wal*Mart

3) My insurance companies (Auto and Medical).

4) My cable company.

5) Facebook.

6) My Bank.

Now, understand, I didn’t even really look at the numbers on these companies. They are not going anywhere, and that’s the point. My investment is monetary  sure, but mostly it is about retribution. These companies have taken something from me, and I am going to get it back. And I know when it’s time to buy more, when I start thinking how much one of these companies pisses me off.

Microsoft, by the way, has put out a nice operating system this year, much to my surprise. I actually like it. And, you know what? I am close to getting all of my money back from them, and it makes me so fucking happy.

I wish the government would privatize the DMV, so I could buy the hell out of it …

You wanta buy a Hog and ride off into the sunset?

Image

Moral dilemma time … Do you save for your children’s college or do you buy a all American-made, kick-ass Harley? Do you come home to a mess every night  kiss your bedraggled spouse and cook fish-sticks, or do you pound tequila with Jax Teller?

What if I told you, you could do both? And cheaper than you thought: at $26,000 – $36,000 a motorcycle, buying a Harley Davidson motorcycle doesn’t seem like a path to financial freedom; but buying a share of this company, NYSE: HOG, (that’s got to be the best ticker symbol ever!) at around $52/share (click the link above for a real time quote), this just may be your ticket to ride!

A poor economy has slowed sales of this Motorcycle powerhouse, but sales will never disappear. Recent talk of increasing dividends, coupled with a depressed market price may give you a great buy-in price on this chrome-plated beauty. This is a stock that will only rise (think blue collar folks recovering from the depression(s)), and it has a serious moat around it -There are no other American companies that pose any competition – and if we know anything about our outlaw biker brothers and sisters, its that only American will do. At least, if they want to hang with the cool kids.

So, what’s the problem here? This is a StockGuilt portfolio “buy”, at this point, and we’ll do just that when the funds roll in … but it was a bit of an ethical conundrum.

I mean, lets just look at the list of negatives here: Does this support oil companies (see StockGuilt manifesto)? Currently there are 0 motorcycles companies that utilize alternative fuel sources, and there is no research (as far as we can tell) that there ever will be. Also, biker gangs do a lot of bad things! They ride Harley’s! Also, just by it’s existance, and it’s enthusiastic following, we know that Harley’s are only around because of simple racism. I mean, seriously, there are more than 10 other countries that make motorcycles that have better reliability and performance than any Harley Davidson cruisers — hell, even hard core bikers laugh about how unreliable and poorly operating Harleys are. They leak so much oil, that there is a term for it: marking their territory.

Ok. So, why do we think this is alright to own? Motorcycles may be gas-burning, but they are the origional high-MPG vehicles. Ranging from 33-48 MPG, for a beefy hog. So, no. They don’t support the oil industry as much as that 4-Runner you have in your driveway. What about the drugs, violence, prostitution, etc? OK, lets just say that 100% of full-time bikers were doing drug deals, which they aren’t  but even if they were, the motorcycle has nothing to do with the business. I mean, do we want to boycott Wilson Suede and Leather too? (well, maybe, depends if your a PETA person or not). Regardless, StockGuilt has no qualms about owning a stock associated with good and bad people, cause every type of people are good and bad. Just cause they prefer choppers to clippers doesn’t make them evil.

But this racism thing, well we can’t shake that. A lot of people that ride Harleys are racists. Does supporting H&D mean supporting racism? Perhaps. We here at StockGuilt don’t think so. It’s an American product, made in America for Americans, but that doesn’t mean that it is bad. It represents America, home of the free, and people like to be reminded of that. Some of the free a dirty bigots, true … but most of the free, well, they love their families, want to retire well off and ride off into a sunset.

NOTE: StockGuilt is a blog about interesting stocks, and our views. We are not stock brokers, investment councilors, planners or legal advisers. In fact, at least one of us is an idiot. The rest are just folks who think about investments. This is what we think, and what we will do/did. In no way are we telling your what to buy or sell … Do your own homework.

If it works out for you, and you feel generous, well, we’ll probably get in trouble if we take your money, so …  We like Ronald McDonald house, Unicef, Salvation Army and SafeNest