Friday, October 27, 2006

Start An Investment Blog


You probably have a unique viewpoint on personal or professional finance - why not start an investment blog

Beside the information I drop into Speculation Rules; I also rant about things economic at A Sovereign Speculator, I display relevant money making information at my Small Business Ideas blog, and I throw out interesting financial tid-bits at the Bastiat Free University blog.

If I can find the time to do this, and a readership can find time to enjoy it - I'm sure you could profit from time spent blogging.

Profit from blogging? You probably won't find another substantial income in blogging, at least I haven't yet. It however does help indirectly with creating traffic that I can redirect to my other ventures.

The real benefit of blogging is that it helps you crystallize your thoughts and learn those truths you follow more deeply. There is really no better way to learn than teach. Starting you own investment blog will help you learn.

How to go about it?

For a nice list of 25 suggestions from the Blue Print For Financial Prosperity site on starting your own investment blog:

25 Steps To A Wildly Successful Personal Finance Blog


Six Reasons To Invest Offshore


The following offshore investing information is taken from the excellent Sovereign Society Newsletter. The "A" newsletter is free and is always full of great information.

I know I've written on these matters before, but this is probably more balanced.

Some in the US and UK will usually call going offshore unpatriotic. They seldom realize that the UK and US are the biggest offshore tax havens - for the rest of the world. There are a lot of reasons to send money offshore other than legally delaying tax payments, asset protection from frivolous law suits being one.

Here are six reasons the Sovereign Society found compelling.

Six Reasons Why Offshore Funds are an Excellent Long-Term Investment

  1. Greater choice. The United States is the world's biggest securities market, but the overwhelming majority of mutual funds traded worldwide aren't available on U.S. exchanges. Indeed, of the more than 54,000 funds trading worldwide, only about 8,000 are registered in the United States.

  2. Offshore funds offer a greater margin of safety than most U.S.-based mutual funds during bear markets. Although bear market or reverse-index mutual funds have been available to retail investors in the United States since the beginning of this decade, offshore funds provide a greater spectrum of alternative mutual funds offered to retail investors that can utilize popular hedge fund trading tactics, including short-selling and long/short global equity strategies. In the United States, individuals must be high net-worth accredited investors to buy alternative mutual funds employing defensive market hedging techniques. In the offshore context, that's not the case. Many of the world's leading hedge fund organizations require only $25,000 - and sometimes much less - to get started.

  3. Offshore funds can offer foreign currency diversification. Most offshore mutual funds are denominated in euro while some products are also sold in Swiss francs and British sterling, in addition to the U.S. dollar. In the United States, the mutual fund industry only offers products denominated in dollars.

  4. Offshore funds offer privacy. As with any non-U.S. investment, offshore funds make it impossible for the small army of professional asset trackers, information brokers and corporate espionage specialists that advertise their ability to uncover assets in U.S. bank and securities accounts to track your wealth. That's because when you buy an offshore fund through the auspices of a foreign private bank, that institution acts as your nominee on the transaction, protecting your privacy in the process.

  5. Offshore funds are suitable for certain structures. There are no restrictions on placing offshore funds in retirement plans, offshore annuities, or offshore life insurance policies.

  6. Offshore funds are a hedge against a sudden U.S. market disturbance. For five full days following the terrorist attack of September 11, 2001, the U.S. markets were closed. When the markets finally re-opened, the Dow had dropped 7%. Terrorism isn't the only risk - there are many other reasons why U.S. markets could shut down, such as a potential computer virus or a New York City wide blackout. Access to global trading markets and foreign currencies in an account beyond your home borders will give you added protection should disaster strike.

Wednesday, October 25, 2006

Making Money Is Not A Zero Sum Game

Most people think of creating wealth as a zero sum game.

That would be like playing Monopoly with only $500.00 dollars available for all players. If someone gains -someone else must have lost.

If you think about it, there is a great deal more wealth in the world today than there was a thousand years ago. Even calculated by toilets per capita - there are more than just two hundred years ago - and today they are inside.

I am not talking the funny money created by governments - and the inflation they create as a tax that hurts those on fixed incomes. Governments will keep printing more money until no one accepts it.

Some forms of managing money are a zero sum game. A venture into the commodities markets is entering a zero sum game. You have a contract - if you win they lose, if they win you lose - less a bit of vigorish from both of you for the facilitators.

If you start a business however, you can create products and generate wealth that does not take from others. In fact as Bastiat said:

By virtue of exchange, one man's prosperity is beneficial to all others."

A growing capitalist tide can raise all boats.

Many in fact talk about the raising gap between the rich and the poor. That is happening - but far more important is the fact that under capitalism the poor are also raised. There are a lot of poor. In a post-capitalist country like the United States the status of the poor steadily increased, until that was stopped by an increase in government instead.

"The inherent vice of capitalism is the unequal sharing of the blessings. The inherent blessing of socialism is the equal sharing of misery." - Winston Churchill

When a government takes money out of circulation for their own purpose it is not available for building general wealth. In fact we are now discovering that wealth can shrink as the various levels of government add their weight to the economy.

Shrinking wealth is not zero sum - it is also not pleasant.

If you don't have any money there are a lot of things you will not be able to do.

However if you create a lot of wealth, you can help yourself, your family, people that are important to you, and society at large.

If you don't have money you will have to hope others will help you.

There are many ways to create wealth, use them to help yourself and others.

"The risks and rewards for you from creative entrepreneurship are greater, and of far more value to society, than illusions of security that enslave a human cog in a social machine." - Allan Wallace

enjoy life - live long and prosper


Tuesday, October 24, 2006

Successful Speculation Rules - The Small Loss

Achieving success at speculation is a matter of (almost) always obeying your speculation trading rules.

The least understood successful speculation is the small loss.

Every investor hears stories about the huge profits won through a successful speculation and dreams off pulling off such a coup themselves. They never quite give themselves the opportunity for a huge speculative win because they don't have rules that allow them to reach that level.

It comes down to speculation rules like the ones on those wonderful small losses.

Psychologically it is hard to take a loss and walk away - most people won't do it. It is no coincidence that most people also lose when they invest. The standard response to a small loss is to hang on hoping you will get back to even. Unfortunately sometimes that happens - that is just encouraging enough to teach folks that it was right to hold on and hope. Then it is just a matter of time until they hold onto the wrong investment for too long and lose all their money.

While they were waiting for that first investment to come back they may have missed successful speculations that could have made them nice profits.

Plan your trade before you make it - than follow your trading plan.

If you reasoned your risk at 2% before you pulled the trigger - there is no reason to have a 10% stop loss built in. Even worse is not knowing your risk and mentally planing to get out if things "get bad." Worst of all is thinking how much money you will make and having no idea of what to do if the trade goes against you.

Simplistically, think of making ten $100.00 speculations and you lose 3% on nine of them - and get out. You have lost $27.00 of your original $1,000.00. If the tenth one doubles or better - you clear $73.00 on the whole venture. Now do it again next month.

Notice that you spread your risk, you cut your losses short, and you let your profit run. Those are some of the speculation rules - like the ones you can use to plan your trades. (I'm writing an in depth e-book on the speculation rules - it should be available before year's end.)

The key to the successful speculation was all those wonderful small losses. A small loss is a successful speculation - it allows the big win. You should be able to do better than one big return in ten - but you can do well with that.

Small losses are just one part of successful speculation.


Saturday, October 21, 2006

The Big Real Estate OUCH Is Yet To Come


I wrote a piece a few weeks ago about how
Realtors should prepare for the real estate slowdown and collapse.

The collapse is picking up speed. The destruction of real estate values starts with new homes, and then it effects the used home market. There will be plenty of vacancies and foreclosed properties in a short while to satisfy, and trap, over eager investors looking to snap up deals.

You can afford to wait.

Over at Mish's blog Mike got Mike to give a streets eye view of the home builder's implosion. It is not pretty.

In my article I made two points to Realtors, the first was to not go into denial.

If you own a home, sell homes, build homes, sell mortgages, or are otherwise involved in the real estate industry you need to read Cool Aid & Krispy Kreams.

If you are still in a trailer, your don't need to read the article, but you do need to know that jobs are going to be hard to find.

Now might be a good time to start your own internet business - internet real estate is far less regulated and manipulated, for now. Expect taxes and regulation to increase as government windfall tax thefts from the real estate boom decrease.

Our governments don't know how to cut back - they only know how to bleed more and different citizens. Start up costs on the internet are still amazingly low.

Get your internet business started now and beat the rush.

If you are still in real estate - there are already a lot of people rushing the exit, you may want to go out a (first floor) window.


Top Investment Blog For Your Money

Or if you wish this is a top investments blog.

My choice was in the blog's title - this is an anti-investment blog.

"Top investments blog" was one of the search engine entries displayed in Hit Tail as helping someone to discover the Speculation Rules investment and speculation resources.

That does make sense in a way - I view investment as a subset of speculation. My definition of investment: a product or asset that someone sells by stressing it is safer for them to speculate with your money than for you to do it yourself.

An investment is therefore a way to make money on commissions and management fees while letting the investor take the speculative risk.

Does that make Speculation Rules a top investment blog? It does if you are trying to figure out how to make some money with money, and reduce the risks of having your capital disappear.

No one cares more about your money than you do, unless they want to use your money, tax your money, charge fees on your money, or just plain steal your money.

Look through our archives, or go to our main site and find more speculation resources there. I do like the plural, investments, because we deal with all sorts of asset classes and ventures.

You will not find specific investment or speculation advice - I'll leave that to those that are well paid to guess for you. What you will find are resources and tools to create and profit from your own investment analysis, and warnings about how to protect your capitol.

If that is what it takes to be a top investments blog - consider this puff piece your introduction to: Speculation Rules - The Top Investment Blog!


Monday, October 16, 2006

Money, Investments, Fear and Greed, And More Money

I have decided not to write an entire book about money, investing, speculating and you - at this time.

I am instead working on an e-book that will give you the speculation rules to acquire wealth - and that if ignored lead to poverty. I only have about twenty pages done so far, but I hope you will enjoy the following taste. This is the introduction to that speculation rules, anti-investing, e-book:


Money is a tool – nothing more.

If you don't have any money there are a lot of things you will not be able to do.

If you make a lot of money, you can help yourself, your family, people that are important to you, and society at large.

If you don't have money you will have to hope others will help you. It is the love of money that is the root of all evil – not the money itself. Both poor and rich can be trapped by love of money.

Money is a neutral tool - like a crowbar. Some people will use it to open things – others will drop it on their toes. Your first step in successful investment is to decide if you want to make enough money to have personal freedom of choice.

If you do not want to be rich because you have been taught that money is evil and the people that have money are evil – you will subconsciously sabotage your own efforts to create wealth.

Money is just a tool.


You can help me out.

Let me know at arwally at gmail dot org if you have an investing or money question you would like addressed.

What do you most want or need to know about money matters -- right now? I'll send you a final copy of the finished $50.00 e-book in appreciation.



Sunday, October 15, 2006

Honest Investment Advice

If you want honest how to invest advice I'll be happy to direct you.

Right back to yourself.

For honest investing advice without conflicts of interest - you are your own best chance. Yes, we can lie to ourselves and even fool ourselves - but we usually work to our own best interests. It might take a bit of courage - but we can listen when we are honest - if we really want to.

Anyone else has an agenda when offering advice. They may honestly believe the advice - but they would probably not give it if it would hurt them.

A financial planner may have taken several courses in financial planning, but that usually means they have learned how to sell insurance, mutual funds, and other financial products. Whether flat fee or commission, they are working to feed themselves first, and they may even hope you do well also.

Brokers, accountants, college finance professors; they earn their living providing directions. They are not going to tell you to read a few books and handle your own money. By the time they are done talking, speculation will sound complicated and dangerous - "better let the professionals handle it" (them).

Start small, give honest investment information to yourself, learn as you go. Take a look at some of the finance book reviews at our main speculation rules site.

You can do this.

No one honestly
cares more about your investment money than you - unless they plan to use or steal your money.


Wednesday, October 11, 2006

Dire Predictions

John Greer starts and ends with peak oil, but the route he takes in between reveals a dream picture hung in front of a window to hide poverty.

Take a look at his interesting read. To find where I diverge from his views - take a look at my rant blog, Speculation Rules. You will find the first few paragraphs mirror this post.

Greer does a great job of entertaining with analogy as he points out what he calls Hallucinated Wealth.

He got me thinking along the same lines.

In our "let them eat cake" economy -- statistics and political pronouncements hide and disguise the unraveling real economy. Crashes of one bubble lead to the immediate inflation of the next bubble. Each bubble is of necessity created a bit larger and more unstable than the prior one.

The old saying that a broken clock is right two times a days is frustrating those of clear vision. They pronounce the end of a bubble and position themselves to profit from the pop, and frequently do make huge profits.

The problem is encountered in retaining the profits. Because their clear vision has shown them the bubble rests on a house of cards, they expect the bubble's burst to blow down the weak structure supporting it. They then bet accordingly.

A new bubble's emergence lifts the weakened
house of cards structure and the new imbalance comes into play.

Greer's analysis if good and worth watching and considering.

That brings us to a speculation rule:

Success is dangerous. Just because you won big does not mean your next idea is brilliant. Take money off the table, protect most of that huge gain.

Wealth is made through concentration, preserved through diversification.


Saturday, October 07, 2006

The Real Estate Slow Down - What Is A Realtor To Do?

With the real estate market changing there are two important thoughts for a Realtor to consider.

  • Don't slip into denial.

  • Change your techniques as the market changes.

I was a Realtor during the last great inflationary period. Interest rates on a new mortgage were at 15%. Real estate offices were closing, companies were going broke, Realtors were going extinct.

The company I worked for closed dozens of offices - including the one I managed. Rather than continuing managing I went back to selling - and had some of the best months of my career. In one month I put together 12 single family home transactions.

In fact during that time I referred to myself as a Jack of all trades & a master of one - real estate. I've since been humbled. I guess now I could refer to myself as a Jack of all trades, and I've been mastered by many.

There is one particular pleasure I enjoyed in the real estate profession - constant change keeps you fresh. It is fun evolving with the new rules, laws, regulations, court decisions, and market conditions. The pendulum however can swing a long way.

What happened?

As good as many Realtors were, they only evolved with markets, revolutionary change created a die off. Unable to adapt they kept doing more and more of what they had done successfully before - and disappeared.

Let me suggest two thing with hard times possibly ahead for Realtors.

Keep on keeping current in the real estate industry, but dabble in other knowledge and technology also.

Make some big changes if what you were succeeding with is starting to fail, there are some powerful tools to make revolutionary changes in your capabilities, use them.

Real estate markets can go up or down, I've watched as houses went down by double digits for years. I've seen bankers offering terms of no payments for a year on a property well under appraised value trying to unload foreclosed (REO) inventory - and having no takers.

Under these conditions, Realtors can still make good money, you will just not be able to make it the same way you did last year.


Sunday, October 01, 2006

Algorithmic Trading vs. Program Trading vs. Portfolio Insurance

Shades of 1987. The computers will make everything ok.

In 1987 the computers protected everyone's accounts with portfolio insurance. We were of course highly sophisticated and nothing could go wrong - go wron -go wro

Latter with LTCM we had Nobel prize winning financial wizards setting the programs.

When LTCM blew up all the kings horses and all the kings men created the huge bubbles we have been popping recently trying to convince the world that Humpty Dumpty was ok.

Here is a recent juicy piece from Yahoo News about an IBM report:

A report launched today by IBM suggests that nine out of ten traders employed in the City of London will have lost their jobs by 2015 as all-electronic “algorithmic trading” is adopted by their employers.

Algorithmic trading is carried out by computers largely unsupervised by human beings and reacting automatically within a split-second to price movements. It is one factor that has sent volumes on all world exchanges rising dramatically in recent years.

Nevertheless, London will continue to be a key international financial centre, IBM concludes.

We are of course very sophisticated today, and even though the programmers may not be Nobel prize award winners, we are sure nothing will go wrong -