M.A.N About Town

So the Mole claims, why not just build your own allocation for retirement. Why not manage your assets on your own. Who needs a planner to do it for you?

I hate hearing advice like that, not just because I am a planner. How many people have the time, know how, desire to do that? If you understand asset allocation, diversification, and a variety of other tools then by all means don’t waste your money to have someone tell you what you already know.

We all know however, that there are just so many risks involved, why not leave it to a professional that will ensure you can sleep at night. Who wants to look at the market everyday in retirement. I know I don’t, i’d rather golf or travel. Is saving 1% worth that risk?

Chances are you aren’t going to know if the time is best to refinance, if your estate plan won’t cripple your heirs, if you can reduce your taxes, how much you can live on in retirement, and countless other questions that a qualified professional can answer. Even if you already know, is it not wise to seek professional advice in important endeavors? Funny how you don’t see many people out there telling you not to use your accountant, or your lawyer. Your financial advisor should be the same way.

It is nice to have someone to keep an eye on what you’ve worked your entire life to build, rather than just do it yourself and risk making a dire mistake. Someone you can trust, someone that you can call when you are unsure about something. Just my two cents.

Marcus Aurelius – Mediations (Possibly a new addition to my favorite books ever written)
Education of a Speculator – Victor Neiderhoffer
The Intelligent Investor – Benjamin Graham

Thanks to Ryan Holiday to introducing me the genius of the forgotton emperor. I read in Time magazine Hu Jintao has read it numerous times.

I haven’t been able to really get into Education of a Speculator yet, as it is written very stream of consciousness style.

Some reccomended Liberal Facism to me, which I noticed several people reading when I was in Ft. Lauderdale. I find it difficult to read things like that because I feel like they are designed simply to align with the thinking of many for the purpose of selling more copies. It does not interest me to have my political views affirmed by bashing one side or the other. I tend to think they are both parties are tragically flawed.

CSN wrote this song about a post apocolypic encounter, I love listening to it.

My father would play this on his guitar when I was younger

Here is a another great Barrons read. I made some comments below at the bullets.

Gloom and Doom? Nah; Just for the U.S. – Barrons.com: “You continue to be very bearish on the U.S. But haven’t there been other times when there was lots of negative sentiment toward the U.S., only to see another era of prosperity emerge? Such as the late 1980s, when there was concern that Japan would take over the U.S. economy. Look at how that turned out.

Yes, but we haven’t been through anything like what we are going through now. The United States has really been living in a fool’s paradise, or a phony economy, probably for more than 20 years. But our economy has been growing and getting bigger and bigger. We have been able to convince the world to lend us money and to provide us with goods that we don’t produce and that we can’t afford to pay for with exports. And it has gotten to the point now where the problem is so big, especially since the real-estate bubble. We’ve now borrowed so much money from abroad. Our trade deficits are now very big, and our industrial base and our infrastructure have been allowed to decay for so long, that we are now at a point that we can only survive as an economy thanks to the charity of the rest of the world. They have provided us with all the goods that we can no longer produce because we lack the industrial capacity. And they have to lend us the money because we don’t have any savings”

• I think this is a very hard point to argue against. After reading a little bit of the intelligent investor this weekend, I feel forecasts can be deeply subject to time horizon. Many sectors of the United States economy are cheap, but will they earn money going forward? One can almost dig for them like DVDs at the bottom of the Wal-Mart bin, yet the cheap ones seem everywhere.

But isn’t there an argument that once we clean up this housing mess — along with the credit bubble, whenever that occurs — the U.S. will be a lot closer to a bottom, where the outlook begins to improve?

I don’t think that’s true. The resolution to the housing problem is going to mean housing prices are going to be a lot lower than they are now, and most Americans are not going to have any home equity. It’s going to mean that trillions of dollars will have been lost by the lenders. When the home equity is gone, Americans are broke, as they don’t have any savings. All they had was their home equity. They were counting on their home equity, without which they will be unable to pay off their credit cards

• I think this is not crystal in ball at this point. The while we are a nation of consumers, we are quite good at it. I believe that very many people are about to become very wealthy in the country because of the transfer of assets from the baby boomer retirement. The true test in my mind, will be if the middle class will exhaust this capital or ride the wave of international growth. There are some good ideas in both fixed income and global equities.