Tarkblog

I want to share my take on investing in this interesting time.

First, I think it’s pretty clear that the normal market is experiencing a very unusual bit of turbulence and free fall. And I think it’s clear that this could continue well into next year, and perhaps beyond.

There are a lot of different people sprouting wisdom as to where to put your money, what’s safe, etc. I can tell you, the one thing nearest to my heart is finding some conventional non-BS wisdom.

If you listen to professional advisors on television, they’ll all come across with various picks and plays. But you know what? A lot of them are advisors to much larger chunks of change than yourself. And they are going to give beneficial advice to those folks, because their income is much more highly derived from those larger pots.

Are they giving both the big guys and the small guys equal advice? I certainly doubt it.

Why? Because the fundamentals of the market is that to buy, someone has to be willing to sell, and to sell, someone has to be willing to buy.

If they are telling you to buy X, why would they also be telling a larger entity to buy X? It seems to me like they’d be telling their larger entity to sell X, because they have now just created a natural buyer. And visa versa.

But all of that aside, I think the fundamental issue that will plague the US over the next few years is inflation. It’s hard to think about that in the midst of a recession, especially as prices are dropping. But it’s clear that the Feds are pumping a large amount of money into the market - it just hasn’t reached consumers yet. The banks are retooling their sheets and haven’t really started the lending stimulus that was expected, though it’s coming.

In the meantime, jobs are being lost, demand is lowering, and as a result, prices are going to get lower. There’s a lot of supply still in the system. I think that part is easily understood and fundamental.

But in the medium term, supply is going to start getting lower, as producers cut back. This is natural. However, the money supply is going up…way up. And that my friends, will lead to inflation.

So, I think a hedge against inflation is a good play right now. The most obvious time tested investment is gold (or perhaps silver). Gold is fairly volatile right now, as I think people are starting to buy it up. It was in the mid 700’s just a week ago, and is now above 800. It may go up, and down, but I think that it will be a good medium/long term investment to protect against some inflation.

I’ve put some money into GLD, the Spider gold trust ETF. It’s basically an ETF that has a reserve amount of gold based on investor purchase (it is backed by hard gold bullion). That makes it a much more fundamental monetary investment over something like “trust”, which is what most other investments are made on.

If you want to follow hard gold, check out Kitco. You can buy hard bullion from them as well. One interesting thing about this is that your purchase/sell of gold isn’t tracked. They report nothing to the IRS. This seems like a huge loophole to me, but makes for a very interesting investment.

Other plays I think might be good are foreign currencies. In particular, the Swiss Franc or the Euro could be good investments also against US inflation, and especially against a falling dollar index. There are ETFs for these as well, like FXE and FXF.

In addition, I recommend spending some time listening to Peter Schiff of Euro Pacific Capital. He’s got a weekly radio/podcast that’s pretty good, but check out a few Youtube videos.

First, the compilation that’s been going around called “Peter Schiff was right”. This is a collection of videos of him from 2006-2007 predicting what’s going on today. Note especially how everyone else thinks he’s crazy, and especially where they tell you to put your money.

Now, a more recent video:

I think Peter’s views are dead-on. This injection of money is only going to make things worse, not better.

It’s been a few weeks. We got our table, in the manner as prescribed in the previous blog.

But that’s not why I’m writing. We had some folks come to the front door tonight and ask for some canned food for a food drive. Not a problem, here you go.

However, it got me thinking: if you were poor and without food, why not just go door to door asking for food for a food drive? Most people are more than willing to give out a few cans. Seems like a pretty practical way of doing it yourself! You know, cut out the middle man (food bank).

I’m not going to give you a picture of it, because it’s boring.

But I will tell you the funny story.

We bought it on target.com, around $300 or so. It’s a plain unfancy style table (and 4 chairs).

Anyway, it came in a really big box and had to be put together. Since we were gone last week, I had the table delivered to work, and today I brought it home in the company truck. It pretty much needed a truck to be delivered, it was big and heavy. I had a dolly to help get it in the house.

Tonight after dinner we put the whole thing together. Well, the whole thing except the last chair. I guess in the Malaysian factory where it was crated, they put in two right legs, instead of a right and left leg, meaning we couldn’t complete putting the thing together. It simply didn’t fit.

So Annie calls target, and talks to someone. First, she gets them to give her a $96 refund. See, the price dropped $96 since we bought it. Nevermind the fact that we had free shipping ($80 value) when we bought it, they gave her the price match. So we saved $96 and got free shipping, after the fact.

Now, on to the leg. The person she talked to ended up giving her an 800 number to call, and she did. She talked with them a bit, but they basically told her since she didn’t buy the table directly from them, there was nothing she can do.

So she calls back, and talks to someone else, and explains the situation. And here’s what the proposed:

They will send us another complete table set. We will take out the correct leg, put back in the bad leg, and then return the table set. No charge for shipping.

Wow, seems a bit like overkill, no?

Anyway, in the meantime the target guy identified an e-mail address that we have to send off to in order to get the part issue resolved. If that doesn’t work though, another table is coming our way.

Celeb and I were in Asheville, NC last week so we decided to drop by Biltmore House, America’s Largest Home.

Biltmore House was quite impressive. Here’s a few interesting facts:
–The inside of the house is over 4 acres.
–There are 65 bedrooms and 41 bathrooms.
–The estate is over 6000 acres.
–The house had an indoor swimming pool illuminated with underwater electric lights.
–In addition to being able to tour the house you can visit the onsite winery, equestrian center, petting zoo, their own farm, and take a segway tour, plus more.

We weren’t able to take pictures inside the house but here are a few pictures from the property.

There’s a little place just south of town called Granny Beas. It’s a really tiny shop that sells VHS, DVDs, CDs, and video games of all types. That’s all it is. Thousands of these things on shelves in a little tiny building. You can buy old school nintendo games there as well.

Just down the road is an IGA store, which is a small independent grocery story.

Both of these are in a pretty rural area. They’re along a highway, though not a major one at all, and really just serve the rural folks who live out that way. Granny Beas does draw people in from further, but certainly not the grocery store.

Recently, the grocery store closed. I can only presume because there just wasn’t enough business in the area to support it.

Not soon after, Granny Beas moved into the grocery store building, giving is much much more space for all of the stuff they sell.

And, in recent days, someone has taken the old Granny Beas store and turned it into a small grocery store.

So, we’re basically right back to where we started, except there’s a bigger selection of movies and a smaller selection of meat.