I just bought some Mattel stock. It had been one of my core holdings, but
had swapped out of it for Hasbro, but Mattel dropped recently and has
low PE and over 4% dividend, so now back to one of my core holdings,
along with Hasbro.
Also, added some to my AT&T stock, since price dip and high dividend.
I just had a CD mature, so invested some in those stocks.
My portfolio, in order of largest holding to least....
INTC (Intel)
WAG (Walgreen)
PEP (Pepsi)
PG (Procter & Gamble)
GPC (Genuine Parts)
MAT (Mattel)
HAS (Hasbro)
MMM (3M)
KO (Coca Cola)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
.375 of 2023 TIPS (Treasury Inflation Protected Securities)
K (Kellogg)
DPS (Dr. Pepper, Snapple)
6% GNMA (Government National Mortgage Association) Bonds
Stocks make up abt 23% of my assets. Other assets are CDs, a home
mortgage and about 2% precious metals + TIPS.
Tuesday, February 25, 2014
Tuesday, January 14, 2014
My Review of "What Happened To Goldman Sachs"
4 out of 5 stars.....
This former Goldman Sachs insider employee,
Steven Mandis, does a very good job in presenting both the history of
the firm and how it changed.
Founded over a hundred years ago as a partnership, partners had the same values, extremely ethical, basically to care most for the customers and think "long-term greedy" so that if the customers were treated well and the customers knew that, the partners would do well even if the film would sacrifice profits in the short term to please the customers. And, as a partnership, the partners were personally liable, so that all the partners' money was at risk, not just their money in the firm, but their personal assets also, therefore creating an environment of trust between partners and customers.
So, a culture of both high ethical values and high profits created a renowned culture, so much so, the firm was able to easily recruit the best talent where each new recruit strove to be a partner. It created a real team approach, everything for the customers and all employees.
The author described how that once proud culture didn't change overnight or dramatically over time, but "drifted."
The drift began when the firm, around the 1980's changed to a limited partnership, LLC, so that only the partners' assets held at the firm were at risk. This change happened as competition grew and instead of concentrating on things like mergers and acquisitions, and financing for such deals - investment banking functions, expanded into where really big profits were, propriety trading. The industry had metastasized, so Goldman Sachs risked not attracting big clients.
Then, in 1999 the firm went public, with an IPO, the last major investment bank to do so. Now, the firm had a priority to shareholders first, clients second even though the firm still had fiduciary responsibilities to them. Plus, the partners no longer had much liability. So, the firm was now more concerned with following just legal responsibilities, making it harder to follow just high ethical standards with clients, as public companies were required to treat shareholders first, plus have a short term outlook, rather than the former long term outlook. Also, as the company became more complex, compensation policies changed, therefore less of a team approach.
The author is perhaps most critical of Jon Corzine and Lloyd Blankfien in transforming the firm around this time, to making it competitive with the other companies especially with propriety trading.But, there still was much of that previous culture around, almost religious, so much so, the employees believed so even if not as true anymore. So, the firm "drifted," still maybe a cut ahead of the competition on ethics and reputation. It did survive the 2008 financial crash, but needed help. Also, this drift happened at other firms and really a warning to all about the industry.
Some points also from the book:
1. After the crash it was revealed in an email some securities sold to clients were "s***y.'
2. Goldman Sachs always did have a commitment to public service, part of its culture of a sense of higher purpose, and thus around 1979 many former employees went to work for the federal government. This did have the effect of expanding the firm's powerful network.
3. Part of the firm's rationalizations that it's shareholder responsibilities didn't really hurt clients is that they considered the clients "big boys" and were aware of the new risks.
4. Goldman did branch out into asset management in 1928 with closed end trust funds, which cratered with the 1929 crash and Goldman did close down for a time.
5. In 2012, in an Op Ed, former employee, Greg Smith, called the culture at Goldman "toxic," specifically blaming CEO Blankfein and president Gary Cohn.
6. Since teamwork was so important to Goldman originally, it strove to recruit those with team sports, military and public service backgrounds.
7. As competition grew, Goldman expanded internationally, even taking on some questionable clients like the Libya sovereign wealth fund.
8. Goldman was accused of its privileged position of trust and confidentiality regarding its bailout of Long Term Capital Management (LTCM).
9. In 2003, Goldman settled charges by the SEC for conflicts of interest by research analysts by paying $110M in fines, because of the Sarbanes-Oxley Act, passed in 2002.
10. Beginning in 1999, Goldman's board of directors had some outside directors, so less knowledge of inside workings of the company.
11. It is debatable whether Goldman could have survived the 2008 financial crash without help from the government.
12 In 2006, Goldman was betting against mortgage bonds it was selling to clients, resulting in a fine.
13. The author counted negative and positive articles about Goldman in the NY Times from 1980-2012, and found more positive before 2007 and more negative after 2007. Most of the negative articles after 2007 dealt with conflicts with clients and connections to the government.
14. A former employee, Greg Smith, mentioned above, wrote a scathing Op Ed, criticizing Goldman with treating clients as "Muppets."
15. Goldman spent over $15M lobbying Dodd-Frank.
In conclusion, Goldman's culture drifted over time, less to welfare of its clients and more to welfare of it. All the while, even current employees felt they were serving a higher purpose, based on original culture. Meanwhile, clients still seemed to prefer Goldman because it was better than its competition, not a very good testimony to the industry
Founded over a hundred years ago as a partnership, partners had the same values, extremely ethical, basically to care most for the customers and think "long-term greedy" so that if the customers were treated well and the customers knew that, the partners would do well even if the film would sacrifice profits in the short term to please the customers. And, as a partnership, the partners were personally liable, so that all the partners' money was at risk, not just their money in the firm, but their personal assets also, therefore creating an environment of trust between partners and customers.
So, a culture of both high ethical values and high profits created a renowned culture, so much so, the firm was able to easily recruit the best talent where each new recruit strove to be a partner. It created a real team approach, everything for the customers and all employees.
The author described how that once proud culture didn't change overnight or dramatically over time, but "drifted."
The drift began when the firm, around the 1980's changed to a limited partnership, LLC, so that only the partners' assets held at the firm were at risk. This change happened as competition grew and instead of concentrating on things like mergers and acquisitions, and financing for such deals - investment banking functions, expanded into where really big profits were, propriety trading. The industry had metastasized, so Goldman Sachs risked not attracting big clients.
Then, in 1999 the firm went public, with an IPO, the last major investment bank to do so. Now, the firm had a priority to shareholders first, clients second even though the firm still had fiduciary responsibilities to them. Plus, the partners no longer had much liability. So, the firm was now more concerned with following just legal responsibilities, making it harder to follow just high ethical standards with clients, as public companies were required to treat shareholders first, plus have a short term outlook, rather than the former long term outlook. Also, as the company became more complex, compensation policies changed, therefore less of a team approach.
The author is perhaps most critical of Jon Corzine and Lloyd Blankfien in transforming the firm around this time, to making it competitive with the other companies especially with propriety trading.But, there still was much of that previous culture around, almost religious, so much so, the employees believed so even if not as true anymore. So, the firm "drifted," still maybe a cut ahead of the competition on ethics and reputation. It did survive the 2008 financial crash, but needed help. Also, this drift happened at other firms and really a warning to all about the industry.
Some points also from the book:
1. After the crash it was revealed in an email some securities sold to clients were "s***y.'
2. Goldman Sachs always did have a commitment to public service, part of its culture of a sense of higher purpose, and thus around 1979 many former employees went to work for the federal government. This did have the effect of expanding the firm's powerful network.
3. Part of the firm's rationalizations that it's shareholder responsibilities didn't really hurt clients is that they considered the clients "big boys" and were aware of the new risks.
4. Goldman did branch out into asset management in 1928 with closed end trust funds, which cratered with the 1929 crash and Goldman did close down for a time.
5. In 2012, in an Op Ed, former employee, Greg Smith, called the culture at Goldman "toxic," specifically blaming CEO Blankfein and president Gary Cohn.
6. Since teamwork was so important to Goldman originally, it strove to recruit those with team sports, military and public service backgrounds.
7. As competition grew, Goldman expanded internationally, even taking on some questionable clients like the Libya sovereign wealth fund.
8. Goldman was accused of its privileged position of trust and confidentiality regarding its bailout of Long Term Capital Management (LTCM).
9. In 2003, Goldman settled charges by the SEC for conflicts of interest by research analysts by paying $110M in fines, because of the Sarbanes-Oxley Act, passed in 2002.
10. Beginning in 1999, Goldman's board of directors had some outside directors, so less knowledge of inside workings of the company.
11. It is debatable whether Goldman could have survived the 2008 financial crash without help from the government.
12 In 2006, Goldman was betting against mortgage bonds it was selling to clients, resulting in a fine.
13. The author counted negative and positive articles about Goldman in the NY Times from 1980-2012, and found more positive before 2007 and more negative after 2007. Most of the negative articles after 2007 dealt with conflicts with clients and connections to the government.
14. A former employee, Greg Smith, mentioned above, wrote a scathing Op Ed, criticizing Goldman with treating clients as "Muppets."
15. Goldman spent over $15M lobbying Dodd-Frank.
In conclusion, Goldman's culture drifted over time, less to welfare of its clients and more to welfare of it. All the while, even current employees felt they were serving a higher purpose, based on original culture. Meanwhile, clients still seemed to prefer Goldman because it was better than its competition, not a very good testimony to the industry
Tuesday, December 03, 2013
Portfolio - "Update"
I've taken a small position in TIPS (Treasury Inflation Protected Securities). I bought the .375's of 2023 at abt 98, so they have a guaranteed profit, minimal if deflation, and a little more than inflation as measured by core CPI, if inflation. I will hold to maturity or only sell if at a good profit and if the price drops in the interim, likely buy more. Also, I added a link to my blog, "Bonds - TIPS Prices." Also, I've included my holdings of GNMAs. The reason I didn't before is because they have, because of the capital they have returned, the face amount is very small. No reason to sell since they do pay 6% interest. I had bought them a long time ago. The only reason I mention them now is because they are also the kinds of bonds besides Treasuries which I would consider if mortgage rates made them worthwhile. My portfolio now stands, in order of largest holding to least......
INTC (Intel)
WAG (Walgreen)
PG (Procter & Gamble)
PEP (Pepsi)
GPC (Genuine Parts)
KO (Coca Cola)
HAS (Hasbro)
MMM (3M)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
.375 of 2023 TIPS (Treasury Inflation Protected Securities)
DPS (Dr. Pepper, Snapple)
6% GNMA (Government National Mortgage Association) Bonds
Stocks make up abt 20% of my assets. Other assets are CDs, a home mortgage and about 2% precious metals + TIPS.
INTC (Intel)
WAG (Walgreen)
PG (Procter & Gamble)
PEP (Pepsi)
GPC (Genuine Parts)
KO (Coca Cola)
HAS (Hasbro)
MMM (3M)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
.375 of 2023 TIPS (Treasury Inflation Protected Securities)
DPS (Dr. Pepper, Snapple)
6% GNMA (Government National Mortgage Association) Bonds
Stocks make up abt 20% of my assets. Other assets are CDs, a home mortgage and about 2% precious metals + TIPS.
Sunday, October 20, 2013
Ready to Rock n' Roll
The way I see the US economic situation after the government shutdown and possible national debt default, we came out excellently. Sure, abt $24B was lost to the economy and some short-term problems do linger, but, politically it does look like the main obstructionists have been defeated and likely some meaningful compromises can be made to avert the future possible shutdown and debt default early next year. So, likely the US economic situation will be improved by long-term debt reduction and better confidence in our economy, hence most spending held back by consumers and businesses, will now move forward. And, actually the shutdown did help some things from an economic standpoint - less of a budget deficit. So, some short-term pain, but we come away stronger. Plus, 10-year Treasury rates have come down from abt 3% to abt 2.6%, and with Janet Yellin nominated to head the Fed, the Fed likely will stay favorable, which is good for RE, stocks, bonds, etc.
As for stocks, anything can happen, but with good fundamental things in the economy, even if we have a major correction, it is overdue and likely just be a good time to pick up bargains.
As for stocks, anything can happen, but with good fundamental things in the economy, even if we have a major correction, it is overdue and likely just be a good time to pick up bargains.
Sunday, September 22, 2013
My Review of "Warren Buffett's 3 Favorite Books"
5 out of 5 stars.....
Should be read by any serious investor, beginning or even experienced for refreshing one's knowledge. The book focuses on long-term value investing with stocks. But, even if one is a speculator with short-term thinking, I think such a person could benefit because this is such a good, including concise, presentation.
The author shows how to value a stock and best time for a purchase and sale. Rather than go into all the stock financial terms/data covered, I'll just mention one because if a reader just remembers one way to value a stock, I think makes the book worthwhile: PE * (Price / Book Value) < or = 22.5 to be considered a good value. Sure, other data should be weighed, but a pretty good starting point in selecting a stock for further research.
Also included in the book are links to very good videos, to enhance understanding concepts in the book.
Excellent stock investing book!
Should be read by any serious investor, beginning or even experienced for refreshing one's knowledge. The book focuses on long-term value investing with stocks. But, even if one is a speculator with short-term thinking, I think such a person could benefit because this is such a good, including concise, presentation.
The author shows how to value a stock and best time for a purchase and sale. Rather than go into all the stock financial terms/data covered, I'll just mention one because if a reader just remembers one way to value a stock, I think makes the book worthwhile: PE * (Price / Book Value) < or = 22.5 to be considered a good value. Sure, other data should be weighed, but a pretty good starting point in selecting a stock for further research.
Also included in the book are links to very good videos, to enhance understanding concepts in the book.
Excellent stock investing book!
Sunday, August 18, 2013
Portfolio "Update"
I've taken a position in DPS (Dr. Pepper, Snapple), but am really waiting for a significant drop in the stock market, to pick up more DPS or of other stocks I hold or CLX (Clorox). Many stocks have exploded to unreasonable PE's. Also, I see the economy as close to a pivot point - either continuing its recovery, even improving it or, because of the bevvy of obstructionists in Congress, possible return to recession. The really big test will be the 2014 elections to see which way the voters want to take the economy. But, since market timing is unpredictable, I'll just wait and stick with my approach, collecting ever increasing dividends and wait for opportunities to present themselves. Stocks I hold in order from largest holding to lowest:
INTC (Intel)
PEP (Pepsi)
WAG (Walgreen)
PG (Procter & Gamble)
GPC (Genuine Parts)
KO (Coca Cola)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
DPS (Dr. Pepper, Snapple)
Stocks now make up about 20% of my portfolio. with my goal of about 25% as new cash and dividends come in. Other assets are CDs, a home mortgage and about 2% precious metals.
INTC (Intel)
PEP (Pepsi)
WAG (Walgreen)
PG (Procter & Gamble)
GPC (Genuine Parts)
KO (Coca Cola)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
DPS (Dr. Pepper, Snapple)
Stocks now make up about 20% of my portfolio. with my goal of about 25% as new cash and dividends come in. Other assets are CDs, a home mortgage and about 2% precious metals.
Saturday, June 15, 2013
Portfolio "Update"
I've sold MSFT and JNJ to take profits and along with some new cash, add to my holdings of GPC, HAS, SYY and PG. Currently, since the stock market is correcting, I am holding new cash, in order to purchase stock when the opportunity seems right. My current stock portfolio, from largest position to smallest is:
INTC (Intel)
PEP (Pepsi)
WAG (Walgreen)
PG (Procter & Gamble)
GPC (Genuine Parts)
KO (Coca Cola)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
Stocks now make up about 19.3% of my portfolio. with my goal of about 25% as new cash and dividends come in. Other assets are CDs, a home mortgage and about 2% precious metals.
INTC (Intel)
PEP (Pepsi)
WAG (Walgreen)
PG (Procter & Gamble)
GPC (Genuine Parts)
KO (Coca Cola)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
Stocks now make up about 19.3% of my portfolio. with my goal of about 25% as new cash and dividends come in. Other assets are CDs, a home mortgage and about 2% precious metals.
Monday, April 08, 2013
Portfolio - "Update"
One CD of mine matured and I bought some INTC stock with the proceeds, having also picked up some INTC recently. INTC's yield is about 4.3 %, a little better than the CD. Plus, with only a PE of about 10, it was pretty hard for me to pass up, especially since most other stocks I like have run up quite a bit in price this year. This is my stock portfolio, largest holding to least....
INTC (Intel)
WAG (Walgreen)
PEP (Pepsi)
PG (Procter & Gamble)
KO (Coca Cola)
GPC (Genuine Parts)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
MSFT (Microsoft)
JNJ (Johnson & Johnson)
Stocks now make up about 18.5% of my assets, with my goal being about 25% as I route some of my cash flow to stocks, as situations present themselves.Other assets are mostly CDs and holding a home mortgage, also about 2% precious metals.
INTC (Intel)
WAG (Walgreen)
PEP (Pepsi)
PG (Procter & Gamble)
KO (Coca Cola)
GPC (Genuine Parts)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
MSFT (Microsoft)
JNJ (Johnson & Johnson)
Stocks now make up about 18.5% of my assets, with my goal being about 25% as I route some of my cash flow to stocks, as situations present themselves.Other assets are mostly CDs and holding a home mortgage, also about 2% precious metals.
Sunday, April 07, 2013
My Review of "The Unfair Trade"
5 out of 5 stars......
The global economy changed everything and it is unfair. Money politics must be destroyed for democracy to flourish. Neo-liberal economics of a free economy is not free to all. Undervalued Chinese currency favored exporting over domestic consumerism....should be less saving in China and more saving in the US. Tea Party and OWS should create new institutions instead of attacking old ones. Nixon taking the US off the gold standard unshackled the FED all the way to today's QE's. Both gold and paper fail because international cooperation is needed. Repeal of Glass-Steagall. Breakup of USSR led the way for more neo-liberal, free-market economics. The great financial transfer of our age - China/Asian savings buying US assets (Treasuries). GWBush/Greenspan - debt/low interest rates led to housing bubble and creation of AAA junk sold all over the world. Euro was the bubble creating power of Europe alowing Italy, Greece, Spain, Portugal,Iceland, etc to borrow at low interest rates.BRICs did well being smart, but commodity inflation hurt many poor like with the Arab Spring. Chimerica led to deflationary forces in the US. China's infrastructure all geared to manufacturing, Germany a moreefficient manufacture than the US because of its better infrastructure. Chinese economy flawed because too dependence on cheap labor. Problems will remain until Chinese become big consumers to lesson deflation in US.
W. Austrailia became wealthy because of mineral resources demanded by China - potential bubble? Race to the bottom - Mexico can't compete with China on manufacturing - so crime/murders rampant. Globalization makes regulating banks harder. Income disparity isn't as important as the disparity of the financial industry and the rest of the economy where "too big to fail" creates all kinds of unfair situations including income disparities.Lobbyists still the biggest problem keeping the financial industry in control. Iceland is a pretty good example how a runaway financial industry wrecked the country, but then Iceland was able to finally cut it down to size, so to speak.
Anyway, the Global economy has caused all kinds of distortions, leaving too many people behind and can only be corrected by proper control of the financial industry, including international agreements so that proper regulation can occur.
The global economy changed everything and it is unfair. Money politics must be destroyed for democracy to flourish. Neo-liberal economics of a free economy is not free to all. Undervalued Chinese currency favored exporting over domestic consumerism....should be less saving in China and more saving in the US. Tea Party and OWS should create new institutions instead of attacking old ones. Nixon taking the US off the gold standard unshackled the FED all the way to today's QE's. Both gold and paper fail because international cooperation is needed. Repeal of Glass-Steagall. Breakup of USSR led the way for more neo-liberal, free-market economics. The great financial transfer of our age - China/Asian savings buying US assets (Treasuries). GWBush/Greenspan - debt/low interest rates led to housing bubble and creation of AAA junk sold all over the world. Euro was the bubble creating power of Europe alowing Italy, Greece, Spain, Portugal,Iceland, etc to borrow at low interest rates.BRICs did well being smart, but commodity inflation hurt many poor like with the Arab Spring. Chimerica led to deflationary forces in the US. China's infrastructure all geared to manufacturing, Germany a moreefficient manufacture than the US because of its better infrastructure. Chinese economy flawed because too dependence on cheap labor. Problems will remain until Chinese become big consumers to lesson deflation in US.
W. Austrailia became wealthy because of mineral resources demanded by China - potential bubble? Race to the bottom - Mexico can't compete with China on manufacturing - so crime/murders rampant. Globalization makes regulating banks harder. Income disparity isn't as important as the disparity of the financial industry and the rest of the economy where "too big to fail" creates all kinds of unfair situations including income disparities.Lobbyists still the biggest problem keeping the financial industry in control. Iceland is a pretty good example how a runaway financial industry wrecked the country, but then Iceland was able to finally cut it down to size, so to speak.
Anyway, the Global economy has caused all kinds of distortions, leaving too many people behind and can only be corrected by proper control of the financial industry, including international agreements so that proper regulation can occur.
My Review of "Europe's Financial Crisis"
3 out of 5 stars....
This book is pretty good in describing the steps which led Europe to its current problems and juxtaposed America's handling of its financial mess which also became part of Europe's mess.
Anyway, the book does think pretty much all financial markets have been tampered with such that their future directions are more uncertain than usual. As for Europe, more planning for the Euro should have happened especially since there are significant problems remaining, mostly political. Weak nations can be bailed out, but it is doubtful politics will allow that, so probably too much austerity will still lead to real recovery being delayed. The author does think it would be wise if a few of the smaller/weaker nations left, but that still would leave Spain and Italy, two nations too large to leave but with much different politics than the strongest nations. So, it is hard to see things working out well in the foreseeable future.
So, a good book in laying out what has happened, but it doesn't seem to me there are any great revelations as to what might happen.
This book is pretty good in describing the steps which led Europe to its current problems and juxtaposed America's handling of its financial mess which also became part of Europe's mess.
Anyway, the book does think pretty much all financial markets have been tampered with such that their future directions are more uncertain than usual. As for Europe, more planning for the Euro should have happened especially since there are significant problems remaining, mostly political. Weak nations can be bailed out, but it is doubtful politics will allow that, so probably too much austerity will still lead to real recovery being delayed. The author does think it would be wise if a few of the smaller/weaker nations left, but that still would leave Spain and Italy, two nations too large to leave but with much different politics than the strongest nations. So, it is hard to see things working out well in the foreseeable future.
So, a good book in laying out what has happened, but it doesn't seem to me there are any great revelations as to what might happen.
Saturday, April 06, 2013
My review of "Street Smarts"
4 out of 5 stars.....
Jim Rogers goes through much of his personal biography, growing up in Alabama, graduated from Yale, studying history, then worked on WS for awhile and got hooked on investing, then off to Oxford to learn more of the world, then got back to finance, hooking up with George Soros and the very successful Quantum hedge fund, all the while having a passion to travel the world and basically figure out things.
Anyway, he is convinced the US is in decline, as all great civilizations eventually do, basically because we are too much in debt...while it is China and Asia which will dominate. Beginning in 1999, he saw a bull market in commodities with US workers falling behind seeking white collar jobs, rather than getting into farming and commodity related businesses. NYC - hotels and airports don't compare to Asia.
He is critical of the 2008 crash, thinking we should have let all the banks, etc go bankrupt...that capitalism can't exist without bankruptcy.....creative destruction as Schumpeter said.
He thinks US education should make greater use of the Internet.............thinks our college system is in a bubble which won't last.
He does feel immigration is great and would prefer no borders. Throughout history the most profitable societies were open to the world.
He does think our federal government should make better use of the Internet and have politicians stay home mostly and vote from there....less contact with DC lobbyists, etc.
He advocates bringing all troops home, not taxing savings and investments, and a simpler tax code.
His key advice to any investor is to ignore him and concentrate on what you know best - everyone has something they know more about than most people.
Overall, a very good book, especially welcome because Rogers is a truly successful investor. That said, one should read the book with a critical eye.....maybe Rogers would understand the US better if he wasn't such a world traveler.....but, I can't say he's wrong...but, personally I do think the US is still unmatched in creativity, I do have more hope for the US than he does.
Tuesday, March 05, 2013
Saturday, February 16, 2013
Portfolio - "Update"
The only change to my portfolio was the selling of my AVP options and taking the proceeds and buying some MSFT stock.......MSFT, because it pays a good dividend and shows a trend to raising the dividend each year, and is a solid company with a good balance sheet, which fits with all stocks I own, so that I really don't care what the stock price does as the income increases each year, though since all are solid companies, I assume sooner or later the price will exceed its current price.....while I will react to any meaningful changes to the companies. So my current stock portfolio, in the order of largest holding to smallest.....
WAG (Walgreen)
PEP (Pepsi)
PG (Procter & Gamble)
KO (Coca Cola)
GPC (Genuine Parts)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
MSFT (Microsoft)
JNJ (Johnson & Johnson)
Stocks now make up about 14.5% of my assets, with my goal being about 25% as I route some of my cash flow to stocks, as situations present themselves.
WAG (Walgreen)
PEP (Pepsi)
PG (Procter & Gamble)
KO (Coca Cola)
GPC (Genuine Parts)
MMM (3M)
HAS (Hasbro)
ADP (Automatic Data Processing)
T (AT&T)
KMB (Kimberly Clark)
SYY (Sysco)
MSFT (Microsoft)
JNJ (Johnson & Johnson)
Stocks now make up about 14.5% of my assets, with my goal being about 25% as I route some of my cash flow to stocks, as situations present themselves.
Thursday, February 07, 2013
The "sequester?"
Although I think a deal will be done to avert the March 1st "sequester,"
I do think the recovery is solidly in place enough, so the sequester,
at worst will not harm the economy too much, maybe just causing a slight
recession.......but some deficit reduction is really OK at this time to
calm financial markets from worrying too much about the nation's deficit
and outstanding debt.
As I judge the economy right now, there is plenty of cash around (booming stock and bond markets), more truly wealthy people, plus the economy is now solidly in the recovery mode, slow, but slow is good since more longer lasting. And, CA is currently BOOMING with the budget now forecast to be in surplus by 2014, the largest reduction in unemployment in 25 years, currently an oil boom in Bakersfield, the Facebook IPO, Tesla being Motor Trend Car of the Year, etc. And at about 12% of the nation, enough to lead the economy no matter what obstructionist politicians do. The BOOM is on…..maybe the greatest ever…..sure, there will be a bubble to be popped, but still much too early……as for bid-up RE prices in some areas, just a typical thing happening at the start of a boom. For those who think the middle and lower classes are being left out……true, but just a sign that there are so many more people left to keep the boom continuing, when they eventually benefit from the economy…….plus, booms always climb a wall of worry……the more I hear words like “crazy” and “insane” while things like employment, RE and stock prices are still well below highs, just makes me more confident. So, as far as any negative impact of the "sequester" or market worry about the possible sequester going into effect, I see it as just an opportunity to load up on undervalued stocks, stocks of great companies which have good balance sheets, pay good dividends and have a history of raising them each year......stocks, like INTC (Intel), MSFT (Microsoft) and some stocks I already hold and I think are undervalued like HAS (Hasbro), in particular, but any other which dips decently in price.
As I judge the economy right now, there is plenty of cash around (booming stock and bond markets), more truly wealthy people, plus the economy is now solidly in the recovery mode, slow, but slow is good since more longer lasting. And, CA is currently BOOMING with the budget now forecast to be in surplus by 2014, the largest reduction in unemployment in 25 years, currently an oil boom in Bakersfield, the Facebook IPO, Tesla being Motor Trend Car of the Year, etc. And at about 12% of the nation, enough to lead the economy no matter what obstructionist politicians do. The BOOM is on…..maybe the greatest ever…..sure, there will be a bubble to be popped, but still much too early……as for bid-up RE prices in some areas, just a typical thing happening at the start of a boom. For those who think the middle and lower classes are being left out……true, but just a sign that there are so many more people left to keep the boom continuing, when they eventually benefit from the economy…….plus, booms always climb a wall of worry……the more I hear words like “crazy” and “insane” while things like employment, RE and stock prices are still well below highs, just makes me more confident. So, as far as any negative impact of the "sequester" or market worry about the possible sequester going into effect, I see it as just an opportunity to load up on undervalued stocks, stocks of great companies which have good balance sheets, pay good dividends and have a history of raising them each year......stocks, like INTC (Intel), MSFT (Microsoft) and some stocks I already hold and I think are undervalued like HAS (Hasbro), in particular, but any other which dips decently in price.
Monday, January 14, 2013
Portfolio - "Update"
I recently did make a major change to my portfolio. I sold some stock and raised some cash from CDs to finance a home purchase for my family, where I will live. It was complicated and took advantage of two short sales and a still discounted home price (about 26% from the 2005 new-home purchase price). The result for me, holding the mortgage on the home. So, besides the mortgage, stocks, etc are....
PEP (Pepsico)
WAG (Walgreen)
PG (Procter and Gamble
KO (Coca Cola)
GPC (Genuine Products)
MMM (3M)
ADP (Automatc Data Processing)
HAS (Hasbro)
KMB (Kimberly Clark)
T (AT&T)
SYY (Sysco)
JNJ (Johnson & Johnson)
AVP (Avon Products) 2014 call options
The stock portfolio represents about 13% of my net worth, Gold/Silver about 2%, and CDs, cash and Mortgage (about 85%). And I will be using my investment cash flow to build up my stock portfolio to about 25% of my net worth, depending upon which stock opportunities exist. Also, I continue to hold no debt.
PEP (Pepsico)
WAG (Walgreen)
PG (Procter and Gamble
KO (Coca Cola)
GPC (Genuine Products)
MMM (3M)
ADP (Automatc Data Processing)
HAS (Hasbro)
KMB (Kimberly Clark)
T (AT&T)
SYY (Sysco)
JNJ (Johnson & Johnson)
AVP (Avon Products) 2014 call options
The stock portfolio represents about 13% of my net worth, Gold/Silver about 2%, and CDs, cash and Mortgage (about 85%). And I will be using my investment cash flow to build up my stock portfolio to about 25% of my net worth, depending upon which stock opportunities exist. Also, I continue to hold no debt.
Tuesday, January 01, 2013
My Review of "Paying the Price"
5 out of 5 stars......
First off, I already respect the author, Mark Zandi, since he does appear to be one of the more reasoned voices during the last several years during this financial mess of recent years.
And after reading the book, I also conclude this book is well-reasoned and excellent for anyone who seeks to be better informed about what has happened and the risks which lie ahead. Some of the things from the book which I think are noteworthy.....
1. Great Recession bad, but bottomed by 6/2009 with 8.75M jobs lost and unemployment 10+%. By 2012, Occupy WS and youth have re-shaped lives, some good (save more/spend less), some bad (less likely to seize opportunities or start new ventures even though the economy needs them).
2. Large businesses are doing well, WS is back and bank failures have abated. What policy makers did to stem the financial panic and combat the Great Recession (GR) remains controversial, but can be judged a success, including the auto bailout.
3. Obama blundered by saying unemployment wouldn't rise above 8% with the Recovery Act.
4. Government policy stopped deflation in housing, while being least effective with mortgage modifications and re-financing's.
5. Dodd/Frank not perfect but had some good things - didn't solve "too big to fail," but makes failures more manageable like with stress tests.
6. The US outlook has never been brighter.
7. Only when the US gov't went all-in in acquiring stakes and debt of largest US financial institutions did the system's free-fall stop.
8. Unlike 2000, the Global Economy was using US financial institutions for investments/savings - Treasuries first then mortgage-backed bonds. Securitizing of bonds and of mobile homes, credit card debt, no-down, no-doc mortgages, etc resulted in regulators hurt by complexity of the system. Banks usually capitalized at 10xCash, but investment banks 30x and Fannie and Freddie 70x.
9. Fannie and Freddie were bit players -- mortgages dominated by the private sectors, but in 2008 concern triggered panic - Lehman should have been taken over, not permitted to fail. After bailouts, banks resumed lending to each other, FDIC ended silent runs by raising FDIC insurance. TARP made it all work. Also TAF, banks borrowing from the FED via silent auctions, creative loans to investment banks, PDCF, TSLF, QE's, etc all helped. However, ultimate judgment can't be made until the FED begins retreating from all the stimulating.
10. Emergency unemployment insurance is one of the largest economic multipliers.
11. Austerity made Europe worse. The US Recovery Act (ARRA) passed Feb 2009 GR ended in June. CBO said ARRA lowered jobless rate by 2%.
12. Should have been rapid principal markdowns on mortgages. FHA came to life, but offered loans as intended in 1930's. Temp. tax credits worked, stops buyers from waiting for prices to drop further.
13. Bankruptcy is OK for non-financial companies, but not for financial ones since they deteriorate quicker/bank runs, etc. Fixing the financial plumbing - Dodd/Frank not perfect, but helped - stress tests and identifying SIFI's sooner and making sure they have enough capital and liquidity. Important to have large banks so the US remains competitive in the global economy. The US financial system, despite its risks, powers the most productive economy in the world. Financial crises are most difficult because they choke off credit - so, must restart credit ASAP to fuel a staggered economy.
So, an excellent book, especially welcomed because Mark Zandi, the author, I judge to be more open-minded than the typical economist.
First off, I already respect the author, Mark Zandi, since he does appear to be one of the more reasoned voices during the last several years during this financial mess of recent years.
And after reading the book, I also conclude this book is well-reasoned and excellent for anyone who seeks to be better informed about what has happened and the risks which lie ahead. Some of the things from the book which I think are noteworthy.....
1. Great Recession bad, but bottomed by 6/2009 with 8.75M jobs lost and unemployment 10+%. By 2012, Occupy WS and youth have re-shaped lives, some good (save more/spend less), some bad (less likely to seize opportunities or start new ventures even though the economy needs them).
2. Large businesses are doing well, WS is back and bank failures have abated. What policy makers did to stem the financial panic and combat the Great Recession (GR) remains controversial, but can be judged a success, including the auto bailout.
3. Obama blundered by saying unemployment wouldn't rise above 8% with the Recovery Act.
4. Government policy stopped deflation in housing, while being least effective with mortgage modifications and re-financing's.
5. Dodd/Frank not perfect but had some good things - didn't solve "too big to fail," but makes failures more manageable like with stress tests.
6. The US outlook has never been brighter.
7. Only when the US gov't went all-in in acquiring stakes and debt of largest US financial institutions did the system's free-fall stop.
8. Unlike 2000, the Global Economy was using US financial institutions for investments/savings - Treasuries first then mortgage-backed bonds. Securitizing of bonds and of mobile homes, credit card debt, no-down, no-doc mortgages, etc resulted in regulators hurt by complexity of the system. Banks usually capitalized at 10xCash, but investment banks 30x and Fannie and Freddie 70x.
9. Fannie and Freddie were bit players -- mortgages dominated by the private sectors, but in 2008 concern triggered panic - Lehman should have been taken over, not permitted to fail. After bailouts, banks resumed lending to each other, FDIC ended silent runs by raising FDIC insurance. TARP made it all work. Also TAF, banks borrowing from the FED via silent auctions, creative loans to investment banks, PDCF, TSLF, QE's, etc all helped. However, ultimate judgment can't be made until the FED begins retreating from all the stimulating.
10. Emergency unemployment insurance is one of the largest economic multipliers.
11. Austerity made Europe worse. The US Recovery Act (ARRA) passed Feb 2009 GR ended in June. CBO said ARRA lowered jobless rate by 2%.
12. Should have been rapid principal markdowns on mortgages. FHA came to life, but offered loans as intended in 1930's. Temp. tax credits worked, stops buyers from waiting for prices to drop further.
13. Bankruptcy is OK for non-financial companies, but not for financial ones since they deteriorate quicker/bank runs, etc. Fixing the financial plumbing - Dodd/Frank not perfect, but helped - stress tests and identifying SIFI's sooner and making sure they have enough capital and liquidity. Important to have large banks so the US remains competitive in the global economy. The US financial system, despite its risks, powers the most productive economy in the world. Financial crises are most difficult because they choke off credit - so, must restart credit ASAP to fuel a staggered economy.
So, an excellent book, especially welcomed because Mark Zandi, the author, I judge to be more open-minded than the typical economist.
Saturday, December 29, 2012
Thursday, November 29, 2012
My Review of "The Knockoff Economy"
4 out of 5 stars........
The book makes the point that copying in many cases actually increases innovation, contrary to what some think that Intellectual Property (IP) must be protected always or else there will not be enough incentive (money) for people to make important new innovations. Sure, sometimes IP must be protected, but the author tries to show, quite well, that it is overused and in many cases restricts innovation, along with having other negative effects. From the book, I took note of the following.....
1. Fashion is an area with little IP protection and the copying thrives along with innovation and profits in the industry, and actually improves the whole industry. Copying is the way trends develop and the pioneer gains reputation in the process which can translate into even more for the pioneer, than if the original product was protected via copyright. And, really it is impossible to protect most things as just slight changes to a product can always be done defeating a copyright, anyway. Not to mention the costs of lawsuits, etc for the pioneer to try and protect something, in time,and money. Also, the speed of the copying hastens fashion cycles, making more innovation and profits- induced obsolescence..
2. As for morality, unlike stealing a car, stealing an idea still leaves the originator with the idea, plus also since someone else has the idea there is greater chance for innovation, improvement of the idea.....this brings up the term "piracy paradox."
3. Cuisine is another area, with little IP protection, which thrives because of the copying, encouraging many variations/innovations like the Korean taco - LA's Korean Tacos in a Truck - Kogi. The recipe can be copyrighted, but the "built food" can't because it is so easily changed in minute ways. Chefs can't protect food concoctions, but can the look and feel of a restaurant.
4. Comedy, also rife with stealing, but slightly different presentations are what makes comedy thrive even more. An example is Louis C.K and Dane Cook.
5. Football, also.....can't copyright plays, yet football thrives like never before. Plus, the originator still holds an advantage by being the first - even if another team copies the play, the team might not have the kinds of players best to execute it and would take years of drafting, trading players, new coaches, etc to match the originator's team.
6. The financial industry, also. Even with copying the originator, by reputation and lead time can gain advantages which others can never match.
7. The computer database industry, also. Can't copyright data, but the ways it can be organized. e.g. Lexis-Nexis,.Factiva.
8. The VCR actually created new industries, like video rental, also new revenue streams for the maker of films.
9. "Useful articles" is a benchmark in copyright law - a dress is useful, a painting is not therefore can copyright. Though, there are special cases, a dress which is more ornamental than functional might lead to special protection. A printed fabric is protected, but the cut and style aren't. Also "trade dress" is protected, the packaging for instance, but not necessarily the product inside. So, trademarks, brands and logos are protected and can increase the value of its products/services even if they are easily copied, in fact copying actually can increase the values.
10. Positional goods - those which create status, like trademarks, logos.
11. Also, copying can spur innovation, what lawyers call "derivative works," tweaking of the original.
12. Copying can also lower the consumer's knowledge costs, by seeing trends happen right before their eyes - also called "anchoring."
13. Social norms can protect IP better than laws sometimes, like with comedians, chefs, etc.
14. The book also discusses "first mover" advantages and disadvantages.
15. For music, can make exact copies, but can't reproduce the performance, live session/concert, etc, so the performance aspect is thriving even more despite the copying, etc. Also, some restaurants won't allow takeout or home delivery.
17. Open source software is discussed. Wikipedia more successful than Microsoft's Encarta. Linix operating system also has led to a new company, Redhat. Plus, creates competition to put pressure on Microsoft, etc to keep improving their products.
18. Fonts are also discussed, zillions of different ones, lots of copying and tweaking....plus, the usefulness test, can't print w/o them, so only certain ones can be protected, so creativity thrives, creating more and more fonts.
Anyway, the book does give one a better understanding of the effects of copying, which it seems more often than not increases creativity, innovation and overall prosperity. After reading it, I think my understanding of IP and its effects is better.
The book makes the point that copying in many cases actually increases innovation, contrary to what some think that Intellectual Property (IP) must be protected always or else there will not be enough incentive (money) for people to make important new innovations. Sure, sometimes IP must be protected, but the author tries to show, quite well, that it is overused and in many cases restricts innovation, along with having other negative effects. From the book, I took note of the following.....
1. Fashion is an area with little IP protection and the copying thrives along with innovation and profits in the industry, and actually improves the whole industry. Copying is the way trends develop and the pioneer gains reputation in the process which can translate into even more for the pioneer, than if the original product was protected via copyright. And, really it is impossible to protect most things as just slight changes to a product can always be done defeating a copyright, anyway. Not to mention the costs of lawsuits, etc for the pioneer to try and protect something, in time,and money. Also, the speed of the copying hastens fashion cycles, making more innovation and profits- induced obsolescence..
2. As for morality, unlike stealing a car, stealing an idea still leaves the originator with the idea, plus also since someone else has the idea there is greater chance for innovation, improvement of the idea.....this brings up the term "piracy paradox."
3. Cuisine is another area, with little IP protection, which thrives because of the copying, encouraging many variations/innovations like the Korean taco - LA's Korean Tacos in a Truck - Kogi. The recipe can be copyrighted, but the "built food" can't because it is so easily changed in minute ways. Chefs can't protect food concoctions, but can the look and feel of a restaurant.
4. Comedy, also rife with stealing, but slightly different presentations are what makes comedy thrive even more. An example is Louis C.K and Dane Cook.
5. Football, also.....can't copyright plays, yet football thrives like never before. Plus, the originator still holds an advantage by being the first - even if another team copies the play, the team might not have the kinds of players best to execute it and would take years of drafting, trading players, new coaches, etc to match the originator's team.
6. The financial industry, also. Even with copying the originator, by reputation and lead time can gain advantages which others can never match.
7. The computer database industry, also. Can't copyright data, but the ways it can be organized. e.g. Lexis-Nexis,.Factiva.
8. The VCR actually created new industries, like video rental, also new revenue streams for the maker of films.
9. "Useful articles" is a benchmark in copyright law - a dress is useful, a painting is not therefore can copyright. Though, there are special cases, a dress which is more ornamental than functional might lead to special protection. A printed fabric is protected, but the cut and style aren't. Also "trade dress" is protected, the packaging for instance, but not necessarily the product inside. So, trademarks, brands and logos are protected and can increase the value of its products/services even if they are easily copied, in fact copying actually can increase the values.
10. Positional goods - those which create status, like trademarks, logos.
11. Also, copying can spur innovation, what lawyers call "derivative works," tweaking of the original.
12. Copying can also lower the consumer's knowledge costs, by seeing trends happen right before their eyes - also called "anchoring."
13. Social norms can protect IP better than laws sometimes, like with comedians, chefs, etc.
14. The book also discusses "first mover" advantages and disadvantages.
15. For music, can make exact copies, but can't reproduce the performance, live session/concert, etc, so the performance aspect is thriving even more despite the copying, etc. Also, some restaurants won't allow takeout or home delivery.
17. Open source software is discussed. Wikipedia more successful than Microsoft's Encarta. Linix operating system also has led to a new company, Redhat. Plus, creates competition to put pressure on Microsoft, etc to keep improving their products.
18. Fonts are also discussed, zillions of different ones, lots of copying and tweaking....plus, the usefulness test, can't print w/o them, so only certain ones can be protected, so creativity thrives, creating more and more fonts.
Anyway, the book does give one a better understanding of the effects of copying, which it seems more often than not increases creativity, innovation and overall prosperity. After reading it, I think my understanding of IP and its effects is better.
Wednesday, November 28, 2012
Nation's Economic Recovery Accelerating!
The recovery did reach, in my opinion, a self-sustaining mode, recently, led by housing which normally leads a recovery. What is new, is that now, it looks like the self-sustaining recovery has entered an acceleration phase, with the news that CA's recovery is now on solid footing, with the budget now forecast by independent sources to possibly have a surplus by 2014, plus recently released unemployment numbers showing the largest percentage decrease in over 25 years. CA has always been boom and bust, with the busts always coming back to all-time high economic highs. Since CA represents about 12% of the nation, it does look like CA will now accelerate the current slow recovery.
I am no fortune teller....I look at facts....and what is currently happening. The only thing I can see stopping this accelerated recovery is some unexpected catastrophic event......not already known risks like the "fiscal cliff, "Greece," "Gaza," etc.
I am no fortune teller....I look at facts....and what is currently happening. The only thing I can see stopping this accelerated recovery is some unexpected catastrophic event......not already known risks like the "fiscal cliff, "Greece," "Gaza," etc.
Tuesday, October 30, 2012
My review of "Occupy World Street"
5 out of 5 Stars.....
This book is a response the Occupy Wall Street and other Occupy movements around the world, where the protestors know there is something wrong, the 1% vs the 99%, most people on the planet, but so far haven't come up with any comprehensive descriptions of the problems or possible solutions, because it is so complex. The author lays most of the blame on neo-liberal economics and related politics, beginning around 1980 with US president Reagan and Britian's Margaret Thatcher - basically complete free-trade and free movement of money with negligible government regulation, resulting in a transference of wealth from public hands and the poor and middle class, into the hands of the wealthy and well-connected. This all represented, in the US, along with, to a degree, Britain, which he calls "The Empire," where what has resulted in a corporatocracy, a form of fascism, where the political system is bought and paid for by large corporations where this capitalism seeks cheap labor and resources from around the world, all the while using up the planet's resources to the point where we are nearing a point of no return where the survival of the world's civilization is at stake unless we change this direction.
What the author claims is that we are going through a paradigm shift from Cartesian/Newtonian physics to Quantum physics at the world level, where the world is a living organism where it isn't "cause and effect" at the world view level, but everything is connected. He offers a possible solution, a Gaian society, led by some small nations and leaders including some wise elders from around the world, to work together with new organizations and local currencies replacing the WTO, IMF and World Bank to work toward a sustainable planet which will change the way we live from from one of greed and accumulating money and material things to one where there is more meaning to our lives.
The book is divided into 6 parts - Planet under siege, Drivers of Destruction, The Empire, New values/New beliefs, Toward a Gaian World Order, Getting There.
Among the things covered are...
1. Global warming (carbon footprint), extinction of species, genetic engineering a risk, antibiotic resistant bacteria, monoculture (industrial farming reduces crop rotation, etc).
2. Corporatocracy is a threat to our civilization because it is overloading our ecosystem as exhibited above, plus overpopulation.
3. Peak oil is mere decades away - tar sand oil and natural gas via fracking use more energy to produce, especially when clean-up costs are included.
4. Tainter's Theory - civilizations solve problems using greater complexity until they become so complex the are overwhelmed by it and collapse.
5. Currently, nations measure progress by GDP, but GDP includes negative things like building of prisons, disaster clean-ups, etc. A more accurate measure GPI (progress)which started declining about 30 years ago.
6. Greater consumption leads to speculative bubbles. Bhutan has a Gross National Happiness Index.
7. Gini Coefficient measures income disparity where societies have shifted to "Greed is good" philosophy which at high levels as it is now, always leads to social and health problems with people rebelling.
8. Beginning in the 80's banks migrated from low risk investments to high risk ones including derivatives, high leverage, Credit Default Swaps, naked derivatives, unrestricted capital flows allowed speculators to get money out of countries fast if bets went bad leaving countries to suffer, front-running to exacerbate trends, repeal of Glass-Steagall, etc.
In sum, a very good look into the problems we face, though the author's solution is more speculative, but a good way to get our discussions started, so we can head in a better direction than we are now going. So, a fine book, even for neo-liberal supporters so that they know what is brewing.
This book is a response the Occupy Wall Street and other Occupy movements around the world, where the protestors know there is something wrong, the 1% vs the 99%, most people on the planet, but so far haven't come up with any comprehensive descriptions of the problems or possible solutions, because it is so complex. The author lays most of the blame on neo-liberal economics and related politics, beginning around 1980 with US president Reagan and Britian's Margaret Thatcher - basically complete free-trade and free movement of money with negligible government regulation, resulting in a transference of wealth from public hands and the poor and middle class, into the hands of the wealthy and well-connected. This all represented, in the US, along with, to a degree, Britain, which he calls "The Empire," where what has resulted in a corporatocracy, a form of fascism, where the political system is bought and paid for by large corporations where this capitalism seeks cheap labor and resources from around the world, all the while using up the planet's resources to the point where we are nearing a point of no return where the survival of the world's civilization is at stake unless we change this direction.
What the author claims is that we are going through a paradigm shift from Cartesian/Newtonian physics to Quantum physics at the world level, where the world is a living organism where it isn't "cause and effect" at the world view level, but everything is connected. He offers a possible solution, a Gaian society, led by some small nations and leaders including some wise elders from around the world, to work together with new organizations and local currencies replacing the WTO, IMF and World Bank to work toward a sustainable planet which will change the way we live from from one of greed and accumulating money and material things to one where there is more meaning to our lives.
The book is divided into 6 parts - Planet under siege, Drivers of Destruction, The Empire, New values/New beliefs, Toward a Gaian World Order, Getting There.
Among the things covered are...
1. Global warming (carbon footprint), extinction of species, genetic engineering a risk, antibiotic resistant bacteria, monoculture (industrial farming reduces crop rotation, etc).
2. Corporatocracy is a threat to our civilization because it is overloading our ecosystem as exhibited above, plus overpopulation.
3. Peak oil is mere decades away - tar sand oil and natural gas via fracking use more energy to produce, especially when clean-up costs are included.
4. Tainter's Theory - civilizations solve problems using greater complexity until they become so complex the are overwhelmed by it and collapse.
5. Currently, nations measure progress by GDP, but GDP includes negative things like building of prisons, disaster clean-ups, etc. A more accurate measure GPI (progress)which started declining about 30 years ago.
6. Greater consumption leads to speculative bubbles. Bhutan has a Gross National Happiness Index.
7. Gini Coefficient measures income disparity where societies have shifted to "Greed is good" philosophy which at high levels as it is now, always leads to social and health problems with people rebelling.
8. Beginning in the 80's banks migrated from low risk investments to high risk ones including derivatives, high leverage, Credit Default Swaps, naked derivatives, unrestricted capital flows allowed speculators to get money out of countries fast if bets went bad leaving countries to suffer, front-running to exacerbate trends, repeal of Glass-Steagall, etc.
In sum, a very good look into the problems we face, though the author's solution is more speculative, but a good way to get our discussions started, so we can head in a better direction than we are now going. So, a fine book, even for neo-liberal supporters so that they know what is brewing.
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