Holidaze

holidaze_2014Today is holiday party time on the elementary school circuit, and then we are settling into two weeks at home and off-line.  The week after Christmas is my favorite one of the year; it’s all about making lists, rekindling, giving yourself permission to try again.

Wishing you lots of love and plenty of prosperity in the new year.

I will see you all back here on Monday January 5th.

[Image from the lovely bonobos]

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Someone Else’s Sugar

someone-elses-sugar

someone-elses-holiday-image

sometimes I just want to take someone else’s holiday. Sometimes the grass is greener, and someone else’s sugar’s sweeter.

I’m not a naturally jealous person, and it’s not the best song, but I love that line (from Sweeter by Gavin McGraw).  I’m sure someone sitting by themselves on the beach next week would rather be in a warm festive house surrounded by snow and their little kids.  But I, with reluctant plans to stay home with a house full of my own little kids, would love a couple of days by myself on a beach balancing pineapples on my head.  There’s just no escaping it; you can’t have it all.  Your stuck with your own holiday, so here’s to enjoying what you’ve got.

[image here]

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Little Luxuries

little-luxuriesI have to admit I had planned to write about how we can cut back our spending in little ways. Maybe I’m just an indulger at heart, but what resonates with me more are the little ways in which we can use our money to really feel abundance.  If you take a minute to really think about what makes you feel abundant versus what makes you feel pinched…the variables are usually very small.  In fact the things that make you feel extravagant are often very simple spends or even free.

It’s not like “I feel rich when I buy a vacation home,” it’s more likely that something small, like cooking dinner for a friend, makes you feel like you have plenty.  So, what are the things that make you feel abundant?  For me, having a vase of cut flowers: $10.  Also, a round of fine cheese and some fresh olives makes me feel like a legit person who does not need to live off of the cold leftovers of her children’s uncleared plates: $10.  Sitting in a clean house with painted nails is just icing on the cake: cost = 1 hour.

Having a clean house with a vase of cut flowers, a round of fine cheese and painted nails pretty much sums up luxury for me right now.  I liked this exercise of identifying the things that I want to spend my discretionary budget and time on, because it makes it easier to cut out the things that aren’t impactful.  It also makes opulence feel so accessible…instead of being $100k away from a lavish life, all it takes is $20 and an hour of elbow grease.

[manicure]

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Investing in Objects

investing-in-things-art

Have you ever bought an object as an investment?  Most things are depreciating assets (cars, houses, horses) but there always some exceptions.  One upside to investing in objects versus stocks is that in your worst-case scenario you own some lovely – if not valuable – object.  Plus it turns something decadent (like art) into something practical, in a sense.  The main places to invest in stuff are:

Instruments: Pianos, violins, guitars.  This article in the New Yorker about the trade in wildly expensive violins is really a great read…the family dynamics of the Carpenter siblings and the way they set up this opulent facade in order to sell their credentials is fascinating, as well as the amount of money – millions per instrument – that is at play.  Also – in the sale that provided the arc for the story, the seller purchased the instrument in bitcoins.

investing-in-things-violin

Art: David Sedaris writes about his parent’s aggressive hope for their very middle class art collection to make them both rich and cultured.  Or the Rubell family: art collecting was their main investment even when they were young, it was what they set aside money to save for every week.  Not the 401k, not the house, but ART.  Which worked out pretty well for them given that they made friends with – go figure – Keith Haring and bought out his first show.

investing-in-things-art-peach

Real estate: While houses are always declining in value, real estate – the land they sit on – has the potential and tendency to appreciate.  Did you buy your home as an investment?  When we bought our home my Dad gave me the good advice to “buy a place to live, not an investment.”  But I would definitely buy a plot of land as an investment, separate from my actual home.  Maybe, say, in Detroit?

p.s. Did you see the movie Boyhood?  Wasn’t it sad when his Dad sold the car?

[horse, violin, art]

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WTF is Bitcoin?

bitcoinAm I the only person who is confused by Bitcoin?  I get that it’s a currency, but how did that happen?  Can you use it to buy stuff?  How do you get it?  Do normal people use it?

So, I forced myself to read up on it, and here’s my executive summary in case you, like me, are interested in bitcoin but simultaneously find it too boring to read about.

What is it?  A virtual currency that is not politically regulated.

Virtual currency?  This means you can’t ‘hold it.’  You send or receive payment electronically via phone or computer.  This is basically how we pay for everything nowadays anyway.

Not politically regulated?  This means that no country is regulating the value/inflation/creation of the currency.  it also means the value of a bitcoin is international.

How do you get bitcoins?  You can buy them on an exchange, or receive them as payment.

What can you buy with bitcoins?  Lots of retailers are starting to accept them, including Overstock, Expedia, and DELL.  Paypal is now integrated to transact in bitcoins too.

How are bitcoins created?  Some complicated system of ‘mining’ where someone has a computer set up to validate transactions, and as a payment for that work they receive newly created bitcoins.  This started as something that normal people could do, but now it requires super high-tech equipment.

Are bitcoin transactions anonymous?  Kind of, but nothing is really anonymous anymore, so I wouldn’t trust it.

How volatile is the price of a bitcoin?  Very.  18% more volatile than the US dollar.  In 2011 one bitcoin cost $.30.  In November of 2013 one bitcoin cost $1,242.  Today one bitcoin costs $355.

Is it on the stock market?  Not on the main exchanges.  Lots of people buy bitcoins as an investment, though.

What do economists think will happen?  Some think it’s a good investment, some think it will be worth $0 within the year.

Do normal people use bitcoins?  Since mainstream retailers are accepting them, I would say yes.  Also, Al Gore and Bill Gates among other notables are fans of the currency.

Should I buy some bitcoins?  I have no idea.

[image, and sign, here]

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The Cost of a Favor

favora.k.a. There ain’t no such thing as a free lunch. (TANSTAAFL)*

Let’s say your car broke down and you need someone to get you to the mechanic.  You ask your spouse to take you and end up spending social capital plus a $100 dinner bill to repay the favor.  Or you ask a colleague to give you a ride, and end up paying in political capital and a bar tab.

You paid for the favor in social capital (you called in a favor) and now you “owe them.”  It’s like the doubling dice in backgammon: if your double is accepted you have to give the dice to the other person to use next.  Plus, while it cost the giver no money to help you, there was an opportunity cost.  They could have been doing something else with the time that they spent helping you.  So you also owe them for the opportunity cost of the time they spent helping you, and you treat them to a dinner or a beer or whatever.

It is so nice sometimes to just accept a favor with a simple thank you, and not try to level the field by giving right back.  Is this a cultural thing?  This rush to repay?  To not be indebted?  Is gratitude “a festering sore” as Wallace Stegner says?  Cultures deal with giving and taking in vastly different ways.  Ours seems pretty icy and isolating…I wonder if there isn’t a better way?

I was having a hard time when my third baby was born, feeling strapped in every way including financially.  My sister said “call in your favors.”  The thought had never occurred to me…I might not have money in the bank, but I had social capital!  But I didn’t “call in my favors” as she urged, because I felt so strapped I didn’t see how I could ever repay them.  I couldn’t receive help freely; asking for a favor felt like taking on a debt.

*p.s. apparently this phrase was popularized in the 1966 book The Moon Is a Harsh Mistress. I love that title.  But it originated when American bars gave away lunch to lure drinkers in.

*p.p.s. tangential but Charlie Wilson’s War is a wonderful and heartbreaking political movie…in DC favors are a real currency.

p.p.p.s. Sorry about the less-than-regular schedule over here, my entire family is kicking around a stomach bug; and as the resident caretaker I’m a little tired.

p.p.p.p.s. image here

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Investing in Craft Beer

investing-in-beer[Have you noticed how serious beer has gotten?  It’s time to get serious right back.]

So while Americans are swiftly giving up plain ol beer in favor of IPA’s and Stouts, the major beer guys are having some brilliant ideas about how to woo back the newly discerning American beer drinker.  Here’s Coors when sales slow down:  “I know, let’s make a bottle that changes color when it’s cold!” (applause)  And here’s Budweiser when sales slow down:  “I’ve got it!  Let’s put this beer in a BLUE bottle!” (applause)

So I’m shorting them both.  I’ve never shorted a stock, but I finally lit on two that I’m pretty confident are going to lose value.  I wrote about what it means to short a stock here if you’re interested.  Basically when you short you set your sell price at what the stock is trading for when you place your order.  Then you actually buy the stock when the stock has lost value, so you make the difference as profit.

Now, both Coors and Anheiser Busch have pretty strong buy ratings, which made me nervous (this means that analysts think the stock is undervalued and you should buy it because it will go up in value).  But then I read a bunch of articles from Forbes to the Wall Street Journal to the Motley Fool that review the plain fact that analyst ratings are not predictive of a stock’s performance.  In fact more often than not stocks with a sell rating outperform stocks with a buy rating.  So I’m soldiering on with my strategy of “gut investing.”

Anheauser-Busch InBev ($BUD, $115.43) has been losing market share for five years running in the US, which is their largest market.  Sales in the US for $BUD were down 3.7% in the 3rd quarter of this year.  They plan to fix this by…re-working their advertising to appeal to young people.  Here’s betting that’s not going to fix the problem.  Shorting $BUD

Molson Coors Brewing Co. ($TAP, $74.55) is also suffering from year over year declines in US sales, but is being more aggressive than $BUD about buying craft breweries to compensate for the shifting trends away from light beer.  But their main beer is still, you know, Coors. Shorting $TAP

Craft beer sales, however, were up 20% in 2013 and the rates of growth in the industry are insane.  This boom is a big one, but most craft breweries are small and independently owned. There are just a few craft breweries that are publicly traded, so I am just going to buy them all and bet on the market in general continuing to grow.   I am buying: Boston Beer ($SAM, $269.21).  The rest are big gambles because they are so small, but I’m doing it anyway: Appalachian Mountain Brewing ($HOPS, $4.40), American Brewing Co ($ABRW, $.42), Mendocino Brewing ($MENB, $.22).

The other reason that domestic sales of light beer from $BUD and $TAP are suffering is because of the boom in bourbon and craft cocktails.  Some say this is a tough industry to invest in, since craft cocktails feels like such a trend yet the spirits that are in such high demand require over five years of aging.  Still, I think the trend has enough stamina to support a buy of Moet Hennessy Louis Vuitton ($LVMUY, $35.53) which has a crazy stable of luxury retail and liquor brands (beyond the obvious it also owns Givenchy, Don Perignon, and so many others).  Seems to me the growing gap between the rich and poor in this country is bad news in every way with the exception of investing in a luxury brand like $LVMUY.

[picture from here]

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