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I Will Not Die

I Will Not Die
A leading blog about human growth, personal achievement and freedom.

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And There Is A Winner, Caffeinated
2007-10-02 03:40:00
The Starbucks Card giveaway is now over. To read the post that introduced the idea, click here. Deborah, from Indianapolis, Indiana won by courageously attempting to drag her friends over to this site. She has yet to determine whether or not she would like to hijack my blog for a single post. If she decides to, I will hand over the reigns (gulp). While I’m still on the topic, I would like
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If At All Possible, Leave Your Chips On The Table
2007-10-01 04:04:00
I have always been interested in the long term implications of short term modifications to the inputs into exponential growth formulas. To examine some examples of these implications, I have made several models that are graphed to illustrate the solid conclusion that if at all possible, you should never pay yourself. At least not too early. Let’s use the following scenario: You invest $1,000 in
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Patience Is That Of Which I Cannot Have Enough
2007-09-30 04:52:00
If patience were a substance of which I could somehow hoard, I would selfishly acquire, at almost any cost, as much as I possibly could. The kind of take no prisoners kind of free for all kind of hoarding. The kind of ransack rob at gunpoint violent kind of sacking we could only imagine should the same thing be sought as if it were a stack of tickets to a distant space station on the eve of an
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Remember: The Stock Market Is Not Really Real
2007-09-28 05:00:00
While I’m not about to instruct you to maneuver your way miraculously throughout your office in evasion of agents Smith, Jones and Brown, I am going to elaborate on how to have a more sober view of that with which we have our daily dance. Almost everywhere where I read about the stock market, I read analyses. I know that doesn’t sound too bad (as if I just led you on), but if such analyses were
More About: Stock Market , Market , Stock , Real , Ally

That Cold Now Comes Upon Us All
2007-09-24 04:10:00
The fall, my friends, is now upon us. Even though sometimes, some of us, all throughout the winter months, yearn for those sunny days that summer brings; those same some of us, now shine smiles to the earth at the doorstep of winter. The changing of the seasons is one of the most refreshing things I know. It is during the latter end of the endless, cold nights, where we aim our hopes so heavily,
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Why I Like The Stock Market – Reason #1
2007-09-20 05:43:00
A long time ago, in a galaxy far, far away (when I was in school), I learned how to hate something with shocking effectiveness: group projects. In fact, I am so effective at it now, that I can translate my incompatibility with it into the defining benefit of solitary production. Beautiful, untarnished circular logic. Solitary work is so good, because group work is simply so bad. It got so bad, in
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So What Exactly IS, The Best Stock Trading In The World…?
2007-09-13 04:38:00
This site, in truth, began with the dawning sensation that for some people, the world can be a very lonely place. Besides the emotionally stricken, socially stricken, and selfishly stricken (to name just a few), there is at least one more subset in possession of extreme rarity: the emotionally sound, socially competent, selfless, but intelligence stricken few. For those poor, but blessed souls, the world can, so it seems to me, be a very lonely place. Fortunately, the niche is not so small so as to completely evacuate the possibility of kinship. Instead those in that class simply have to look a little harder. Or, as the Internet permits, a little farther. It was this understanding that prompted the creation of that which you are now reading. As if this pruning were not enough, it also seems to me, that some of the brightest, most competent, most motivated, and most skilled people out there (so spread out as they are) have terrific and daunting impediments that retard their abili...
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My Personal Comprehension Of Risk Versus Reward - Part IV
2007-09-12 04:44:00
(continued)After risking a peek at such risky matters, let’s now rid ourselves of risk. And we can do better than a freezer stash. We can generally conclude now that stocks that are not profitable, are growing slowly, and haven’t enough money to pay their bills, but have the potential to rectify these matters, are risky but might reward us. We have also concluded that such rewards come at the price the gambler pays. Alternatively, by finding stocks which represent less risk but are simply not priced according to that risk, we are provided with opportunities for low risk gains. Let’s go hunting. When is a stock priced badly? Well, if it is making, is growing rapidly, can pay its bills, but is trading at a discount. Often this happens from bad press (sometimes with good reason). Sometimes, its because a stock is so boring that not enough people are watching it. Other times it’s because the stock’s price simply hasn’t caught up yet. The two main things a company represen...
More About: Personal , Risk , Versus , Part , Sona

My Personal Comprehension Of Risk Versus Reward - Part III
2007-09-11 22:41:00
(continued) Let’s get complicated. First though, let’s create a fundamental definition: it’s not the risky aspects of a company that will translate into that which will reward us. In other words, a company’s lack of profitability will never reward us directly. The reward is what happens to a stock’s price, should it lose that which makes it risky. Major point: not all risky stocks have the potential to be rewarding. This little fact will become our holy grail. Now, let’s include some more variables: growth, cash and margins. A company that is not growing, can’t pay its bills, and has low margins, is a risky stock. However, remember, none of those things will do for us a damned. So what’s the function that translates risk into potential reward? We just walked right over it. Potential. If that pig can turn things around, then we have no pig. If you’re particularly bright, as most of my regular readers tend to be, something might be dawning on you: you might noti...
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My Personal Comprehension Of Risk Versus Reward - Part II
2007-09-09 15:51:00
(continued) So let’s do this. We must remember: higher risk does not equal higher reward. Higher risk means there is potential for higher reward at the cost of potential pain. If, in comparison to stock B (which is trading at $10, has no risk, and will reward you nothing above inflation—sound like a Treasury bond?), stock A has a 60% chance of failure (i.e., chance of say defaulting) but a 40% chance of turning a profit, then, depending on what we feel the price might do should it turn a profit, we might want to speculate with stock A. Though this isn’t a mathematics blog, a probability distribution can be used to generally illustrate the risk of something with its associated reward—and most importantly, it will force us to acknowledge the risk of pain, or loss. In other words, it will help us think. What you’re about to see is precisely why so many of the buyers of speculative stocks fail: they incorrectly incorporate failure into the price of a speculative buy. Those th...
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My Personal Comprehension Of Risk Versus Reward - Part I
2007-09-06 03:41:00
One of the most fundamental things to think about in the investor’s mind is the concept of risk. Interestingly, it can be the biggest thing many of those investors either think about wrong or do not think about enough. So let’s think about this. Everyone who has followed financial theory directly knows well that teeter-totter we call “risk versus reward”; even those who haven’t followed theory know it from their gut. It’s the hesitation they feel when striking a deal. The quick calculation prior to saying something profound within a group of people. It’s the scalp sweat that creeps up just before they ask their boss for a raise. It’s the pause that makes us move. The general concept is that when you accept more risk, you gain the potential for more reward. In one simple stock trading example, we could compare Microsoft and Sun Microsystems. So, pretending that one lonely day you’re sitting there watching your portfolio and you sense something—some longing from...
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Why Google Makes Me So Hungry
2007-09-05 04:52:00
I would rather chew off my very own right forearm, than buy a share of Googl e . And I’m right handed too. That’s right, I would rather look up smiling that uniquely red, sinew strung grin, and proclaim to all within ear shot that as quite clearly was evidenced by the horrific sight that could be viewed by all within eyesight, I had in fact mustered up that necessary muster and channeled my hatred for that awful wretch of a stock into my very own meat below my elbow. Oh, were you expecting an analysis of Google’s financials? You see, that’s the problem. I don’t, nor does anyone need to talk about their financials. That game is long since done. Stop looking at my arm. Really, it doesn’t hurt. We could ask whether or not they will continue to experience exponential growth in profitability. They no doubt will. Forever. Uh-huh, I swear. Or, we could ask whether or not they will continue to add more and more valuable services to their repertoire. Oh, I forgot, they already ...
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Introducing Query From The Queue
2007-09-04 04:05:00
I often receive terrific questions, via e-mail, regarding a variety of topics often relevant to many of the things I enjoy discussing on this blog. Truly thoughtful stuff. When answering them, I often encourage the inquirers to post questions such as the ones they asked in the blog itself in an effort to facilitate more of a clan mentality. In other words, they asked something I thought was worth sharing. It occurred to me then, that this clan could engage in a new ritual. My proposition is this: I would like to request that readers ask a question, and weekly, I will pick one that I think I can answer intelligently. Then I will post the original question, and my answer. However, once the idea was sprung, with it were potential problems. To overcome some of them I think some guidelines might be necessary. So here are some rules: 1) Ask the question via e-mail, not in a comment. The comments are moderated and getting a great many comments to moderate might be wasteful (not to menti...
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Why I Like Danny Merkel
2007-09-03 21:03:00
Who is Danny Merkel ? Danny Merkel runs two very useful blogs (both of which I have on my blogroll if you would like to find them in the future). One blog is the Gold Stock Prophet, the other is Trading With the Trend. Two things occurred to me after reading a comment on his blog the other day: 1) I’m sometimes too selfish (and sometimes simply too busy) to take the necessary time to offer very useful commentary on his blogs, and 2) That I needed to rectify this immediately to maintain some degree of self-respect. The natural thing to think to do when one admits of personal error is to set their foot down and say, “From now on I’m going to do things differently.” Often times, that is quite good enough (certainly better than continuing to do the wrong things). But, I’ve always been or have always tried to be an overachiever. So I asked myself, “Can you do better than that?” Being an overachiever by nature, the answer came easily: “Yes, I can. In this public place ...

The Only Time The Stock Market Is Rational Is When It’s Not A Stock Marke
2007-09-02 00:35:00
(continued) Why in the hell is any of this even necessary? Simply: The worst possible thing we can do, as the most prudent class of investors the world has ever known, is to think we can second guess this irrational beast: to think she can ever be rational or that we can fully understand her, and to assimilate these into our thinking. Then she would win, instead of us. The extent to which we believe in the rationality of the stock market should be the general acknowledgement that the process of pricing things generally makes sense, but never any more than that. The moment you ever assume the stock market is “currently irrational” is the moment that hidden in that assumption is your anticipation for it to become something you can know. That is the moment of loss. That will be the tipping point. The closest thing to being rational about the stock market is merely being more rational relative to the other players; that is your single most important weapon you can bring to be...
More About: Stock Market , Market , Time , Stock , Rational

The Only Time The Stock Market Is Rational Is When It’s Not A Stock Marke
2007-09-01 16:57:00
(continued)So again: On one hand, the market is rational because it’s a market. Market s do special things. Largely, they dictate prices. The process of dictating prices is generally a knowable thing. I’m in the desert for four days and now a gallon of water is the price I place on my very life. A high demand would seem to be a rational explanation for a high price. Defined like this, the market is rational. On the other hand, the market’s sometimes strange valuation of things makes it irrational. Using our analogy: I’m in the desert for fours days, and a man offers me that gallon of water. I reply, “$50 for a gallon of water?! Are you out of your mind? No way am I paying that.” Alternatively, that water offering man, seeing me near death sells it to me for the going urban price of about $1. Defined like this, philanthropy aside, the market is very irrational. So, as I said before, for the sake of argument, both can be very right. However, for the sake of utility, I sug...
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The Only Time The Stock Market Is Rational Is When It’s Not A Stock Marke
2007-09-01 03:12:00
When people think of the juxtaposition of words like “rational” and “market”, they often will think of Keynes’ “the market can stay irrational longer than you can stay solvent“ or Greenspan’s “irrational exuberance.” However, the mere discussion of the circumstantial irrationality of the stock market can, so it seems to me, tend to be misleading in one important respect: it might let us briefly believe that the stock market can sometimes be rational. Mired in your eventual, destined insolvency, you might sadly glance through the grey, joyless, used newspaper only to depressingly discover that those damned stocks of yours finally recovered. In other words, finally, it started being rational, long after your insolvency. Or, you might be having the time of your life some time, glancing left and right, calculating this, calculating that, measuring the health of this sector, or of that one, and gaily exclaiming to your friends and loved ones that all these unantic...
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The Value Blog Review Reviews The Best Stock Trading in the World
2007-08-29 02:48:00
“Depth.” That is the single word sentence that so flatteringly opens that author’s review of this website. However, hidden deep within that depth and ensuing description, so deep in fact that we must listen hard in order to expose it, lies something just as spectacular if not more so spectacular because of its veil: the secret depth of the reviewer. That esoteric review, which on one hand told the incoming readers of my blog what they could expect once they came here, told the author of my blog what I couldn’t have known so easily about the author of that blog. He goes on to say that “It is what I most enjoy about the blogs I read.” That is our secret entrance. Care to follow? “Depth both in content and quality of writing is what appeals most to me when I am reading a blog. The kind of content depth that forces you to pay attention when you a read a blog post to make sure you don't miss the point. The kind of writing depth that displays a nuanced command of the Engli...
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Day 71: 1st Buffett Year Achieved
2007-08-29 00:09:00
Today is the 71st day since I bought the first stock and started this blog. The total yield, after a huge gain from Aluminum Corporation of China Limited (ACH) was taken today, was pushed decidedly past the first benchmark of 27.52%—the average yearly yield of Warren Buffett . It’s now 33.24%. Theoretically, were I more conservative than I am, I could stop, put everything into Prospect Street High Income Portfolio Inc. (PHY), add to my gains another 7.74% (assuming I could reinvest the dividends, but not assuming any appreciation on the share price—which is dubious because it more frequently trades at a 10% higher price), and still come out at the end of the year much better off than our benchmark. Doing this in 71 days without a doubt exceeded my expectations. The benefit of meeting the benchmark so early is that it will forever expedite all future yields. A year from now I hope to be making gains from these initial gains, meaning those gains could be more, and so on. ***Fe...
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Why Coffee Ought To Be The Tool Of Choice For Investors Who Are Thinkers
2007-08-26 19:55:00
When remarking about this blog, elsewhere on the Internet, I often say that this is the thinking man’s portal to the world of investment. That summary indicates something important about what it is I am trying to do, namely, to address what I think is a neglected sphere of insight regarding the world of investment. At the same time neglected, I think this sphere is the overarching sphere. The “thinking” sphere as a sphere then, is neglected because it is often quickly bypassed by people who seek to get directly to what they are after not realizing that “thinking” first will benefit the entire rest of the journey. All sex without romance. Those for whom thinking is the doorway taken to investing (versus say some dive through a side window straight to the living room) are those who will have everything in the house forever colored by their entrance. Diving through the window might be fun and exciting, but one might miss something important. One might break an arm. But th...
More About: Coffee , Tool , Choice , Investors , Thinker

Why Hoping A Stock Will Go Up Is Why You Shouldn’t Buy It
2007-08-24 05:23:00
I want to clarify a distinction. Hoping a stock will go up is speculation. Knowing a stock will go up is smart investing. Speculation is gambling. When I read other blogs and articles I often read about the sensation felt while stock trading—something like, “that felt good, almost like gambling.” That sensation is our encounter with luck. Or even better, it’s our encounter with the hope that it will fall on our side. If feeling lucky feels so good, why doesn’t prudence? Think about that. Why does knowing you’re going to win before you even play ruin all of the fun? Deliberateness is actually a form of work. Being lucky is a windfall. It exacts essentially no price. It’s one of life’s freebies. But ask anyone and they’re likely to tell you (correctly) that life offers far fewer freebies than it does misfortunes. This tug of war is so stamped on us all that when we’re feeling lucky, what we’re really feeling is that we stole back something stolen. Keep that in m...
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My View on a View About My Views on Warren Buffett
2007-08-23 05:13:00
I was on Technorati the other day and I noticed that Dennis Goedegebuure at the Moneydiet blog mentioned my blog in a post titled Investing like Warren Buffett . At first I have to admit that I was flattered to have received unanticipated attention. I have thanked him for taking the time to mention my work by adding a link to his blog in my blogroll (you can find the link about half way down on
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