Archive for November, 2008

The Amazing Stock Market

November 22nd, 2008 1 comment

I’m pretty amazed at what I’ve been able to experience this year.  I keep hearing the phrase “…not seen since the great depression/WW2/etc..”, and I’m wondering what it will be like to look back on this time period in some distant future.

My 401K is officially down 52%.  I can hardly believe it.  The people who I pay an annual fee to manage mutual funds in my retirement account have actually lost more than half of my money.  The only upside is that I’m only in my 20′s and have another 30 years to save for retirement, but I can only imagine the grief that some older people are feeling right now who were getting ready to retire.

My personal investing account is down 20%.  When compared to my 401k, it looks like I’m a genius, but the reality is that I had only a chunk of my money in stocks when this whole event started.  Through the downturn I’ve invested, thinking it must be getting close to the bottom, only to see it keep going down.  Remember the GM stock I bought for $10?  It recently hit the same price it was during the Great Depression in the 1930s at $1.75. 

Both my company and the Wife’s company have gone through layoffs, and at both companies there are rumors of more to come in the next quarter or two.  One of the guys I worked with who has a year old daughter and a wife who just quit her job in order to take care of the kids was let go.  I feel bad for him, but there’s nothing I can really do.  At least I know they gave him a few months worth of a severance package.

And just look at the economic forecast for next year….

I may seem like I’m all depressed about the bad news, but it’s funny.  I’m not really bothered by it, and I’m not worried about myself or the wife getting laid off.  I guess I kind of see how “good” we have it, and I also feel that we could handle anything that gets thrown at us.  One thing they talk about in stock market psychology is that people assume the future will continue as today does (think about how everyone thought house prices were going to keep heading up, or that the stock market will continue going down).  I think we might be close to the worst we’ll see by the end of the year, and I can only hope the investments/401k will be heading up from there.

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November 5th, 2008 1 comment

Last night before I passed out, after watching the election results, the wife told me about a story she heard on NPR.  In it, Eric Janszen, a former Venture Capitalist, talked about how we can re-industrialize the US.

His theme was something I feel like I already knew deep down, but could not quite put into words.  Our economy right now is focused too heavily on FIRE (finance, insurance, and real estate), and we need to shift some of that investment to other areas; mainly ones that focus on making our workers more efficient.

Janszen mentioned that clean energy, telecommunications, and physical infrastructure are areas our government should focus on to help get the economy going again.  Imagine if George W had taken $150 billion and built wind turbines throughout the country instead of sending everyone a check for $600 that they spent at Best Buy?  Imagine if the government would spend a big chunk of the current bailout package on providing a nationwide wireless internet (maybe Wimax?) instead of giving the unallocated funds to banks and car manufacturers?

As the wife said, I hope someone is whispering these things in Obama’s ear right now.

Check out the replay on NPR here.

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