Two book reviews Freakonomics and Stop Working Heres how you can

[selkirk]

Freakonomics by Stephen Levitt and Stephen Dubner
Revised and Expanded edition pages 310

This is an excellent book, and many things are explained using numbers and simple logic.

How a criminal orgainzation works similar to a corporation, people name their children, crime rates, overpriced coffins, to many heart surgeries, cheating teachers and sumo wrestlers. Real Estate brokers.

my only small complaint, well two. they went on about childrens names, it was interesting but thought they should go deeper into som topic just briefly mentioned.

like how many angioplasty operations are not needed. yes maybe even overpriced coffins...lol.

also they take a shot at Winkopedia with the black sox, and though it is true. winkopedia is for the most part a great resource. use it twice a month on average. it should be a start point for research and though some items are wrong most are correct and well thought out, with good links.

great book hopefully a sequel is coming, and maybe make it longer.


Stop Working Here is how you Can
by Derek Foster

Derek Foster is a cnd. married with three children (?) who lives 1.5 hours outside of Toronto.

this is a refressing book and though short 178 pages brings up some good points.

He buys stocks that pay dividends and increase on a routine basis, ussually every year or two.

he also argues that you do not need much to retire, far less than the one million advertised. agree with this.; beleive the smallest amount would be 200,000, but believe his portfolio was over 300,000.

He also writes for the cdn. moneysaver, and has several good points.

one point I disaggree is that he does not care what a stock does just as long as it pays a div.

easier to say than do, and also believe you should notice if your stock falls 30%. sometmes these can be warnings.

should also note his wife works, and he has sold over 150K of these self published books.

would be interesting to see someone with no spousal income, and no large amount of book sales, over 1 million. try this experiment.

should state believe D. Foster was 34 when he retired and wrote the book.

would give Freakonomics 9/10
and Stop Working 7.5/10 should have been longer.

 

[DOGS THAT BARK]

Interetring Kirk--especially the 2nd part--like div paying stocks myself but will put stops on them same as any other.Believe his amount to retire on would depend on where one retires--One could currently retire in China and live very comfortably on about 1/3 of what it would take to live modestly in U.S. with exception of of playing golf--very expensive in China.

Found article the other day and would like your input on it if you have time---

What the Media Isn't Telling You About China's Market


Tony Sagami (Harvest Advisors) submits: The Shenzhen/Shanghai Index of 300 stocks fell 9.2% last Tuesday. Why? Because the State Council, China?s highest ruling body, said it started a special task force to clamp down on illegal share offerings and other banned activities. Investors were worried that the government?s zeal could damage the whole stock market.

There?s no question that 9.2% is a big single-day drop. However, just looking at that one day doesn?t tell the whole story. In the previous six days, the same index had jumped 13%. That means that, despite the big drop, the index was still up 3.8% in seven trading days. I?d hardly call that a disaster. Regardless, a parade of market watchers has been bad-mouthing Chinese stocks, blaming them for the Dow?s plunge, and more.

Today, I want to tell you some things that you?re not hearing from these so-called experts. In short, I want to tell you why the Chinese stock market is very different from the Dow or even European markets ....

The Chinese Government Provides Built-in Safety Nets for Its Stocks

Given all the furious capitalism and all the economic growth happening in China, it?s easy to forget that the country is still a command economy controlled by the Communist Party. But it is, and that brings with it all kinds of implications that many Western investors aren?t used to ...

First, the Chinese government is the largest shareholder of Chinese stocks in the world. In fact, a majority of the listed companies are state-owned enterprises ? China Mobile (CHL), CNOOC (CEO), China Aluminum (ACH), Sinopec Petroleum (SNP), Yanzhou Coal (YZC), China Life (LFC), Bank of China, etc. The government also controls several of the largest brokerage firms, banks, insurance companies, and pension funds. If the Chinese market falls, the government stands to lose a very substantial portion of its asset value.

Second, the world is watching and Beijing doesn?t want to be embarrassed. The concept of ?saving face? may not mean a whole lot in the U.S., but it?s a crucial part of Asian culture. Do you think the Chinese government will stand by idly while its markets go into a freefall now that it has the world?s attention? I don?t. Government officials certainly don?t want a repeat of previous bear markets when a large crowd of disgruntled investors hurled stones at the Shenzhen Stock Exchange ... or when angry investors protested outside the offices of Beijing regulators.

Third, the government has an ace in the hole that can go a long way to help offset declining prices. If Beijing wanted to prop up the Chinese stock market, it could mobilize a portion of its $1 trillion in foreign currency reserves. Even a small fraction of that war chest would make a significant difference ? not only symbolically, but in substance as well. Fourth, the government still controls the media in China. To a U.S. citizen, this might be disturbing. But it does give the authorities greater control over the flow of news that might impact the market.

For example, after the 9.2% drop in the Shanghai/Shenzhen 300, the lead story on the front page of the Shanghai Daily ? the city?s English-language daily ? was ?Wheat Scientist Wins Top Research Honors.? Even the lead story of the business section was ?Buying Stampede Greets Return of Mutual Funds.? The information about the stock market drubbing was buried in the middle of the paper.

Am I saying state-controlled media is a good thing? Of course not. But as a very practical matter, it helps buffer the markets from the investor frenzy that might otherwise be more likely. Nor am I saying that Chinese stocks can never go down. They can and they do. Rather, there are many reasons to expect the damage to be limited. The most fundamental of these: The market?s action doesn?t do a single thing to change China?s juggernaut economic growth. The same goes for other Asian markets

 

[selkirk]

DTB you raised a (good) main point on the book, he lives outsitde of Toronto in 150K house, in Toronto the same house would run at least 3X higher, probably four.

also you must have no debt. his house was paid off quickly, and he worked summers during college and built up little student debt.

also shows how his divs, are taxed better and less deductions and expenses when he was working.
location is important, believe where I live could retire on around 300,000-500,000 easily but would not be able to live in a bin in TO or Vancouver. saw a 4000 New York Apartment downtown. 4K a month. barely enough room to turn around. actually two hours to the north or me, could buy a house for 35K. nice one.

ten years ago should a have bought a home 4 hours to the north. great big nice home, 10K with wrap around deck....main risk one industry town. however still going and great lake, ect.

China : Good article on China. would agree the market downturn was a little overblown. however the market probably remembers the late 90s correction. did not involve China. still heard this mentioned.

China has plenty or reserves and cash to protect the market, however I believe that they do care if it corrects and finds it own level.

there are stories how people in China were pouring their savings into the market, chasing after the great returns. people were selling items to generate cash to invest...many see it as their retirment.

that is all true, however it does not hurt to show people the market can also go down,...ie. 9%.
if it dropped even 20% would show that the markets are volatile and cool the frenzy.

China does want the markets to go over time though, and would want to avoid huge bear market. 50% +....... otherwise they will let the market find its own level.

it is true the China governments owns many large companies that trade, that is a slight positive for these stocks however if one was managed badly believe they would let it fall; to show that it is not guarantee, just because they are involved. believe this part is often overstated.
many reasons will explain them later.

as for China investing their large reserves in the US. ie. US bond market..... this is to help with the debt and the currency of the country that they rely on for their exports.

however would not worry about China removing money from US debt, bond market. for one simple reason....China does not have a liquid, large bond market, the US does. in time as the middle class grows and they rely less on exports, and also develop their own bond market; will not have to rely on US bond market as much. That will be there choice. this will probably not happen for at least 8-10 years probably. maybe longer.

my final point is though I agree with many items in the article, and that China government could (probably ) would step in to defend the market. At the end of the day a market will always trade on the fundamentals, and in the end (long term) no amount of government intervention matters.

if trouble breaks out it will start in the US markets, and move across the world....hope and pray for posiitive growth in the US.

DTB you know more about China however India and China have come a long way. they interviewed a man who was invested in the market, and said he was still up 45% and did not care about a little "correction".

China will have to keep its economy running north of 5% just to accomodate the number of people moving from rural to urban areas. will probably have to create a small social safety net for people, espically in rural China.

India will have to fix their class system, but the progress they are making is also amazing. just reading their business news they are ready to compete.

another emerging asia tiger that gets no press is Vietnam....... in 5 years they will.

thanks
selkirk

 

[DOGS THAT BARK]

Thanks Kirk--I like your feedback better than original article

--and ditto on Vietnam--been watching them