David Michael Bruno

Is It Possible To Invest On This Playing Field?

Stuart Fleming added a great comment to my recent post about teaching children financial responsibility. He thinks about these things and has a few ideas himself. I want to quickly comment on the idea that we grown ups should invest and should teach our children to invest.

I've been a little bit distracted and so have not been able to give my $10,000 Challenge as much attention as I'd like. The idea of it, though, is to take a chunk of money and put it to good use to 1. realize a good return and 2. add more value to the economy. Thus far I've used $100 of this money to buy the URL www.100ThingChallenge.com. Also I am using some of this money to develop an identity for the 100 Thing Challenge with one of my friends who is an amazing designer.

But also I invested some of it in Apple (AAPL). Nothing big time. I bought 15 shares a while back when it was trading below $200 a share. Looking over the company's fundamentals, anticipating its strong earnings, and believing that its Tablet will be "game changing" like the iPhone was, I believed that Apple was a sure bet. And it appeared that I was right. Pretty much the day I bought, the stock rode up to $205 and then into the $220s. All the fundamentals stayed in place. Earnings (to be released on Monday) are sure to be great. Price targets are being set for $240 or even $260. This stock is exactly what an average investor can choose with minimal risk.

But then Friday. Apple dropped like Newton's Apple right through $200 a share, which was my stop price. Why? It's a portrait of our economic meltdown. It took a dive because there are crooks who manipulate the market, and there is nothing an average investor can do about it but sit back and take the hit. Here's what happened to Apple's stock. Worst of all? In after hours trading, the price jumped back up to $204. Who wants to bet it will open in the $210-215 range tomorrow?

Now some will say that this is just the way it works and why it is risky to be in the stock market. Uh, no. This is the same reason it's risky to get involved in the mafia, because you're dealing with dishonest people who are willing to change their minds and kill you at a moment's notice.

I was talking to a day-trading buddy of mine a while back and he suggested a better use for my $10,000 than investing in the market. He thought I should use it to take as many people out for coffee as possible until I find one of them to hire me for lots of money. It was sort of tongue and cheek, but only sort of.

To be honest, I might still try to pick up some Apple shares in pre-hours trading on Monday. Despite the crooks who screwed average investors like me on Friday, I think it's obvious that Apple is a solid company. Moreover, I think that over the next few years their Tablet will do for publishing what the iPhone did for communications and music. (Not that I'm all happy about what happened. There are some negative consequences. But you cannot deny that the iPhone created the new way in which these industries work.)

But my sense is this. If we adults want to put some investment money to good use, and if we want to teach our children to do the same, it's probably best to start with a lemonade stand on a hot summer day.

Is It Easier to Squander These Days?

This morning got off to a productive start, getting the oil changed on my car. If you have a Mazda or Honda and live in San Diego North County, make sure you take it to Alan's Wrench for service. Best mechanic in town.

While waiting, I struck up a conversation with the guys in the shop. We were talking about how people who come into sudden wealth usually blow it super fast. I know this human disposition isn't unique to modern-day American lottery winners, other people have blown it before. But I wonder if the excessive consumerism of our day and age makes dealing with wealth especially tricky?

I tend to think, "No." I tend to think that temptation is there for anyone, in any time, in any culture who comes into wealth.

Perhaps if anything, the issue we have to confront in our time is that the expectation of what to do with wealth has changed a bit. If we are upper-middle class or above, the expectation is that we'll have certain cars, houses, clothes, toys, educations, spouses, etc. And those expectations somehow seem to run about 10-20% more costly than whatever level of wealth we achieve.

Average Americans Aspiring - Sneak Peek at $10,000 Challenge

I don't want to get too idealistic here. It strikes me, though, that these days when a person achieves something like the American Dream (let's just say that's moving solidly into the upper-middle class), his lifestyle changes. He becomes a cigar aficionado and also starts collecting fine wines. He starts driving a sports car or a luxury car, perhaps both. He buys a larger, flatter TV and pays for access to sports cable networks.

Now I don't want to suggest that there was a time in America when financial success was divorced from selfishness. Humans are humans. But wasn't there a time when a person's service to his community and country grew in proportion to his family's success?

Here is something to gnaw on. What if we average Americans put a line item into our budgets: "American Value Creation." Not only do we work hard to see other line items (like retirement and college savings and discretionary spending) increase, but we use our ingenuity and resources to increase the value we bring to the American economy, our communities, our culture.

Let's just say you had $10,000 in that line item right now. How would you use it? Suggestions?

New Year Resoluthemes

For the new year I am resolving to live out some "themes" instead of specific goals.

Theme 1 "Controlled urgency" - I've never been a huge fan of "our times are more awful than other times" thinking. It can create irrational and unfounded panic. That's why I'm committed to controlling my hysteria in 2010. I am just going to calmly point my energy and time toward important life choices amidst twelve trillion dollars of ballooning federal debt, dismal employment numbers, my bankrupt state (CA), crooked financial institutions, and other impending disasters. I might bowl a few games on my buddy's Wii to relax. I'll keep surfing. But for the most part, 2010 is going to be a very very focused year. This is no time to screw around and waste opportunity. My prediction: Responsible living right now is going to pay back on an order of magnitude in a few years.

Theme 2 "Value creation" - I have this financial slogan: "Whenever we use our money and other resources well it is always good for our personal and national economies." I have not always done this. In 2010 pretty much everything I do will be subject to this question, Am I using my money and time well? If I'm not creating more value for my family, community, and the world then I'm not going to do it.

Theme 3 "Include others" - Yeah, I am going to nag you and everyone else I know. They say that "misery loves company," but so does joyfulness and thoughtfulness and responsibility. I've always been amazed at the things friends, family, and strangers will pull me aside to promote. They rant on about how fun Las Vegas is, what a great deal some timeshare is, how smart Sarah Palin is, how cheap Wal-Mart is, and on and on and on. I'm going to be less bashful about speaking up for the things I care about.

Now, regular readers of guynameddave.com may notice no direct social justice themes or religious themes among my three themes for 2010. I'll be working on specifics in those areas, as well as themes specific to family/parenting. And in the "value creation" theme there are several sub-goals related to writing and growing my guynameddave voice on topics like American-style consumerism. So there are specifics within the big-picture themes.

Thanks for reading and encouraging over the last year of the original 100 Thing Challenge. Looking forward to much more this year and down the road.

Accountability Is Personal Stewardship

I am getting ready to launch my blogging themes for the new year. Here's a couple of choice quotes from a recent news piece that motivates me to keep writing:

They [the Senate] will hold the final vote on major health care legislation at 8 a.m. on Thursday — Christmas Eve — followed by a vote on raising the nation’s debt limit.

The vote on the debt limit will allow a temporary two-month increase, long enough to prevent the country from defaulting.

We need people like you and me to get our personal financial houses in order. Let's be the change in 2010! Rah rah rah! We can do it, yes we can!