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Autumn Woods

Notes on The Intelligent Investor: Chapters 1 & 2

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I had been starting to read “The Intelligent Investor,” by Benjamin Graham with commentary by Jason Zweig for some time and had soon after also set it aside for a period of time. I’ve decided to pick it back up again, I’ve taken a degree of interest in stocks and investing and figured who better to take advice from than Warren Buffett himself? So I watched some videos and read some articles to see what recommendations he had for resources on stocks and investment, and it appears to be that of all the books and of all the resources this would be the holy grail based on his point of view (“this” being “The Intelligent Investor”) so certainly I’d take the advice from someone who is just about the most well learned in their field as is Warren Buffet in finance.

As I’ve read so far I put tabs on key points as I read and so far the chapters that I’ve covered are filled will hoards of multicolored tabs, I hope to get rid of these by taking notes on them instead through this blog. I’ll go straight to those notes for chapters 1 and 2 here now in this particular post:

The standard advice in this book, or the simplest version of the advice provided to the reader is to: “maintain a 50-50 proportion between [high grade bonds and leading common stocks]” (22). However, there’s room for variation based upon each individual, being that one can hold a minimum of 25% in leading common stocks and a maximum of 75% of leading common stocks in proportion to high grade bonds.

A situation that may call for a 25% proportion in leading common stocks would be in a “dangerously high” market, whereas a situation calling for 75% in leading common stocks would be during times when there’s a fall in stock prices (if I’ve understood the advice the I’ve read so far in this book, then I would venture that this would be in the case of a bear market, which would basically be a general fall in the stock market-the most extreme example of this being the Great Depression) (22).

In general I have many questions regarding buying silver and gold. Sometimes it seems like a trend for the old world, but on the other hand my gut tells me that no matter how it may be seen outwardly, silver and gold will always be worth owning. In this day and age the economy, at least the American one, is based on debt. There is essentially nothing backing the dollar, whereas in the past money had always been backed by gold.

I digress. The reason why I even turned to the topic of gold and silver is because in the book there is a footnote in the second chapter that touches on this subject that I’ll include here:

“The investment philosopher Peter L. Bernstein feels that Graham was “dead wrong” about precious metals, particularly gold, which (at least in the years after Graham wrote this chapter) has shown a robust ability to outpace inflation. Financial adviser William Bernstein agrees, pointing out that a tiny allocation to a precious-metals fund (say, 2% of your total assets) is too small to hurt your overall returns when gold does poorly. But, when gold does well, its returns are often so spectacular-sometimes exceeding 100% in a year-that it can, all by itself, set an otherwise lackluster portfolio glittering. However, the intelligent investor avoids investing in gold directly, with its high storage and insurance costs; instead, seek out a well-diversified mutual fund specializing in the stocks of precious-metal companies and charging below 1% in annual expenses. Limit your stake to 2% of your total financial assets (or perhaps 5% if you’re over the age of 65).” (55-56)

I also marked for myself some additional reading material that I might consider taking a look at at a later time of: “”Stanley Fisher, Ratna Sahay, and Carlos A. Vegh, “Modern Hyper-and High Inflations,” National Bureau of Economic Research, Working Paper 8930, at https://www.nber.org/papers/w8930.” (60)

I also marked another source for myself about TIPS (treasury inflation-protected securities), which apparently is a safer option for investment during times of inflation and the book provides further reading in this specific topic on:
www.federalreserve.gov/Pubs/feds/2002/200232/200232pap.pdf.

Key Points from the Reading:

  • “maintain a 50-50 proportion between [high grade bonds and leading common stocks]” (22)
  • Allocate 2% of total investments to gold

 

Source:

Graham, B., Buffett, W. E., & Zweig, J. (2013). The intelligent investor: The definitive book on value investing. New York: Harper Collins.

Book Review of Uprooted by Naomi Novik

IMG_1812.jpgAutumn Wood’s late fall book recommendation.

I’m a little nervous about writing a book review because if I make a review of any books it must be because I like them and I could only hope to be able to give them some due justice; I likely won’t bother with a review of any books unless I either love the book or find it very useful. I don’t want to write about books otherwise. So if you ever find me reviewing a book I probably enjoyed reading it a great deal or found it quite useful.

Uprooted is in the really really enjoyed it, loved it category. I must say though that I read this book about a year ago, but it’s also how I came across a more recent book I read that I’ll review at a later time.

Reader I don’t know what your tastes in books are, so I have no idea if you’ll love the same books that I do, so if you end up disappointed with the way I make Uprooted sound to you or if you read it and it doesn’t meet your expectations then I apologize ahead of time for your wasted time, but reading this book wasn’t a waste of my time.

I’ll get on with the review now.

Hopefully I’ll have a strong enough of a remembrance of the book. I’m not saying I don’t remember it well necessarily, but it may not be fresh enough in my system for as good of a review as I’d like to give you. When I read this book I lived in it, I was looking at my own world through rose colored Uprooted glasses.

One of the reasons why I like this book is because it’s a fantasy book that involves magical powers and at this point in my life when I came across this book I was craving for the fantasy genre and this hit just the right spot.

What was very different about this book from other books I’d read in the past though was that it was the first book I’ve read with a Russian setting other than one children’s book from elementary school which I don’t count.

I don’t feel interested in revealing too much though because I enjoyed letting the story unfold for myself as I read and don’t want to take that from you if you end up choosing to read this book. I’ll just say a few things about it. The protagonist is Agnieszka who you get to see develop more as a character through the course of the book, there is a “dragon” in this story as well, and the villain of this story is the woods (one of the most interesting concepts to me of the story since the woods is it’s own entity that is trying to envelop the world around it in darkness). Overall it’s simply an enjoyable rollercoaster ride of a book with a setting that I didn’t ever want to leave. Anyhow, happy readings reader. I’ll be posting a new book review up soon.

TAG Agreement, SAT, and ACT Exams in California for the College Bound

So I’d like to cover this topic before I perpetually forget to do so, you see I was having a discussion with my stepmother regarding these three topics in relation to my younger brother who is near the doorstep of reaching his college years. He’s a very good student and I’d like to offer them as much information as I can to help him along the way and in doing so I figured that I might as well share this information to anyone else who might find it helpful as well.

First off I’m not really going to address the topic of SATs much because it’s something that my stepmother is already well aware of, but for anyone else who might not be as familiar with it I’ll simply say that it is one of the main exams that colleges and universities look at when they’re deciding whether or not to accept a students’ college application.

Second I’ll cover the ACT exam because my stepmother had never heard of it and unless things have changed since the time that I was in my college bound years, then it is the second exam that colleges and universities look at when going over applications.

The only site that I found that discusses which test you need to take or if you need to take both is https://www.princetonreview.com/college/sat-act. It seems that based on the information it gives you can take one or both and that most colleges will accept either test but just click on the link to read the information for yourself and to see what the Princeton Review suggests.

As for information regarding the ACT test alone the link for the information on their exam is here: http://www.act.org/content/act/en/products-and-services/the-act.html. One of the additional links provided from them on that page which includes a free study guide would be this: http://www.act.org/content/dam/act/unsecured/documents/Preparing-for-the-ACT.pdf.

As for the TAG agreement (aka the Transfer Agreement Guarantee), this is an agreement between community colleges and the UC’s in California. It basically is a transfer agreement between the community colleges and the UC’s, wherein 6 out of the 9 UC’s in California are participating in this program.  It is basically that the student will have to meet a list of requirements provided by the given UC’s including number of units, specific classes taken, and minimum GPA. As long as the student has applied to enter the agreement and has met the requirements then in the end the given students will automatically be accepted and be able to transfer to the UC after they have met its requirements. The agreement gives the student a 60 and a 90 unit option. I had a couple of friends that took this route and went to UC Davis and I had considered and applied for it as well, but decided not to go on with it, although even now that I am working I’m still receiving emails from these UC’s. It’s definitely a good option for people who want to save some money by entering community college first. The link for the TAG agreement is here: http://admission.universityofcalifornia.edu/transfer/guarantee/index.html. The six participating UC’s are: Davis, Irvine, Merced, Riverside, Santa Barbara, and Santa Cruz.

The Power of Community: How Cuba Survived Peak Oil

I’m copying and pasting a post that I’d once made on a prior blog site that I’d created, it’s also the only post I ever made on that blog and since I have no plans as of this time to continue to write on my other blog I will post what I wrote here instead, especially since this remains a topic and subject matter that I care about and take interest in.

Reader’s guide:

  • If you are a reader by nature then feel free to go straight into the reading below.
  • If you prefer learning through videos, but are still interested in information regarding this issue, this is the link to the video covered in this post The Power of Community.

This post will be covering the issues addressed in the documentary, “The Power of Community: How Cuba Survived Peak Oil”. In 1993 the Cuban economy crashed, which resulted in something along the lines of an artificial peak oil crisis.

History

M. King Hubbert is the theorist that first brought about the idea of peak oil. Even before the crisis in Cuba the United States had gotten a taste of some of the hardships that might be faced during an oil crisis, when in 1973 an embargo on oil was passed as a result of the Arab-Israeli War. Some of the effects of this embargo included gas purchases being restricted to every other day, long gas lines, and lowered speed limits.

Jimmy Carter had begun to address the issues related to peak oil, but this progress was short lived as Reagan’s presidency put an end to the fledgling progress began during the Carter years.

What is peak oil?

The point in time in which oil production reaches its maximum (meaning to say that the reservoirs have become half empty). The oil does not run out, but production does begin to decline. Oil is a nonrenewable resource in the sense that it took millions of years for the remains of dead plants and animals to become the energy sources that they are today, and when these sources have been used up, it will take millions of years for these resources to become available once more. Unless new scientific advances change this inevitable fate, there will be an impending global oil crisis yet to come. To make matters worse this insatiable need for oil is only growing as countries like China try to follow in the footsteps of the United States.

“The Special Period”

Cubans often refer to their past oil crisis as “the special period”. This crisis began when oil imports from the Soviet Union dropped from about 13 or 14 million gallons per year down to only about 4 million. The average Cuban lost about 20 lbs during this crisis and blackouts became a commonplace occurrence all across the country. Workers also had to wait 3-4 hours for buses to take them to their jobs. The Cuban government imported 1.2 million bicycles and manufactured half a million more.

To make matters worse the U.S. also enacted its own embargo on Cuba. Import of food went down about 80%, money became useless. In order to keep the population from starving the Cuban government created food rations and also began to provide subsidized meals.

Surviving Peak Oil

  1. Agriculture: It is in the agricultural sector that Cubans saw the most drastic changes. In the time of this oil Cuba’s green revolution began. Before the crisis Cuba’s agricultural industry was the most industrialized out of all the Latin American countries and exceeded the United States in fertilizer use. The sudden shortage in oil caused the agricultural industry to falter and resulted in the food shortages. Due to these struggles people began to grow food throughout the Cuban cities. Nearly all arable land was turned into organic gardens.
  2. Urban gardens: Vacant lots throughout the cities were converted to orchards. It was through the process of trial and error that these urban gardens succeeded. Permaculture experts from Australia visited Cuba to assist the people with innovative new ways of growing food and this newly acquired knowledge spreed throughout the community. During this time of hardship farmers were seen as some of the most successful members of society. In the city of Habana over 50% of the produce was supplied by the urban gardens. For smaller cities and towns the yield of local gardens accounted for 80-100% of produce. This change in food availability reduced much of the need of transporting food over long distances.
  3. Sustainable practices: The newly adopted organic farming approach eliminated the need for natural gas and oil based farming methods and became implemented nationally within a few years. The new methods worked with nature rather than against it. One of the key components was ensuring that farms had healthy topsoil (the soil situated at around the top 3 inches of the land). Past farming methods were greatly damaging to topsoil because adding chemicals damages soil turning it into sand. Some of the methods of improving top soil included crop rotation, composting, and green manure.
  4. Land distribution: 40% of large state farms were divided up into privately owned cooperatives. Land was leased rent free and tax free to small farmers. In return these farmers had to show the state that they were growing food on these pieces of land or else this privilege would be taken away.
  5. Education and healthcare: Due to the lack of transportation universities became decentralized. Originally Cuba had 3 universities, but this number went up to about 50 after the crisis. In spite of the hardships faced by Cubans during this time the government continued to provide its citizens with free education and healthcare. The average lifespan and infant mortality rates in Cuba was almost equal to those of the people in the United State despite the economic challenges they faced.
  6. Transportation: Many large vehicles were converted into city buses and government cars were required to pick up anyone needing a ride. As for the people residing in rural areas, many turned to using mules and horses for their transportation and as mentioned previously bicycles became one of the most commonly used modes of transit.
  7. Housing: 85% of Cubans own their own home, but most of these houses are small and simple. Cubans living in rural areas often have more land available to grow food and often those living in the cities can only afford to live in apartments, which seemed acceptable to many as there still remained a draw to live within the hustle and bustle of city squares.
  8. Alternative energy: The government provided many of the rural schools with solar panels, as this was less costly than connecting them to the city grids. Many sugar mills were utilized for an additional purpose, to function as power plants. Crude oil, which is very bad for the environment was also used during this time, as there were very limited resources for acquiring oil and survival was what was most important.

Our society today lives in unsustainable ways and the security of oil supplies are getting more risky with each day that passes. The world is changing and we too must change in order to adapt. One of the ways that we can do so is through rebuilding our communities. It’s great to think about issues globally, but action must take place at a local level, each person much contribute their part in their own way, no matter how small.

Takeaways:

  • A change in oil supplies can turn a nation dependent on fossil fuels upside down.
  • Societies can develop more resilience by learning to rely more on local resources.
  • Community is at the heart of any social fabric and can help to bring people out of the darkest of times.

 

 

Source:

The Power of Community-How Cuba Survived Peak Oil (2006), produced by Community Solutions and directed by Faith Morgan.

 

Don’t Lose Sight of Why You Started It All

It’s still so early so don’t lose sight of why you started it all, so early in on writing this blog and sometimes it can already be easy to forget. First and foremost it’s for yourself, it’s your journal (of course with some constraints due to the fact that it’s an open journal of sorts), but never-the-less it’s your journal and it’s here to serve you. It should serve to aid you and never to hurt you. It isn’t for how many follows or likes you can get, although that can be nice sometimes too, but rather it’s to help organize your thoughts and is a vessel through which you can communicate and express your feelings. It shouldn’t feel like a chore and you shouldn’t feel like you have to impress anyone other than yourself, in fact since it’s yourself there’s no impressing to be done anyway. It should be used as a tool and not used as a self inflicted chain. You can’t require yourself to write blank amount of posts each month, only that you hopefully do write each month. It should grow and change with you, but it should never restrict you or make you feel like you need to do it. Just relax and allow it to be what it is and allow yourself to be what you are, nothing more and nothing less.

Work for Myself 8 hours Each Month

So I have four big personal goals that I’d like to achieve in some near future and they are: to get my ASN to BSN, go back to school to take Environmental Science, write a children’s book, and write a novel.

In my very first blog post I wrote that I expected this year to be a very boring year because of one main reason: I thought that there was little to no chance of me to be able to work towards achieving these goals, but that doesn’t sit too well with me, so instead I’ve been thinking, “How can I find some small way of making progress towards achieving my dreams?” I’ve decided this: I can’t work on the educational goals just yet because I haven’t decided on a school, I’m planning to go part time (yet I’m still full time), and I’d like to save some money first. Next I’ve decided that I can’t work on my novel just yet because it will take up too much time and energy at this point in time since I’m at a bit of a writers block at 30,000 words and have had such a long hiatus since I’d last written that I can’t trust myself at this time to remember all that I’ve written and must reread my work all over again before I can even pick up where I left off. So that leaves me with my children’s book idea.

I choose this because it mostly just requires that I sit and work on my illustrations every once in a while since the illustrations make up the bulk of my project. The picture I’ve posted is one of these illustrations that I’ve made.

The reason why I’ve titled my post “Work for Myself 8 hours Each Month” is that I’ve decided: I practically devote 182 hours to my job each month, why shouldn’t I at least devote a traditional 8 hour work day to my own dreams? I’m working for someone else’s dreams day in and day out by working for a company, I should at least take some time to work for myself as well. Also I plan to do so in increments, likely in 2 hour increments over 4 off days each month with the chosen days to be determined by me from month to month.

So I’ll see how this works out, so many of us spend so much of our time working for other people that sometimes our own dreams get set aside on the back burner and we always run the risks of never going back and pursuing those dreams if we’re not careful, so this is my attempt at beginning to reclaim my own dreams.