The Katana: Lauching The Samurai Fund To Prove A Theory 12/28

The S&P 500 is up about 22% year-to-date, and up 69% since bottoming at lucky 666 in early March.  Being up 22% after being down 40% in 2008, still means the average portfolio is down 27% from the 2007 peak.  You may fool yourself into thinking the average 401K balance of $50,000 has recuperated most of its losses, but you’re confusing contribution with performance i.e. going from $50,000 down to $30,000 (40% loss), but contributing $16,500 + a 22% rebound ($6,600 on $30K) = $52,000 does NOT mean you’re back to even!

The tipping point in your 401K, where performance starts outweighing a maximum $16,500 annual contribution is roughly $200,000. Once you have $200,000, the real juice comes from performance where an 8% return equals roughly the maximum contribution you can make every year.

There are two lessons to be learned in 401K land: 1) Contribute the max to your 401K every year, and in 10 years, you will likely have $200,000 given company matches, and performance (even in this past decade) and 2) Once you reach $200,000, you’re going to hurt like no other if you lose 40%, or $80,000 of your portfolio, so diversify!  The sword cuts both ways.

IN SEARCH OF LUCK WITH FORESIGHT

I’ve only had a couple big stock hits in my life, and I attribute it all to LUCK.  Of course, I also attribute all my loss making ideas to BAD LUCK, and not to poor timing, bad fundamental analysis, and generally not understanding what the hell I’m investing in!

Essentially, I believe with a lot of luck and a little bit of effort we can outperform the markets.  Hence, let’s see if the PF community can outperform the S&P 500 with our own randomly unscientific stock picks based on permutations of our own names and blog titles!

THE SAMURAI FUND – CONTRIBUTION GUIDELINES:

Domain Name Investing 101: Online Real Estate as an Asset Class

I’m always searching for new ways to make money and regular reader, Joel (aka CreditCardChaser) provides some very unique insights on a new asset class, domain names!  I remember back in 2000, Korea.com was sold for $5 million bucks to the government and I thought gosh dang!  After reading this article, hopefully we’ll all have our own success in something so potentially lucrative. Enjoy!  Sam-urai

Chances are that when you read the term “domain name investing” you immediately have the following questions pop up:

  1. Umm [insert embarrassed pause here], what exactly is a domain name anyway? Do you mean like a website? (No)
  2. What in the world is domain name investing and why should I care?
  3. How would I go about investing in domain names in the first place?

My goals for this article are to show you that: A) Domain names have inherent value B) Domain names can potentially be a great asset class to invest in and C) Give you some practical guidance on how the domain name investing process works.

Domain Name Definition

The World Stock Markets Are Crashing & You’re Going Shopping?!

It’s Black Shopping Weekend and world stock markets are crumbling anywhere between 2-5% because Dubai World, the country’s main investing arm can’t pay its $60bn in debt for another 6 months!

Who would have thought that one of the most glitzy countries in the world would have trouble paying their own debt on time?  The fear of systemic contagion is real as investors sell first, and ask questions later.

If Dubai can’t pay their debts, who else can’t?  The US of course, but that’s OK!  Everybody will fund our debt as you observe the US dollar and US treasuries strengthen.  Don’t believe me?  The 10-yr US treasury yield has dipped below 3.25% again.  What inflation?  Cheap money forever!

Investors around the world can mock us, and debase our weak currency all they want!  You shouldn’t care, because all you have to do is watch what investors DO and not what they say.  Investors are rushing in to our arms today crying “We love you America!  Give us shelter!”

So many have disagreed with our “A Weak Dollar Doesn’t Matter Folks!” thesis.  Yet so many are going to shop till they drop for pieces of junk they shouldn’t be buying in the first place!  It’s Black Friday every day at Ross, TJ Max, and Craigslist, so save your stress and relax!  If you go shopping today and check your 401k and stock accounts when you return, you might just have to go back on Monday and return everything!

* CONTEST * Predict where the Dow Jones closes today (11/27) and win a free pat on the back!  I predict 10,288.  I’ll also highlight the winner in my weekly Katana wrap.

Readers, are there any out there who are relaxing at home in their pajamas being entertained by the media coverage of shopping frenzy?  Why don’t people just shop on-line instead, given similar deals?  If you make $20/hr from work, but stand in line for 5 hours to save $100 on a laptop, doesn’t the bring you back to even?

Dale Siegel is offering a second “The New Rules of Mortgage” book as a giveaway.  Why not just comment and give yourself a chance to win?  What’s cheaper than FREE?

Keigu,

Financial Samurai - “Slicing Through Money’s Mysteries”

Twitter @FinancialSamura and sign up for our RSS feed.

I Saved $2.1 Million On Lunch – A Sit Down With Warren Buffett

I thoroughly dislike watching CNBC for investing purposes due to all the noise.  When the markets are up, they bring on every single pundit to talk about how the market is going higher.  When the markets are down, they bring on all the bearish pundits to tell you why the world is coming to an end.  I remember when the S&P hit the ominous 666 level earlier this year, they brought in a “famed” technical analyst who said to expect S&P 200 by year-end.   What was her name again? I forget.  Watch CNBC for entertainment purposes mainly, and a little bit of learning.  Don’t watch CNBC to get rich.

Sometimes though, CNBC puts together something great.  And that great feat was bringing Warren Buffet (Columbia B-School Alum) and Bill Gates together in a town hall with all their business school students to ask them questions.

Here are some of the most memorable lines paraphrased from the show:

The Samurai Mask: An Interview With The CEO of BULLDOG Gin

 

A Brazen Breed of Gin

A Brazen Breed of Gin

I’m pleased to highlight a new series of articles focused on understanding the thoughts of successful entrepreneurs.   For our inaugural series, entitled, “The Samurai Mask,” I speak with the CEO and Founder of BULLDOG Gin, Mr. Anshuman Vohra, 31.  “Shu” was once a JP Morgan Banker who gave up his lucrative career to start BULLDOG Gin three years ago.  I was very inspired after watching his story about overcoming rejection on Donny Deutsche’s “The Big Idea” and I’m pleased he’s here with us today.  This is his story about finding entrepreneurial success, and going against the odds.

INTRODUCTION

FS: Shu, thanks for taking the time to speak.  First of all, tell us about Bulldog Gin, and why it is such a hot product?

Shu: It’s good to speak to you and it’s an honor to be the inaugural interviewee for your new series.  BULLDOG Gin is a quadruple distilled, ultra premium gin with dragon eye and other distinctive botanicals.  This is not your old folks gin, but a younger, brazen breed of  gin that you can imagine Steve McQueen and James Bond drinking.