Paul asks…
Why many frenchs people doesn’t like the U.S.A. ?
and the Americans too.
It is sad 
Of course, there are americans who are bad, but not every americans.
Justin answers:
Why do so many French people do not like the USA?
It is best to ask the majority of the French people. Make sure the answers are based on very hard facts because if you are going to condemn a country then you better use hard facts and not emotions or opinions. In addition to this question, the whole world does not like the USA. It never did and probably never will.
Now to respond to the rest of you on your answers, let me make a few corrections:
1. Most Americans are not brash and loud. The percentage of Americans that like the sound of their own voices is about the same percentage of brash and loud Euroasians.
2. Foreign policy changes in according to what is best for the USA just like it is done in Europe, Asia, Africa, Mexico, and South America.
3. The USA is not killing civilians on purpose. Unfortunately, that is collateral damage. When you go to war, you kill the enemy and the enemy is “bravely” hiding behind civilians. The USA is not propping up terrorist regimes. Is the USA doing a good job in the Middle East? The answer is no because of President Bush and President Obama did a lousy job. And what about the other countries (UK, Spain, South Korea, Italy, Poland, Australia, Georgia, Ukraine, Netherlands, and Spain) that went along with the US in invading Iraq from 2003-2009? These countries did not have to go. They knew what the stakes were. Why is the rest of the world not criticizing them? Let us not forget the Middle East does not like the rest of the world, which the French and Germans know too well. Why is Europe and Asia not criticizing the Middle East for this?
4. The USA is not forcing the world to buy gristleburgers and weak coffee. Especially the Euroasians, they have a choice in not buying them.
5. On dumping busted home loans on Europe’s banks wrecking economies; well, that is the price you pay for international banking and investing. It was all interconnected for years. Where was the realistic government regulation on both sides?
6. Yes, the USA is using most of the world’s oil because its economic infrastructure is depended on it and it is still much larger than any other developed nation in Europe and Asia. The USA had 37 years to start the transition from oil to other sources and the American private sector did nothing. However, BP had an industrial accident and they are still held accountable for it just as the American government and the other American companies who worked with BP are held accountable for it. This is an international crisis and if nothing is done then 90% of the world’s marine life will become extinct. This crisis was not done deliberately so you cannot blame any country for this.
7. Most Americans know that these so-called American Calvinists are fake or hypocrites. We do not follow them. I do not know why Europe and Asia lump Americans with these losers.
8. Most American atheists are law-biding citizens that do not interfere with other Americans that believe in God. It is the very small special interest groups (neo-Nazi religious and atheist groups) that preach hate and genocide. They also exist in Europe and Asia.
9. Yes, there is exploitation of Americans by Americans. Buy why is that a reason to hate the USA when Europe, Asia, Africa, and South America are doing the same thing to themselves?
10. Most American people are not very selfish and they do not think they can do anything to others as they please. Remember what Europe did to North America, South America, Asia, and the Middle East starting more than 500 years ago? The world is now paying for this European “blowback” to this very day.
11. Most Americans know that the USA is not the world police. Who coined that term? We did not. Most Americans know that the USA is not the superior nation because there is none on this planet. There never was and there never will be.
12. American press is anti-American and American television and movies do not portray American society accurately.
If the world hates the USA, which I believe they do, then why is it still the number one country to immigrate to?
Ken asks…
Is Sprint/Nextel a bargain right now at $3 and change?
Stock Symbol (S) http://finance.yahoo.com/q?s=S&d=t
What do people think?
Justin answers:
This is a good example of how markets work and how markets can be efficient even in the face of dramatic price changes. If is very difficult to determine a fair price for any stock. Earnings are theoretically the most important measures. However, earnings are highly variable. TTM which stands for trailing twelve months earning are very low for most companies. Most companies are trading on expected future earnings. Sprint still has significant revenue and an economic recovery could put them back in the black within a relatively short time.
Another measure of a stock’s value is book value. Sprint/Nextel’s book value is over $6 per share. Book value is the accounting value of the assets. Accounting value and fair market value is not the same thing. Assets are bought and then depreciated and recorded on the books at their depreciated value. Market value for real estate usually goes up over time while the depreciated value goes down. Often there is enormous real estate value that is not included in book value.
However the reverse is also possible. Especially now with real estate in such hard times. It is possible that recently purchased real estate may be on the books for much more than it is worth. Inventory as similar issues. Inventory can be recorded according to a variety of methods which can over or under-state it true value.
There is also the possibility that unfunded pension liabilities may not be included accurately in book value. Still, it is a measure that gives a clue that there could be value here in excess of the current market value.
In the Intelligent Investor, Benjamin Graham explains how to dissect balance sheets in search of hidden value and then profit by buying wealth at pennies on the dollar. Of course sometimes you have to wait a very long time to profit by your purchase.
Moreover, in any one stock, it is little better than a coin toss as to whether you do better or worse than another stock. Building a portfolio of good bets increases your odds of success.
Broadly speaking, investing in companies like Sprint/Nextel is known as value investing. You buy companies whose price is low relative to some intrinsic measure. Sometime value investors use earnings. By that measure Sprint/Nextel would not be a value stock since it is losing money as others who have answered this question have pointed out.
However, Sprint/Nextel does have assets and revenue and could be a value stock when measured against those metrics.
Investing in value stocks has produced higher returns than the market as a whole over long periods of time. You can invest in a diversified portfolio of value stocks through stock index funds like Vanguard Value or through ETFs like iShares Russell 1000 Value. Doing this gives you broad exposure to many stocks like Sprint/Nextel.
You can also invest in actively managed value mutual funds like the Vanguard Windsor fund or the Dodge and Cox stock fund. Rather than buy all value stocks in a particular value index, they do the kind of analysis Benjamin Graham explains in the Intelligent Investor to try to select the best ones.
Finally, you can try to select individual stocks as you seem to want to do. If you want to go that route, You should read the Intelligent Investor by Benjamin Graham as well as One Up On Wall Street by Peter Lynch. Warren Buffett was a student of Benjamin Graham’s and built his fortune using these principles.
Most professional investors fail to beat unmanaged index funds. If you expect to succeed where professionals usually fail, you have to develop some strategy by which you feel you can gain an advantage.
My portfolio strategy is to develop a portfolio of low-cost index funds diversified among US and foreign, large and small, value and growth. I over-weight small and value since I believe small and value offer higher expected returns over time. But I include large and growth since there are no sure things.
I am a CFA and a CFP(r). I have a degree in economics. I bought my first stock when I was 14. I have been a professional investor since 1989 and have been in the financial services industry since 1983. All of that experience has led me to the conclusion that index investing offers the highest probability of success.
George asks…
What should I do with my money ?
My salary is very high(more than 300k per year) and I want to know if it is a good idea to keep my money in the bank or should I invest them in something.I work very much and I don’t have so much time to invest seriously in something so I was wondering if buying gold is the solution.I heard that I can keep gold bars in some accounts in switzerland,but if for example I keep the gold there,how do I know if it would ever lose value.Somebody told me that lead can be turned into gold,but it is very expensive in this moment,but it could become very cheap in the near future…I consider keeping money in the bank the easiest way for me to invest in something,because the interest rate is quite good,but what about inflation?The dollar is loosing value almost every year and I don’t know if the interest rate will help me very much…
What should I do? a)buy gold bars b)keep the money in the bank c)something else
Justin answers:
About the worst thing you could do with it is nothing (e.g. Cash bank account)! In that case it’s not growing – much – and is losing value at the rate of inflation minus whatever small interest rate it’s getting. And with the dollar tanking like it seems to be having just cash gets even worse.
I would recommend investing in stocks and/or mutual funds, precious metals, and perhaps bonds
Obviously you will have to assess your tolerance for risk – can you stand the thought of the “roller coaster ride” (potential big losses but excellent potential for great gains as well if you give it time to grow)? If not maybe bonds/money market type funds are up your alley – they are known as ‘low risk’ investments but have low lifetime gains.
The big gainers have more risk but if you have enough years on your hands to invest (say multiple decades) I would recommend them. Big gainers would be things like stocks and commodities, many mutual funds.
As far as gold/silver/platinum I would defiantly buy some but certainly not only them – they should supplement other investments. I would purchase bullion coins, not bars. Gold is certainly on a great climb up right now and I am of the opinion that it has a ways to go yet, but no one knows for sure.
I recommend getting information from one of my favorite sources, Richard Maybury
http://www.richardmaybury.com/
http://www.youtube.com/user/RichardMaybury?blend=2&ob=1#p/u/9/K5qrKVASvEw
(link about purchasing precious metals)
The most frequent guideline I have see while learning about investing has been: Diversify! This means put your money in different places such as stocks of big companies, small companies, foreign stocks, domestic stocks, precious metals, some as cash, etc
Try experimenting with this calculator from Fidelity http://personal.fidelity.com/toolbox/growth/growth.shtml
and notice that the value – compared to what you started with – starts to skyrocket after a few decades with a high return (8-10%).
For example I just tried the scenario of investing 80,000 per year for 15 years assuming 10% return and you get $3,130,158. But notice if you keep that same scenario up for 35 years you end up with $26,098,339 and after 50 years $111,815,219. That’s the power of compound returns. Granted, getting 10% may be unlikely but 8% is realistic and the same idea of compound returns applies.
My bank account gets 0.25% interest and most CDs now get under 3 or 4% and bond funds get under 6% if not a lot under. Try plugging those values into the calculator and see how they grow over a lifetime – it’s dramatically less than the earlier scenario. The advantage of these types of investments is they don’t fluctuate a lot but if you have a lot years to invest, I believe going with the stock/commodity type of investments is well worth it.
Charles asks…
Things to do before you die?? for 10 points?
I invite you to try to make a list of things to do before you die (aka. Bucket List) I have 170 things for now, and I want to reach1001 (Number 1001 being to die) PLEASE HELP
Justin answers:
–Experience a full day without a sunset. (Barrow, Alaska in June and July, for example)
–Swim in the ocean
–Pick a ripe orange from a tree and eat it right there
–Stand on top of a mountain–it can be a small mountain that’s easy to climb, basically a large hill that you walk up without special equipment, but big enough so you can feel some accomplishment and see some distance when you stand at the top.
–Sleep under the stars (best done in an arid climate where there are practically zero insects.) It might seem boring but it’s really cool waking up at night with all the stars shining above you.
–Hike the Grand Canyon (down one day, rest a day, then back up)
–Fly on a jumbo jet
–Go to a totally foreign country
–Ask out someone you’re really attracted to who you think will probably turn you down. If they do turn you down, you can pat yourself on the back for having the courage to ask–and on the other hand, they might surprise you and say yes!
–Tell your relatives and friends you love them. You never know when someone might be taken suddenly in a car crash or whatever. It might be embarrassing or awkward to say, but it’s something you will never regret doing, no matter how long you live.
–Hunt. If you eat meat, then at least once in your life you should hunt a game animal, kill it and eat it. Otherwise, you will never really understand what it means to eat meat, and what it truly costs.
–Go parachuting or at least bungee jumping or parasailing or water skiing or surfing
–Take a flying lesson. If you can’t afford to take enough lessons to learn to fly, then just take the one lesson, just for the experience.
–Get arrested for a silly crime like public drunkenness or indecent exposure (this one can have bad consequences, so it’s optional!)
–Take a cruise on a cruise ship. They are surprisingly affordable, especially off-season!
–Invest in some gold coins. Feel their weight–gold is heavier than solid lead. Put them in your pocket and take them to the bank to put into your safe deposit box.
–Take a class on surviving in the wild.
Just a few ideas off the top of my head.
John asks…
Why should the private Federal Reserve continue to operate in secret and never allow an audit by the GAO?
The private Federal Reserve Bank creates trillions of dollars from thin air, bails out international banks and corporations and assigns trillions of dollars of debt to the American people.
Many Congressmen voted against an audit, but it still passed the House with bi-partisan support. It is believed that Senator Harry Reid will not take the audit bill to the Senate floor to ensure the Federal Reserve can continue to print money and create trillions more in debt in bail-outs and gifts to foreign bankers.
What is the best argument to permit the private Federal Reserve Bank to continue to have complete secrecy in their creation of money and debt for American citizens? Why was Harry Reid in support auditing the FED in 1995 and has decided they need to continue to operate in secrecy today?
Why NOT audit the FED?
Justin answers:
You don’t want to audit the Federal Reserve because you want people to continuously believe that those pieces of paper in their wallets is real money and that the coins they use actually have any real value.
Article 1, Section 10 of the US Constitution states that only gold and silver should be used as money. Why? Because gold and silver cannot be made. When we keep printing fed reserve notes with no real commodity backing it up, we are creating a large problem.
This is why I no longer invest in the market. I put my savings in buying physical silver and have various weight portions of fine silver if we ever have to trade with it again, which i’m hoping we will.
I have no problem with silver or gold certificates as long as they are truly backed by gold or silver. Gold and silver cannot be made, but a printing press can print a federal reserve note with any face value amount on it and in thousands with the snap of a finger instantly. This leads to a big problem.
Most of the US “money” does not even exist as paper money. Most of it is electronic. How much easier is it to push several more zeros after a whole number vs printing federal reserve notes? Scary isn’t it?
James asks…
what are the monetary goals of bsp?explain the varios tools?how can this solve the problem of inflation?
Justin answers:
In the operation of monetary policy, BSP (Central Bank of the Philippines), gives primary and immediate importance to the maintenance of monetary stability. This is so because, first of all, monetary stability is a proper and essential objective of a note-issuing Central bank. Monetary stability is necessary because confidence in money is the basis for all economic activities in a society based upon credit. Without monetary stability, it will be quite difficult not to say impossible to achieve a high rate of savings which is essential for funding huge investments that are required in a growing economy. Such a circumstance will inevitably bring about inflationary movements, discourage domestic savings as well as deter productive investment at the expense of speculative investments.
Tools? Am sure you mean the instruments of BSP..
BSP is equipped with a number of instruments that will help enable it to achieve its objectives, I can only name 2..
One is “moral suasion” which is the ability of the Central Bank to make banks and the public pursue certain lines of action without coercion. Moral suasion and other direct action may be resorted not merely to influence the amount of borrowings but also the lending and security purchasing policies of banks.
Another is “operations in gold and foreign exchange”. The Bangko Sentral may buy and sell gold in any form, subject to such regulations as the Monetary Board may issue. The purchases and sales of gold shall be made in the national currency at the prevailing international market price as determined by the MB. Also, BSP may buy and sell foreign notes and coins and documents and instruments of types customarily employed for the international transfer of funds.
Oh wait, tools.. Monetary and fiscal policy, taken together, provide powerful tools for influencing the flow of money income and the level of output, employment and prices. These tools can be properly used only after the ultimate policy goals are established.
Monetary policy can be particularly effective in braking inflationary boom, as there is no veto on business expansion more absolute and effective than the lack of funds.
Fiscal policy, although it affects the balance of payments to an important extent, has its greatest impact on domestic incomes, prices and employment. It also has a strong impact when the need is to expand the economy as it creates income directly rather than merely create a potential for increased income if businessmen feel inclined to invest.
Joseph asks…
Please check grammatical mistakes in this composition/5 stars to the best!?
Hey there everyone!!I’m studying abroad and I need some help just to check this essay i´ve just done. Any suggestions or corrections will be appreciated. Thanks very much!!
Do you really think it is a good idea to take a gap year?
Over recent years, the number of people who have chosen to take a gap year has increased. They want to park their everyday’s life for a while and experience and learn completely new things. Do you think it does really worth it?
On the one side of the coin, going abroad makes us more independent and contributes to the improvement of our foreign language speaking skills. One must also consider that being familiarised with a second or even a third language is essential for nowadays labour market.
On the other hand, gap years imply losing time which we could have invested in our university studies, and problems may arise when returning to one’s academic life. Moreover, gap years are prone to be very expensive and being able to confront the economic demand for a whole year is not just a matter of a few minutes.
In conclusion, I believe that gap years are not a good idea at all, as when starting something one must continue with it until the end. Losing our concentration in our way to achievement in university is just a waste of time and money.
Justin answers:
Do you really think it is a good idea to take a gap year?
Over recent years, the number of people who have chosen to take a gap year has increased. They want to park their everyday life for a while and experience and learn completely new things. Do you think it’s really worth it?
On one side of the coin, going abroad makes us more independent and contributes to the improvement of our foreign language speaking skills. One must also consider that being familiarised with a second or even a third language is essential for today’s labour market.
On the other hand, gap years imply losing time which we could have invested in our university studies, and problems may arise when returning to one’s academic life. Moreover, gap years can often prove costly and being able to confront the economic demand for a whole year can be difficult even for the most resourceful of students.
In conclusion, I believe that gap years are not a good idea at all, as when starting something one must continue with it until the end. In my opinion, losing focus and direction on our way to achievement in university is a waste of time and money.
David asks…
Ford Dividend Reinstatement?
to the seasoned investors out their,
im 19 and have been putting as much money into the stock market as i can, i have recently realized the magic of dividends and how wonderful they are. I currently own three securities, ford, ge, and mcdonalds, Mcdonalds has about a 7.5% dividend yield compared to ge with is much lower and ford that is non existent. In you opinion to should i continue to invest in stock that currently has a dividend, or should i keep putting my money into ford (which is currently has the highest $$ amount in my portfolio) hoping they reinstate a dividend
does a good dividend always mean a successful stock, since mcdonalds has such a high Dividend, are they reliable, or is general electric a better option
Justin answers:
A high dividend can mean the company is prospering, so they wish to compensate their investors, or it can mean, the company has nowhere to put its money, so it pays its investors back, rather than put it into company growth. There are 2 sides to the coins.
It will be years in coming until Ford reinstates its dividend, so don’t hold your breath. And the company does not need to do this either, as it competes with domestic and foreign autos, and deals with a downturn economy where people are holding onto cars longer than before.
When you buy into a company, look at growth potential not dividend growth. If you were 59 maybe, but at 19, you can take chances.
Michael asks…
What do you think about the military industrial complex?
You know, the arms manufacturers. Weapons makers profit from war, so they use political connections to create wars like Vietnam and Iraq and any of the other countless conflicts the US has been involved with in the past several decades.. Money at the expense of lives.
Oh, and before you go calling it a bunch of liberal crap watch this video and keep in mind, the man who coined the term “military industrial complex” and first warned America about it was Dwight D. Eisenhower.
This was the man who led America to victory in World War II and was as conservative as they come.
Justin answers:
The Military Industrial Complex won years ago…first with the National Security Act of 1947, this was followed by covert operations in Iran (1953), Guatamala (1954), Brazil (1964), Greece (1965), Chile (1973), Afghanistan (1979), Nicaragua (1980s) and Haiti (2004) and overt wars Korea (1950-53), Viet Nam (1962-1973), Dominican Republic (1965), Greneda (1983), Panama (1989), Iraq (1991), Yugoslavia (1999), Afghanistan (2001-…) and Iraq (2003-…)
Massive increases in Military Spending occurred in the 1980s under Ronald Reagan under the pretext of the “War on Communism” and in the 2000s under George W. Bush under the pretext of the “War of Terror.”
Chalmers Johnson has covered this subject well in Sorrows of Empire and Nemesis (as well as the first of the trilogy: Blowback.)
“There are three broad aspects to our debt crisis. First, in the current fiscal year (2008) we are spending insane amounts of money on “defense” projects that bear no relationship to the national security of the United States. Simultaneously, we are keeping the income tax burdens on the richest segments of the American population at strikingly low levels.
Second, we continue to believe that we can compensate for the accelerating erosion of our manufacturing base and our loss of jobs to foreign countries through massive military expenditures – so-called “military Keynesianism,” which I discuss in detail in my book Nemesis: The Last Days of the American Republic. By military Keynesianism, I mean the mistaken belief that public policies focused on frequent wars, huge expenditures on weapons and munitions, and large standing armies can indefinitely sustain a wealthy capitalist economy. The opposite is actually true.
Third, in our devotion to militarism (despite our limited resources), we are failing to invest in our social infrastructure and other requirements for the long-term health of our country. These are what economists call “opportunity costs,” things not done because we spent our money on something else. Our public education system has deteriorated alarmingly. We have failed to provide health care to all our citizens and neglected our responsibilities as the world’s number-one polluter. Most important, we have lost our competitiveness as a manufacturer for civilian needs – an infinitely more efficient use of scarce resources than arms manufacturing.”
The Military Industrial Complex is no “conspiracy theory,” but rather is the fundamental driving force of our capitalist economy. 40-50% of discretionary income goes to the Pentagon, the Energy Dept. (10,000 Nukes) , Veterans and Military Occupations. Fully one half of the world’s Military spending is spent by the United States.
There are over 800 U.S. Military bases in over 100 countries.
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