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Why I Choose Dividend Growth Investing

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Why I Choose Dividend Growth Investing

I would like to address some of the points they made and discuss why, for me, DGI makes the most sense as compared to other types of investing. In both articles their main point is that when a stock goes ex-dividend the price automatically drops an
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Saletan: The shameful attack on Mitt Romney's investing

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Saletan: The shameful attack on Mitt Romney's investing

He said of Romney and Paul Ryan: "Instead of investing in America, they hide their money in Swiss bank accounts and ship our jobs to China. Swiss bank accounts never built an American bridge. Swiss bank accounts never put cops on the streets or
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Newsday
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Value Investing Flavors

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Value Investing Flavors

Thus, as I developed my own theories of value investing, I considered the range of opinion, and realized that there is a single model for value investing, but that it is complex enough that different parties use different approximations of the full
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Qualcomm Investing in Sharp to Push IGZO Display Technology Forward

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Qualcomm Investing in Sharp to Push IGZO Display Technology Forward

The Wall Street Journal reports that Qualcomm has agreed to invest up to $120 million in Sharp as part of an effort to prop up the ailing manufacturer of displays for a wide range of electronic devices. The deal will also see the two companies working
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Mac Rumors
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MONEY & INVESTING

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MONEY & INVESTING

A predominant 2013 New Year's resolution for U.S. adults will be weightrelated. The resolution will manifest in an uptick in gym memberships, an increase in the sale of diet aids, purging fats, sugars and processed foods from kitchen cabinets and
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Your Questions About Summary Of Stock Market Crash

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Thomas asks…

How did the 1920s Stock Market Crash happen?

I don’t get it like what’s a broker, and what are shares, and all that…

Justin answers:

Well the stock market is basically where people buy shares of companies. A share is basically just a percentage of a company that you then own, because you bought it. Say for instance a company sell 100 shares, and 100 you and 99 other people buy a share. Then you own 1% of the company. Because it’s a market, and there are a fixed number of shares, the value of the share goes up and down according to demand. If a lot of people want to buy the share, the price goes up, if no one wants it, the price goes down. Since it’s all a sort of virtual thing, people place a value on the company based on what the company produces, and if it will grow in the future or not. The whole idea is that since it’s an investment in that company, you want the value to go up, so that you can sell the share at a higher price later. A crash happens when lots of people begin to sell their shares within a short period of time. Because so many people are selling, the supply of shares goes up considerably and the value goes down. Since no one wants to lose money, everyone sells before the shares become essentially worthless. Since people pull all their money out, companies can go bankrupt because that was money they use to operate. It’s like a snowball effect. This is a simplified summary of course, but it just boils down to supply and demand.

When the market crashed in 1929 it was because people had the belief that the stock prices would keep going up indefinitely and that everyone would get rich. So people began speculating, that is to say, guessing about future prices. This lead to a severe overvaluation of stocks. This essentially means that the price was a lot higher than the actual value. When this happens, by the laws of economics there will eventually be a correction. When the market begins to correct, all people see is that prices begin to fall. So when the prices began to go down, people started to panic and took all their money out of the stock market. That’s how it crashed.

Because of this, today we have a number of rules in place to help prevent this from happening. They’ve tightened up and are more watchful over speculation. The market will also sometimes close early to stop people from trading if they notice that something is going to wrong way too quickly.

James asks…

What Is The Situation With The Stock Market?

It’s Confusing, Can Someone Just Explain. Because I Understand It’s Happened With Pension Funds, Hedge Funds Etc. I Know It’s Crashed In Asia And The USA. But What Are The Main Reasons?

Justin answers:

The basic problem with the stock market is a credit problem. Interest rates were brought way too low in order to get over 9/11 and after the y2k bubble. So this has been building for a long time. Since rates were so low people borrowed way too much money because they were buying payments not things. Meaning they bought a home for $2000 a month (or a lower teaser rate) instead of buying a $320,000 home. With this happening and banks/mortgage companies not wanting to miss out on cash they started giving loans to everyone including those who were not credit worthy. Additionally they figured that some “exciting products” would keep the good times rolling. Those products included alt-a loans which are really known as “liar loans”. The premise is basically this: How much do I need to make per month to afford this house… $20,000? It just so happens that is exactly what I make and I don’t have to show you papers… Good because I don’t have any. Payment option loans, yes you can pay interest, interest and principle or something less than just interest which results in negative amortization. Subprime loans were given to anything with a pulse (this probably included some cats). Last but not least the mortgage companies offered a lot of adjustable rate mortgages when rates were at their lowest, including the shady teaser rates. What happens when you take out an adjustable rate mortgage at historically low rates… The payment goes up. This is also becoming a disaster in the teaser rate loans where the company gave someone a loan at 1% interest for a year or two and then it resets from $750 a month to $1500+. Well it has unfortunately come to bear that all this idiotic underwriting and shady loans are not being foreclosed on and the companys that issued all this debt are going bankrupt. The companies who issued all this debt sold a lot of it to hedge funds, pension funds etc… Commonly as CDO’s or collateralized debt obligations. Since the underlying debt is now basically worthless (you can’t sell the houses and even if you could you wouldn’t get all your money back).

The results are now a more rational market where lenders make sure you can afford things before buying them. Unfortunately this means a lot of people can’t buy things and that hurts the housing market. Many people were stupid and used their house like an ATM figuring that it would appreciate forever and they could sell it at will. They can’t and now the banks are figuring out that some of this home equity loans are not equity but negative equity.

Consumer spending makes up the largest part of GDP (gross domestic product) which is the sum of all goods and services produced in the country (for simplification) if GDP gets larger the economy will grow and vice versa. Well no more housing ATM means no more free spending and that means the possibility of recession along with massive foreclosures might really hammer a lot of people in the country.

Some other concerns are all time highs in margin balances (huge problem) and even with the dollar at a historical low a trade defecit still exists. It is confusing but this is the basic summary. Please message me if I can be more clear.

Daniel asks…

What happens in the Philippines during “Great Depression” in US?

Great Depression (1929) in US

1. High unemployment
2. Inflation
3. Recession
4. Over supply of goods (under demand)
5. The stock market crash

but what about Philippines?

Justin answers:

The “Great Depression” was a global event so I imagine things were pretty tough here in the Philippines too. Most economist used to agree that war debts that failed following WW1 was the catalyst that broke the global banking network but this view has become politically unpopular.

Also, the Philippines was still under US occupation at that time so they suffered right along with everyone else. Being less dependent on industry, many Filipinos probably didn’t even know it was going on as the Philippine economy was and is largely agricultural. There most likely was plenty here to eat but no place to send the exports. At that time the Philippines was the largest economy in SE Asia. I am sure all the banks did feel the impact as well as anyone in export.

In Summary: Filipino investors lost a good deal in the initial crash. This was probably not a factor outside of the National Capital Region or Cebu. Even today Filipinos in the provinces just do not buy that many imported goods and most do not have a bank account.

Donald asks…

Does Anyone Know How to Fix the Country?

I have been following the decline of the world since 2006, when I was informed the stock market would crash within the next 12 months. The prediction was about a year off, but still. The entire world economy is screwed, stemming from the international sub-prime lending crisis, but more importantly the massive debts and over-production over the last decade and a half caused by too much consumer spending on credit cards and loans. Japan is getting ready for a Great Depression style deflationary depression, China is set up for the most massive economic collapse the world has ever seen. Europe is failing financially. The last time the world economy fell into depression Hitler, Stalin, Mussolini, Tojo, and Mao came to power. I personally cannot see any way to save America or the world, and I’m pretty sure Obama and McCain can neither see the multitude of impossible problems they will be faced with, nor do anything about them. Can you?
This is not meant to be one of those arrogant, you don’t know the answer questions. I am actually wondering if there was something I hadn’t thought of. I hope to get at least one well thought out answer, if you just want to read the question, say, “oh, thats interesting,” and move on, thats fine too.

Justin answers:

You’ll probably think I’m partisan for saying this, but I really have considered the options and

Obama’s economic plan is superior
http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=12342127

as is his healthcare proposal
http://www.epi.org/content.cfm/pm126
http://www.urban.org/UploadedPDF/health_proposal_summaries.pdf

as are his tax policies
http://www.taxpolicycenter.org/publications/url.cfm?ID=411741
http://www.washingtonpost.com/wp-dyn/content/story/2008/06/09/ST2008060900950.html
http://www.usbudgetwatch.org/files/crfb/USBW%20Voter%20Guide%20October%205%202008.pdf

Only time will tell if he was good enough to save this country.

Oh, and when FDR came to power, I think he did pretty well.

Joseph asks…

do you thing this is a good summary about john steinbeck and the grape of wrath?

In 1936 John Steinbeck was approached by a San Francisco newspaper report to write summaries about the migration in Oklahoma City. In October 1929 the U.S. stock market crashed, during the Great Depression. Many Banks collapsed. Businesses closed. By 1933, almost a quarter of the population was unemployed and which at that time were mostly farmland ,The drought killed crops, and with no plants to hold down the soil, the dry dirt swirled up into suffocating dust storms when the winds kicked in. The entire region became known as the Dust Bowl. The Oklahoma panhandle was the hardest hit. Farmers’ crops were destroyed, and with nothing to sell many lost their homes and farms. They were forced to migrate in search of work. Many of the men who had once been their own bosses were now forced to work for wages on other people’s farms. As john Steinbeck travel down to California he saw a lot of men who have worked hard on their own farms and have felt the pride of possessing and living in close touch with the land,” he wrote. “They are resourceful and intelligent Americans, who have gone through the hell of the drought, have seen their lands wither and die and the top soil blow away; and this, to a man who has owned his land, is a curious and terrible pain.

Justin answers:

Yes!!! That is AMAZING!!!

Hope I helped,

Jade <3

Paul asks…

How to start the conclusion of a speech about fear?

How to start the conclusion of a speech about fear?
Don’t want to start with ‘to conclude’ or anything boring like that but I can’t come up with anything. Please help! Any suggestions welcome!!

Justin answers:

Hello, Claire!

Here’s my suggestion:

You can begin your conclusion, or summary, by injecting a famous quote by President Roosevelt at his first inaugural address in early 1933:

“Let me assert my firm belief that the only thing we have to fear is fear itself.”

He made a point of directing his speech to the Great Depression that was gripping the land as a result of the Stock Market Crash of 1929. Mass unemployment ensued, and a general sense of deep malaise left many Americans feeling that there was no hope of recovering what they had lost. By focusing on conquering fear, President Roosevelt hoped to rejuvenate an effort not to give up but to rebuild, yet it took a world war to finally get us out of the Depression’s vice-like hold.

John asks…

HELP!! I need to write a 2-4 sentence “news report” on the Stock Market Crash in 1929…?

My project is to make a news report on the 20’s, and I have everything I need EXCEPT this. I just can’t seem to keep it short. Can anyone help me write a short summary (about 2-4 sentences) on the stock market crash of 1929?
It needs to be written as if it was a current news report, like how it would be if there had been a news report on it during that time.

Justin answers:

On October 29, 1929, Black Tuesday hit Wall Street as investors traded some 16 million shares on the New York Stock Exchange in a single day. Billions of dollars were lost, wiping out thousands of investors. In the aftermath of Black Tuesday, America and the rest of the industrialized world spiraled downward into the Great Depression (1929-39), the deepest and longest-lasting economic downturn in the history of the Western industrialized world up to that time.

Steven asks…

Can someone please explain how WW1 and WW2 came about?

In simple terms please. I need to help my son with his homework and never really paid attention in History classes at school, shameful I know.

I would also like to know for myself too!!

Thanks

Justin answers:

Watch the History channel.

WWI started with the assassination of Archduke Ferdinand of Austria; he was married to one of Queen Victoria’s daughters (she had a number of children who married into different ruling families in europe, so she was referred to as something like mother of kings and [something] of nations).
Anyway that’s all fascinating; it all blew up from there.

Who knows if the assassination of the Czar was related to that; probably. That was 1917; the archduke was prior to that, I believe.

WWII started with Fascism and Nazis in Europe, seeking to expand their territories, Fascists in Italy and Nazis in Germany. Germany was expanding in Europe. At the same time, Japan had expanded all over Asia from the late 19th century on and had ratcheted it up in the late 1930’s. The United States was following an isolationist policy and trying not to get involved. When the Japanese bombed Pearl Harbor, the eastward expansion of their territory over the Pacific Islands (Hawaii was not a state until 1959, remember) in late 1941 and declared war, we were in it for the next five years.

Simultaneous to the Pearl Harbor attack was the invasion of Singapore, I believe. The Japanese had been in China for some time — in Manchuria with Henry Pu-I (“The Last Emperor” film is a good panorama of 20th century history in China), referred to as “The Puppet Emperor” because he was a baby when he took the throne, so was a “puppet” of the various political factions within the Forbidden City, and later in the 1920s 30s, exiled in Manchuria, was a figurehead Emperor, a “puppet” of the Japanese. In 1900-1902, he had succeeded Tsu-hsi Tai-ho, “The Dowager Empress,” who was a contemporary of Queen Victoria. Henry Pu-I was, I believe, the youngest of successors to throne, perhaps a nephew; Tsu-hsi Tai-ho had confined a teenaged successor to an island on her man-made lake, where he died of pneumonia. That one had been her own son.

China was then in turmoil, fighting the Japanese and the Communists, and the KMT, the Republic of China government (ROC) had its resources split by fighting both factions and moving its capital around. I think the last capital was in Nanching. The northern Capital fell to the Communists (PROC), Henry Pu-I was then incarcerated for “reeducation” under the communist regime, the ROC moved its capital to Taiwan in 1945 — directly following Japan’s surrender to the US, the Japanese left all their occupied territory, including Taiwan, which houses the government of the Republic of China, established by Dr. Sun Yat-sen in 1912 (which would coincide with the time that Pu-I went into exile in Manchuria, coincide with or immediately precede)

WWII had Germany expanding in Europe — and had Russia expanded at that time too, or earlier, after the revolution of 1917. China had a revolution of 1912. Japan was expanding in Asia, and round about 1939 it became less of a country-by-country struggle but a world one.

How’s that for an off the top of my head summary of two World Wars and the various influences on them.

Remember also that the stock-market crashed in the US in 1929 and a great depression was world-wide, which would have led to people supporting different leadership. The US was isolationist, getting itself back together after the crash. By 1939, things were looking up economically most places, though great social changes had taken place during that time.

Roaring 20’s was post WWI; affluence was widespread, and with that, a gap between the rich and poor. Then the crash. Overlay that over the timeline I gave you on expansionism and you get a clearer picture of forces at work.

History is boring in school because it seems to be isolated facts. It only becomes interesting after we have absorbed as much of the information given us as we can and then start reading for fun, historical fiction, watching specific History channel or PBS presentations when we see the figures of history come alive, and then start making connections out of what we have absorbed. Besides the people, it’s the connections between incidents and influences that is so fascinating.

Everyone can have his or her own key to history also: my first interest was Art History, with a sideline in film history, before that was a subject. The changes in the world influence changes or coincide with changes in Art. Developments in Science and Art are closely paralleled; often Art was working with elements of science that were yet to be proven by the scientific method.

Anyway, I hope I have stirred an interest in history for you as well as given you some starting places to pinpoint — with more exactitude than “off the top of my head” will provide in regard to names and dates and parallel or coordinated events — the influences at work in the beginnings of both World Wars. Also remember that WWII dates from 1939 (1938?) and not late 1941, which is the date the US became involved.

Invest in “A Dictionary of Cultural Literacy” as a reference book to help your son. It has its shortcomings, but is of great value in terms of a desktop reference for things “everybody should know” or things people might expect others to know.

Robert asks…

What has the Nazi’s got to do with the Soviet Union?

Please can you give me a brief summary of how Nazi’s/Germany is involved with the Soviet Union, during the late 1940-80s? (ONLY for this Period!)

Thanks
Are they enemies then?

Justin answers:

Im sorry for starting out with 1939 but thats when it all started so i can’t tell you everything else without telling you what they did then.

In 1939, Germany and the USSR signed the Nazi-Soviet Pact. Later, in 1941, the two states broke their alliance in the Nazi invasion known as Operation Barbarossa. This writeup attempts to analyze the USSR’s reasons for its initial alliance with Germany, and its later break. Most interesting is that the Soviet Union attempted to form an alliance against Germany before the start of WWII. The two countries were in a shaky alliance at best.

Initially, the Soviet Union held good relations with Germany. Both were isolated after World War I for different reasons. The “war guilt” clause of the Treaty of Versailles placed the blame for the war squarely on Germany, and other sections of the treaty forced it to pay heavy reparations to the victors. The USSR had undergone a revolution in the midst of the war, and in the process had reneged on treaty commitments to Great Britain and France, and had confiscated British and French assets in Russia as well. The end result was that both countries were isolated, and so joined together out of mutual interest. This friendly relationship manifested itself most notably in 1922 in the German—Soviet Treaty of Rapallo. With this treaty in place, a policy was established in which Germany helped train the Soviet army in return for the ability to carry out military soil experiments in the USSR. Another provision allowed the Germans to train their air force, the Luftwaffe, in the Soviet Union.

This relationship continued unchanged through the 1920’s and into the 1930’s, during which some important changes occurred. Lenin’s illness and subsequent death in 1924 allowed the rise of Stalin to power. In 1931 Stalin made his famous speech and began the process of industrialization.

One feature of the history of old Russia was the continual beatings she suffered for falling behind, for her backwardness…She was beaten because to do so was profitable and could be done with impunity…That is why we must no longer lag behind. We are fifty or a hundred years behind the advanced countries. We must make good this distance in ten years. Either we do it, or they crush us. (Barber and Harrison, 1991: 3-4)
With this in mind, Stalin instituted his several Five-Year Plans, in which the leadership would place extraordinarily high goals for industrialization. Factories were forced to raise output regardless of cost or quality. Those that failed to meet demands were purged as “saboteurs.” Industrialization moved in fits and spurts. Quick improvements led to periods of stagnation, as resources ran out and experts were killed off. Eventually, industrialization would continue as the government would cut back on its goals and focus resources on those plans closest to completion, and remove funding from those that were most expensive. Much of this industrialization was focused on the military, since Stalin constantly feared invasion, and so took away resources from other areas, especially the quality of life of Soviet citizens. This resulted in a Soviet Union with a severely weakened economy despite all of its growth.

Meanwhile, the stock market crash of 1929 led first America and later all of Europe as well into the Great Depression. This increased pressure on Germany’s economy, which in turn increased unrest in its citizenry, and ultimately led to the election of Adolf Hitler as chancellor of Germany in 1933.

This change in both the Soviet Union and Germany led to uncertainty about their relationship under Rapallo, but all remained as normal temporarily. “In 1938 and 1939, the Soviet Union fought two small and undeclared border wars with Japan,” (Barber and Harrison, 1991: 13) at Lake Khasan and at Khalkin-Gol. With this in mind, the USSR believed Japan to be a far more likely aggressor than Germany, and so strongly desired to maintain the status quo in the hopes that it could have Germany as an ally in case of an attack.

Eventually, however, fear of Hitler and his policies led the USSR to pursue anti-German policies. Hitler was a fascist, and as such was leader of a government that was the polar opposite of the Soviet Union. Public opinion in the USSR stated that “Britain and France would rather unite with Hitler and sacrifice Czechoslovakia than allow Russian troops to march into Europe.” (Basseches, 1952: 327) Foreign Communist Parties were ordered to form “popular fronts” composed of all types of liberals, including socialists and moderates, to fight against fascism. The Anti-Comintern Pact, signed in 1936 by Germany, Italy, and Japan, stated that all were dedicated to fighting communism, and specifically, would take an attack by the Soviet Union on any one of the three states as an attack on all. Soviet leaders took this as an ominous warning, and looked urgently for an ally, now looking upon a war as unavoidable. Public opinion, based stro

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Tax Lien Investing Course Teaches How to Buy Tax Lien Certificates Online at …

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Tax Lien Investing Course Teaches How to Buy Tax Lien Certificates Online at …

TedThomas.com has released a new and updated tax lien investing course to teach average people how to buy tax lien certificates online. The course information is authored by 20-year veteran tax certificate instructor, Ted Thomas, and can be accessed
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