Money and Investing Thoughts

I found this quote and link on the site of Otto Rock. It very succinctly puts the worth of the current crop of economic advisors and experts in their place:

It acknowledges that the discipline is subject to three critiques:

1) it helped cause the current economic crisis

2) It failed to see it coming

3) It doesn’t know how to fix it.

via naked capitalism: Guest Post: Linda Beale on What Went Wrong With Economics.

I find it quite amusing that the powers in government are following the advice of these same economists to get the economy out of the current problems.

Inergy, L.P. | Investor Relations | Press Release.

One of the best income stocks I have come across since starting this site is Inergy L.P. (NRGY: 17.56 -5.12 -22.57%). This propane retailer and natural gas midstream company has again increased their quarterly payout. This is the 31st consecutive increase in the distribution. The stock currently yields almost 9%.

Inergy seems to be especially well managed to control costs and grow revenues. It has not had a hiccup in the 3 years I have been watching the stock. The retail propane business continues to make their margins in both high and low energy price scenarios. The natural gas midstream operations are also not dependent on energy prices.

It is hard to believe the market knocked this stock down to $12.40 per share when the world was ending last November. I would not mind another energy price scare to pick up this stock at a lower price.

Investors who bought a condo next to Disneyland for $154,100 in June at a foreclosure auction, offered it for sale on Saturday at $229,900 and found a buyer the next day …

The servicer or bank asked for just $123,250 at the June 26 auction even though $358,096 was owed on the first mortgage. Potential buyers bid it up to $154,100.

via Bankstocks.com.

Read the article good stuff. The last paragraph says it all.

Existing June home sales numbers released today by the National Association of Realtors show positive gains over the May figures. You have probably read the articles or at least the headlines. I pulled down the report data and was happy to see especially strong numbers for the western region. Here are the numbers for the western region:

• Home sales (seasonally adjusted) vs. last month: +6.4%, vs. last year: +11.5%
• Home sales, raw numbers vs. last month: +12.8%, vs. last year: +15%

• Median sales price: $214,800, an increase of %7,800 or 3.8% over May.
• Mean sales price: $260,400, up $10,000 or 4.0% since May.

It is not really an accurate analysis, but it is nice to believe my little piece of California happiness gained $10k in value last month. I have been stating for a year and a half the bottom in the market would be when prices stabilized and started to increase. June is the 2nd month in a row of price increases. A few more and we will be able to point back to April 2009 as the bottom of the real estate market in the western U.S.

Forbes.com: Digital Rules By Rich Karlgaard.

Linked above is a thought provoking article by Forbes’ Rich Karlgaard. His discussion revolves around the following premise:

Wriston said capital (meaning both money and ideas), when freed to travel at the speed of light, “will go where it is wanted, stay where it is well-treated.”

By applying Wriston’s Law of capital and talent flow, you can predict the fortunes of companies (and countries). All predictions about future performance must start with this most basic question: Do companies (and countries) attract money and talent, or repel it?

The rest of the article is good historical background on the rise of U.S. entrepreneurial and economic power over the last century. I spend most of my time in a country where the government has a tighter control on jobs and money which stifles new business and job formation. However, the country is friendly to foreign investment so cash is torrenting in from the neighboring countries to buy up land and homes as parking places for cash. It is interesting to watch the processes at work here and in the U.S.

My goal is not political. I think the path the U.S. is on is the almost inevitable result of democracy. Iwant to work to make mine and my family’s life happy and prosperous. Read the article.