Oil Bubble to Finally Burst?

Oil has continued to slide in recent days and is back down to the $136 level today. It seemed just two weeks ago the it was going to be "$150 or Bust."

I know for us and across the internet I see more and more tlking obut how they have had to cut back, how small town especially are getting decimated, and how Congress is being beat up up pretty badly for letting this gett so out of control.

Could this be the, not the end of historically high oil/gas price. Not so sure, but to rip off Churchill...I hope it is at least the End of the Beginning!

If this has been an investor bubble, which I believe, oil would over-correct ala the houseing market. Regardless it is going to be a wild ride as no political office holder want to be running with $5 Gas hanging over their heads.

It is going to get interesting...

Personal Finance QuickTake: Even Gold Gets Less...Golden

Sure your 401k is down, stocks are on a roller coaster, savings rates are getting whacked, but at least you will always have gold right?

That yellow metal has been on a roll as the dollar tanks. Not a big shock as it has always been a hedge against currency movement.

However, Gold has been in a bit of too much of a tear. Gold recently busted the $1000 per ounce record level, not seen adjusted highs since the early 1980's. But gold fell nearly $100 an ounce back to the $950 level. The real question is there even support there as many investors feel gold could correct back to the $850 sort of level.

As this increase has been 100% investor driven, and gold is priced in dollars world round, it is easy to see why some are taking the money and running. After a housing bubble an Internet bubble and an Ice cream bubble (OK I made that up) investors want to lock in profits...on something.

From the Report:

With lower mortgage resets, the upcoming elections - which tend to boost the dollar - and the coming seasonal lull for gold, Nadler sees gold slipping to around $650 to $750 in the summer.
"That represents a good equilibrium level for gold, as jewelers will be able to sell gold again," he said. Still, some analysts think Wednesday's selloff is largely a hiccup - a temporary reaction by speculative buyers to changes in the economic climate, which can dramatically impact on the price of gold.

"When you are operating in a heavily overbought market, corrections like the one we're seeing today are very easy to have," said Nicoals Kavalis, a senior analyst at precious metals consultancy GFMS.

So is the dollar finally on track? With all of these rate cuts that would be amazing, but perhaps America's Housing induced cold has been caught by our friends over the pond.

Is Suze Orman's Advice Too Basic?

First let me say I believe Dave Ramsey and Suze Orman have brought more people to consider their personal finances than most other financial writers. Orman has additionally brought more women into thinking more about their finances and take control of their financial futures. However, every time I see her (which, to be fair is not that much) something troubles me.

Her advise is often very simplistic.

I watched the show awhile ago and there was a segment on the show called "Can I afford It?" No offence to the people that called in, but it was like a bad SNL skit.

• Caller: Suze...Can I afford a Plasma TV?
• Suze: Tell me, do you have any cash on hand for Emergencies?
• Caller: No...
• Suze: Any Retirement savings
• Caller: Yeah I have $2500 in my 401K
• Suze: How old are you?
• Caller: 50
• Suze: I wouldn't...get some bonds right away...

That was totally made up but it isn't that far off the calls received. It isn't her problem who calls in, but the way real radio or TV works is that they feed the callers and queue them...some someone tosses her some real softballs...at least when I watched.

Her tips that I have read out on the web were pretty pedestrian as well.

• Don't Eat Lunch out
• Search your closet for lost money
• Use Self-Serve pumps at gas stations

They might as well also include:

• Don't put your money in a pile and burn it
• Don't eat dirt
• Don't try All of the get rich quick schemes...its not fair to others that want to get rich too...

Love to hear you opinion, am I being too hard on her based on the few shows I have seen? Is one of her books a must read? Let us all know!

Nothing wrong with simple, just simplistic! It really comes down to this: If you want to create wealth first you need to spend less than you make. Period. Then topics like Budget, Emergency Fund, 401K, debt management and investing should be reviewed in depth.

Common Investor Mistakes Revealed

You might not think of yourself as an investor, but you are. Most of us have a checking account and probably a savings account, even if it is for just Christmas or your Emergency fund. A good portion also have 401K accounts or some other retirement account available to them via their work.

But even if you are just starting out, or have been maxing out your 401K there are five very common investor mistakes made over and over again. Retirement is a compounding game, meaning that returns magnify returns. You really can't afford to drop even 1% a year over 30 years.

If you invested $10,000, never touched it again and earned 4% interest compounded yearly (BTW avoid any investment that only compounds yearly :) ) after 30 years you would have $32,433.98, but at 4% percent it would be $43,219.42 or $10,785.45 more...more even than your original investment.

So here are Five Common Mistakes to Avoid:

1. I Have Plenty of Time to Worry about That - Actually you don't. Using those 4% numbers above; if you have that investment for 20 years instead of 30, your out nearly $17,000! Time is the friend and enemy...use it wisely
2. It is too Late - It's never to late! Once again time is ticking and every second lost is money lost. This goes for everyone: The best time to invest is now!
3. I Won't Take any Risk - While I believe we should all invest within our own tolerance level, unfortunately risk equals reward. You have to balance out the two. As shown above, every percentage is very important over time.
4. I am Captain Cowboy, Let it Ride! - OK, as I have stated before risk management is key here. You need the returns, but risk is still risk. If you want to bet on every tip out there go to Vegas, but read Viva Wall Street first.
5. All in your Company's Stock - One word that should scare the heck out of you at night; the 20th Century Frankenstein...ENRON. The company would have pep rallys, tell the the working staff how great things were going, wait for them to buy to drive up the price of the stock, then sell! I am not saying don't buy any either, take advantage of ESOPs (Stock Options) if you can, just do not peg a higher percentage then you should have of that type of investment class. If you think you need 20% Mid-Cap stocks, and your company is a Mid-Cap stock company and it is run well, etc, fine put some, 5-10% of it in the stock. It is hard to be the nay-saying when your cube mate is high-fiving the janitor, but when/if it tanks, you may be out of a job, but you won't be starting over.

Look, take whatever I say with a huge grain of salt. I am not a stock broker, but I just see people tossing away $10,000's of Dollars. Get with a retirement fund helper. Find someone you trust, then...don't trust her/him! Ask questions, lots. Read blogs (especially this one :) )Don't feel stupid. People can feel dumb all the way to the poor house!

But whatever you decide, make a plan and start working it today. The investment interest you save may be your own!

Personal Finance QuickTake: Ex E*Trade CEO Cashes In...

Fortune Magazine Online ran a great story last night about the former head of E*Trade's Golden Parachute. In recognition of his ability to drive E*Trade down 84% by entering into super-risky sub-prime loans Mitchel Caplan received a severance package worth $10.9 Million in cash plus lifetime medical.

Let me go on the record ( I guess I am anyway since this is on the web) that I believe a CEO should share in the riches if a company does well. I expect to get paid in my job I do not begrudge someone their money for doing the same. I also understand that, like with professional athletics, the a company will pay someone very well if they can help the team, because it is a good investment. If I was paid $10 Million, but I increased shareholder value $1 billion, my pumpkin head is gonna rest easy...

That being said, their is such a thing as admit you were wrong, even with the best intentions, and parting ways. I believe in severance as long as their was no wrong doing. But if you lose 84% of the value of a company, have the decency to leave a couple bucks in the till on your way out...

Viva Wall Street...

Stock Pickers Paradise!

Can't Lose Tip

My Doctor told me about this new drug...

Stock tips. OK. Most of us at one time or another have heard a juicy stock tip. Whether out playing golf, on a blog or from a friend these little glimmers of fast money dance in your head.

I once had a boss who was enamored of them. This was a non-drinker, non-smoker, non-gambler who was straighter than fresh cut wood. When we went to Las Vegas for trade shows he wouldn't play the nickle slots, as it was a bad investment!

So one early January a co-worker and I told him I heard about this experimental drug Oigaleb. It was Italian and not on the market yet. It cured some horrible disease and was in stage IV clinic trials. That we could get in for a small investment. It WAS a risk though, but it had a 50/50ish shot at a 100% upside.

He offered to write me a check right then for however much I wanted!

I said OK, but their are three types; the red vaccine, the black vaccine and a really experimental green vaccine, this one was extra risky, but it had a 1800% upside, but only a 1 in 18 shot in being the one. Only one of these could come in, but according to my guy it was a 100% probability that one, and only one would.

He then asked, "What was the most he could invest?"

"$50,000"

"Per vaccine?"

"Uh...yeah"

"Done!"

He then proceeds to write me a check from his ETrade account for $150,000! At this point we stopped him and explained that we were talking about Roulette, and Oigaleb was Belagio backwards! Not a drug...He played it off like he knew all along, but it really did wake him up. What he was doing was gambling not investing. If you want to do that, go to Vegas at least they will comp dinner if you lose...