Most days here at the ol’ FU machine, we do the same old thing. I talk about finance stuff and you kids pull up your proverbial chairs and gather round, just waiting to be wowed by the wonderful pageantry that is Nelson.
Either that or you’re dicking around at work in an attempt to forget about your crippling existence for a little while. Got a little real there, didn’t it?
A blog is kind of like a hot dog factory. You never know about the background, likely for good reason. All you get to see is the delicious tube-shaped product when it’s finished and you’re about to stick a six inch dog in your mouth. Be gentle with it. Anyone who puts it all in at once is just showing off.
So let’s do something a little different today. Let’s take a closer look at how I make the magic happen. Allow me to take you for a personalized tour of the hot dog factory, Nelson’s desk.
Picture it up, yo
Oh God Nelson that’s disgusting. An energy drink?
Relax, it’s empty.
I don’t think you really understand my criticism.
So let’s start at the beginning. This high quality office you see actually costs me money.
The story goes something like this. I got back from South Korea and was deciding whether I’d take writing seriously or get a job and continue writing on the side. After applying for all of one job that semi-interested me, the choice was pretty clear. Typos and all, Nelly was going to double down and become a true professional writeer.
That typo is intentional. I’m not that big of a hack.
I quickly realized writing at home wasn’t going to do it for me. It was depressing not leaving the house for days at a time. I missed human interaction. My wife made me cook dinner. And most importantly, I really needed to put on pants and go to work. The psychological boost of leaving the house is a huge deal for me.
I started going to coffee shops and grocery stores to write, but that got old quickly. I’d run into people I knew or they’d just be too damn noisy. Coffee shop internet will do in a pinch, but it’s not really that good.
So I decided to rent an office. After viewing a half dozen different offices, I chose the one in the picture above for a few different reasons, including:
- It’s located in a mall, which gives me a physical location for private mortgage clients to pay me
- I liked the free option for opening up a retail store, although after more than a year here I still can’t think of anything I’d want to open
- The rent is a terrific deal for what I’m getting
- There are other people around who I can talk to
- Snacks and energy drinks are close by
My desk basically sits in the corner of a retail space that’s approximately 400 square feet in total area. I use maybe 100 square feet. There’s another ~200 square feet in the back, too.
Here’s the view from the other side.
As you can see, there’s plenty of room for me to stretch my legs. I’ve thought about opening a co-working space with my extra area, but my landlord isn’t really in favor of subletting and I am cripplingly lazy. I’m also not exactly sure how much demand there would be. Solopreneurs don’t really end up in my boring small town.
Anyhoo, onto the desk itself.
Let’s start with the two monitor setup. If you’re a writer, it’s an absolute godsend. You can research on one monitor while keeping the other open to your work. It makes everything go that much faster and smoother.
Ron Swanson currently guards one of the monitors, and Bender will soon be guarding the other. I left him at home. He’ll be standing right where the Subway cup is.
The MacBook pro exists for two reasons. I use it almost exclusively for email and tweeting, and every now and again I’ll drag if off with me when I do somewhere. I will need to replace the cord soon for the second time, which I don’t intend on doing. It will get replaced by a PC laptop sometime soon, probably in 2017.
My papers are always a bit of a mess. On the left is the least high-tech system ever for keeping track of stuff I want to write about. The large notebook has ideas for Motley Fool and other investing topics I want to cover, while the smaller one has all the ideas for this here blog.
I own the Texas Instruments BA II Plus Financial Calculator which is the only calculator any serious finance type needs. You can figure out things like depreciation, amortization, and compound interest on it, although I usually just use online calculators for a lot of those things. Still, it was only $30.
Off to the right is a printer and file cabinet, which actually get used. More than once. I went with the printer that could scan stuff because that’s nice to have every now and again.
You might have noticed the pair of shoes under the desk. They’re off most of the day. The only time I really put them on is when I go somewhere. The rest of the time I walk around in my socks.
And finally, let’s talk about the chair. I spent $170 on that chair (regular price, $249) and it was the best money I ever spent. If my ass could talk, it would probably just say things about my bidet and that chair over and over again.
As evidenced by the previous pictures, I don’t have much up on the wall. In fact, my wall only has two things on it, my business licence and my pictures.
The two bottom pictures are of my wife. I decided to take these pictures out because the last thing I need is to be yelled at. The other two pictures are of my cat, who only yells at me in cat language. Besides, cats don’t use the internet.
Let’s talk more about the picture of Warren Buffett, which I got at the Berkshire Hathaway annual meeting for a buck. Warren looks down on me, making sure I don’t make any dumb decisions with my capital. Charlie Munger is on the other side, and periodically I might turn it around so Charlie is looking down on me.
Best dollar ever.
And that’s really about it. It’s not the most glamorous desk, but hey, it sure beats one of those standing desks. Nobody likes those things.
If you’re actually graduating this year, you were probably treated to a big long ceremony which included a speech from some C-list celebrity that peaked in 2003. Wilmer Valderama, come on down.
Hey, not all of us can have Andy Samberg show up. Seriously, take 20 minutes of your day to watch that. It is so delightfully awkward. I’m legit surprised he didn’t get the ol’ vaudeville hook.
Those of you who have been around for a little while might remember that my annual speeches to grads are a bit of a tradition. It started off in 2013, when I pointed out that real life is much harder than college. I followed it up in 2014 by telling people that if they spent their life working hard and working smart, things would be much easier.
Because apparently I don’t know when to stop beating a dead horse, I followed things up with a 2015 edition that begged graduates to stop being so damn impatient. It’s great you want to change the world. But it’s not going to happen overnight.
And so that brings us to 2016, graduates. When I first started this series, you were only just entering university, a pimply-nosed nerd who thought that somehow getting out town and into college was going to get your ass laid. Naturally, this did not work, on account of you still being a pimply-nosed loser. At least internet porn exists.
The world of higher education seems to have changed completely in the last couple of years. Safe spaces have become a thing, especially for minority and LBGTQ students. Colleges, which have long been a bastion for liberal thought, have almost become dangerous for those who don’t share the same opinion as the prevailing wisdom.
My understanding of this issue is most students think the same way about safe spaces as reasonably informed people in the real world. They think that people should have the right to spend time in places they feel safe. They’re just not sure those freedoms should extend into places where being uncomfortable is a good thing for long-term growth, like in the classroom or the workplace.
See, graduate, here’s the deal. Maybe you don’t want to feel uncomfortable at work. But Bob from accounting doesn’t give two craps if you feel safe at work or not. As long as he’s not breaking the law or about to get himself fired, he’s going to give you hell if your results aren’t up to snuff. Bob cares far more about the health and welfare of himself and his kids than he cares about some new grad the company hired.
The big picture
This brings up a bigger issue. At the end of the day, colleges are echo chambers. Liberal students end up learning from liberal professors who are the underlings of liberal university staff. Because these people all look at the world in the same way, they think alike. They all agree that Donald Trump is the devil and Jon Stewart (RIP) is our GOD. There is no room for alternative thinking.
If you surround yourself with these people, you will never grow as a person. All you’ll do is continue to hear the same opinions as you always do, which further cements your beliefs. That is not a formula for growing as a person.
For whatever reason, we’ve decided that the opposite side of the argument isn’t even worth listening to. The internet has turned debate from a respectful thing into a contest of who can use the most swear words and condescending language. Whoever is the biggest asshole wins, apparently. Both sides of the political spectrum are guilty of this.
People who just scan the comment sections of Gawker, the New York Times, or Breitbart think this is ridiculous, of course. We all realize that in the scheme of things, it’s just not worth our energy to get that upset about which gender takes a whiz in which bathroom. We have more important stuff to worry about, like whether Bob from accounting is going to fire our asses.
The problem is that you, graduate, have never had bigger things to worry about. You don’t have the kinds of problems those of us in the real world have because you’ve never been in the real world.
Say this whole getting a job thing doesn’t work out. Most of you can (and will!) end up back in your parents’ basement after just one phone call. You’ve got a built-in support group that is conditioned to feeling sorry for you. Sure, most of us older folks have a similar group of sympathetic friends, but we’re conditioned to feel pride in being able to take care of ourselves. If you think it’s bad being a 22-year old who moves back in with their parents, try being a 32-year old who does. That person is mocked, and rightfully so.
We have a new generation of kids entering the working world who have never really dealt with adversity in a big way. Their parents protected them. College protected them. And they protected themselves by only exposing themselves to one side of a lot of different complex arguments. They’re about to enter a very different world.
This will be a shock for many people, especially ones who insisted upon safe spaces and trigger warnings at school. If these folks don’t figure out things quickly upon graduation, they’ll quickly devolve from promising young grads to bitter entry-level employees who somehow think it’s The Man’s fault that they’re not junior vice-president after a year of mediocre service. That’s not a formula that’ll get anyone ahead.
Luckily, there’s a solution to this, and it’s really easy. You just have to change your attitude. Instead of thinking of the world as a you-centric place, think about what you can do for the world.
If you don’t get ahead after a year and your job no longer challenges you, be thankful you have the mental energy to be creative outside of work. Start a side hustle to harness those creative juices.
If you can’t afford to buy a house because of Canada’s real estate bubble, focus on how good of a deal renting is.
If one of your co-workers suck, spend time appreciating all the awesome co-workers you have.
Focus on what you can do to make your life better, rather than insisting somebody else make changes to accommodate you.
Here’s the deal, graduate. The world is your oyster. It really is, even if I’ve spent 1,000 words telling you how it’s hard. There will come a point when you just shake your head and marvel about all the opportunities out there.
This won’t happen unless you have the right attitude. If all you focus on are negative things, you’ll see the world in a negative way. If you focus on viewing the world the same way as the average university student, you’ll miss out on all the valuable contributions made by people who don’t view things the same way as you do.
Embrace this new world and ditch the echo chamber of your old one if you want to succeed. Your schooling might be over, but your education is just beginning.
A quick note before we begin. I don’t normally like to do posts about stuff like this. You people don’t come here for a diary of my life. You come for interesting finance information and those shirtless pictures I totally didn’t just Photoshop my face onto. So I’ll try to weave in some lessons about what I learned from the Berkshire Hathaway annual meeting along with the trip recap stuff.
Like any investor, I idolize Warren Buffett. I’ve read the living crap out of The Snowball probably about three times now. I’ve read hundreds of articles about the guy over the years. And he’s probably entered my head thousands of times.
Buffett doesn’t need an introduction, but screw it. He’ll get one anyway. Buffett is the greatest investor the world has ever seen. He killed it as a micro-cap stock investor in the 1960s, starting a hedge fund before that product was really a thing. He then switched to more of an intrinsic value kind of guy, and then he killed it that way too. Along the way Berkshire Hathaway acquired all sorts of whole businesses, moves that have turned out pretty well. Oh, and Buffett happens to be one of the best insurance operators out there.
Is there anything the guy can’t do, besides limiting himself to fewer than three Cokes a day?
Buffett isn’t getting any younger, so I figured that if I was going to go down to Omaha to the Berkshire Hathaway annual meeting, this year would probably be a good choice. Both Buffett and his right hand man Charlie Munger could easily die tomorrow. They do have a combined age of 177, after all. Last I checked that’s a lot, especially for guys who don’t seem particularly healthy.
So I went to Omaha. But not without some difficulty.
It all started a few days before I left. Our hotel got struck by lightning, which caused a fire. The hotel was fine, but sprinklers and fire hoses soaked the place to the point where the place was inhabitable. Naturally, I found this out from a source other than the hotel, and on the morning I was supposed to leave.
You can imagine my shock. Here I was with non-refundable plane tickets about to go to a smallish city on the biggest weekend of the year. This was going to cost a fortune. Fortunately, Berkshire’s decision to live-stream the annual meeting brought attendance down about 10% compared to the year before, which meant there were rooms available. The total hotel cost was $700 for four days, split with my traveling companion. So that was reasonable.
As an aside, he had his own problems getting to Omaha. First his plane was delayed two hours due to mechanical issues, and then the plane couldn’t land through the crazy storms Omaha was having that day. The plane went back to St. Louis, refueled, and then was able to get to Omaha.
Once we made it to Omaha without God smiting us directly with His wrath, things went much better.
Friday was dedicated to the Berkshire Hathaway trade show. Dozens of different Berkshire Hathaway-owned companies filled Omaha’s conference center selling everything from NetJets memberships to Dairy Queen dilly bars. This year’s marquee item were the Berky boxers, made by Fruit of the Loom, which cost a grand total of $8. That was a bit of a rip-off considering I bought five pairs of regular boxers for $7, but what am I supposed to do, not buy these bad boys?
The strategy behind this trade show is really quite simple. Berkshire rents out a giant hall, stuffs it full of products that it owns, and then encourages people with money to show up for the good deals. For all the money they lose selling Dilly Bars pretty much at cost, the company gains back by selling those Berky boxers or t-shirts with the Geico logo on it.
“I can’t believe I just paid money for a t-shirt that says Geico on it.” — an actual quote
The biggest takeaway I got from the trade show was just the power of knowing your customer. Some 40,000 people show up each year in Omaha, eager to hear Buffett talk about all sorts of stuff. They’ve already shown they love the guy just by showing up. You could sell them anything with Berkshire logos on it.
Friday was just a warm-up to the main event, the shareholders meeting on Saturday.
The doors were supposed to open at 7:00am, and word was you had to get there early to ensure a decent seat. We got there shortly after six, fighting a torrential downpour the whole way. The doors opened at about 6:30 to let people out of the rain.
Overall, our seats weren’t bad. We were just a little too late to get floor seats, but we did secure decent seats about 20 rows up. We were probably 150 or so feet away from Warren and Charlie up on the stage. We could have probably gotten closer, but we really didn’t care. Getting a few sections nearer to the stage wasn’t about to make things much more enjoyable.
After the hilarious shareholder video–which included cameos from Jamie Lee Curtis, some of The Office cast, Bryan Cranston, and others–it was non-stop Warren and Charlie. Questions came from the audience, media, and analysts. Buffett and Munger answered all of them.
Buffett gets all the attention, and rightfully so. He’s been the guy who’s built Berkshire into what it is today. He didn’t disappoint either, switching between insightful and funny with ease. But he tended to ramble on a little too long and repeat himself somewhat. He also had a habit of only sort of answering questions. He’d address one part of a question and not another.
I’d almost say Munger was the highlight of the event. He probably said a tenth of the words Buffett did, but his words were very purposefully chosen. None were wasted. Charlie made his point succinctly, and he’s just as funny as Buffett. It’s criminal that Buffett gets so much of the limelight and Munger gets almost no public credit.
I could spend another 1,000 words saying what I learned from Charlie and Warren. Instead, I’ll just do some quick summaries.
Dismiss bad ideas quickly
At one point, a cattle rancher asked the two whether they’d invest in cattle. Charlie dismissed the idea as quickly as it showed up, saying he can’t think of a worse business.
The lesson: Don’t spend time on crap ideas. Punt them to the curb as soon as you can and move on.
Don’t be a macro guy
When asked about macroeconomic factors, Charlie Munger had this to say. “Microeconomics is what we do, macro is what we have to put up with.” Both Buffett and Munger repeatedly pointed out they have no idea about macroeconomic issues, and they don’t really spend much time thinking about them.
The lesson: You might think stocks are expensive, rates are going to go up, or the Eurozone is about to collapse. But you don’t know for sure. The easiest way to minimize these risks is to just invest. Dollar cost average into good ETFs or great companies and call it a day. Don’t bother trying to be an economist. Actual economists have trouble with this stuff. What chance do you have?
Berkshire has a simple company policy. When shares get below 1.2 times book value, the company buys back stock. Buffett stated that if shares ever got back below 1.2 times book, he’d back up the truck and aggressively buy back shares.
There are very few companies with that kind of discipline. Most buy back shares when the price is expensive, because times are good. That’s when they have the most cash. This doesn’t work out well, for obvious reasons.
The lesson: Don’t be reactive. By setting ground rules when you’re thinking clearly, you can take advantage of opportuntites later.
Should you go?
I really enjoyed my time in Omaha, but I probably won’t be going back next year. If you’re a hardcore investor it’s probably worth your time to make the pilgrimage at least once, but it’s mostly for the atmosphere. Omaha isn’t a very exciting city, and it turns out you can’t get very close to Warren Buffett’s house. But hey, it was fun.
Rather than typing out the rules for the Financial Uproar stock picking competition a million times over the next X number of years until I get bored of this and go live in a cave, I figured I’d just put them all in one place.
Here’s a link to previous contests in case you’re into such things.
If you’ve entered before this will all just be a reminder, but here are the rules for the rest of the unwashed masses.
1. Each participant picks four stocks that trade on the TSX, TSX Venture, NYSE, NASDAQ, or OTC stock exchanges. ETFs are fine, but no screwy weird exchange traded notes. (This is the Don’t Quit Your Day Job rule). I’ll use the Canadian ticker automatically for any inter-listed stocks.
2. Total return is counted, including dividends. To make it simple, each pick is assigned a one quarter weighting. Total return is an average of the four top picks.
3. Currency fluctuations do not count.
4. If a stock is taken over during the year, you’re locked into that return.
5. Deadline for entering is December 30th at midnight. Whichever time zone you’re in.
How do I enter?
You can either:
a) comment on this here blog post with your picks
b) send me a message on the Twitter
c) email me (financialuproar at gmail dot com).
(I will also be sending an email to everyone who participated last year, which you can reply to)
And that’s about it, kids. Good luck, cause you’re gonna need it against my STOCK PICKING GODLINESS.
Hey. It’s Christmas Eve. What exactly are you doing here? Does your family not love you or something? It’s okay, I get it. Nobody quite understands how it is to be a constant disappointment more than Nelly. It’s all my family can do to not vomit all over the place when they think of me. Nice try, blaming it on the cat. I’m onto you people.
Anyhoo, the blogging world tends to slow down at this time of year, and this blog is no exception. So instead of actual content, here are the best twelve posts I did this year, separated out by month. It’s probably been a while since you’ve read some of these, and considering how the average person remembers about as much as a football player after a Grade IV concussion, it’ll be just like reading new stuff again. So be excited, dammit!
The case for working backwards to retirement
Too often, us personal finance-type people think the world can be easily fixed with cliches, rules-of-thumb, and other such nonsense. We tell people to save 10%, 20% or whatever of their earnings without any thought of what their retirement goals might be.
I propose a different thought process. What if we started with the retirement goal and then worked backwards?
Stop making money a gender issue
If I had a nickel for every finance article targeted at women that just repeated the same old crap that applies to everyone equally, I’d have enough to fix the (almost imaginary) gender wage gap. The fact is 99% of all money issues apply equally to both genders. So why do we make something that’s so obviously not a gender issue into one?
Oh, and how come we never see male-specific personal finance advice?
Focus on the big stuff
There are a few big things and thousands of tiny things that can have an effect on your finances. And yet, we spend, collectively, many multiples more time talking about the little things. I say to ignore all that, and focus on the things that will make you serious money.
A promotion or successful side hustle will improve your life exponentially more than switching to generic brand garbage bags.
Forget retirement; Embrace selfish employment
This is one of my favorite posts I’ve ever written. Over the years, regular readers know I’ve taken a few shots at the retire-early-at-all-costs folks. This article condenses all my feelings about the matter into one piece, and gives a simple yet elegant alternative. Instead of quitting a job you hate for nothing, become rich and then do something you like.
That post got me in trouble with the folks at the Early Retirement Extreme forums, btw. For some reason they didn’t like it. I can’t imagine why.
A message to 2015 graduates
Besides trying to poison a veteran each Remembrance Day, writing a message each year to college and high school grads is my favorite annual tradition. Because hey, nothing beats talking down to some self-righteous little snotbag recent graduate. Those people are the worst people in the world.
The best ever?
No, we’re not talking about my writing skills or the quality of this here blog, which both remain mediocre at best.
This post makes fun of literally the two stupidest indebted people on the planet, a couple that banks keep throwing money at for some reason. Because they can’t help themselves, they spend it all and then some. Plus, Timmy, a little boy with no hands or feet makes an appearance. He’s fun for a double peg leg.
Why you need to hold bonds in your portfolio
So many blog posts focus on what the stock market will return over x number of years. But nobody focuses on owning bonds, mostly because they’re all but guaranteed to return less than stocks. Besides, nobody ever impressed anyone by talking about their bond portfolio. When the shit hits the fan though, bonds are very valuable, and in a couple of different ways too.
The easy way to create your own real estate empire
Being a landlord is great. Getting paid each month to basically do nothing is as sweet as it gets. But up here in cold, cold Canada, the rental yield on the average property is more dismal than outside in January. Plus, property managers eat up a big chunk of that small profit. I have a better solution.
What would you do with $100,000 in cash?
This post is a little different. I tried to crowdsource some differing investment ideas by presenting a hypothetical situation. If you were sitting on $100k and couldn’t put the money into the usual choices (stocks, bonds, real estate, or paying down debt), what would you do with it? I got some interesting ideas, some of which are definitely worth investigating further.
Did boomers really have it that much easier than millennials do now?
My three biggest pet peeves are unwanted pickles in my sandwich, pants, and millennials bitching about how much easier boomers had it back in the day. What a glorious waste of time.
These days, the favorite activity of millennials seems to be complaining about how much easier boomers had it, especially when it came to buying a house. But is that really the case? As is the answer with most things, it’s hardly black and white.
An insider’s look at Canada’s mortgage fraud problem
I was a mortgage broker from 2007 to 2010. I wasn’t particularly good, but I did see my share of dishonest and unethical things that went on in the industry. As much as we’d love to see less of it, I think people trying to screw the system is a reality of a world where people are compensated by commissions.
Paying off the mortgage in 3 years: smart or foolish?
I still contend this wasn’t a smart move. I don’t think many people agree with me though.
And that’s it
Thanks for reading and have a good holiday season. Happy whatever it is you celebrate. As always, thanks for reading. See you in a week for the entries for the 2016 edition of the stock picking contest.