A Brief Tutorial on Google Finance Portfolios


Google provides a plethora of free and powerful tools, however, they do not highly publicize or tout their free tools very often.

One such free tool I have found extremely useful is the Portfolio section in Google finance. It allows a user to:

  • Create multiple portfolios
  • Track multiple lists of stocks
  • Track custom stock data to track personal stocks
  • Track custom stock data to track hypothetical stock transactions – for those wanting to experiment.
  • Stream customized news feeds for the stocks in a portfolio
  • Provides upcoming events for stocks in your portfolio, such as Quarter earnings releases, etc.

The best part is that it is FREE!

One limitation is does have is that you cannot view the portfolios of others.

I hope you can find this tool as helpful as I do.

When culture hurts the economy

The recent devastating earthquakes in Japan have hurt not only their own economy, but have also affect industries around the world. Car manufacturers and especially nuclear energy will be set back for years. With the rebuilding anticipation for Japan comes a quiet movement that can put Japan’s economy at stake for a significant dip. The bad news is that this movement is part of the national culture in Japan.

Not known to many outside Japan is the concept of Fukinshin, which translates to roughly “inappropriate.” It’s the concept that one shouldn’t celebrate and display joy while others around them are experiencing so much pain and suffering. It also includes the idea that one shouldn’t burden neighbors and should also keep oneself available for any sort of situations that they may be needed to help.

A large part of the culture is the concept of putting the community before oneself. It is one of the main reasons there were no reports of mass looting and crime once cities were in disarray. Instead of stealing items on the street, people would actually bring them back into the store and pay for them.

Additionally, many all over Japan are cancelling trips, vacations, events, celebrations, and even refraining from other hobbies of pleasure in order to band together for the recent earthquakes. However, this has negative effects on local economies as sales for local goods have plummeted. Even events such as a drive to save electricity and anime festivals have been cancelled.

The idea of Fukinshin and putting the community ahead of oneself is very admirable and something that is most likely impossible to have in many other countries. However, there has to be a balance. It is one thing to help each other in times of need, but entirely something else to further hurt your local economy in the process.

One Brewery in Japan is hoping to change some of that sentiment and is urging people to buy more Sake.

Hopefully they can garner some sales before it’s too late.



Ten Important Facts About Capital Gains and Losses

Capital gains are profits from investments into capital assets (see fact #1 about what a capital asset is). These become especially important when a person is involved in investments and is filing taxes. The last thing any of us wants is to get audited.

Here are the facts straight from the IRS.

1. Almost everything you own and use for personal purposes, pleasure or investment is a capital asset.

2. When you sell a capital asset, the difference between the amount you sell it for and your basis – which is usually what you paid for it – is a capital gain or a capital loss.

3. You must report all capital gains.

4. You may deduct capital losses only on investment property, not on property held for personal use.

5. Capital gains and losses are classified as long-term or short-term, depending on how long you hold the property before you sell it. If you hold it more than one year, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.

6. If you have long-term gains in excess of your long-term losses, you have a net capital gain to the extent your net long-term capital gain is more than your net short-term capital loss, if any.

7. The tax rates that apply to net capital gain are generally lower than the tax rates that apply to other income. For 2010, the maximum capital gains rate for most people is 15%. For lower-income individuals, the rate may be 0% on some or all of the net capital gain. Special types of net capital gain can be taxed at 25% or 28%.

8. If your capital losses exceed your capital gains, the excess can be deducted on your tax return and used to reduce other income, such as wages, up to an annual limit of $3,000, or $1,500 if you are married filing separately.

9. If your total net capital loss is more than the yearly limit on capital loss deductions, you can carry over the unused part to the next year and treat it as if you incurred it in that next year.

10. Capital gains and losses are reported on Schedule D, Capital Gains and Losses, and then transferred to line 13 of Form 1040.


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Major League Baseball opening day vs the stock market

Yesterday was Major League Baseball’s (MLB) opening day, so much of the news in the sports world was baseball related. Naturally I decided to Google some opening day trivia facts and ran across this lonely message board post.

Hi everybody, I’m new here and have this burning question that I can’t find the answer to anywhere else, so I thought I might try here. If this isn’t the right spot, please feel free to move me.

Is there a correlation between stock market performance and the Opening Day of MLB? Has anyone ever done any research into this? This is the kind of stuff I think about when I’m home in bed with the flu watching baseball all day.

Apparently it was paustinsmall’s first and only post. Not being answered in the last 3 years must have taken a toll on his poor soul, never again returning to baseballforum.com.

Fear not paustinsmall, I will take on this task (kinda) and restore your hope in humanity!



Ok so apparently it is actually quite a chore to find the exact opening day historical dates. MLB.com is hard to navigate and wikipedia doesn’t list opening day dates as well. What we do know is that opening day is always either right at the end of March or the beginning of April, so we can examine the historical closing days of those periods.

I should note that in order to determine if there is a true correlation between opening day and stock market trends we would need a sufficient sample size, multiple variables, and multiple regressions.

I’m not going to do any of those. Why not? I don’t want to spend too much time trying to calculate an outcome that most of us already pretty much know. While there may be a few select companies or industries that benefit from MLB opening day, it is not enough to affect the overall market in any significant way. The market is much bigger than just baseball.

Let’s look at the Dow closing levels around the opening day periods since 2000.


DOW closing levels during MLB Opening Day periods


So to paustinsmall, is there a correlation between stock market performance and the Opening Day of MLB?

Probably not.

Pay a little to save thousands on your mortgage

Owning a home is generally seen as an investment. When it comes to home mortgages, it is a well known fact that over the typical 30 year mortgage the average person will end up paying more than twice the amount of the original loan. This is because of the interest payments.

For example, and this is a rough estimate, with a:

  • $200,000 mortgage
  • 30-year loan
  • 7% interest rate

By the time the loan was paid off in year 30 the total amount that would have been paid into the loan would have been almost $480,000. That means an additional $280,000 was paid just in interest payments alone.

What can be done about this?

A home owner could always go for a shorter term mortgage such as a 15-year loan. The difference in interest paid in a 15-year loan vs. a 30 year loan is  nearly $150,000 saved. That is, if they can afford the higher payments.

If you don’t plan on owning a home for the full term then the situation changes as well.

What if you are already in a 30-year mortgage and are planning on outright owning the home? What else can you do? You can always pay extra every month! I know it’s not what a lot of you want to hear, but before you close this page, hear me out!

A good thing is that most lenders allow borrowers to prepay on the principle balance without any prepayment penalty.

Let’s look at that same $200,000 loan. Paying $100 extra each month will shorten the mortgage repayment time by 5 years and 9 months and save over $63,000 in the long term. Not so bad, if you really think about it.

Here is a handy tool you can use to get a rough estimate of how much you can save by paying extra each month.

Interest rates news you shouldn’t ignore

Interesting news came out today about the future of interest rates. Those that are planning on financing large purchases should pay attention.

Charles Plosser, the president of the Philadelphia Federal Reserve Bank, revealed today that the Federal Reserve should increase interest rates from current range of near zero to 2.5% within a year. The Fed would sell $125 billion of assets for each 25 basis point increase in the funds rate. Meaning, at the end the Federal Reserve would have taken back $1.25 trillion. For those worried about inflation, this is a good thing. It’s basically  removing money from the system.

This of course comes as a surprise to many, myself included. Considering the quantitative easing tactics employed by the Fed and the state of the economy, many expected this move to happen much later in 2012 and 2013.

There is speculation as to why the sudden change in attitude from the FOMC. Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, commented that they are aware of the strong increases of short-term inflation the past few months and assured that it would not last long. Lockhart was most likely alluding to their plan to increase the federal funds rate. Perhaps the Fed is getting worried about inflation as well.

Some economists argue that raising interest rates currently would cause growth to stop and revert back. However, recent measurement indicating the growth of the US economy may also be playing a part in the Fed revealing these new planned actions.

Raising rates will have  a wide variety of effects on the economy:

  • Inflation hedges such as Gold and Silver will definitely take hits as increasing interest rates lowers projected inflation rates (see Loanable Funds Model)
  • Confidence in the US Dollar will improve, increasing it’s exchange rate value
  • Not the best news for bondholders
  • Money and loans will become harder to procure overall as banks will most likely tighten up lending
  • Will most likely spur reactionary economic policies from other countries

Remember, this is only a statement and not yet a decided policy. The FOMC will still vote on it in their next meeting.

This goes to show just how powerful the Federal Reserve is at moving markets and affecting economies. Unfortunately there is really nothing we can do about it. All we can do is prepare ourselves as best we can.

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Will this be a missed opportunity for American car companies?

The news coming from Toyota is very grim. Toyota gave word to many of its plants that they should all prepare for potential temporary shut downs. The main reason due to crippled factories in Japan unable to supply vital parts for manufacturing. Honda is faring no better.

At a time when gas prices are starting to skyrocket and Prius sales had a record February, it could end up being a perfect storm for American car manufacturers. While many companies do outsource and get parts from Japan, there is still opportunity for them to take advantage of the situation. However, the real question is: Will they?

Cars such as the highly advertised Ford Fiesta diesel would be an example of a benefactor if Japanese car companies are forced to halt manufacturing.  Chevrolet sold about 48,000 vehicles with four-cylinder engines in February, which were higher numbers than this past January and also February of the previous year.

However, will a potential lack of supply of fuel efficient cars from Toyota and Honda be enough to drive consumers to other companies? Will American car companies be able to navigate a constrained supply chain? Only time and long term gas prices will tell.

Let’s look at how investors are speculating:

There looks to be some small gains, but nothing to write home about yet. While some speculate Ford will be able to withstand supply shortages of parts, others are expecting Ford to announce partial shutdowns soon.

What about General Motors?

They had small gains as well, but they have other issues because they do outsource many parts from Japan. In fact, GM shut down production at its Shreveport plant in Louisiana for the week of March 21 because they ran out of parts that were made in Japan. However, it is a truck manufacturing facility, so with current trends of car buyers moving towards smaller and more efficient cars, this may not be as bad a hit as some would expect.

If they cannot capitalize on these events maybe this could also be used as an opportunity to teach American car companies to rely less on foreign parts and improve our own capabilities within the US.

All the cool kids wonder where their tax money goes, right?

I’m sure all the cool kids take the time to ponder where all of the money they pay in taxes goes. Fear not, the folks at wallstats.com have heeded your calls and provided a wonderfully huge and detailed picture full of statistics and figures.

You can even order this as a giant poster, but I’m not that cool…

Click to see full size

Is history doomed to repeat itself?

I was going through my daily news feeds and noticed this article. The title was “Adjustable Rate Mortgages are Back.”

I literally had to pause for a few seconds to think about it. Are they really back? Further reading into the article states some interesting statistics:

After accounting for nearly 70% of all mortgages issued during the boom, ARMs vanished during the bust, totaling just 3% of the market in 2009. Now they make up 5% of all mortgages issued, and Freddie Mac predicts 10% by December.

While I wouldn’t exactly say they are coming back, the projection of the amount of ARMs to double by this December is a bit unsettling. Are people starting to forget that ARMs were one of the main ingredients in sustaining the housing market crash?

The terms of an ARM do look enticing, especially considering the economic situation of many. Let’s take a look at some of the important details of an ARM:



Fully Indexed rate – the rate you must pay, barring any periodic caps, in order to fully amortize or pay off the loan.

Margin – the fixed component of your ARM loan, constant throughout the life of the loan.

Index – the variable component of your ARM loan, changes on a monthly basis. Examples of indices include the Cost of Funds (11th District), One Year Treasury, Monthly Treasury Average (MTA), 1 Year Treasury Average, CD, LIBOR, etc.

Example using the 1 Year Treasury: 

1 Year Treasury Index = 6.170
Loan Margin = 2.50
6.170 (Index) + 2.50 (Margin) = 8.67%** (Fully Indexed Rate)

**(most lenders will round the rate to the nearest 1/8%
so the actual rate would be 8.625%)


Many times ARMs will include low teaser rates and have lifetime caps for interest.

Let’s look at the original article‘s calculations:

On a $200,000 mortgage, the monthly ARM payment at 3.5% would be $898 compared with $1,074 for a 30-year, fixed-rate loan at 5%.

That’s a $10,560 difference after five years, when the ARM would adjust. At that point the ARM rate could jump to a worst-case scenario 8.5% and the monthly payment to $1,538.

It would still take more than 22 months of the higher ARM payments to offset the first five years of savings.

The article takes these numbers a lot lighter than even I would. Jumping from $898 a month to $1538 is nearly a 72% jump in monthly mortgage payments. For many that’s a huge jump for what only looks like a 5% increase in rates. It also assumes that the borrower is saving the difference in payments and will have that money on hand if interest rates rise. That takes incredible discipline and is unfortunately not a realistic behavior to expect from the majority of home buyers.

I believe there are a few assumptions made when it comes to ARMs:

  1. Interest rates will remain low (meaning lower payments)
  2. A home buyer is only going to keep the home for a few years
  3. A home buyer will be able to sell their home before the ARMs start to adjust higher

First of all, right now the interest rates have been at record lows. The federal Reserve has been working hard to keep those rates low, but in the process have created a situation where it cannot be sustained for a long time. Will these rates be this low once an ARM matures? I wouldn’t count on it, but then again that’s my opinion.

Second, how long will it take for the real estate market to recover to the point where a home buyer can sell their home in a reasonable amount of time without taking a large loss? Will it recover in the time before an ARM matures?

The ideas in which ARMs were created from are not new. They are very enticing and the teaser rates are very low. However, beauty is only skin deep, and history has shown that many have been burned.

If you do get into an ARM, make sure you know exactly what you are doing.

Opportunity in disaster

2011 has already had it’s share of natural disasters. From the hurricane in Australia, the earthquake in New Zealand, and now the recent earthquake in Japan, there has been literally hundreds of billion dollars worth of damages. While many have died and much property destroyed, we cannot forget about one of the most important parts of all – the rebuilding process.

The physical rebuilding process will require many materials from around the world. Let’s take a look at a few commodities and how the market is reacting to the events and the upcoming rebuilding anticipation:

Lumber Commodity
Lumber Futures contracts are traded on the Chicago Mercantile Exchange and are delivered in January, March, May, July, September, and November of ever year.


We also need to pay attention to reactions from the nuclear reactor in Japan. If you happen to be invested into uranium futures, it looks like now is not the time to be in it.

Uranium Futures
Uranium futures are traded on the New York Mercantile Exchange are delivered every year in January, February, March, April, May, June, July, August, September, October, November and December (all months).

Steel will probably be needed for the rebuilding process. However, car manufacturers in Japan have also been affected. Arcelor Mittal is the largest producer in the world. Will they benefit from this as well?

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