long term stock investing

I remember in 2000 when I got my first job out of college and I looked over my 401K benefits material. It had a lot of info on the kind of investments you should have and it said especially as a young person you should have lots invested in stocks. It said the longer the period you are looking to invest for, the more you should invest in stocks. I figured a decade most people who invested in stocks would better off 10 years down the road.

Well, around that time the Dow Jones Industrial was at almost 12000 and the S&P 500 was at about 1500. Today almost a decade later both indexes are well below those levels with the Dow in the 7000 range and the S&P around 800. So basically both are over 30% below their 2000 highs. Think about it, if you had $10,000 invested in stocks in 2000 you would have been better off putting $8000 under your mattress and spending the rest on booze, gambling and strippers than you would have investing in the stock market for the last decade. That is kind of sad.

oil hype2

A few posts ago in the summer I said in this blog that oil prices were too high. I don't want to say I told you so because even though I had thought oil prices would drop a good amount, I had no idea they would plummet to $40 a barrel! I can't believe that the same gas stations that I was paying $4.20/gallon at a few months ago now I'm paying $1.80. I know the financial crisis and a pending global recession are a big cause but who would have thought this summer that gas would be below $2 and a barrel of oil below $50 by the end of the year.

Schuykill River Trail

Over the past few years I've used the Schuylkill river trail for recreational purposes, but over this past summer I've used probably more than the previous 5 years combined.
Ever since I moved to Conshohocken at the beginning of this year I have started riding my bike a lot more than I ever have in my life. I pretty much ride at least a couple of times a week depending on weather and my schedule. There is one main reason for this, and it's the Schuylkill river trail. Since the trail is right out my front door it gives me little excuse not too ride my bike. I've been riding enough where I can get to center city near the art museum area
going eastbound,(about 10 miles from my apt one way) and Valley Forge park going west bound (also about 10 miles). For shorter rides I'll go to Manayunk which is about a 5 mile ride or the Norristown area. I also have 2 friends who live very close to the trail at different points on the trail so sometime I'll stop by there to take a break. The trail is very nice and follows many miles along the river.
http://www.schuylkillriver.org/Detail.aspx?id=548

Conshohocken fire

I've had quite an experience the last few days due to a major fire at my apartment complex in Conshohocken PA which caused me to be displaced for awhile. After a 4 day hiatus I got to return to my apartment on Sunday while many others in my apartment complex will not be able to return due to the massive damage. I don't know what the long term future for me holds living here. I would like to live here but think it may become a ghost town as many residents leave and very few are going to want to move in.

oil hype

As oil is now over $130/barrel there is lots of news about oil prices in recent months but I think this is going to be another bubble that has occurred over the past decade. Here are the others:

1) In 1999 everybody was into stock investing as the stock market was giving 20% plus annual returns. The hottest thing was new internet stocks. Many of them doubled in value in less than a year. The common person started owning stocks and CNBC was a big hit. Yes the internet was the new thing and internet companies had a lot of potential but nothing could justify the huge run up in their stock price. Of course after 2000 the stock market dropped especially the Nasdaq and today, 8 years later, out of the major indexes the S&P 500 and Nasdaq are still below their 2000 highs and the Dow Jones Industrial is just barely above.

2) in 2004-2005 everybody was getting into real estate and housing prices were appreciating 10, 20, even in some places 30% a year. People were buying homes that they could not afford and home building/decorating shows became hits. Yes, interest rates were low and the economy was healthy so housing prices should have gone up a little, but the run up in house prices was out of control. Over the last year or two house prices have leveled off and in many places have dropped. It will probably a rough near future for housing market with many parts of the country prices staying flat or falling for many years to come.

3) Now the price of oil has doubled in a year and is over 5 times what it was just a few years ago. Yes there is more demand from around the world as many countries (particularly China and India) have rapidly growing economies. Yes, there are supply and demand reasons why oil should rise, but does it justify the price of a barrel to double in a year? I don't think so.

All 3 things are examples of speculators driving up the price of something to such high levels that it causes the prices to drop because they simply got to be too high. All 3 have justifications to go up in the long term but little justification to go up as much as they did in the short term.

Pennsylvania in center of it all

Although, I wouldn't go as far as to call myself a political junkie, nor do I passionately support either democratic candidate, it's kind of exciting to have Pennsylvania be in the center of the political universe for the past month and especially the past few days and next 48 hours. Every 4 years there is always focus on Iowa and New Hampshire, now for the 1st time in a long time all the focus is on Pennsylvania. The candidates and their surrogates are in the Philly area pretty much every day and there are tons of national media all over the place. Even local politicians like Governor Rendell and Mayor Nutter are on national programs news programs like 'Meet the Press' and 'Face the Nation'. Lots of news programs talk about the PA economy and give all kinds of demographic data about the state. A lot of people outside the state (or even in the state) have learned a lot more about Pennsylvania over the past month. I'm sure some people are already tired of all the campaigning, but it will seem kind of weird next week when I turn on a news network and nobody is talking about the PA primary.

100,000 miles

I know nobody on the planet cares about this other than me but this past week my Nissan Sentra hit 100,000 miles. Since it happened when i was parking my car at home, I took a picture since it's probably the most significant milestone in the history of your vehicle. Of those 100k miles other then a few when i let my friends drive pretty much every mile was put on with me behind the wheel. Now that the car is at 100k it's slowly becoming time to start looking for a new car.