Friday, March 20, 2009

One Reason to Avoid 401Ks: Taxes

One of the pitches for 401Ks is that it they take "pre-tax" money out of your paycheck for investment. This money then "grows" (ha-ha) tax-free, and isn't taxed until you take it out at retirement.

The big assumption here - other than your money will grow - is that when you take it out you will be living under a lower-tax bracket. 401Ks let you avoid "high" taxes now so you pay them when you have "low" taxes at retirement.

With the current budget deficit, which will only grow higher with new spending programs and gazillions of dollars flowing into new spending, there is nooooo way that taxes will be lower in the future, even if you ARE making less in retirement. So 401K programs allow you to avoid lower taxes now so you can pay higher taxes in the future.

About the only thing that might make it worthwhile is if your employer has (or still has) a match, in which case if you invest up to the match you might still be ahead in the future. Otherwise it may make sense to avoid 401Ks, bite the bullet on the lower taxes now and invest it in an "regular account" (which will also allow you to have access to it unlike a 401K).

Thursday, March 19, 2009

Scenes from a Korean Mall

The Coex Mall is a vast underground mall in the heart of Seoul. It spans blocks beneath huge business towers in the priciest part of the city, and has everything from movie theaters to internet lounges.

Here is a Starbucks, a Coffee Bean and a Tom Tom Coffee - all pretty much the same store - all on one corner. A fourth coffee chain "Angel in Us" is around the corner just out of view:

Maybe there are a few Irish in Korea doing mall design?

This is an underground mall but parts of it are open to the sky - so the "roof" here is ground level, sort of like a pit. It was really quite crowded, and this was past 9pm at night. It was hard to believe the Korean economy is worse than the U.S. right now.

Update: And of course, I found Window Manager Nirvana here:

Tuesday, March 17, 2009

There's No Green Beer in Korea

Happy St. Patrick's Day, although I am in a country that is conspicuously non-Irish and doesn't even know the day exists. Although the Koreans don't exactly need a special day for a reason to drink.

Friday, March 13, 2009

There is One Market That is Up

"Smartphones". Actually it is not a market, but a market segment, and its growth is from cannibalizing phones on the lower end. I am a little surprised by Apple's market share. I just got an iPhone, LOVE IT, and can't believe anyone would use anything else...

Global Smartphone Sales Growth 3.7% In 4Q

Worldwide smartphone sales grew 3.7% on the year to 38.1 million units in the fourth quarter 2008, research firm Gartner said Wednesday.

(within the smartphone segment) Research In Motion (RIMM), the maker of Blackberry smartphones, increased its market share to 19.5% from 10.9%, as its sales grew 85% to 7.4 million units.

Apple's (AAPL) market share increased to 10.7% from 5.2%, as its sales more than doubled, to 4.1 million units from 1.9 million.

Tuesday, March 10, 2009

Nokia PCs, Dell Cellphones

With low-end "netbooks" and high-end "smart phones", we are starting to see an overlap between what has been up to now two distinct market segments, PCs and cellphones.

As technology moves forward, we are going to see companies that never competed against one another vie for market share in what is going to eventually become the vast middle ground between a full functional PC and a basic low-end cellphone.

The world's largest handset maker, Nokia, is already off to the races, indicating their intention to move into PCs:

Nokia's CEO Olli-Pekka Kallasvuo says his company is actively looking at the market for notebook computers as smartphone and computing continue to converge.

In the mean time major PC makers, including Acer and Dell, have already entered or will soon be entering the cellphone market.

Where the segment ends up, I think, will be a function of display and data entry technology. Flexible, folding displays are already being shown in the back rooms of many technology companies and will be here soon, allowing larger displays to be carried in smaller formats. MMI (man-machine interface) is still an issue, however, and the segment will be segmented for a while between a full keyboard and some other data entry mechanism that allows a smaller unit, until some breakthrough is made in this area.

Sunday, March 08, 2009

One Reason to Buy GM - Scripophily

Scripophily is the study and collection of stocks and bonds. A specialized field of numismatics, scripophily is an interesting area of collecting due to both the inherent beauty of some historical documents as well as the interesting historical context.

A friend recommend buying Ford or GM. After all, the prices are so low that if they go bankrupt you won't lose that much, but the potential upside in 20 years is pretty large if they make it through the recession.

This got me thinking that actually, this investment could have little or no downside in case of bankruptcy if you hold the certificate. Because if GM and Ford cease to exist, the certificates will become collector's items.

Standard Oil (Merged into what eventually became Exxon) - $2800

Ford is at $1.70, GM at $1.56. Pick up a 100 shares of each, and if they go caput the certificate will definitely be worth the investment in less than ten years. The only issue will be the time to get the certificates. It can take a few weeks, and Ford and GM might not have that long. - Bankrupt during the internet bust - $695

Wednesday, March 04, 2009

A Cigar with Sal

The night was late. The drinks were deep. The cigar bar was located well off the Strip, hidden in the depths of the side streets and alleys.

The man seemed to be waiting for me, his steel-grey eyes framed by his steel-grey hair. He beckoned me to him, his hand waving me to him behind a cloud of cigar smoke.

“Come. You talk to me. You are?”


“WM. We talk.” The alcohol flowing through my veins substituted trust, the fatigue in my mind replaced wary, and I gave him my complete and utter confidence. I sat down with my cigar and listened.

“I am Salvatore, you call me Sal. And now we talk of things, you and I, and I tell you of the World.” I stared into his eyes. Even at forty I felt a child beside this man. His cold grey eyes had seen so much more than me. This man had seen and experienced The World.

“The world is in a difficult place, my friend. I have been in Vegas for over thirty years. Recessions have come and gone, but nothing, nothing has been like what I am seeing today. My restaurant”, he waved aimlessly around him, “ My restaurant, the food receipts are down ten percent, the bar is down over thirty percent. I have never seen what I am seeing today. Even the conventions like you are attending do not help my business.”

I did not ask him how he knew I was at a convention. He would know. He continued. “And the real estate. Condominiums were sold before they are built. For hundreds of thousand of dollars. And now those owners. Those owners lose everything. Sometimes the buildings are not being built. All. All of them bankrupt.”

I inhaled my cigar, savoring the pungent aroma, trying to enjoy the taste, but his weary message made it difficult to enjoy my guilty pleasure.

“I tell you, my friend, this is nothing like we have seen before. It will be years, years before it passes.”

I nodded silently, letting the older man continue his rant. “The best years. Those were the 60s, the 70s”. He smiled ruefully. “My friend, do you know what the women were like back then?” He smiled at me and I nodded my head no, telling him I was barely born.

He laughed out loud. “Oh my God! The women! But today…they are like the economy, both are now are so cold!” He laughed at his own joke, then shrugged his shoulders.

“SoWM,all I can say to you is to enjoy what you have today, because things are only going to get more difficult, my friend. We are entering a new world.”

He gazed at me through the cigar smoke, as if daring me to take his advice.

Tuesday, March 03, 2009

Finding a Face in a Crowd in Las Vegas

I am heading to Vegas for the annual Photo Marketing Association trade show. While new cameras and big megapixels are the hottest items, the newest thing coming to your nearest camera will be face recognition. A little background on the technology is here: Face Recognition: Clever or Just Plain Creepy?

While here I won't be spending any time at the craps tables...