My ironic suggestion for cognitive dissonance in two New York Times articles was hosted in yesterday’s Best of the Web Today (print edition today) – a daily column on the Wall Street Journal’s Opinion Page.
wall street journal
In 2006, Former President George Bush signed a well intentioned law which allowed companies to automatically enroll employees in the company retirement program – and to automatically choose the investment in which they were enrolled. The Pension Protection Act of 2006 authorized companies to automatically enroll new participants and enroll them in three types of funds – lifecycle funds, balanced funds, and managed accounts – while absolving the companies of any financial liability for losses in the funds. As expected, the law has effectively increased the rate of participation in company 401(k) accounts.
… is higher than credit card debt in our country (hat tip: Wall Street Journal). How can this be?, you may ask, when the number of news stories on credit cards seem to vastly outweigh the corresponding reports on student loans. Well, yes, credit card stories seem to outnumber student loan stories by a ratio of about 15 to 1, according to StudentLoanJustice.org. How did this happen?
How about this title in the Wall Street Journal? “Credit Cards Take From Poor, Give to the Rich” is the name, in reference to a Boston Federal Reserve Bank report on credit card reward programs. The paper says just that: credit card rewards programs and merchant fees for credit card usage are increasing the overall cost of goods for check and cash customers.
My friend sent me an article the other day which really summarized my thoughts succinctly – he sent me this piece from Evan Newmark writing at the Wall Street Journal. If you haven’t noticed the crazy action in the stock market in recent weeks and days, let me be the bearer of bad news: the major US indicators are down from their yearly peaks. You’ve probably lost some money on paper, even. Between oil in the Gulf, the Greece Drama, and even North Korea, there is a lot to be worried about. Here’s the thing – these are all known unknowns, and generally priced into the stock market already.
One of the more interesting risks you’ll face in investing in stocks (or bonds, or any security of a single company for that matter) is headline risk. Headline risk, as you may know, is the effect that news can have on a company (or sector, etc.). Often times, negative news which is only loosely related to a company can hurt it negatively. Of recent note: Tiger Woods’s “transgressions” on the companies that pay him to sponsor their products.
When it comes to credit card rewards programs, either those run with points or those run with frequent flier miles, you have to spend money to make money. One way to game the system is to spend money on money. While this trick would work with gold (although you lose some- gold is sold above its spot price), it’s also an open secret that the U.S. Mint offers Direct Ship coins, payable by credit card. To sweeten the deal further, they will even pay for domestic shipping.
Is Journalism, as suggested by the Washington Post’s Michael Gerson, dying a slow death? Or is Mr. Gerson simply being melodramatic? The issue boils down to how you define journalism. If journalism- in the mold of the traditional magazine and newspaper journalism- is dying, is that the end of news? Tough questions, for sure, but what is the goal of media? To train journalists?
What better way to start writing again (Happy October!) then to write about an investing fallacy: over periods of 20 years or longer, many investors automatically assume that stocks are the best investment. Really, it isn’t fair. Stocks have behaved (before this decade anyway) in such a controlled fashion, gaining 10% or so on average every year, that it is only natural for many investors to assume that this trend will continue. Well, as Jason Zweig of the Wall Street Journal makes clear, that isn’t the case.
Think this will become a fad? Commerce, a restaurant in New York’s Greenwich Village, no longer accepts cash. Think about that. They accept credit and debit cards, but not paper cash or change. Check it out in today’s Wall Street Journal.