Friday, July 8, 2011

Short Takes: Earnings Surprises, RRSP Swaps, and more

Jason Zweig says that quarterly earnings surprises are largely planned. I remember this from the tech boom; arranging for an earnings surprise was essentially a way to market a stock.

Canadian Capitalist is concerned that the new tax rules aimed at eliminating advantages of RRSP swap transactions is causing some financial institutions to ban RRSP swaps altogether.

Preet Banerjee says that home renovations are consumption disguised as investments.

Big Cajun Man takes a swipe at advice to build up debt while you’re young. Building up debt would be fine if you know what your lifetime income is going to be and you know that you’ll enjoy staying in the job that pays this money. This applies to nobody and so debt should be kept to a minimum.

Money Smarts and Million Dollar Journey reported on the current standings of their stock-picking contest. If I entered, I’d just pick some index ETFs and plan to finish third or fourth out of ten.

The Blunt Bean Counter takes a look at 4 different personality types when it comes to money.

4 comments:

  1. The Blunt Bean CounterJuly 8, 2011 at 7:48 AM

    Michael, thx for note. Some great originality in your posts this week

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  2. I'm sorry Michael, but we don't allow boring investors in our contest (regardless of how successful they might be). ;)

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  3. Another problem with building up debt is human nature. It is very hard for us to change our ways. We can't easily change from being a spendthrift in our younger days and a responsible saver in our 40s.

    Thanks for the mention!

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  4. @CC: One of the more reasonable-sounding justifications of building debt when you're young I've heard is smo0thing your lifetime consumption so that you spending each year is constant. So you'd spend more than you make at first and less than you make later. But this supposes that you can predict your future income. I think it's safer to presume that you won't want to work any more than you have to so that it makes sense to build as little debt as possible.

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