1. Big Cajun Man isn’t too happy about the city of Ottawa’s plans to more than double garbage collection fees and charge for them separately . With the trend toward cities charging fees for services, eventually property taxes will pay for nothing but the bloated administration that adds nothing to the actual services delivered. 2. Jonathan Chevreau reports that Visa has revised its financial literacy web site (the web page with this article has disappeared since the time of writing). Apparently, Visa thinks the 20-10 rule makes sense: “never borrow more than 20% of your yearly net income” and “monthly payments should not exceed 10% of your monthly net income.” I have a better idea: never borrow more on your credit card than you can pay off at the end of the month.

Most investors who are stock pickers have had the feeling at one time or another that a particular stock would go down. The usual response to this is to sell any shares they have or not buy shares. Some are tempted to short the stock, but this is a difficult game. Shorting a stock means to sell shares that you don’t own. You are essentially borrowing shares from someone else and selling them with the promise that you’ll buy the shares back later and return them to the original owner. This is done with the hope that the shares will drop in value between selling them and re-buying them so that you’ll make a profit. Unfortunately for short sellers, stocks tend to go up. Suppose that the stock market tends to go up 10% each year. So, investors in low-cost stock index ETFs make 10% per year, on average, without doing anything. To beat the index as a short seller, you have to find a stock that will go down by about 10% or more. If a short seller just throws darts at a stock listing, h...

In his article about the new ban on short selling 800 US financial stocks , Larry MacDonald discussed some of the pitfalls of short selling. This reminded me of one of the more interesting ways that short sellers can come out on the losing end. Short selling is the practice of borrowing stock and selling it so that you effectively own a negative number of shares. Short sellers hope that the stock drops so that they can later buy the stock back at a lower price, pocket the difference, and return the borrowed shares. Until recently, this practice was perfectly legal. Now, short selling is banned on certain beleaguered financial stocks. As Larry said, the biggest reason why short selling is a difficult game is that stocks tend to go up. When you pick a stock to short, you have to have far better insight into the stock’s future than other investors just to break even. Using short sales to make more money than you could have made by simply owning an index is very difficult. Some ...