Wednesday, February 27, 2008

The Beardstown Ladies Common Sense Investing Guide

The Beardstown Ladies Common Sense Investing Guide by the Beardstown Ladies

When you think of your grandma do you associate her with being savvy with the stock market? This group of 16 women aged primarily in the 50 to 80 year old range began an investment club in the early 1980s for the purpose of learning more about the stock market and as a good social outlet. Among the group was a school principal, a secretary, a pig farmer, and assorted other professions.

Some of them had a general understanding of the stock market prior to meeting together and some did not but all of them gained a much better understanding of investing and business in general over the course of the club meetings.

The structure was such that they met once per month to discuss various companies and the pros and cons of investing in them. They used various financial metrics on income statements, balance sheets, and analyst opinions to make informed decisions about stocks to invest in. Each member contributed $25 per month to the club and when enough money had accumulated shares of stock were purchased.

Each member of the group was assigned a company to track and perform research on through various methods such as observing local businesses like Walmart, reading the Wall Street Journal, watching financial shows on television, and the nightly news.

From 1984 to 1993 they claimed to have earned more 23% in the stock market but later audits revealed the actual percentage to be closer to 9%. Regardless of the actual return the women became substantially more knowledgeable about the stock market and much more savvy about investing.

The club also provided them with a great social outlet where they swapped recipes and stories in addition to investing money. Many of these women were widowed and the club gave them a great deal more confidence when managing their finances.

The first half of the book describes the club structure and how they originally started and the second half deals primarily with their investing principles and how they went about selecting stocks to buy, hold, and sell. Interspersed throughout are the ladies personal comments about various investing and other topics. There is also a recipe section towards the end of the book.

This book provides a good vehicle for learning how investing clubs work as well as general tips on growing one's knowledge of the stock market and how to evaluate individual stocks. The beginning investor would do well to first thoroughly research mutual funds and their benefits prior to investing in individual stocks.

If you found this review helpful, please let Amazon know at this link.

Sunday, February 24, 2008

Air 1

I've recently discovered a new radio station called Air 1 the positive alternative. Here in the Kansas City area, it plays on 91.9 FM. The format is alternative Christian rock music. I really enjoy stations such as Calvary 88.5 and K-LOVE 97.3 but their style sometimes leaves out good music with an edgier sound. Air 1 plays popular bands like Mercy Me, Third Day, Newsboys, and the David Crowder Band that you hear on the other stations but they also have music by bands such as Switchfoot, Sanctus Real, Reliant K, Lifehouse, and Hawk Nelson. This really fills a hole and can be a great ministry tool for people who enjoy the edgy sound and slightly more rock oriented style. Be sure to let your rock star friends know about it. You can also listen online at

Wednesday, February 20, 2008

Prayer and Breathing

Prayer should be like breathing to us, as frequent and constant and necessary as the next breath. In it we find our sustenance and strength, our life line to God. How awesome that the God and creator of the world desires intimate communication with us. As you breath, pray and draw life from the giver of it.

"Call to me and I will answer you and tell you great and mighty things which you do not know." -Jeremiah 33:3.

Monday, February 18, 2008

The Alchemist

The Alchemist by Paulo Coelho

This is a beautiful story about a young lad from Spain embarking on the journey of life. After completing his formal education, he chooses to become a shepherd in order to help see more of the world. He learns the ways of shepherds and sheep for several years then has a dream about treasure near the pyramids in Egypt. He sells his sheep and travels to Africa where, upon arrival, all his money is stolen by a thief. Back to nothing, he doesn't lose heart but is industrious and trades cleaning services at a crystal shop for lunch. The shop owner offers him a job and he helps grow the business over the next year.

At the end of the year, he has enough money to return to his home and purchase twice as many sheep if he so desired. This however, is not his calling or "Personal Legend" as the book describes it. He instead hooks up with a caravan traveling to Egypt. On the journey, the caravan stops at a town in an oasis. While there, the boy sees an omen warning the town of an attack.

An alchemist subsequently approaches the boy and plays teacher and sage to the boy in his quest to find the treasure. The alchemist helps him see beyond the physical desires of man and go much deeper to the elemental core of man's true desire. He helps him see that sometimes choices involve taking a chance. Though one's current position in life may be comfortable and relatively safe, it can fall short of his or her dreams and Personal Legend.

The boy eventually arrives at the pyramids where he begins digging and is promptly robbed in the process. The evil doers ask him why he's digging and he tells them he had a dream that treasure was buried there. One of them says he also had a dream that treasure was buried under a tree at an abandoned church in Spain but that traveling across the desert would be too long and foolish to follow such a lark. The boy recognizes the church's description and returns to ultimately claim the treasure. His great gain was not in finding the treasure but in developing character and experience through the journey he embarked upon.

Religious elements from the major world religions are woven throughout the story. The boy had training in Christian studies so this is his base but he then works with and interacts with many Muslims so learns about their faith. Also ever present are the philosophies and teachings of Buddhism which seems to be the predominant current running through the book.

Even setting aside the religious elements, the story is a great lesson in seeking out goals and dreams and not settling for the status quo.

If you found this review helpful, please let Amazon know at this link
Article also posted at

Monday, February 11, 2008

Kansas Caucus

This weekend I went to the Kansas Republican caucus. It was my first time at a caucus and was interesting overall. A caucus differs from a primary election in that everyone voting comes together then listens to speakers promoting each candidate. After politicking and electioneering, each person casts their vote. There were tons of people at the site I went to in Overland Park, Kansas. The candidates with the most visible supporters were Mike Huckabee and Ron Paul. People had all kinds of signs, shirts, stickers, and paraphernalia promoting their candidate.

This was also an assignment I completed for the Community Faces section of the Kansas City Star's online website As a service to Wisdom of Dre readers, a section in the column to the right has been added which provides links to the most recent photography assignements. Be sure to check them out and if for some reason you're interested in purchasing a picture for the low low price of $2.50, please do so. I'll get a massive paycheck of $0.63 per picture downloaded and purchased.

Bringing Down the House

Bringing Down the House by Ben Mezrich

Is it really possible to beat the casino at black jack? This true story by Ben Mezrich chronicles how a team of MIT students studied Basic Strategy and developed an intricate queuing system designed to capitalize on favorable odds and ultimately win money from the house. The book reads like a suspense thriller novel with all kinds of twists and turns, mutiny, subterfuge, dark alleys, shady men in dark suits, complex video surveillance, private detectives, false identities and pretty much anything you've seen in your basic thriller centered around Vegas.

The story follows Kevin Lewis who begins as a straight A MIT engineering student and is recruited to be a member of the MIT black jack team. He learns how to count cards and determine ways to increase the probability of winning at blackjack. If played by oneself, a skilled card counter may have a 2% advantage over the house. But when working in tandem with a team, much larger returns can be made.

The teams used different role players such as spotters, gorillas, and big players. Spotters sit at a table and play the minimum bet while counting face cards and low cards. Low cards are 2 through 6 and receive a point value of positive 1 and high cards are 10 through Ace and receive a value of minus 1. The 7 through 9 cards have neutral value. Each time one of these cards is played the spotter either adds or subtracts from the total to determine the probability of drawing a high card. High cards favor the player over the house. So when the count gets high, the spotter signals the big player to come in and put down big money. This allows large bets with high probabilities of winning. The big player then leaves the table when the count drops back to unfavorable odds. In casino play, they commonly use 6 decks of cards at a time so the counter improves his or her ability of predicting favorable outcomes the deeper into the deck (or horseshoe) that the game goes. The best hand is if the player hits black jack or 21 which pays out 1.5 times the bet. By working as a team, wins are maximized. The system doesn't guarantee winning every time but over a long period of time allows for a good team to win and make lots of money.

The team would fly to Vegas on weekends strapped with as much as half a million dollars strapped to their bodies going through airports and play in the big casinos. Eventually the casinos began to notice patterns of players who consistently won and would ask them to leave to stop the outflow of money. Casinos hire private investigating firms to help identify cheaters and card counters. Eventually, the MIT team is found out and begins getting barred from playing in any casino. They try to circumvent this by developing disguises but these end up failing in time as well.

Some of the members of the team ended up walking away with hundreds of thousands of dollars up to as much or more than a million dollars in winnings over the course of a few years. Card counting is perfectly legal and is not considered cheating since it does not alter the outcome of the game. Casinos clearly do not like to lose money so try to limit losses by identifying card counters.

The amateur should not think he or she can emulate the success of these MIT students. They practiced and practiced countless hours and memorized charts, patterns, signaling systems, and dealt many many hands of Black Jack before even entering a casino. Keep in mind that they were also some of the most brilliant students at MIT which speaks for itself.

The reader should be cautioned that there is a good bit of graphic detail about the seedy side of Vegas, the gambling industry as a whole as well as some moderate violence. If the book were a movie, it would easily be rated R.

If you found this review helpful, please let Amazon know at this link.

Friday, February 08, 2008

Multiplication Trick

In the spirit of mathematical quirks, here is another trick. When mutiplying by 9, hold up both hands and put down the finger corresponding with the number you're multiplying by. Then count the number of fingers to the left and right of the finger that is down and you'll have the respective ten digit and single digit number for 9 times X. So for example if I were multiplying 9 x 7, I would hold down the index finger on my right hand. There are 6 fingers/thumbs to the left of the index finger which is down and 3 fingers to the right. So 9 x 7 according to our finger calculator is 63. Doing a little math by hand, if you will.

Saturday, February 02, 2008

The Rule of 72

A quirky little mathematical trick you can use to determine how long it will take a sum of money to double is called the rule of 72. The way this works is say for example you put $1,000 into an investment growing at 8% per year. Divide 72 by 8 which is 9. This means that your investment would grow to approximately $2,000 in 9 years if growing at a rate of 8%. This formula will closely approximate the number of years for the majority of growth rates that are commonly seen. So a 10% growth rate would double an investment in roughly 7.2 years. It stops working when using exorbitant growth rates or very, very tiny growth rates.
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