Daily Intent

Bold News This Week:

“Lehman Brothers, 4th largest Investment Bank, declares bankruptcy”
“AIG saved by the government’s $85Bn at the 11th hour”
“Washington Mutual teeters as stock plummets”
“Merrill Lynch, the 100yr old giant bull, waves white flag in front of BofA

“How are you feeling after being witness to the 6th largest one day drop ever in the market place?  And a yesterdays huge decline?Nervous?   Wondering if you will ever retire?    Wanting to strangle your financial adviser?  In need of aspirin? These are all normal feelings. It’s natural to want to pull back. 

But Stop.  Stop for a minute and remember what we have been discussing for the last 6 months.  We have understood the need to be conservative with our budgets.  And we’ve also been understanding of the opportunity in this mayhem.  There is opportunity to recreate a new basis for how our financial system works, a system and way of assessing progress that dates back over 100 years.  May it be time to readjust?Remember what we Americans have ingrained in our DNA:
Optimism and Inventiveness and Creativity. And remember that the best thing you can do for yourself in any market, up, down or sideways, is to invest in yourself, your knowledge, your well being. Take care of yourself and your mind.

To be graphic but straightforward for a moment: The last thing you want is to be dead at 45 because of a heart attack instead of alive at 60 with 5 grandchildren and 20% less in investments.

Second issue:  you want to strangle your financial adviser.  I recommend you reconsider for three reasons.  First off, they are human.    Secondly, they have a long term plan for you, not a short term one in which your emotions are in line.  Thirdly, I’ve broken down how I would have done, should I have invested on my own at the start of the year.   Clearly, a financial advisor would have positioned me better, per the Dow and S&P performance.

Four of my favorite companies: Goldman Sachs, Google, Apple, Coca Cola.

Goldman - $189 at beginning of year.  Today - $100.  Down 48%
Google - $650 at beginning of year.  Today - $418.    Down 36%
Apple - $194 at beginning of year.  Today - $123      Down 37%
Coca Cola - $61 at beginning of year.  Today - $53   Down 13%

The Dow - 13,056 at beginning of year.  Today - 10,615     Down 19%
The S&P 500 - 1,447 at beginning of year.  Today - 1,155  Down 20%
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Ocean Preservation: “The Big Swim”, channel crossing, was a huge success. We started at midnight and arrived 16 hours later at Goleta Beach with no shark bites.  The benefiting organization was the National Marine Sanctuary Foundation.    Thank you to those that donated through me to the cause.  And for those that would still like to support, it is not too late.  My intent is to raise $400.  Call or email me. 

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Compounding Your Knowledge Seminar Series: For Real Estate Agents!
Lehman?  AIG?  Do you understand the Fannie and Freddie impact?  Are you armed with the knowledge and information that will encourage your borrowers to consider home ownership?  Do you understand the possible Tax Credit of $7500?  How about when the $729,750 goes away?  The economic status?  What are you doing now to build business and increase market share?  We’ll discuss this all Monday, September 22nd at my office - 21 E Victoria St #300. 6pm.
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Buzzword of the week: Aspirin Count Theory

“A market theory that states stock prices and aspirin production are inversely related.  The Aspirin count theory is a lagging indicator and actually hasn’t been formally tested, so it is more a humorous hypothesis than a theory.

As stock prices fall, more and more people need pain relievers to get through the day.  For example the Aspirin count theory would predict that as a aspirin sales increase, the stock market’s value decreases and vice versa.” -Investopedia

Quick poll:  Have you purchased aspirin recently?

Sports points to ponder:  to lighten the mood.

1. USC pummeled Ohio State!!!  The rest of the Pac-10  embarrassed.
2. Cassel, hadn’t started since high school, leads the Patriots to victory.  Favre loses first games as a Jet.  Rodgers leads Pac to two in a row.   Hawks lose to the Niners, really?!
3. Might this be the first year in centuries the Sox or Yankees don’t take the division?  The Rays are 2 games up with few remaining.
4. The Ryder Cup (golf), Davis Cup (Tennis) starts this week.  Countries collide.
5. Lance Armstrong expected to announce  this week his return to the tour.
6. The Dodgers and Angels:  might we see a cross-town World Series?! Both lead their division.

Services: Rate Watch Reminder

This week, again, there was a small window of time that I was able to capitalize on for some of my clients.  5.375% at 1pt is a fantastic 30yr fixed rate.  If you aren’t part of this rate watch program and would like to be, please give me a call.  We’ll then get you prepared to take advantage of my information and knowledge.

Local:

Last Museum Nights at SBMA
Where: Santa Barbara Museum of Art
When: Tonight, 7 - 9:30pm
Cost: $35
Why:  Picasso themed.  Back patio festival included.

Live and Be Well,

Jeff Bochsler