From Swinging to Investing: A Money Making Experiment……….(click here for home & most recent)

And so ends the worst week in Wall Street history.  The Dow is now trading comfortably under $9,000 and every opening bell has become the signal at the gate of a downhill skiing competition.  My 403b statement came in the mail today; I won’t look at it.  In the envelope it will stay until times are good again and I can look back on this time and laugh.

One year ago yesterday, the Dow hit its highest trade ever at $14,164.  As of today, we’re rapidly closing in on half that number.  $6,000 is beginning to look like a fair estimate of the bottom.  Could it go lower?  If this week was an indicator, yes it could go lower. 

The National Debt Clock in Times Square ran out of number placements this week because back when it was erected, no one ever predicted our national debt would soar to over $10 trillion.  Well it did, and now we need a new clock.  If our current debt was divided by the number of people living in the US, we’d currently all owe over $33,000.  I wonder if the cost of the new clock, which will be able to track debt up to a quadrillion dollars, will be tacked onto the national debt. 

If there is a silver lining to this story it’s torn and tattered but definitely intact in a few areas.  For one, strong stocks are being thrown away with the rest of them, making it clear that people are somewhat overreacting.  This week, Apple (AAPL) hit a low of $85, yet as we all know, everyone has at least one ipod.  I have two.  One doesn’t work anymore because it was the second generation mini that wasn’t covered under the bunk battery warranty, and even if it had been covered, the application for refund or repair was too involved.  Genius, Apple, genius.  So, Apple’s got money- our money. 

The second good thing this week brought was lower and lower oil prices.  My cheap landlord, after provoking me to tell him I was moving out (“You want to leave?  I can get $1,200 for that apartment no problem!  You tell me right now!  You tell me right now if you want to leave and I’ll get someone else in there!  You tell me right now!!) finally put the heat on, which is fueled by oil.  So my cold is lifting.  OPEC wants to meet soon to talk about the dropping oil prices and whether they should decrease production, but with gas prices still up over $3 a gallon, and people losing their jobs, my suspicion is that oil will continue to fall.  And my apartment will continue to be warm.

The third good thing is that lobster prices are way down.  Mmmmm….

The last good thing I can see from this mess we’re in is that once it’s over, there are going to be some serious undervalued stocks to scoop up.  The fact that Apple is being tossed out with the garbage screams undervaluation.  My plan now, since I’ve taken a big hit with the rest of the world, is to wait for the white flag and average down.  By then I should be in a good position to pick up a bunch more shares on the super cheap.

But that time isn’t yet.  Henry Paulson says he’ll get the plan in place “soon”.  How subjective.  How soon is soon?  That’s as hard a question to answer as “where is the bottom?”  I doubt even Paulson knows.

One story that I forgot to write about, but which deserves attention, is the one about the AIG executives on the days following their taxpayer bailout.  Just one day after we showered them with $85 billion of our hard-earned tax dollars, a whole bunch of these bald bankers were showering in luxury at the St. Regis Spa & Resort in Monarch Beach, California.  For an entire week while we were all trekking to work, they were being treated to facials and manicures, free food and wine.  The spa trip cost the company, and in turn you and me, hundreds of thousands of dollars and has caused some AIG big-wigs, and I use that term loosely, to be called to Congress’s carpet. 

But the thing that bothers me most about the whole AIG spa trip thing is not the free pampering or even the gross sense of entitlement these guys still have despite f*cking up all of our lives.  What bothers me most about this story is the thought of a few dozen or so pasty white bankers wrapped in only slightly whiter terry towels, sitting around pools and steam room benches talking about whatever it is bankers talk about when they’re not at the office.  By God, please tell me the towels stayed on.  It’s enough to shift one’s reoccurring nightmare from piles of 401k statements on milk crates within cardboard residences up and down Main Street to dark steam rooms and sweaty, liver-spotted heads.  I’m going to be sick. 

On a lighter note, the Dow lost a modest 128 points today to settle the week at $8,451.  Crude oil closed at a 13-month low of $77.70 today.  I’ve likely lost half of my investment, and am doing an OK job at staying positive.  My landlord is a drunk who talks big and who won’t really make me leave, my job is secure, and any waken moment that I’m not working or preparing lessons, I’m working on my calculus homework.  First test this coming Wednesday- a little nervous.  So I’ve been staying occupied.  And I know the ship will eventually right, just as it always has throughout time, and out of this crash will emerge some seriously rich folk who took advantage of some seriously good stock deals.  I hope to be one of them. 

SmartMoney Magazine published a letter I wrote to them one early morning about their September article “10 Things Millionaires Won’t Tell You”.  I think it’s pretty hilarious I got published in a money magazine considering that a year ago I didn’t know how to open a brokerage account.  Oh how the tides do change.