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Thursday, August 21, 2008

What Has Been Termed by Some as "The New Robber Barons"

Quotations of the Day: "You must not defraud your fellow, and you must not rob. The wages of a hired laborer should not stay all night with you until morning" - Leviticus 19:13

"In his day you should give him his wages, and the sun should not set upon them, because he is in trouble and is lifting up his soul to his wages; " - Deuteronomy 24:15

"The workman is worthy of his wages" - 1 Timothy 5:18

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Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39

Personal Trading Thoughts: Things feel odd now. That's the best way I can describe it. There is a lot of bearish news, but the market seems to be having a hard time falling right now. When in doubt? ALWAYS - stand aside.

Personal Investing Thoughts: DRIP remains on for all of my stocks. I have my eye on a few stocks for my long term investment portfolio. But also I have in mind that there are signs of weakness in the midst of this relief rally. In addition, September is a month of extreme seasonal weakness. Therefore, I will wait. Sometimes, the best thing you can do with investing, is know when to just wait.

I have two shareholder presentations to review today. Two of my tankers. FRO and SFL..

Edit: Sweeeeet! Divvy increases with both of them! Earnings look good, if demand is somewhat weak.

Those who follow my blog here understand that I despise the unethical immoral implications and precepts behind communism. But at times the question arises ... how much money ... is too much money? When should a wealthy persons income be examined by the public at large? I would state that it is when a person becomes what some are calling, the new "Robber Baron".

Although the term 'Robber Baron' has an extensive etymology? The vulgate meaning of this term is a wealthy person who engages in unfair business practices, typically at the expense of the economy of which he is a participant. And yes, I believe we have 'Robber Barons' amongst us today ... (video included)

Wages have held steady within the United States for a long, long time. There are corporations out there, with men who lead well. They are rewarded well monetarily, and raise the wages of their employees. CEO's such as Jim Senegal of COSTCO.

And I'm not saying a million dollar income is a bad thing. Lord, it's a great thing. Jim's salary with bonuses included is 2.9 million dollars a year.

But for those who have led their company to failure, and are deciding to cut the workforce, and cut health care benefits? When wages remain flat for your average worker? When you've slashed your dividend to nothing? For this, CEO's like Rick Wagoner are paid 1.55 million dollars a year before bonuses, and 14.4 million dollars after bonuses? It's that the wage, is not matching the work they have produced. They produce failure, and are rewarded tremendous amounts of money for it.

If GM or Ford has to cut their workforce, cut benefits, cut health care? Then the entire board should not receive a dime in compensation. The workman is worthy of his wage. If you produced nothing but failure and unemployment? Then why should you be paid for it? If this is supposed to be a capitalist society? Well, then the rules of the game should be adhered to for everyone. Communism is supposed to be the system where you're rewarded for doing nothing, and all incentive is destroyed.

That leads to what is the biggest insult in this situation. These individuals are trying to hide under the cloak of "Capitalism" and "Free Markets". They are nothing more than Communists. Communists are paid, regardless of failure and mediocrity. The workman is worthy of his wages. If you produce failure, you're not worthy of a wage. These new Robber Barons fail, and they are rewarded for it.

I have NO problem with million dollar incomes for CEO's. If they produce.

Tomorrow I will discuss the implications and complexities of taxes on dividends ...

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Challenge Project Account Balances and
Money Management Numbers:

Investing Account Balance:
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39

Total Trades: 6
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $56.63
Average Loss: $74.27
Accuracy Rate: 33%
Average Reward: $175.34
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Up + $53.84

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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