i should have learned many years ago when i just a little pirate, that the majority of people have very little logic… we are creatures of passion and emotion.  therefore, woe is me.

you see, in my (not anywhere close to) humble opinion, Google had and still has everything going for it. as far as i am concerned they will be the next Microsoft. no one can stop this juggernaut. so why is it that everyone is dumping their Google stock? i mean i know i spoke about the Yahoo! buy a few days ago, but you are killing me people!  Google is not going to be slain by the little old David this time. just like Microsoft is not going anywhere.  any of you that understand the markets know that the overnight market is loving the fact that all of you are selling.  large corporations have been buying up cheap Google… that is why, among other reasons, that i am hanging onto all of my Google

a deck mate of mine recently complained about the $4.1 billion acquisition of Country Wide mortgage company by Bank of America.  i had to ask why that was such a huge thing to him and he responded that he didn’t think we should bail out a sinking ship…

well the thing about that sinking ship is that it holds the majority of US Real Estate in the belly of that boat. not something that i want on the bottom of the sea as far as i am concerned.  what he should have been looking for was the wind that is now filling the sails of BAC stock.  since the acquisition of Counrtywide, BAC has gone up almost $7/a share. if you were smart enough to jump on that boat you are going to be riding the swells for awhile.

so as everyone scrambles for their stocks and securities in this “pending recession” i think to myself…. why is everyone selling?

historically the market has ALWAYS recovered. not one single time has it not… so there is no need to run for the banks as they did in the 1929 market collapse.  it is precisely during these times that you want to buy! i think of my favorite person in the world that is still currently alive, Warren Buffet.  the Berkshire Hathaway guru himself has made almost all of the money that he has by following this very simple rule.  “buy low, sell dear” if you are always putting money into stocks that are low. and you never sell unless you are making a profit then you should be doing perfectly.  of course this is simple to say but when you are dealing with your own money, how many of us can calmly and dispassionately look at our portfolio dropping and say… “lets put more money into it!” but that is exactly what i and Mr. Buffet would advise.

 So to help you in this most difficult of endeavors, i have a few suggestions.

one, always look for undervalued stock. by this i mean look for low share price with high PE (price to earnings) ratios.

two, listen to the news. if any of you have been listening for that last few weeks then you would know that Microsoft is thinking of buying Yahoo! guess what if you had bought Yahoo! 2 weeks ago… you would be up over 50%…

third, and lastly, remember that the stock market is a long run game. not a sprint. it will come up… it always does. just hold onto your stock and it will go up.

as many of you that know me have begun to inform me of my lack of punctuation, i feel i need to let you all know. i am a pirate, i don’t concern myself with the capitization of my sentances. i am concerned about the underpinnings of our economy and how to help others maintain their money.

for 2007 we had a negative savings rate… again. that is 2 years running. maybe this is hard for people of intelligence to fathom. so in dumbed down vernacular, the average person spends more than they make. so they are effectively more poor this coming year than they were the previous year. isn’t that the antithesis of the “American Dream”? i mean come on people is this really a difficult concept? DON’T SPEND WHAT YOU DO NOT HAVE. if you can figure this out you will have an understanding of what i call the pirates first rule of finance. i know this seems easy, but just from our national savings rate we can see that not very many people understand it. get on the wagon train people, we are going west.

i think it is also of importance to point out that this negative savings rate is not including mortgages and car loans (though in many cases these may be the very problem) they are focusing on consumer debt. meaning money spent on none permantent things. like eating out and clothing.  

some of you may be asking: how do you spend money you don’t have… answer: the wonder of credit.

what is credit? very simply put, it is borrowing money from someone you don’t know, for specified return on THEIR investment. when you invest in a stock you are loaning your money to a company of your choice assuming you will receive a return. that is the same thing that visa and american express are doing. they are assuming you wont pay it all back in a that period. so they charge interest. that is the very definition of “risk” as far as i am concerned.  so the pirates second rule is this (you may have heard this before) “those that get it, get it. and those that don’t get it, pay it.” i truly hope this will sink in and work for your benefit.   

the bank pirate