The Writer’s Coin

A couple of weeks ago I went to see the very good Mongol and that’s why I’m currently reading Genghis Khan and the Making of the Modern World. When I was a little kid I saw some kind of special or documentary on the Mongols and I was blown away by it/them. Ever since I’ve always thought of Genghis Kahn as one of the greatest leaders who ever was.

Anyway, the book is fantastic (I’m almost done with it) and the movie was good. It focused more on the early life of Genghis Kahn, so it doesn’t show as much of the cool stuff like how the Mongols fought and their different strategies. But just wanted to give a heads up to anyone that is interested in watching more Mongol stuff: A&E is airing a one-hour show called Genghis Kahn on Friday at 3am. So set that DVR and if you can, make sure you record the HD version!

Day 10 of Building a Better Blog is here. We’re almost halfway there and today’s tip is to Declutter Your Sidebar. Clutter can accumulate over time all over a blog, so paying attention to specific areas like the Sidebar is very helpful.

This is one of those basic blog tips that often goes overlooked because it seems so simple. And, honestly, that’s why it took me so long to get Day 11 of this project going. But really, it’s on here for a reason: it will make your blog better and easier on the eyes for your viewers.

Here are the changes I made after taking a hard look at my sidebar:

• I lessened the amount of “recent comments” that show up from ten to five. I figured this would declutter the sidebar a little bit and break up that particular section of the sidebar a little. Before that, it just kind of ran on and on.
• I changed the way the categories section shows up. I don’t know how readers feel about it, but I rarely click on this stuff on other blogs. But when I do, I haven’t seen this drop-down method. Which is fine because I think this is more efficient. Do I really need to have a static list of every single category taking up all that space? Nope. So out it went.
• I took out the Amazon widget. I had a little rectangle there that kind of added some color to the sidebar and broke up all the text. But it didn’t really fit there, and now that I changed the categories it’s not really needed.

What do you think of these changes? Does the sidebar work this way? Do you see any other changes that look off/odd?

When I was six years old, I wanted to play baseball. So I went to this academy with my mom and while she talked to the administrators, I stared out at all the kids playing baseball and I knew this was what I wanted to do. It was my mom that had first turned me onto baseball — she had played softball back in the day and one day she asked me if I wanted to watch a ball game on TV with her. Having nothing else to do, I said yes. After a few minutes of watching major leaguers play on TV, I told her I wanted to play baseball. So we went to the academy. When my mom came out of the office, she told me the bad news: I was too young to play baseball, I would have to play t-ball. I don’t really remember saying this, but I guess I told her that I would wait until I was seven because I didn’t want to play t-ball. It was “stupid.” So I waited a year and finally joined up. I was absolutely terrible during my first year, but I eventually became pretty good and here I am 20 years later — still playing ball in a city league here in Chicago.

I was going to write about how important it is to have a passion back when our season began, but I procrastinated. Just being out on the field doing something you’ve done for so long is so satisfying. But it also balances my life out. Between work and the everyday world of bills, errands, worrying about money and so on — you tend to get very wrapped up in stuff. But playing baseball for me is a reminder of a more innocent time. When you did things for fun and for the passion you felt for them. I mean, there’s nothing else in the world that I can say I’ve done for 20 years (I’m 27 years old) — and that means something to me.

What finally got me to write about this? Yesterday was our last regular-season game, so now the end is near (barring the playoffs of course) and that’s when you really start to value being out there and playing the game.

Why is this important?

It’s important because having a something you’re passionate, that you’re good at and that you’ve done for a very long time is crucial in life. It does wonders for your self esteem when things are rough at work or you feel stressed out about this or the other thing in life. It feeds your confidence and your ego, which is very important. I call myself a writer, but I haven’t published anything yet. It’s kind of depressing when I take a look at my rejection folder and see how many places have said “No” to my stories and essays — I may need a new folder soon. So that definitely takes its toll, but when I think back to how awful I was at baseball when I started, it makes me feel better. I was terrible, but I worked hard at it and managed to make myself into a pretty good player. In other words, I came a LONG way.

I intend to do the same with writing. Having a blueprint of success like that makes me feel like I can pretty much take anything on as long as I devote myself to it. After that first year of baseball, I practiced every day. I would come home and throw a tennis ball against this wall in my yard and play for hours. I would hit rocks with a stick and pretend I was in the world series. I sat and watched hours of baseball games, paying attention to what these guys were doing. When my coaches spoke, I listened.

In other words, my passion isn’t just a hobby that lets me have a good time when I play it, it’s given me the tools and experience to apply myself to other things. When I started writing I knew I was bad, but that was OK. I persisted because I knew I had overcome “being bad” once before.

I hope this is coming out right. What I’m trying to say is that it’s really important to have that one “something” that you’re passionate about and you feel at home with. It will make your life so much easier. And for all of those that have it and know what it is but have neglected it, DON’T! Go back to it in any way you can and never let it go, you’ll be glad you did.

What’s your passion and how has it helped you in your life?

Maybe you haven’t read it yet, but Freakonomics is a great book. The sequel, SuperFreakonomics, should be out in the near future — so you better hurry up and read the first one. Never has Economics been so interesting. Anyway, if you don’t want to go and buy (or check out) the book based only on my flimsy recommendation, you’re in luck. The two authors have one of the most entertaining blogs out there. They cover very disparate topics like watching The Wire with drug dealers and whether or not connoisseurs can tell the difference between cheap and expensive wine (they can’t). Either way, it’s a great read and it’s also a great way to expose  yourself to a topic you typically wouldn’t care for (Economics) but that will still entertain you.

Moving on to the blog. They have a few people writing for it and typically you’ll see six or seven updates per day, which means the odds of finding something really interesting are pretty good. my favorite recent posts include a chat with the author of a book called Traffic, a bit on the probability of putts, and the HUGE series on watching my favorite show — The Wire — with gangsters to see what they think of the show. Since I’m still on season three of the show, I couldn’t read through the whole series because they’re watching season five I think, but once I get there I can’t wait to see what real drug dealers think about a show that feels more real than any other “cop show” out there. So says me and so says the critics.

The guy who wrote those posts, Sudhir Venkatesh, has dedicated a lot of his time and research to the sociology of gangs. His story is a pretty interesting one and I’m actually reading his book, Gang Leader for a Day, soon. He’s a pretty ballsy guy — he spends seven years “hanging out” with poor people in Chicago’s shadiest areas to get a feel for how people live and the way gangs function. I will be sure to put up a full review after I read the book.

On the topic of good reads, I’ve always felt that you’re only as good as the stuff you read, so I guess I’ll continue on the “good read” path. Here is an article written by the authors of Freakonomics that I found via their blog. “A Star is Made” deals with talent vs. hard work in the world of athletics. They start out with a strange bit of data: an inordinate amount of talented soccer players are born in the first few months of the year than in any other. Why is that? They go on to explain what they’ve found, comparing elite athletes to sports and describing the process by which people become good at what they do (no matter what it is). Essentially, this is a nature vs. nurture debate — were you born with talent or did you work for it?

Who knew economics could be so interesting?

M and I are starting to look for our first place and up until today it’s only been us going online or walking around our neighborhood looking for open houses. But today it gets serious as we’re meeting with a real-estate person who is going to be helping us through the process. He’s experienced and my friend raved about him, so we think it’s going to be a big help. Understandable, though, we’re nervous.

I feel as though I’m prepared…sort of. I’ve read up on what the process is going to be like, what the different steps are going to be, how to prepare for them, etc. But still, this being our first time buying a place we’re both feeling a bit uneasy. What if we pick the “wrong” house? What if we can’t afford what we want? What if…? There are just too many what ifs out there and this meeting today is going to hopefully clarify a lot of these questions.

Any tips? Questions we should keep in mind as we meet with this guy?

One of my favorite books this year (and probably all time) was The Brief Wondrous Life of Oscar Wao by Junot Diaz. It’s a fantastic novel that really did deserve the Pulitzer Prize — I’ve been recommending it to everyone I talk to. So, being someone that loves to talk (and write) about writing and all its processes, here is a neat video I found over on Slate TV of Diaz discussing the book, how long it took him to write it, and some other little details that are pretty interesting.

If you haven’t read it yet, please make sure you do. Otherwise you’re missing on a great story by a great writer who isn’t afraid to tell it like he sees it (even if that means sprinkling a lot of spanish into the book).

It took me a while to come around on the importance of editing. When I first started writing, I thought that all I needed was to “inspire myself” and jot everything down in a flurry of creative energy. Sure, editing was good to catch typos and play with some commas, but otherwise I felt like the writing itself shouldn’t change. The story should stay the same. I guess I still had it in my head that writing was this fantastic, creative ride that you simply had to ride and good stuff would come of it.

And I was wrong, of course.

That creative impulse exists, I agree, but it most definitely needs to be honed. As I wrote before, most first drafts are pretty shitty. It’s the following step, editing, that turns that raw material into something worth reading. And sometimes it takes a lot longer than the actual writing.

Real-Life Examples

I still struggle with this occasionally — especially when I’m trying to edit a story or essay. Shouldn’t I leave that scene as is? I mean, there was something that made me write it that way, right? It’s tough to separate yourself from what you’ve written to become just an editor of it. But you need that cold eye to be ruthless so you can get rid of crap when you see it. That’s why I like to put away a piece for a week or two after I’m “done” writing it before I start to edit. It makes it fresh again and I’m not as attached.

I’m lucky because everyday at work I get a chance to see the power of editing. I’m on a tight schedule so I have to come up with fresh material to write about every day. That means scouring the news, coming up with a good story related to investing and then hammering it out. It has to be fun and entertaining, but it also has to have some meat to it — no easy feat. So what I do is read as much as I can about the topic or companies and then just write as much as I possibly can. Write, write, write. I don’t worry too much about spelling or how good it is or anything. All I want is to say everything I’ve got to say on the subject. Once that’s done, I print it out and take a fresh look at it on paper. It’s amazing how different a piece looks on paper than it does on the computer (it’s a process I also use for my fiction). Then I take out my red pen and make the article good. As I read through I think to myself, “Thank god I’m editing this because it sucks/doesn’t make sense/(pick a fault and insert here).” Without editing, all these stories would be crap.

It’s a little microcosm of my fiction-writing process that teaches me/reminds me of how important it is to edit. This is the step of the writing process that makes for great writing. I don’t want to undermine that initial burst of creative energy — after all, there would be nothing to edit without it — but I’m a big believer in this.

I’m thinking of posting a story/article on here with the first version and then the edited version to show how drastically something can be changed. I’ve seen it in different writing magazines and it’s really amazing to see how bad something was the first time around, only to see it got published somewhere after a few edits.

First of all, let me remind everyone that I am a Warren Buffet disciple when it comes to investing — I believe that, when it comes to individual stock investing, what matters is the long term performance of a company. I am not a trader: I’m not interested in making a quick buck or in the day-to-day gyrations of the market. So even with all the bad news that’s out there right now, I’m OK — I just put more money into my Roth IRA. It means I’m getting more of my portfolio’s equities on the cheap. But when it comes to individual stocks, I’m starting to see some evidence that maybe buying and holding isn’t such a great idea after all.

Individual Stocks vs Index Funds

Most of my holdings are in index funds — I truly believe they are the best, most efficient, and simplest way to invest in the stock market (again, in the long run). But I do a lot of research to invest some of my money (around 10-15%) in individual stocks. Why? I also believe that, if you do the research and remain disciplined, individual stocks can help boost your index-fund portfolio. Let’s face it, most index funds (mine track the S&P 500, mid-cap stocks and foreign markets) aren’t going to gain 30% in one year. Individual stocks, on the other hand, can sometimes achieve that kind of hefty return. That reward comes with added risk, but those are the breaks. My individual stocks are only there to supplement my overall holdings.

Buy and Hold

The quick and dirty version: you buy a stock and hold on to it for a long period of time because, over time, stocks tend to do well (it’s the reason why people like myself by index funds). In the short term, a stock you think is a good investment could tank because of rumors, bad press, nervous institutional investors, etc. Any number of things that have nothing to do with the quality of the business can send the stock plummeting. If you’re buying and selling, you may wind up selling (or buying) at the “wrong” time. The idea behind buying and holding is you mitigate that risk by holding on to the stock for a long time.

I used to believe wholeheartedly in this, especially since no one can time the market. And because you can’t time it, you don’t know when it’s safe to “get out,” or sell the stock. Right?

Stocks that Work Like Index Funds

Before I move on to knowing “when to sell,” I also want to mention that there are individual stocks out there that function almost like index funds. They are highly diversified and, over the long run, have had great results. This is the stock chart for Procter & Gamble, one of those stocks you hear about over and over and over. It’s a diversified company that is considered “safe” and has proven itself time and time again. The stock chart doesn’t lie — it’s done great over the past 35 years. Plus Warren loves PG so that’s also a good sign. But PG is the exception rather than the rule. You could hold on to Procter your whole life and you’ll probably come out OK. Another examples is Warren Buffett’s Berkshire Hathaway, which I actually own.

As for any other of the thousands of stocks out there, knowing when to sell is nearly impossible.

When to Sell?

Why am I reevaluating my thoughts on the buy-and-hold strategy? I’ve been seeing way too many stocks that have returned to levels where they were five, six, even ten years ago. That means that a buy-and-hold investor has gained absolutely nothing (barring dividends) over that time span. Not good.

Let’s take a look at an example:

That’s the stock chart for Crocs, the once-popular squishy-shoe maker. The stock did fantastic up to the end of last year, and then in just collapsed. Sure, some of it is the economy, but some of it was the company itself — their one product was a trend whose time was up. How were you supposed to know that?  A buy-and-hold investor probably wouldn’t have invested a significant amount of money on such a young company with little history to go on, but if they would’ve they would be hurting right now. You may have heard a comment or two from someone saying that the shoes were stupid and that they wouldn’t be caught dead in them anymore now that everyone and their mother had a pair. But does that really warrant selling off your stock? Or maybe you hears someone on CNBC say something bad about the company.

In retrospect, it’s easy to fool ourselves into thinking, “I would’ve known to get out back then.” The reality, however, is wholly different.

Now What?

Let me say it again even though you’ve heard it a million times: you can’t time the stock market. I think the only lesson here is that, while buying and holding can be incredible risky, it’s probably the best way to go. The downside should make investors even more picky about where they put their money. Like Warren says, when you buy a stock, pretend you’ll be holding it forever. That would’ve protected you from investing in something like Crocs (I hope).

In the end, our greed and desire for outstanding returns may be too great to hide behind the buy-and-hold strategy. I understand — looking at some of the companies out there that have started small and then shot up over shorter periods of time is tough to handle psychologically. I’ve been thinking about trying a strategy with certain stocks where I buy and hold — until I hit a preset return.

Buying and Holding…with a Catch

The idea here is that, instead of trying to time the market, you set a timeline of selling at a predetermined number. Let’s say you bought stock in Crocs at the end of 2006 when it was around 20 and you told yourself “I’d be real happy here with a 20% return.” That may be a little too greedy (I’d probably be happy with a 15% over a year’s time), but let’s see what would’ve happened.

You would’ve gotten your 20% return in just a few months — fantastic! BUT you would’ve felt like an idiot because you missed out on the 235% return you could’ve gotten. While that’s frustrating, what would’ve made you get out at the top? Setting a 235% return is not very realistic. Getting out at this predetermined 20% would save you the hassle of thinking you can time the market (which you be very stressful). So you missed out on a 235% return — that happens all the time. But you can’t complain about a 20% return in a few months.

Anyway, that’s just an idea I’m considering, I haven’t put it into practice just yet. I’d love to hear what everyone else thinks about it and the buy-and-hold strategy in general.

*all the stock charts were taken from Yahoo! Finance

I’m a big fan of ING’s, I’ve made that pretty clear in the past. With all the drama surrounding the banks right now, a lot of people are getting nervous about losing their money. That’s why making sure your bank is FDIC insured is so important — you’re covered for up to $100,000 no matter what happens. And in the 75-year history of the FDIC, not a cent of insured deposits has been lost. ING is, of course, FDIC insured. I also think that ING is a great place for anyone to start when it comes to organizing their finances. Saving is the first step before you get to investing, and ING makes that easy.

But what if you are getting close to that $100,000 in the bank? Well, good job! But what you want to do is deposit the overflow in a different FDIC-insured account so that all your money is safe. You can have as many of these open as you want (as far as I know).

Anyway, I still have a bunch of referrals left through ING so if anyone out there is interested in opening an ING account and wants to make an easy $25, email me and let me know. I’ll send you the link. You can read the full ING scoop over here.

Happy savings!

Today I want to mention two men that have greatly influenced how I look at things. I consider myself an optimist these two men blow me out of the water. When bad things happen, they happen. Nothing you can do about them. But what these bad times also bring is an incredible opportunity — a chance to see what you’re made of. How will you react when the sh*t really hits the fan?

Randy Pausch

In case you don’t know who that is, his name is Randy Pausch and he’s also the author of a book titled The Last Lecture. I had heard of the book and seen him on TV on Good Morning America a while back, but I never got around to actually watching his speech until recently. The thing that struck me the most was something he says at the beginning, something to the effect of “If I’m not as morose and depressed as you would want, I’m sorry.” He also adds, “You can’t change the cards you’ve been dealt.” While that may sound cliché to a lot of people, it has a very important lesson that all of us can learn from.

I mean, the man has cancer and was give X amount of time left to live — and he’s using his time to the fullest. We should all learn a valuable lesson from him. I know it’s hard to tell ourselves to live our lives as if today was our last day on earth, but his story makes it easier to pretend.

The man was supposed to die a long time ago and now he’s all over the country getting his message across.

Viktor Frankl

The other person I want to mention is Viktor Frankl and his book Man’s Search for Meaning. This is one of my all-time favorite books. If you haven’t read it, just go to Amazon real quick and buy it. Go to the library and check it out. Run out to Border’s and buy it—whatever it takes, just go get it and read it. You can thank me now if you like.

I’ve been meaning to do a full review of this book but haven’t gotten around to it. The first half is Frankl talking about his experiences in a Nazi concentration camp and all the horrible things he experienced there.

The second half is about Logotherapy, which he founded. It came out of his background as a psychiatrist but was greatly influenced by what he talks about in the first half of the book.

Here’s my big takeaway for this book (besides the story itself, which is fascinating): when bad things happen, it’s an opportunity to see what you’re made of. Rarely do we think about negative things this way, but Frankl has a point. And I’m talking about your car breaking down during rush hour, having to make a crucial decision at work, etc. Nowhere near the kind of stress that he had to face in the camps. Yet he still believes that, without those incredibly difficult times, he wouldn’t have been able to “challenge” himself to see what he’s made of. How would you react in extremely difficult circumstances? The idea is that you’ll only find out when you find yourself going through tough times. And that’s why they should be embraced as an opportunity instead of as simply a “bad thing.”

After reading this book I took this idea to heart and it has made me an even more hopeful optimist. Has anyone out there read this book or Pausch’s? I like hearing how they have influenced/affected other people too.