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People who say it cannot be done should not interrupt those who are doing it. Welcome to From On High.

Saturday, July 29, 2006

Beating The Odds

Something for you to consider:

I took a stats course in graduate school that was taught by the manager of General Motors' seat belt division in Detroit (you're asking - a statistician was in charge of seat belt design and manufacture? Yes. He was there to calculate failure rates, which there always will be, no matter how safe they become. Six sigma and all that.).

Anyway, I remember him asking the following question of his students one day:

If you were to take all the different kinds of gaming in Las Vegas - roulette, slots, craps, blackjack, etc. - rolled them together and calculated the odds of a person winning, what percentage of the time would a person beat the house and come away a winner?

Answers ranged from 1% to 10%.

In fact, your chances of winning are 49.5%. Nearly every other time you sit down to gamble, odds are you're going to come away with some extra cash. Nearly being the key word. It is that 0.5% that makes Las Vegas rich. If you think about it, if the odds were remote, you'd never come back for more. It only makes sense.

That being the case, I'm here to tell you I beat the odds this week in my four fun-filled days in Atlantic City. I broke even. I didn't bet a dime.

So I came out 0.5% ahead of the casinos. And spent the money on beer. I was a winner all the way around.

Did You Take My Advice?

I told you three months ago that, despite General Motors' woeful showing in terms of profitability and market share, it was time to buy. I hope you took my advice:
GM shares increase for 10th straight day
Jeff Green and Daniel Hauck, Bloomberg News


NEW YORK -- General Motors Corp., the best performing stock in the Dow Jones Industrial Average, tied a 22- year record for consecutive daily gains with Friday's increase.


The shares rose for a 10th straight day, gaining 24 cents to close at $32.35 in New York Stock Exchange composite trading. They matched a streak that last occurred July 25 through Aug. 7, 1984, according to data compiled by Bloomberg.

GM's stock has climbed 67 percent this year. [my emphasis] (
link)
Just for the sake of bragging rights, that climb began the Monday after I issued my BUY directive.

I should do this full time.

It Ain't Over

While I'm giving financial advice, I thought I'd pass this along.

I advised you a few months ago to put a chunk of money in short term CD's because the price of oil was going to play havoc on inflation and, in turn, interest rates. While you may have gotten over the "gas pump shock," inflation pressures are now starting to build.

From the U.S. Chamber of Commerce:
Producer Price Index

Producer prices for finished goods jumped a higher-than-expected 0.5% in June, driven by a large 1.4% jump in prices for food products. Prices for core finished goods, which exclude food and energy, edged up just 0.2% for the month. Inflation was greater at the earlier stages of processing, with prices for core intermediate goods rising 0.8% in June and prices for core crude goods increasing 1.7%. [my emphasis] (
link)
It's at this level where inflation will start raising its ugly head. Its ugly head seems to be a'rising.

Roll those short term CD's into short term CD's. Or don't pay attention to the expert and starve. It's up to you.

My Kinda Hotel

I rolled into Richmond yesterday morning at 2:00 am, was checked in by 2:05, and was in bed at 2:09.

Holiday Inn Express indeed.

It All Becomes Clear

I did a short piece yesterday (see it here) on Chicago city council's decision to pass an ordinance requiring that Wal-Mart stores operating within city limits pay their employees more. It made absolutely no sense.

Now it does:
Stone: Labor playing rough on wage issue
By Fran Spielman, Chicago Sun-Times City Hall Reporter


An influential alderman accused organized labor on Tuesday of using political threats to muscle aldermen into supporting wage and benefit standards for Wal-Mart and other giant retailers.

... [Alderman Bernard] Stone said he has little hope of getting through to his colleagues now that union leaders have flexed their political muscle.

"The unions have backed aldermen against the wall. They've threatened to fund opponents against them and to solicit opponents to run against" those who dare to oppose the big-box ordinance, Stone said.

"I'm not stupid. I know certain aldermen have been threatened. That's the type of campaign the unions have run. I think it's despicable what's been done. They figure they've got us by the short hairs." (
link)
Gotta keep the rich and powerful union bosses happy, even if it means the poor go without jobs ...

Oh, did I mention that Chicago is run by the party of the little guy?

Semper I

I received a great email that I thought I'd pass along:

***
"Semper I" is an old Marine Corps term applied to those selfish careerists who place their own success ahead of their men and the wellbeing of the Corps. Congressman John Murtha is a living example of that disgraceful term.

A bugle blows in Arlington,
Lilting notes fill still sad air,
An eagle’s tears a globe fall on,
Trail an anchor with despair,

For a man we’d wish had not to die,
Brave youth among the best,
A Marine, he lived for Semper Fi,
And with Semper Fi he’ll rest.

So sadly is the contrast,
Between those who talk and fight;
Fat Pols for whom their war’s past,
But now can’t see the light,

Accusing brave young fighting men,
Of crimes they can’t defend,
Disgraceful fat old congressmen,
Who’ve lost the will to win.

Yes there we see the difference,
Between those who fight to win,
And a congressman with no sense,
Who’s committed grievous sin;

He’s turned against his Corps,
And no one knows quite why,
Except he loves himself much more:
Classic case of Semper I.
Semper Fi to all Marines everywhere from an old paratrooper who holds Murtha in as much contempt as you do.

Russ Vaughn
327th Parachute Infantry Regiment
101st Airborne Division
Vietnam 65-66

The feelings of betrayal run deep ...