College years are sometimes referred to as the “best four years of your life.”
Whether or not this is true, they sure beat the last four years of life for a Sallie Mae shareholder. (negative 76% total return).
And the next four years don’t look good either.
From Bloomberg: “SLM Corp, the biggest US student loan company, tapped the bond market for the first time in two years, paying more in interest than it charges [college students for their loans.]”
SLM sold $1.5 Billion of 8 percent notes due in 2020 at a yield of 8.25%. Stafford federal studen loans have a fixed interest rate of 5.6%.
Bright college years … ahh.
Rocky walked over to his Lexus car on Sunday morning, and discovered that all four windows mysteriously opened overnight. This posed a problem because a late-night monsoon left the seats, carpet and dashboard badly soaked. Even the cupholders were holding water (without cups).
“Unintended acceleration gets all the attention, but unintended ventilation is far more insidious,” grumbled Rocky, as he wiped the seats with a handful of Trophy Wife’s dish towels. “At least with unintended acceleration, you can shift into neutral or turn off the engine.”
The outside temperature was in the high 30’s, so obviously Rocky had not opened the windows intentionally. Also, he keeps the passenger windows in “locked mode,” so he could not have accidentally confused the door-lock and down-window buttons when exiting.
Other than an electronic problem, the best explanation is that Rocky may have sat on his key fob in an odd way. When a driver presses a Lexus key fob unlock-button for 5 continous seconds, all of the car windows open. But how could this happen accidentally? Rocky does not wear his trousers to bed, nor does he engage in contortionist exercises. The best explanation is that Rocky “bent over,” (literally) as he must occasionally do….
[Disclosure: Rocky intends to contact the National Highway Safety Administration and lodge a complaint. Perhaps then Toyota will issue a key fob safety recall — which will prevent unintended ventilation from ruining more fine wool suits and silk jackets — as these fine garments are pressed against soaked leather seats.]
One year ago, Rocky was diligently “dollar cost averaging” in stocks, corporate bonds and other “risky” assets.
It was painful at the time, yet his models, reason and experience suggested an extremely high probability of double-digit returns over the ensuing five years. (Rocky neither predicted nor expected a 70% rally in only twelve months.)
After this historic rally, Rocky’s estimate for stock market returns over the next five years is back towards the low single digits. What’s Rocky doing? He’s not betting that the stock market will decline, but instead, he’s pruning back some exposure (with long term capital gains tax treatment) and building his cash balances. The most difficult investment today: cash yielding zero.
Rocky’s a terrible market predictor and he readily acknowledges that the stock market could easily rise another 10% over the next six months. However, Rocky notes that the most difficult investment is often the best investment. And that painful investment is now “cash.”
[Disclosure: Rocky doesn’t provides investment advice. He always buys early, sells early, and goes to bed early.]
Rocky enjoys receiving free toasters and other perks when he opens a new bank account. But for the first time ever, he found a bank that offers a bonus for CLOSING a bank account!
The Nevada Federal Credit Union announced that they are paying savers a $25 bonus if they withdraw $25,000, and a $75 bonus if they withdraw $75,000. The full story is here: http://www.lvrj.com/business/credit-union–pul-lease-take-your-money-86320527.html
Rocky wonders whether this is the beginning of a nationwide trend? Will his local Exxon station will pay him $25 if he goes across the street to Texaco? Will Verizon Wireless pay him $50 to switch to AT&T?
[Disclosure: Zero Percent Interest Rates seem to be causing unexpected consequences.]
She read that the massive Chilean earthquake knocked the earth off its axis — and caused “time to be lost.” At school today, she asked Mrs. Calabash for a 1.26 microsecond extension on her research paper about dinosaurs. (Her request was immediately granted.)
From the NASA website:
JPL research scientist Richard Gross computed how Earth’s rotation should have changed as a result of the Feb. 27 quake. Using a complex model, he and fellow scientists came up with a preliminary calculation that the quake should have shortened the length of an Earth day by about 1.26 microseconds (a microsecond is one millionth of a second).
The full NASA link is here: http://www.nasa.gov/topics/earth/features/earth-20100301.html
[Disclosure: For students who need more than an extra microsecond, a list of good excuses can be found here: http://www.jobprofiles.org/library/students/the-ferris-bueller.htm …. Rocky awaits an announcement from the NY Stock Exchange whether the trading day will be shortened by 1.26 microseconds.]