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Wednesday, February 13, 2008

Beer and Taxes

The title should at least pique the interest of most of my readership (one of the two)....I saw this today and found it funny....

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this: * The first four men (the poorest) would pay nothing. * The fifth would pay $1. * The sixth would pay $3. * The seventh would pay $7. * The eighth would pay $12. * The ninth would pay $18. * The tenth man (the richest) would pay $59. So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20.' Drinks for the ten now cost just $80. The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so: * The fifth man, like the first four, now paid nothing (100% savings). * The sixth now paid $2 instead of $3 (33%savings). * The seventh now pay $5 instead of $7 (28%savings). * The eighth now paid $9 instead of $12 (25% savings). * The ninth now paid $14 instead of $18 (22% savings). * The tenth now paid $49 instead of $59 (16% savings). Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings. 'I only got a dollar out of the $20,' declared the sixth man. He pointed to the tenth man, 'but he got $10!' 'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I!' 'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!' 'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!' The nine men surrounded the tenth and beat him up. The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
All I want to know is: where is this place that 10 guys can drink all night for $100??? Maybe the Den at 4th street bowl????

Monday, February 11, 2008

Nothing to say...

So unfortunately I have had zero time to watch the markets lately. All I know is that things seemed to have settled out around the 12K mark. I still have not seen a really good trend emerging that says things get significantly better in the next few months so I really do not feel compelled to go flying back into the market just yet. Instead I will use this time (whenever I get some) to look for some stocks which are solid and can weather the storm. Speaking of which...I should mention that of the stocks that we recommended here...

Those snoring dividend stocks are holding up well (ROH +6%, TTM even, FWLT +1%, GLS +10%, DSX even) despite the market meltdown of almost 15%.

Those high fliers are not holding up well (GOOG only up 10% vs being up 50% before, AAPL -20%, STV -20%). So it just goes to show that you must be diversified or you will get killed. Having said that...tech is looking pretty cheap...but is usually one of the last to rebound....you have time!

And props to Sue for her comment left on the last post....well done.....spoken like a true old fogie ;-) JK!