Kathi Derevan: ‘I just returned from a visit to a friend in Chicago who bought Tivo for her husband last Christmas (!!) and still it was not installed, (a) because they didn’t know how, (b) he was totally blasé about it and thought he didn’t ‘need’ the silly thing. While he was away for the weekend, I installed it and told him on the phone that his old life was now over and his Tivo life had begun. Oh, how he scoffed! But now, you and I know where he is every evening, and what he is holding in his hand. (By the way, the perfect combination is Tivo with a DVD recorder. You Tivo everything as usual, and what you want to save – for me, sadly, the whole Osbournes series! – goes right onto a DVD, which can then be viewed anywhere, anytime!)

Dennis Hoffman: ‘I finally broke down and followed your advice. I bought a TIVO (series 2) in May. You’re right – it made life better. It’s currently in the shop (Series 2 still has the same hardware problems as the original) and TV watching is miserable. The interesting thing about TIVO is that I watch less TV. Because when I got used to being able to see what I want when I want, now I’m not willing to watch a lot of the stuff I used to watch.’


Bob Fyfe: ‘Coffee grows naturally in the shade of a forest canopy. This forest supports a wide diversity of animal life. In an effort to increase coffee production, farmers in Central and South America have moved to the faster, higher producing method of sun grown coffee, where the overhanging canopy is removed (deforestation) allowing the now sunlit coffee plants to grow more quickly. The problems with this method are that it requires chemical fertilizers and pesticides, the coffee doesn’t taste as good, and the winter habitat of millions of migratory birds is destroyed. Here are two websites detailing the problem, one from Audubon, one from The Atlantic. In an effort to utilize market forces to stem the change to sun grown plantations, there is now a move afoot to promote Shade Grown Coffee. In fact, I’ve heard one environmentalist state that the one action that Americans could take that would have the greatest impact on saving the rain forests would be to stop buying sun grown coffee.’


For those of you arriving late, click here and here and . . . oh, well, if you want them all, go to my archives and search on ‘Dick Davis.’

Item 30: Behind The Moves in Stocks

When news comes out on a stock, it is automatically cited as the reason for the move in the stock. It makes a logical and convenient explanation. But there can be a myriad of other reasons why a stock moves that are never mentioned. These include the mood and direction of the market that day, sympathy with the action of other stocks in the group, the scarcity of buyers or sellers, the level of interest rates, tax considerations, the size of cash reserves, short covering, the pressure on fund managers to perform, technical considerations such as moving averages and resistance and support levels, and many more. The reporter may say a stock is down because it was downgraded. What’s not reported is that it was also upgraded by another firm, and that the real reason for the decline is that the company CEO sold a large block of stock to pay for his divorce settlement.

Item 31: Dollar Cost Averaging

If the market is unpredictable, a dollar-cost averaging approach makes a lot of sense. Investing a fixed amount of money at fixed intervals in the same stock or fund is a way of taking the emotion and guesswork out of market timing. For example, in a down market, if you leave instructions to transfer ‘X’ amount of dollars from your money market account into XYZ stock on the first of every month or every 3 months, some of your purchases will likely be made when fear is causing others to sell at low prices. The result is that you buy more shares for the same amount of money and lower your average cost. One caveat: Dollar-cost averaging requires patience and discipline and confidence that the stock or fund position that you’re accumulating will eventually go higher. Otherwise it doesn’t work. Also, if and when you decide to sell, do so after a period of rising prices. For example, if you invested $500 every month in the S&P 500 Index during the 5 years, 1997 through 2001 when prices went way up and then came way down, your gain at the end of that 5 years would have been negligible.


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