When it comes to identifying projects in trouble, the key warning signs of personnel turnover, sponsor turnover and funding uncertainty are really late signals that confirm that the project is going off track. By and large, these things only happen after real problems have begun to entrench themselves.

So what causes a project to go off track?

ESI International's Jim Foreman lists the following:

1. Drifting away from standards.
2. Frequent change of direction by management.
3. Inability to determine current status.

More than anything else, these things indicate that the project is moving toward an "out-of-control" condition in the quality sense. Left unchecked, these things will result in a series of building issues with the project's stakeholders (team members, sponsors, and customers), that will ultimately destabilize the project and compromise its potential for success.

After a point, the project's stakeholders will simply vote with their feet and dollars and go elsewhere (the key warning signs that confirm the project is in trouble.)

It falls to the project manager to stay on top of developing issues during the course of the project. While it's not uncommon for there to be variance from a perfectly-controlled situation, the problems that can doom a project are best avoided before they reach an out-of-control condition.

In a nutshell, that's the real job of the project manager!

More information: The Long Island chapter of the Project Management Institute has incorporated portions of Jim Foreman's comments on identifying and dealing with problems in projects in their January 2007 minutes.

Labels: project management, quality

- posted by Ironman at 8:10 AM | Permalink | Home |

We do a pretty fair share of project management here at Political Calculations, which comes part and parcel with our focus upon developing unique tools that help people answer questions of interest in their lives. We define and control the scope of our projects, create timelines, priortize tasks, allocate resources, work to meet deadlines and we do it all in reasonable amount of time and all on a shoestring budget!

So when we recently had the opportunity to hear an expert on identifying the warning signs that a project may be in trouble, we were intrigued. Jim Foreman is a Vice President of Client Solutions for project management training developer and consulting powerhouse ESI International, who has been traveling the country speaking to various quality and project management-oriented groups on the topic of "Troubled Projects - Identifying Early Warning Signs and Providing Project First Aid."

Here are the key warning signs Jim Foreman identifies as being clear indications that a project is in trouble:

1. Personnel turnover.
2. Sponsorship turnover.
3. Funding uncertainty.

The list is unsurprising in that the balance of these three factors pretty much defines every business or project in existence. You have the people who work on projects (personnel), the people who lead or organize them (sponsors), and the people who fund them ("bankers").

What each of these warning signs indicate is that trouble has already developed that is affecting whether or not the key people involved want to continue pursuing it. For example, when personnel opt to leave a project for other assignments or opportunities, they're really indicating by voting with their feet that they have greater confidence that their contributions go to better effect elsewhere.

Likewise, if you have turnover in the projects sponsors or leaders, that indicates that the people in these positions have made a determination that other efforts are more worthy their time. This is particularly true if turnover in leadership is frequent.

What ultimately kills a project however is when its "bankers" substantially increase the contigencies upon which continued funding is provided beyond what was originally defined at the beginning of the project. More than anything else, this creates uncertainty in the future of the project, which in turn affects the decisions of both personnel and project managers. Left unchecked, this creates a "death spiral" for the project.

More information: The Long Island chapter of the Project Management Institute has incorporated portions of Jim Foreman's lecture in their January 2007 minutes.

Labels: project management

- posted by Ironman at 8:19 AM | Permalink | Home |

Welcome to the February 23, 2007 edition of On the Moneyed Midways, the only weekly review of the best business and money-related posts from each of the week's major blog carnivals! We seek out the best posts from among the hundreds posted to the various blog carnivals posted each week and we select one post as being The Best Post of the Week, Anywhere!^(TM) As an added bonus, we also cite the near contenders for the best post of the week as being Absolutely essential reading!^(TM)

For those wondering about the progress of our carnival experiment, we postponed our initial surge of contribution activity until today, so if you're a regular carnival-goer, you should start seeing what we do beginning as early as next Monday!

That's all the commentary for this week! All that's left is to scroll on down for the best posts we found in the week that was....

On the Moneyed Midways for February 23, 2007
Carnival	Post	Blog	Comments
30s and 40s Personal Finances	Assisted Living - Pros and Cons	My Wealth Builder	The Savvy Saver weighs the advantages and disadvantage of placing ones elderly parents in an assisted living facility.
Carnival of Business Intelligence	How to Harness the Intelligence of Customer to Solve Your Problems	Emmanuel Oluwatosin: Inspiring Excellence, Realising Ambitions	Emmanuel Oluwatosin discusses "crowdsourcing" and the techniques by which you might be able to capture the wisdom of your customers.
Carnival of Career Intensity	Quantify to Qualify	Static Cure	Clint James stumbled upon a technique to distinguish yourself on your resume from the rest of the crowd in the job market. Good advice!
Carnival of Entrepreneurs	Top 20 Dumbest Business Ideas that Made Millions… Or Not!	The Digerati Life	The Silicon Valley Blogger scoured the web for the 10 silliest online business concepts that made those who conceived them millions, along with 10 that were maybe too silly to go anywhere. Absolutely essential reading!
Carnival of Financial Books and Podcasts	Quick Cash Fixes: Help! I Can't Pay My Bills	The Frugal Duchess	Sharon Harvey Rosenberg outlines and comments upon several "quick fixes for cash leaks" from Sally Herigstad's new book.
Carnival of Fraud	How to Deal with Friends Involved in Quixtar and Other MLM Schemes	Getting Green	Matthew Paulson offers suggestions for how to dance around people close to you who have become taken with multi-level marketing schemes.
Carnival of Management Tips	A Case Study in Professional Ethics	Passion, People and Principles	David Maister passes along the story of what happened when a company that could have swept a mistake it made under the rug without anyone being the wiser came clean with its customer instead. The Best Post of the Week, Anywhere!
Carnival of Money Stories	No Good Tax Break Goes Unpunished	Don't Mess with Taxes	For 2006 only, the IRS is allowing taxpayers to get a tax credit for previously paid federal excise taxes on long distance service. Kay Bell reports that claiming the credit is causing a lot of pain.
Carnival of Personal Finance	Tightwads and Spendthrifts Are Both Screwy, in Different Ways	The Frugal Law Student	The Frugal Law Student notes the findings of recent research that suggests that tightwads and spendthrifts have a lot more in common than you might think!
Carnival of Real Estate	SPAC Disease Reaches Pandemic Proportions	BloodhoundBlog	Schitzo Prospectus Actualis Capitalis (SPAC) is the tongue-in-cheek condition where sellers believe their home is worth more than it is. Allen Butler discusses the nationwide phenomenon and its potential treatments.
Carnival of Real Estate Investing	Creative Financing - Conversion to Traditional Mortgages	Salt Lake Real Estate Blog	Nigel Swaby discusses how to transition to a less "creative" form of financing for your properties!
Carnival of Taxes	Reduce Taxes by Fighting Your Property Appraisal	Trying to Get It Right	Dorky Dad walks through the steps you need to take to contest your property appraisal to combat excessive property taxes.
Carnival of the Capitalists	Off Topic - Kind of…	InsureBlog	Bob Vineyard reviews the ramifications of insurance companies having to cope with the unpredictable costs of litigation. Absolutely essential reading!
Carnival of Under 30 Finances	11 Things You Do Not Learn in School	Grad Money [Matters]	ispf unexpectedly discovered wisdom in a forwarded chain e-mail "that SHOULD be a part of the commencement speech in every high school!"
Carnival on Employer Branding	Exxon and Global Warming and Capitalism	Reasoned Audacity	Jack Yoest notes the reasons why ExxonMobil is one of the most hated companies in the world, at the same time that it's one of the most desirable companies in the world. Absolutely essential reading!
Festival of Stocks	Blood and Guts on Your iPod (LGF)	One Guy's Investments	Travis Johnson considers the future of horror film powerhouse Lionsgate Entertainment after it announced that its library will be made available on iTunes.
Leadership Growth	Being Effective with People: Part 1 (Listening)	Verve Coaching	Erek Ostrowski argues that being effective with people, rather than being an innate skill, is something that can be learned, which begines with developing the ability to listen.
Personal Development Carnival	Motivation for College	Phil for Humanity	Phil B. shares his secret of how to develop the motivation to succeed in college.
Personal Growth Carnival	Ingredients of Victory	Fish Creek House - INNside Innkeeping	Our most eclectic post of the week! G.P. discusses the fear of failure and overcoming it to pursue a dream. As an added bonus, there's a recipe for blueberry pancakes!
Working at Home	An Entrepreneur's Life - Headaches, Heartaches and Hooray's	Krishna De	Krishna De provides some key lessons for entrepreneurs that also apply just about everywhere where one might desire success. Absolutely essential reading!

Previous Editions

• OMM's Running Index for 2007
• The Best Blogs Found in 2006 (and our full 2006 index)!

Labels: carnival

- posted by Ironman at 1:04 PM | Permalink | Home |

Last year, we looked at 30 years of box office totals for Best Picture winners and we wondered how much does winning an Academy Award boost the box office numbers for the movies on the winner's list:

To answer that question, let's first look at their box office totals as of March 1, 2006, ranked from highest to lowest (all figures may be considered to be equivalent to 2005 U.S. dollars):

• Brokeback Mountain: $75,838,000 - BEST DIRECTOR
• Crash: $53,404,817 - BEST PICTURE WINNER
• Munich: $46,178,425
• Good Night, and Good Luck: $30,455,120
• Capote: $23,441,493 - BEST ACTOR WINNER

The box office has long since closed for each of the films nominated for Best Picture of 2005 and we now have the results, which might tell us what effect winning an Academy Award delivers for each movie's box office numbers. The results are summarized in the table below (award winners are shown in boldface):

Best Picture Nominee's Pre and Post Oscar U.S. Domestic Box Office Totals
Best Picture Nominee	Pre-Award Box Office	Post-Award Box Office	Post-Award Change	Percent of Pre-Award Box Office
Brokeback Mountain	$75,838,000	$83,043,761	$7,205,761	9.5%
Capote	$23,441,493	$28,750,530	$5,309,037	22.6%
Crash	$53,404,817	$54,580,300	$1,175,483	2.2%
Munich	$46,178,425	$47,403,685	$1,225,260	2.7%
Good Night, and Good Luck	$30,455,120	$31,558,003	$1,102,883	3.6%

Here's what we observed about these movies last year:

By and large, what these figures tell us is that at this point, whatever 2005 nominee goes on to win the award for Best Picture will rank among the least popular of all Best Picture winning movies over the past 30 years. Only Brokeback Mountain, with its exceptionally well-executed marketing plan, breaks over the very low hurdle set by 1987’s The Last Emperor, which was noted in that year as having been seen in theaters by remarkably few people.

To be fair, the jury this year is still out for Capote, which is only now coming into wide release. What will be interesting to see is whether Academy voters will give the Oscar to the nominee that has already made the most money (Brokeback Mountain) or will give it to the movie that has the most to gain in box office revenue from winning at this point (Capote). That assumes that Hollywood doesn't have some other agenda they're pursuing this year with its most recognized awards.

With a post-award pickup of 22.6% of its pre-award box office following Phillip Seymour Hoffman's Best Actor award, just imagine how big a pretty obscure art-house movie like Capote's take would have been if it had won Best Picture instead! Likewise, Brokeback Mountain was able to take in an additional 9.5% of its pre-Academy Award box office, even though it reached its widest distribution in U.S. theaters nearly a month earlier.

By contrast, Best Picture winner Crash was re-released into just 150 theaters the week after the Academy Awards were announced, limiting the ability to generate significant income fro this venue. Crash's additional box office was also hurt by the movie already having been released to the home video market back in September 2005.

For movie-makers, this result does suggest why "serious" Oscar contenders are released very late in the year, as the box office for films put out earlier (Crash and Good Night, and Good Luck) doesn't seem to benefit much from winning, especially if they're already released to DVD.

Now, those DVD sales are a different matter that we might look at next year!

What About This Year's Top Pictures?

Here's the box office totals as of Tuesday, February 20 for this year's Best Picture nominees:

• Babel: $33,218,792
• The Departed: $131,498,360
• Letters from Iwo Jima: $11,811,634
• Little Miss Sunshine: $59,758,048
• The Queen: $51,350,148

We'll see what happens after the awards are announced this Sunday. And for those who remember what we think of the Academy Awards ceremony, we still won't be watching....

Labels: academy awards, box office, movies

- posted by Ironman at 4:46 PM | Permalink | Home |

Have you ever noticed that some things are made out to be a lot harder than they have to be? Consider how the U.S. Census goes about determining where to set the level of the threshold of poverty for individuals and families each year:

• Poverty thresholds are the dollar amounts used to determine poverty status
• Each person or family is assigned one out of 48 possible poverty thresholds
• Thresholds vary according to:
  • Size of the family
  • Ages of the members
• The same thresholds are used throughout the United States (do not vary geographically)
• Updated annually for inflation using the Consumer Price Index for All Urban Consumers (CPI-U).
• Although the thresholds in some sense reflect families needs,
  • they are intended for use as a statistical yardstick, not as a complete description of what people and families need to live
    
  • many government aid programs use a different poverty measure, the Department of Health and Human Services (HHS) poverty guidelines, or multiples thereof
• Poverty thresholds were originally derived in 1963-1964,using:
  • U.S. Department of Agriculture food budgets designed for families under economic stress
  • Data about what portion of their income families spent on food

Seems like quite a lot goes into it, doesn't it? And it probably was when the levels were first set back in the 1960s. Since at least 1980 however, setting the U.S. poverty threshold each year would appear to be a piece of cake. First, here's our chart showing the poverty threshold for each year since 1980 for single individuals with either 0, 1 or 2 children:

That's not your imagination. All the data points basically sit on a straight line. Now, let's see the poverty threshold for each year since 1980 for married couples with either 0, 1 or 2 children:

Once again, all the data points hover around a straight line running through them!

The nice thing about these trends is that we now have an almost supernatural power to be able to determine almost exactly where the poverty threshold will be set years into the future! Our latest tool does the math - all you need to do is select the year of interest, marital status, and number of children:

What else can we say? We didn't expect it to be that easy either!

Labels: forecasting, poverty, tool

- posted by Ironman at 8:14 AM | Permalink | Home |

When were the best years to have ever invested in the S&P 500 stock market index? Last week, we introduced our chart showing the best inflation-adjusted rates of return ever obtained from the stock market index, but today, it's time to introduce our dynamic table!

We returned to our database of the S&P 500's performance since January 1871, and scanned month-by-month through every period ranging from 1 year to 50 years in length to sort out what the highest ever real returns were for our hypothetical investments and when they began.

In our analysis, we assumed full reinvestment of dividends, adjusted for inflation, and did not consider the effects of taxes or commissions and fees, which vary considerably over time. Our results for our hypothetical investment's holding periods between 1 and 50 years are summarized in the dynamic table below. You may sort the data by clicking the column headings - clicking the column heading once will sort by the selected category from low to high values, and clicking a second time will re-sort the table's data from high to low values.

Best Case Inflation-Adjusted S&P 500 Rates of Return for Investment Holding Periods of 1 to 50 Years

Holding Period (Years)	Starting Date (Year-Month)	Ending Date (Year-Month)	Nominal Return (%)	Inflation Rate (%)	Real Return (%)
1	1932-07	1933-07	139.8	-03.7	143.5
2	1932-06	1934-06	53.1	-00.7	053.8
3	1926-09	1929-09	38.7	-00.4	039.1
4	1932-06	1936-06	39.4	00.4	039.0
5	1924-09	1929-09	33.6	00.2	033.4
6	1923-09	1929-09	31.4	00.1	031.3
7	1922-01	1929-01	25.6	00.2	025.4
8	1921-09	1929-09	27.9	-00.1	028.0
9	1920-08	1929-08	23.0	-01.8	024.8
10	1919-09	1929-09	19.6	-00.3	019.9
11	1918-09	1929-09	20.3	00.9	019.4
12	1949-06	1961-06	19.4	01.9	017.5
13	1948-12	1961-12	18.2	01.7	016.5
14	1942-04	1956-04	20.1	03.7	016.4
15	1954-07	1969-07	18.2	02.1	016.1
16	1982-07	1998-07	19.7	03.3	016.4
17	1982-07	1999-07	19.7	03.2	016.5
18	1982-08	2000-08	19.0	03.2	015.8
19	1980-04	1999-04	18.4	03.9	014.5
20	1980-04	2000-04	17.9	03.8	014.1
21	1942-05	1963-05	16.3	03.0	013.3
22	1942-05	1964-05	16.4	02.9	013.5
23	1942-05	1965-05	16.3	02.9	013.4
24	1932-06	1956-06	16.0	02.9	013.1
25	1932-06	1957-06	15.6	02.9	012.7
26	1942-05	1968-05	15.1	02.9	012.2
27	1932-06	1959-06	15.6	02.9	012.7
28	1932-06	1960-06	15.1	02.8	012.3
29	1932-06	1961-06	15.2	02.7	012.5
30	1932-06	1962-06	14.2	02.7	011.5
31	1932-06	1963-06	14.7	02.7	012.0
32	1932-06	1964-06	14.7	02.6	012.1
33	1932-06	1965-06	14.6	02.6	012.0
34	1932-06	1966-06	14.3	02.6	011.7
35	1932-06	1967-06	14.1	02.6	011.5
36	1932-06	1968-06	14.1	02.6	011.5
37	1932-06	1969-06	13.7	02.7	011.0
38	1921-08	1959-08	11.8	01.3	010.5
39	1920-12	1959-12	11.5	01.1	010.4
40	1921-08	1961-08	11.7	01.3	010.4
41	1920-12	1961-12	11.6	01.1	010.5
42	1921-08	1963-08	11.4	01.3	010.1
43	1921-07	1964-07	11.6	01.3	010.3
44	1920-12	1964-12	11.4	01.1	010.3
45	1920-12	1965-12	11.4	01.1	010.3
46	1921-08	1967-08	11.4	01.4	010.0
47	1920-12	1967-12	11.2	01.2	010.0
48	1920-12	1968-12	11.3	01.3	010.0
49	1949-06	1998-06	13.6	04.0	009.6
50	1949-06	1999-06	13.8	04.0	009.8

The End of the Worst Marks the Beginning of the Best

Unlike our previous findings that found that the worst periods for having made an investment in the S&P 500 were defined by when the given holding period ended, when looking at the best ever real returns for the index, we find here that they're largely determined by when they began. More remarkably, they largely began at the end of the worst-ever recorded rates of return for the holding periods in question!

Here's what we mean. The worst ever month to have ended an investment in the S&P 500 is June 1932, which marks the end of 23 of the 50 worst holding periods for investments in the index that we previously recorded. June 1932 also marks the beginning of 15 of the 50 best holding periods for having launched an investment in the S&P 500.

We also see this pattern for the worst investing holding periods ending in 1920 and 1921, which accounts for 14 of the 50 worst 1-to-50 year holding periods, but also marks the beginning of 13 of the 50 best 1-to-50 year holding periods! And we see this same pattern for investments ending and beginning in 1980-1982 and 1942.

The Bubble Years

When we turn our attention to the years ending the best inflation-adjusted performance of investments ranging from 1 to 50 years in length, we find two timeframes that stand out above all others: 1929 and 1999-2000. Both are significant in that each of these years marks the pinnacles of the stock market bubbles of their day!

Together, these periods account for 13 of the 50 best recorded performances for investments made in the S&P 500. 1929 alone accounts for 8 of these top inflation-adjusted rates of return, with 1999-2000 accounting for the remaining 5.

Labels: best case, investing, performance, SP 500, stock market

- posted by Ironman at 8:20 AM | Permalink | Home |

Welcome to the February 16, 2007 edition of On the Moneyed Midways, the only weekly review of the best business and money-related posts from each of the week's major blog carnivals! Every week, we seek out the best posts from among the hundreds posted to the various blog carnivals and we select one post as being The Best Post of the Week, Anywhere!^(TM) As an added bonus, we also cite the near contenders for the best post of the week as being Absolutely essential reading!^(TM)

This week, we want to steer your attention toward the Cavalcade of Risk, whose Valentine's Day edition offers a lot of high-quality posts that are assembled in very entertaining (and appropriate) format! If you're organizing a blog carnival that will fall on a major "social event" day like Valentine's, take notes!

That's all the commentary for this week! All that's left is to scroll on down for the best posts we found in the week that was....

On the Moneyed Midways for February 16, 2007
Carnival	Post	Blog	Comments
Blogging for Cash	Paid Blogging Market Review	Daily Blog Tips	There's a growing market where advertisers are paying bloggers to post about their products. Daniel Scocco reviews several of the outlets that are behind the "pay-per-post" business model.
Carnival of Career Intensity	Perspective on Careers	Passion, People and Principles	David Maister lists the 12 things you need to do to actively manage the direction of your career.
Carnival of Customer Service	Can I Help You?	Mine Your Own Business	If you're in sales, approaching a potential customer and asking "Can I help you?" might kill any chance you have of making a deal. Mike Buckley weighs in on what it takes to start down the path to a sale. The Best Post of the Week, Anywhere!
Carnival of Entrepreneurs	10 Key Questions to Ask About Franchises	Personal Finance Advice	Franchises are often an attractive route to becoming your own boss. Jeffrey Strain notes the questions you should ask before you take this entrepreneurial path.
Carnival of Fraud	Spam Scam Artistry	Pink Slip	Maureen Rogers deconstructs an e-mail she received with an "attractive" offer. The funniest post of the week!
Carnival of Home Business	Why Your Business Isn't Growing	Small Business Buzz	If your business isn't growing, it's likely because it's missing something essential. Michelle Cramer demonstrates how to make the essential connections your business needs. Absolutely essential reading!
Carnival of Improvement	Heal the Fears of Change	howtowheelchair	Leonard Alexander uses FEAR as an acronym for 4 steps to follow when coping with change.
Carnival of Management Tips	Organizational Culture: The Keys to the Kingdom	Verve Coaching	Erek Ostrowski notes that "highly effective organizations take the time to become aware of and manage their culture." Short post well worth reading!
Carnival of the Capitalists	Task Motivation vs. Goal Setting	Disorganizational Behavior	What is the difference between task motivation and goal setting, and when should you use each? Travis Sinquefield explains and answers!
Carnival of the Credit Card	Behind the Times - I Learn About Keep the Change	Wisebread	Andrea Dickson just found out about debit cards that automatically round up the amount being debited from your account and put the "change" into a savings account, but has found out enough to list their pros and cons! Absolutely essential reading!
Cavalcade of Risk	In This Corner, the Villanova Mauler	Roth & Company Tax Updates	Joe Kristan responds to questions from Villanova professor Jim Maule regarding the universal health care proposal made by the President in his 2007 State of the Union Address.
Economics and Social Policy	The Problem with Debt Consolidation	Getting Green	Matthew Paulson finds that instead of being a problem, debt is actually a symptom. The real problem? You're spending too much money, which can't be fixed by consolidating your debts!
Ethics, Values & Personal Finance	Trust, Democracy and Capitalism	Trusted Advisor	Charles H. Green argues that a nation of opaque financial laws, written by those favoring the concentration of wealth and violated without serious penalties, is a nation whose economic system is no longer based on trust. Absolutely essential reading!
Festival of Stocks	Quiet Outperformance for Myriad Genetics (MYGN)	One Guy's Investments	MYGN is losing more money than ever before, but its stock has become a not-so-well-known darling of Wall Street. Travis Johnson explains its what's in the biotech's pipeline that makes it so attractive.
Festival of Under 30 Finances	When's It Time to "Grow Up" and Upgrade Your Stuff? (& Does It Have to Break the Bank?)	Money and Values	Penny Nickel has kept living like a college student despite having graduated nearly three years ago, and now wonders when is it time to start spending like an adult.
Personal Development Carnival	The Price of Success	Renovate Your Life with Craig	Craig Harper is hearing way too many excuses from people who want to create positive change in their life.
Personal Growth Carnival	SWOT Your Life to Success	A Bettery You Blog	How can an MBA-style analysis help you set a course for success? Patricia identifies SWOT analysis as a powerful tool for shaping the new you!
Real Estate Investing	How to Purchase Underperforming Properties with Construction Loans	Investement Property Insider	Craig S. Higdon shows how using a construction loan to acquire a commercial property might be used to both buy the property and improve it in one step!

Previous Editions

• OMM's Running Index for 2007
• The Best Blogs Found in 2006 (and our full 2006 index)!

Labels: carnival

- posted by Ironman at 9:28 AM | Permalink | Home |

Last week, we introduced our findings of the worst case performance of the S&P 500 adjusted for inflation for investments made in the index ranging from 1 to 50 years in length. This week, we're looking at the brighter side of the U.S. stock market in looking at the best case performance for the index for investments of the same lengths of time! Here's the chart (click to enlarge):

Best Case Real Rates of Return

The chart above shows our basic findings of the best-case inflation-adjusted performance of the S&P 500 for all holding periods of 1 to 50 years, defining each unique period as beginning in each month starting from January 1871 and going all the way through to December 2006. The annualized rates of return shown in the chart have been adjusted for inflation and assume that dividends are fully reinvested. No taxes or trading commissions and fees are taken into account for these results.

A key point of interest is the investing holding period of 45 years, which spans the typical length of an individual's career (assuming starting at age 20 and working until age 65). Here, the best case annualized rate of return for an investment of this length is 10.3% after adjusting for inflation. By contrast, the worst case historical performance of the S&P 500 for a holding period of 45 years is 3.6% after inflation.

Although we don't show it in the chart above, as more time passes, the best-case performance for an investment in the index continues to gradually decrease, eventually reaching a range between 7.4% and 7.8% for holding periods running between 100 and 130 years in length.

The Best Years Ever for Beginning an Investment in the S&P 500

Unlike our previous look at the worst case real returns for the S&P 500, the best case performance for investments made in the index are largely defined by the year in which they begin, instead of when they end.

For this analysis, we found that five periods account for 84% of the best periods in which to have made an investment. The best, by far, is for investments made in 1932, and more specifically, in or around June 1932, which accounts for 32% of the best case holding periods for investments made in the index of 1 to 50 years in length. The other periods that are defined by the years in which they began include 1920-1921 (26%), 1942 (10%), 1980-1982 (10%) and 1949 (6%).

More interestingly, the periods in which the best real returns were obtained seem to be largely correlated with the end of the periods in which the worst real returns were achieved for investments made in the index!

If nothing else, this observation does suggest a unique stock investing strategy. Should the market ever break its records for worst case real return performance, that may be a really good signal that it's a really good time to go "all-in"!

Labels: best case, investing, performance, SP 500

- posted by Ironman at 9:11 AM | Permalink | Home |

Here's the situation: it's Valentine's Day, and you have two potential people with whom you might choose to go with out on a date on this romantic holiday. How on earth will you choose between them?

You might consider simply choosing the one you like best, but can you really trust your feelings? Fortunately, Geek Logik author Garth Sundem has struck again, finding ways to reduce life's quandaries down to friendly algebraic equations. Here's the back story from his new blog:

While I'm safely removed from the dating pool, Stephanie Street is not (is this perhaps a pseudonym?). She phoned in a Valentine's Day question to the PRI radio program Fair Game, and won the dubious honor of chatting with me and the host on air (tonight, online at www.morefairgame.org by 9:00pm) and thus having her pseudonym forever attached to this equation, heretofore known as The Manometer. Her dilemma was the choice between two proposed Valentine's Day dates—one eight years older, mature and stable and another two years younger, brash and exciting (does this sound like the plot of a Danielle Steel novel to anyone else?). The older gent was thinking basketball game while the younger had gone with the standby wine-and-dine.

Which to choose? Luckily the revolutionary Man-O-Meter makes Stephanie's decision easy (and maybe yours, too). Just plug in the numbers to rank each dude and go with the one that scores highest. And guys—it doesn't take a PhD in String Theory to switch the genders, just be careful with the age variables.

There's not much more to it than that! But before you scroll down to use the tool for doing the math, here's the Valentine's Date equation you'll be solving (and yes, we're a bit suspicious of how Garth names his variables - we think this one may be on par with the urban legend for explaining poor Latin American Chevrolet Nova sales....):

You read that right. The equation is set up to evaluate the "VD" score for each of your potential dates and according to Garth, you should "go out with the guy who scores most." Ahem. All we can say is that it must have made for an interesting radio show. In any case, here's the tool for solving this particular dilemma:

To be fair, Garth intended "VD" to stand for "Valentine's Date," but we couldn't keep a straight face after we saw the equation. And as dating selection criteria goes, it beats flipping a coin!

Labels: geek logik, tool

- posted by Ironman at 2:01 AM | Permalink | Home |

It's official - Political Calculations has become surprisingly popular in Iran! And of all the tools we've created, we would never have guessed that our tool asking the question "What are the chances your marriage will last?" would be the first to stimulate commentary in Farsi!

We always knew it was unlikely that there were two people going by the name "Craig Newmark" (see here), but now we know that one of the two might prefer the name "David M. Newmark," despite all protests to the contrary!

"Fatherland, socialism or death" declared Venezuela's Hugo Chávez when being sworn into office. At least we don't have to wonder about what kind of 21st-century socialist he may be. He's clearly the national socialist kind. We wonder only if Cuba will prove to be the new Austria....

Calling Greg Mankiw: A New York state senator calls for a new law that would impose a $100 fine on people who cross a street while listening to their iPods or talking on their cell phones, citing the danger to personal safety of being distracted by modern electronic devices. We anxiously await the good professor's call for a Pigovian tax on personal electronic products to "correct" these negative externalities.

Late breaking: A balanced federal budget sooner?

Labels: random thoughts

- posted by Ironman at 7:20 AM | Permalink | Home |

Here's a neat bit of data that suggests one contributing factor to the stock market's strong performance last year. Did you know the supply of stocks in the U.S. stock market is shrinking? We came across the following chart from Schwab's chief investment strategist Liz Ann Sonders a while ago, which shows the annual change in net new equitives from November 1995 through November 2006:

Of course, the stock market has changed tremendously in size over this time period, so we did a little bit of digging and found where Liz Ann has shown the size of these changes as a percentage of the entire market:

This particular chart is nice in that is shows the relative changes over a longer period of time, going all the way back to 1976 (but ending in September 2006). We can also see that the current decline in the supply of equities is on par with the leveraged buyout boom of the mid-1980s.

How is the U.S. stock market shrinking? For the most part, a huge increase in the amount and number of private-equity buyouts (the chart below shows the 1995 through 2006 timeframe again):

Of course, the real question is why is the U.S. stock market shrinking? Our list of items on our running hypothesis list include:

1. The U.S. stock market has become unattractive for new IPOs. Better deals are being found in other countries' exchanges.
2. Increased regulation of publicly-traded companies (via Sarbanes-Oxley) has made it more attractive to take companies private. We'll note that the high cost of regulatory compliance would also make the U.S. stock market unattractive for new issues.
3. Massive stock buyback plans, particularly in the energy sector. This really would have no effect on the attractiveness of the U.S. stock market.

As we noted above, one of the main beneficiaries of this trend is existing U.S. stockholders, who benefit from having approximately the same supply of money chasing after a declining number of stocks.

The main downside to the same investors? As stocks become more expensive per share, it becomes more difficult to purchase a fixed quantity of new shares. Also, there may be somewhat of a distortionary effect on reported company financials, such as earnings per share, that lead people to do some very stupid things.

Here's a quick example of what we mean. Let's assume that a company's earnings (profits) are unchanged when reported year over year. Here, the company's decreased number of shares will tend to make its stock look as if the company's actual earnings have increased (as measured by earnings per share), which might fool some relatively clueless observers (namely, unsophisticated investors, reporters and politicians) into believing that the company is still growing its profits.

While an unsophisticated investor might only lose some money on their investment, the combination of reporters and politicians is more dangerous in that the unscrupulous among these groups might point to a company's or sector's "record" earnings per share and begin calling for a windfall profits tax to be imposed upon them, ignoring whether or not these are "real" profits.

This scenario represents the real losing situation for the U.S., as these kinds of taxes make the U.S. economy less attractive in which to do business!

But hey, that's just us pointing out the obvious!

Labels: stock market

- posted by Ironman at 2:26 PM | Permalink | Home |

Welcome to the February 9, 2007 edition of On the Moneyed Midways, the only weekly review of the best business and money-related posts from each of the week's major blog carnivals! Every week, we seek out the best posts from among the hundreds posted to the various blog carnivals and we select one post as being The Best Post of the Week, Anywhere!^(TM) As an added bonus, we also cite the near contenders for the best post of the week as being Absolutely essential reading!^(TM)

Do posts submitted to blog carnivals really drive a lot more traffic to your blog? Once upon a time in the blogosphere, that was true. But, now that blog carnivals are proliferating while becoming more and more narrowly focused, we're wondering if posting to a carnival is really worth the time and trouble. To find out, we're going to run a little experiment. Since it's been so long since we've seriously contributed to the blog carnivals ourselves, we thought that we might sort through our recent posts and submit on-topic posts to some 20 or more carnivals. Since it will take several weeks for them all to play out, we'll take our most recent month of traffic (shown in the image to the left) and compare it with what we see in the next month.

But enough about science! Once again, we have lots of new carnivals this week. Scroll on down for the best posts we found for the week that was....

On the Moneyed Midways for February 9, 2007
Carnival	Post	Blog	Comments
30s and 40s Personal Finances	Everything You Need to Know About Financial Success in Less Than 100 Words	Worldwide Success	David takes on Dilbert cartoonist Scott Adams in seeking to provide the most wide-ranging, yet shortest, guide to attaining financial success.
Business, Technology and Knowledge	Technology Could Make Waitresses Obsolete	Small Business Buzz	Michelle Cramer provides an analysis of the pros and cons of automating the ordering process in restaurants - with the minimum wage likely to go up soon, this post is perhaps a glance of how the future will adapt to higher costs for low-skilled workers. Absolutely essential reading!
Capital, Charisma, & Cojones	20 Bad Workplace Habits	Passion, People and Principles	David Maister excerpts executive coach Marshall Goldsmith's new book to provide a list of 20 bad habits employees and bosses should avoid.
Carnival of Career Intensity	Making Decisions with Less the Stress	Towards Better Life	Victor Fam lists five things you can do to minimize the stress associated with making an important decision
Carnival of Debt Management	Never Pay Off Student Loans Early!	Stingy Students	The StingyStudent looks at the reasons why paying off a student loan early might be the wrong thing to do. Worth reading just for the hypothetical situation involving an amourous Himalayan Yeti.
Carnival of Entrepreneurs	Think Like an Entrepreneur	Priscilla Ortiz	What can you learn about entrepreneurship from Trump University students? As the students are themselves entrepreneurs, they begin with why they decided to strike out on their own.
Carnival of Fraud	Booms, Busts, Fraud and Sarbanes-Oxley	SOX First	Leon Gettler reports on findings by University of Minnesota researchers that indicate fraud is most likely to occur when times are good, and paradoxically, when more information that is made available to the public, the likelihood of fraud increases. Absolutely essential reading!
Carnival of Improvement	When Not to Buy a House	1SiliconValley.com	Steve Leung has five warning signs that may help you avoid making the most costly mistake of your life!
Carnival of Management Tips	Fire Your Crappy Customers - The Homestead Hubbub	Instigator Blog	Ben Yoskovitz examines the situation of Homestead CEO Justin Kitch, who suggested that there's a time and place for firing customers. Absolutely essential reading!
Carnival of Project Management	Top 6 Problems with Risk Management	Software Project Management	How can something that seems so reasonable be so hard to do convince people to do? Pawel Brodzinski exposes the obstacles that project teams erect in the face of implementing risk management processes in The Best Post of the Week, Anywhere!
Carnival of Real Estate	Attracting a Conversation: Blog Comment Tips	Zillow Blog	David Gibbons finds that blog comments for realtors may be a key to developing new connections and provides suggestions for growing a blog into a community.
Carnival of Taxes	Taxpayer Panic - What to Do If You Can't Pay Uncle Sam!	BrianBrown CPA	Sure, we all *want* to give Uncle Sam a large chunk of what we earned last year, but what if you can't pay your tax bill? Brian Brown talks you through what you need to know to survive the experience.
Carnival of the Capitalists	A Government-Enforced Monopoly	PowerBlog	Jordan Baillor shows the inherently corrupt process by which the government's power of regulation is used to create monopolies that only benefit the politically connected few. Absolutely essential reading!
Economics and Social Policy	What Type of Training and With Whom?: Getting a Return on Investment	The New Business World	There are two kinds of training that corporations provide to their employees: general and specific. Murad Ali highlights the findings of a study that indicates one is much more beneficial to the bottom line than the other.
Festival of Stocks	Reasoning About Two Sub-Prime Lenders	Worst Case Scenario Investing	With sub-prime lenders at risk of higher levels of defaults with the end of the so-called housing bubble, the WCSInvestor takes a closer look at two sub-prime lenders to see if there's opportunity afoot.
Home Business Carnival	What I've Learned Starting an Online Store	Starting an Online Store Called givitup	If you've ever wondered what's involved in setting up shop on the Internet, Nancy's take on her experience in operating her business will give you a taste of what you might be in for.
Personal Development Carnival	Creative Thinking Is for Everyone	Young Man's Journey to Become a CEO & Succeed	Milo Riano discusses how to think creatively, arguing that it's not just for select artistic individuals - it really means continuous improvement.
Personal Growth Carnival*	It's Nice to Be Important, But It's More Important to Be Nice	GameProducer.net	Juuso observes that the effect that titles can have on people, warning that "the moment you start to think that “being important” (or “more important than others”) is your goal then you are heading to wrong direction."
Real Estate Investing	The Savvy Investor: Watchouts for New Market Investing	Bloodhoundblog	Michael Cook recently traveled from New York to North Carolina in pursuit of some real estate investment opportunities. His experience shows some of what real estate investors have to consider when looking at properties outside their home territory.
Wealth Building Ideas*	It's About How Hard You Take the Hits and Still Keep Moving	Reflections of a BizDrivenLife	Wilson Ng finds inspiration in the central subplot of Rocky Balboa - if you had been planning to wait for the DVD, you might want to catch the movie while it's still in theatres after reading Wilson's review!
Working at Home	How to Complain and Get a Good Result	Wise Bread	Paul Michael reveals the secrets of getting the kind of response you want when writing a complaint letter to a company's customer service department.

* A "Bryan C. Fleming" production. For more about the Bryan C. Fleming universe of blog carnivals, see this excellent post by the Silicon Valley Blogger at The Digerati Life (or our commentary from the December 15, 2006 edition of On the Moneyed Midways.

Previous Editions

• OMM's Running Index for 2007
• The Best Blogs Found in 2006 (and our full 2006 index)!

Labels: carnival

- posted by Ironman at 11:47 AM | Permalink | Home |