LIVING OFF DIVIDENDS & PASSIVE INCOME

I’m always in search of good books to read and a few people recommended Michael Lewis’ new bestseller The Big Short. I put off reading it because I didn’t really want to read yet another book about the subprime mortgage meltdown. However, I finally got the kindle version to read on my new iPad and was pleasantly surprised by how good it was. Actually, I wish I had read it earlier – the book was rather amazing. It was as fast paced and entertaining as his first book, Liar’s Poker.

Lewis describes the financial industry collapse induced by subprime mortgage bond derivative market from the point of view of a couple of hedge fund managers who shorted them. Not very large hedge funds either. Instead of focusing on well known managers like John Paulson, he focuses on relatively unknown and minor investors, with interesting personalities.  Read more... (426 words, 9 images, estimated 1:42 mins reading time)

As someone who’s struggled with finding meaning in life, I can understand the frustration young high schoolers feel when they ask me what they should be doing with their life. Unfortunately, I never have a good answer.

But now thanks to Penelope Trunk, I can direct them to this page and get them off my back:

There is no other way to figure out where you belong than to make time to do it and give yourself space to fail, give yourself time to be lost. If you think you have to get it right the first time, you won’t have the space really to investigate, and you’ll convince yourself that something is right when it’s not. And then you’ll have a quarterlife crisis when you realize that you lied to yourself so you could feel stable instead of investigating. Here’s how to avoid that outcome.  Read more... (1004 words, 8 images, estimated 4:01 mins reading time)

Addison Wiggin at Agora Financial sat down with Warren Buffett for an interview. He published that interview in his brand new book, I.O.U.S.A – One Nation. Under Stress. In Debt. On the whole, Buffett seems pretty optimistic. Here’s an excerpt:

On our national debt problems…

We’re transferring small bits of the country – ownership of the country, or IOUs – to the rest of the world. But our national pie is still growing.

We’re like a very, very, very, rich family that owns a farm the size of Texas, and we have all this output coming from the farm. Now, because we consume a little more than we produce, we’re selling bits of that farm daily, a couple billion worth. Or we’re giving a small mortgage on it which we don’t even notice, but it builds up over time.  Read more... (913 words, 9 images, estimated 3:39 mins reading time)

As I mentioned 5 weeks ago when oil breached $115/barrel, demand for the black gold will cause the price to keep on rising. On Wednesday, I drove to USC where I had an interview at the Marshall School of Business for the full-time MBA program. While driving there, I heard that Oil had exceeded $133 per barrel. I had a great interview (where I spoke about my background, my interests, the state of the economy, what a moron George W. Bush is, and the current elections) and then proceeded to a friends’ place to spend the night.

I later heard that oil prices hit $135/barrel. That news was broadcast incessantly on all the news channels and I kind of felt that it was being overdone. Whenever everyones saying that the price of something is breaking all records, it usually pulls back. I think thats why the US Dollar had shown some strength this year. I woke up on Thursday and bought the ULTRASHORT OIL & GAS ETF (AMEX: DUG), it went up a dollar and I exited my position, happy to have made enough money to pay for my gasoline bill for this month.  Read more... (617 words, 8 images, estimated 2:28 mins reading time)

I managed to get accepted in the UCLA Anderson School of Management. Since I applied in the third round I think thats quite an achievement. Of course, applying so late virtually guarantees no funding or fellowships. This kind of sucks since I did get a 740 on my GMAT which typically helps in getting MBA fellowships (unless you’re going to the top 5 schools). But on the other hand UCLA is ranked #12 for the full-time MBA program.

I was looking forward to not having any student loans when I graduate, especially after receiving a fellowship from UCSD. But UCLA’s program is much more highly ranked so the question is whether its worth spending the extra $60,000.

Of course, if we go through a period of hyperinflation (which I think we’re already in the beginning stages of) then in 10 years, $60,000 might only seem like $10,000! In which case, going to even the most expensive school will look like a good investment in hindsight.  Read more... (253 words, 8 images, estimated 1:01 mins reading time)

Today I got a letter from the University of California, San Diego’s Business School. They’ve offered me a full fellowship for the MBA program! I think it was based on my GMAT score.

It consists of a complete waiver of all tuition and professional fees for both the years of the course. Getting this means I won’t need any student aid, nor will I have to sell any of my investments to fund my education. Considering that I have a very pessimistic outlook on the direction of the US economy, I believe the unemployment rate will be a lot higher when I graduate in 2 years time. I’d rather save up my money for the rainy days ahead (which means they’ll be more opportunity for good investments at that time). Not having to sell my investments also means I’ll be able to use the income they generate for living expenses.  Read more... (516 words, 8 images, estimated 2:04 mins reading time)