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Financial Predictions without Skin in the Game

So the folks over at Freakonomics did a Podcast on the Folly of Predictions where they pointed out the obvious. Humans are lousy at Predicting future events (no matter what models and heuristics that are used). In a follow up post More Predictions, From Bad to Worse another very good point was made:

Fact: Because the incentives to predict are quite imperfect — bad predictions are rarely punished — this situation is unlikely to change.

Excellent point! If someone makes predictions in the media, they should then be forced to prove that they are backing up this prediction with either money of their own, or give a punishment that they will take if they are wrong. This could make Stock Predicting a much more interesting game to watch.

Think of it, if I stood up and stated:

The Eternal Flame in Ottawa (not the Olympic flame)
The Eternal Flame in Ottawa

I think Internationl BuggyWhip Megabrand (IBwM) is a great investment, and they will beat the market, and to show my commitment to this statement here is a link to prove my purchase of 2000 shares of this fine stock AND if I am wrong (and the stock goes down in the next 3 months), I will personally stand naked on Parliament Hill next to the eternal flame on January 15th for 2 hours, as penance for being wrong.

You would think that either:

  1. I’ve lost my mind and need to be institutionalized. -or-
  2. That this is a great stock tip


Would it make me any better at stock prognostication ? No, but it might stop me from making outlandish predictions that I have little (or no) data to support my statements.

The next time someone predicts something, ask them what they are willing to do to back up their claim, then you’ll know how confident they are in their statement.

If anyone goes to the eternal flame on January 15th don’t expect to see me standing there.

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How do you write so much?

When I meet with my financial bloggers peers, what are the questions that they ask me? You might be surprised be surprised at the most asked question:

  • Why do you hate debt?
  • Why aren’t you taller?
  • Why are you called the Big Cajun Man?
  • Who’s that guy you are always seen with?

No, none of those questions came up (although someone did say they recognized me because I was so tall),  the most asked question for me was, “How do you write so darn much?” (note the question was not, “How do you write such great articles?”, quantity not quality).

The answer to that question is, “I have no idea“.

M.C. Escher’s Hand Drawing Hands courtesy Wikipaintings

Why the muse hits me is unknown, I write when I think of it:

  • I am writing this particular piece during a presentation at the Financial Bloggers conference.
  • I have written articles (or the core of them) during meetings at work
  • I have great ideas elsewhere (at basketball games, on the bus, etc.,) , and if I have a piece of paper I will scribble it down, because if I don’t I will forget it.

I realize that on occasion I take liberties with this podium I have created and pontificate about my life’s trivialities, but I end up writing about things that matter to me. I will be trying to write more “How To” or helpful pieces for folks dealing with disabled loved ones (financially), but I don’t think I will be changing what I write about a great deal either.

My guess will be that meeting with other writers, and hearing their ideas and opinions will create a backlog of posts (I wrote outlines of six of them on the train back to Ottawa), but I will try to spread those out over the next little while, as they are more about the business of writing.

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TD and Free McAfee

So I kept noticing on the On Line TD Banking home page a mention of protecting your computer with McAfee, and on Saturday I investigated further. The short answer is: yes, it does seem that they are giving away McAfee Anti-Virus if you are a TD client. I haven’t actually installed the “Free” software, but I have registered for it, and it does seem to be a real copy of the software (if anyone has done this, please leave me a comment on your experience).

At first blush this is a bit annoying (for me) if it is a real copy of the software, as I have already updated my software (now I got it very cheap on sale, but I still paid money, for something I could have received for free which always annoys me). No Alanis that is not Ironic, just really annoying.

The second thing that I noticed was that after I registered the software with my existing McAfee account, this “Free” software asked me to update my credit card information (since I let it lapse), and the “Free” subscription would not allow me to continue until I gave a valid credit card number with a valid expiration date. This seems odd to me since I am not paying for this “Free” software, so why do they need a credit card?

Why you may ask indeed, and after I finished the registration process the system noted (in a side column, where I might not have looked) that the “Free” software had Auto-Renewal set to ON, so that I wouldn’t lose my “security experience”. To quote George Costanza, “A HA!!!!!!!“, now I get why they wanted an up to date credit card, so they could auto-renew it some time in the future and charge me $75 for the year (also remember George’s comments about “… sticking it to me!”).

To stop the auto-renewal is a simple matter of finding the auto-renewal page, and turning auto-renewal to OFF, however, I would guess many folks who would not go looking for that (or even notice that auto-renewal was on).

Why does computer security software marketing tricks seem solely based on Used Car Sales and Carnival Games of “Skill” trickery?

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Success Sells

A favorite read of mine is The Pessimist blog, and this week they have a very interesting philosophical statement, which is nothing says Success like selling your “secrets of success” . The heart of the concept is that being over-confident in your own skills makes you seem much more successful (according to Forbes, the Kardashian effect). If you are a shameless self-promoter and over confident you will be successful (or at least appear to be successful).

success sells

After reading over many different posts lately for a lot of reasons (not just for the Carnival of Personal Finance), and I tend to agree with the concept that: Shtick seems to overrule Skill™.

I realize that most Leaders have a degree of Chutzpah or Brashness in them, but the number of “get rich quick” schemes out there clearly out strips the money to be made from them (except for the person selling the Get Rich Quick scheme).

How Do I Make Millions?

So the implication seems to be that you:

  1. Claim to be a financial Success
  2. Create a “methodology” about how you became “successful”
  3. Whore, shill, and sell this until the cows come home (with the correct legaleze disclaiming any claims that it actually works)
  4. Wait for the money to roll in
  5. Success!

Success is the result of this function, not the catalyst. Stay tuned I’ll need to start marketing: The BCM Make a Million Bucks as a Personal Finance Blogger™.

 

 

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Ten Things I have said that have Saved Me Money

First let me preface this bit of literary fun with my wife’s comment, “OH MY GOD, NOT ANOTHER Top 10 List!”, as you know that is normally my reaction, but sometimes I read yet another Top 10 list on the web and end up feeling I should ridicule this “cheap pop” writing technique used by far too many writers (including me), however this has saved me money.

Throughout my life there have been a few instances where I have said the right thing, and something good has happened. The most important time was when I asked Mrs. C8j out for the first time.

Top 10 phrases that have saved me money

saved me money
Top 10
  1. What is my price ?
    This should not work, but surprisingly, it has worked, more than once. I learned this from one of my first bosses.
  2. I can’t afford that price, sorry.
    Followed by me leaving, and many times this has worked. Buying cars this works quite well, but you must be willing to leave.
  3. That can’t seriously be the price, is it?
    I blurted that one out at the Future shop and managed to get a much cheaper laptop. The down side was that it was an HP laptop, which I have learned are not of the highest of quality (unless you wish to cook bacon on it).|
  4. What if I pay cash?
    This one rarely works, but it is always worth asking.   Cash is dying a slow death, so this one does not work as well these days.
  5. I know, Mr. Jones, he said I’d get a good price here
    Mr. Jones is a generic name I use, but in more than one instance I (or more specifically Mrs. C8j) has got the “friend of Mr. Jones” price, and it can be quite substantial.
  6.  I would like to close my account with {Bell|Rogers|Fido|Telus| etc.,}.
    This seems to be the only way I get discounts with any telephone, internet or cable supplier. If you don’t get to customer retention, you won’t get the best deal.
  7.  I am not paying for banking, if you won’t give me free banking, I will go to {PC | ING }
    That got me free banking many times, but it has been much harder to get free banking from TD these days. I got a full point knocked off my TD secured line of credit rate, instead.
  8.  {Say nothing simply wear a suit}
    This worked for me many times while traveling, I have been upgraded to business class or access to the business lounge for various airlines. Have no idea why this works, maybe I just look good in a suit?
  9. I am sorry officer I am an idiot, and just didn’t realize how fast I was driving
    As I pointed out in my post about talking nicely to police folk, sometimes not acting like a complete jerk when the police folk stop you, can sometimes be to your advantage.  In fact talking like a complete douche bag to anyone in authority or folks in the service industry will only put you in a much worse place than you were before you opened your mouth.
  10. Do I really look that stupid?
    Yup, I actually did say that when buying a phone, and also a couple of times buying other pieces of technology that I do know something about. It’s a form of intimidation  that you should use sparingly (because you do sound like a douche bag (see (9)).

Did this help you? Do you have other phrases you have used to save money? This has saved me money, but what have you saved money with ?

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