In reading a well-articulated yet unsurprising article on the eco-friendly sub-trends emerging in 2009 by TrenWatchers, I was reminded of a non-profit idea I had decades ago. We all throw out things we shouldn't. The VCR remote that has a single broken button, the microwave that simply had its turntable belt snap yet still warms food fine or the laptop with the broken screen. Naturally, the "repair vs. buy a newer better version" decision is one that we have traditionally chosen to favor cost over environmental responsibility. What better excuse is engrained upon consumers than "if it's broken, don't fix it. Buy a new one?" As we see the perils of this shortminded logic come to the forefront of politics, I can't help but think about a primitive idea I had. What if we could begin to explore repairing items and craftsmanship again in the United States and other developed nations? Why is it that we can't repair the microwave in today's day and age? Becauase it costs you $100 dollars just to have a technician (if one even exists in your town) look at your microwave, when you could buy a brand new one from China, albeit of crap quality that will fail in a year, with some new trendy feature of allure. I thought about this on my commute as my bus rolled past a TV and Electronics repair store, in shambled and definintely without marketing investment since the 1960s. Transistors and tubes anyone? I won't go into the obvious follow on costs that we as a nation are oblivious too when chosing to buy the new microwave: the cost of waste, removal, impact on the environment, lost service revenue and economic stimulus for the repair person, etc. I can hear the greed-driven counter argument from capatalism: if consumers were taught to spend less, how would that adversely affect the economy? Simple: it would hurt China's trade surplus and corporate shareholders, it would only help local consumers.

"We are living in a false economy where the price of goods and services does not include the cost of waste and pollution," Lynn Landes, Founder and Director of Zero Waste America.

Fact is, we are finally coming to terms with the 1980s "greed is good" lifestyle and the hangover is sobering. With less and less value creation occuring within US borders and as a result of true US GDP (hint: try adjusting our GDP for goods produced locally with local resources, very enlightening) we are simply siphoning the consumer spend out of this nation. Now, this is a gross over simplification of a long term trend towards globalisation, and taking advantage of labor price differences. The US auto-industry is a great example of our failures to capatilise on local resources and ingenuity. But I digress. This train of thought made me recall an idea about leveraging labor price differences in developing countries for the sake of good. Imagine the possibility that these often discarded yet serviceable goods were made availible for repair. Based off of the model of self-sufficiency, capatlist farming schemes used in Africa to teach economics to fringe villages, this method could be applied to harnessing the latent value in all things we typically call "garbage." Instead of filling up landfills, goods in need of minor repair could be donated for free to these trade schools and the students would learn vocational skills to repair these household goods: either selling the refurbished unit or simply donating to needy homes. Although a microwave may not seem necessary to the average sub-Saharan tribal villager, these goods could be of value to neighboring cities and metropolitan areas in poor socioeconomic standing.The students in return get vocational and business skills necessary for partaking in the global economy. Naturally, there are many hurdles: logistically transporting tons of microwaves and washing machines from other nations, funding for the teachers, incentivization for donations, etc. By no means small hurdles. However, at some point, self-sufficient agriculture is not going to be a feasible trade for villagers looking to enter society as whole. This could simply be another venue for value creation, fortunately out of thin air. Please, send your thoughts and poke holes in the idea. Its far from pefect, so I'd love to hear your thoughts on making it so.

If you've been following my tweets, one of the central concerns I had in November was the lack of concern around deflation, amidst worries of inflation. The financial media has turned around as has the http://news.yahoo.com/s/nm/20081121/bs_nm/us_usa_fed_bullard" target="_blank">mainstream. What's still troubling is the complete radio silence around how the $7.8 Trillion in total bail-outs are being appropriated at these institutions. An amazing statistic to back-up just how self-serving these taxpayer funded relief programs are is taken from a recent article about "good" news in the sector:

In 2007, bankers made a total of $38 billion in bonuses alone -- even though their shareholders lost $74 billion in stock market value. That's because their reported profits were fake. In the last few years the top nine banks have reported $305 billion in profits -- but since then they've taken $323 billion in write-offs.

Sad. It's obvious that the federal government didn't heed the warnings, and to top it off, the relief programs have yet to do address the investor. Sad, how unequipped the average hardworking American is to truly understand or have decisive factor in how these measures are created, used or approved. I'm sure if the average Joe knew that AIG executives were playing golf on taxpayer money there would be less support for such measures. Sad, to ponder just how much the average citizen will endure before actually changing, speaking out against the system. What will it take for reform? What message are citizens sending politicians, our leaders, if they accept intentionally complex economic justifications to rationalise the fleecing of citizens at benefit of greed? Sad, that the well-educated and infinietly more crafty sharks on the Street will undoubtedly outwit public servants responsible for protecting the public's investments. History repeats itself, once again. I simply hope that these events will server as lessons to citizens that personal dreams of realising Horatio Alger story of rags to riches is no reason to allow financial perpetraitors to exist. Plenty of developed nations have proven they generate wealth for the spectrum of their society's classes, without engendering a culture of hell-bent greed. Hopefully, the new guard can begin to change this culture on the hill. For more reading on this topic, I recommend an interesting read: John Perkins book, Confessions of an Economic Hitman. Surrounded by controversy, you're left to interpret this how you see fit. Conspiracy theories abound, but it brings to bear the motivations of a modern empire. As well, it's perhaps an enlightening reading for a citizen who has not personally come face to face directly with flesh and blood foreigners, outside the protective cocoon of American mass media, and misinformation. I , as well as Perkins, was amazed by how well educated and politically knowledgeable indigenous tribes are about current affairs relative to "civilization." I was shocked when I visited a tribe in the Fijian highlands in the Christmas of 2001 and was engaged in deep conversations surrounding the attacks that September. In closing, I draw from an telling quote from Perkins in his prologue, in which he is confident that:

Once enough of us become aware of how we are being exploited ... we will no longer tolerate it.

I too belive that awareness is the key. I have no doubt the majority of man is goodwilled, we simply need to take ownership of our actions and assume personal responsibility for being an informed and well educated society. From a technological perspective, we are seeing how the erosion of information advantages and democratization of media has delivered serious blows to the current corporate regime. As a tecnologist, I have no doubt that the various spiritual and societal references to the "collective conscience" is indeed currently being supported by the knowledge sharing and awareness brought about by the internet. My, just look at our President Elect.

After what many would assume would be the lowest point we'd expect to hit in the Dow, hitting the 7,000 mark for the first time in ages, I'd beg to differ. Long time bell-weather of economic resilience, consumer and retail spending in the holiday season is in jeopardy. With BestBuy in anguish, Circuit City filing for bankruptcy and holiday sales expected to slow for the first time in 25 years my prediction is that we have not yet hit a bottom in economic angst. All the bears need is to see the actual results of retail spending to drive the Dow down below to 1980 levels, and it's shaping up to go that direction given the fact that even American Express is seeking protection by converting to a bank to take advantage of the TARP scheme. Maybe every company with debt should consider becoming a bank... Still, the market overall is going to psychologically be swayed by consumer fears about the upcoming retail season. I've yet to see any indication of how the federal financial bailout plans are doing anything to protect the consumer who is ultimately paying the bill twice, once in lost homes and second in tax hikes to offest the debt. In what could be one of the greatest acts of corruption-fueled-socialism in our modern era, the bailout plans have been kept Guantanamo secret for one reason: the administration doesn't want anyone to know how the money is being used, because in reality, its a raw deal for average citizens. The financial institutions are paying themselves, and the government is ignoring the consumer.I'm still shocked how in a government so god-fearing and anti-socialist that more citizens haven't raised their hands to comment on the nature of the bailout as being completely socialist in it's nature. Even more troubling, is that it is practically an dictatorially decided, purely elitist-benefiting move that is socially funded. Read: the rich stealing from the poor. This is taking the government back some 600 years to the level of paying tribute to the royal kingdom. It escapes me how the government can endorse unsafe financial practices in the first place, and then further endorse those actions by providing more cash to the institutions responsible for the meltdown. In effect, the government is rewarding the actions of shady executives meeting at luxury retreats and ignoring those with true problems: the average consumer facing the reality of the downturn. Where are the foreclosure freezes? The interest rate freezes? By siding with the banks, it's as if the government is blaming the uneducated masses for being conned into junk debt. It's everyone's responsibility to be an educated consumer, but in extreme circumstances as we are in now, if the government doesn't side with the people, who will? And, what will happen in the next bubble in seven years? What scheme will Wall Street use to shill the moms and pops around the country next time? It seems like people never learn to distrust the Street.

Interesting how just weeks ago, before the fed rate pause, analysts were hammering Apple's price target down to 60. Some even had worse sentiment not mentioning, becuase it simply shows how narrowminded analysts can be. In fact, I love playing against the analysts advice. I love gaming analysts. Opportunity is found in what the market is not paying attention to, or has got all wrong. I ask myself if any of the analysts assigned to Apple even own an iPod or really are inspired by the business model, the process, the creativity. One of my biggest rules to investing is to only invest in tangible companies: one's you have first experience with, be it on a consumer or professional level. I guess I can't blame the analysts, as they have to play risk-averse ball in order to appease the masses. No one wants to lose their retirement on tech (again) right? I don't have to play no contact, however, and if the anlaysts had picked up on the subtle clue in the quarterly report given by the Apple CFO that the iPhone was indeed a reality, you could have caught Apple at low 60's. Now, Apple does happen to be up 8% in two days

since the announcement of the iPhone, and the analysts are of course, upgrading after the stock has already gone up. Thank the analysts when the stock pulls back as most would after such a rally (hint: if I bought Apple at 50, its recent 52 week low, I would consider selling at 72, lest I be considered greedy. You can't beat 50% in 3 months on a blue-chip). I set my target price for Apple at 75. I'm going to play hardball and ride it out to 85 just to save commissions on the sale. I strongly believe in setting targets for stock plays, as opposed to Index funds. Set a goal, score and go home. Don't expect lightning to keep striking in the same place indefinitely. Same goes for any gamble. That's why I've never lost money gambling. I wish I could say the same for the stock market. :) And yes, I'm even more excited about the iPhone! My mobile contracts about to expire and my beloved SE t610 is on it's last legs after 3 years of dutiful service.

Whew! After the Fed maintained rates, the market finally grew some confidence, replenishing support levels for several of my long positions. If you've been keeping track, I went long on Whole Foods (WFMI

) after it fell from 64. I dug deeper at 55 and even at 47, after the stock went through a cyclically enforced multiple contraction: basically, Whole Foods' stock was expensive relative to other peers in the food industry, such as Safeway and Krogers. It's PE was up in the 50's, while the competitors were half that amount. Hence, in a time of economic uncertainty, investors will not pay for stocks that are at a premium to earnings - in fact, those who are risk averse will actually short these positions and reap the earnings thus far, subsequently dropping the share price for others. Now, as I learned with Apple, high profile stocks with high multiples are very market sensitive, and are the first to fall to cyclical impacts. However, despite my humble and limited experience, I have learned that staring at chart prices is a complete waste of time - as you are not looking at the long term prospects. The question I asked myself when Apple tanked from 60 to 50 the day after I bought it, was the same question I asked with Whole Foods fall from 64 to 47.

Did anything about the underlying fundamentals of the business change?

The answer was no. Did the competition overtake? Did the company make a poor fiscal choices? Did management jump ship? Did any experience on a consumer level hint that the jig was up?

No.

So what's the explanation? Most investors, I'd hate to admit, are not looking at the long term. Long term wisdom is rare and it defines a successful investor (or gambler, for that matter). If you know something the market doesn't (or doesn't want to listen to because they are being emotional) then you have an edge.

I've learned it's a rookie move to bail on a stock (or mutual fund) if for only the stock price drops. Sure, this sounds obvious. However, you'll never truly know how it feels untill  you have a sizeable position, lets say,$10,000 in a fund, and it depreciates by $3,000. This happened to me with  Vanguards International flagship (VTRIX

). It's doubled for me in the past few years thanks to expansion in emerging markets, so when I lost almost 60% of that growth in this past May's bleeding, I panicked and I sold. Man, I have a knack for selling. Would you believe I sold at the absolute low, the trough at 35 before it immeidately ran back to the 40's?

Sweet. Selling actually cost me that $3000 I earned. Had I sit tight and researched more before pulling the trigger, I would have realized the truth behind my newest favorite saying:

Selling does not erase the loss. If it's down already, hold ship.

If you think about this, this strategy is (practically) infallible in the long term. The stocks will rebound just by the nature of economic expansion, even if by just accounting population growth. In other words, for one to state the market will not rebound (or grow) is not have confidence in economic expansion, period. In which case, we have a lot more to worry about than the market.

Selling should only be qualified by a change in fundamentals, market cycles or ... selling into strength. As in, you've made sizeable gains, and it doesn't pay to be greedy. Even the best play will sour at some point, when the big boys call the game over.

Now, having learned that lesson (from hard-learned experience, not just from a book), and the lesson of Apple, I applied this to Whole Foods. Did it bounce back from 47? Yes, its at 55 now. Why did I buy? Becuase the fundamentals didn't change from the time I bought at 64. Yes, the market was not favoring the stock in this cycle, but cycles come to a close. When the economy rebounds, Whole Foods will be dramatically undervalued. I've already made 18% on the play at 47. When it rolls back to 64, I'll have made nearly a 50% gain on the 47 buy.

All this tells me is that I bought WFMI too early. Sure, easy to say with 20/20 hindsight. Did I research? Sure, in fact it was down from 80, so 64 seemed like there was a misvaluation. Truth be told, this is my first market cycle to contend with, and I need to ride them out a few times to place my bets at better times.

Such is the fun of investing.