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$750,000 pounds! $500,000 pounds! $891,934 pounds! How could I be so lucky?

In the weeks surrounding christmas and new years, I received notification that I had just won three jackpots in the uk lottery system. Each one asked for my contact information but none asked me to send money or provide my own bank information. Two gave a specific lottery ticket serial number.

Here are the three emails in the order which they were received.

From:”End Of Year Promo”
To: ..@sympatico.ca

You have won £750,000 GBP. confirm by
Sending name,address,country to,

MR..ADAMS CLAY : icwinservice@btinternet.com

—————————————————————

From: “BRITISH LOTTERY DEPT”
To:info@winneronline.co.uk

BRITISH LOTTERY6/49,P O Box 1010, 3b Olympic Way,
Sefton Business Park, Aintree, Liverpool , L30 1RD
Customer Care Line: +44 70359 28475

FINAL NOTIFICATION
We are notifying you on our end of year Online Draw held on 21/11/08,
where your Email emerged one of the two lucky winners who won the first
prize of a total sum of 500,000.00, from a total payout prize pool of
8,075,997.00 in our Online Lottery Draw.Your e-mail was attached to Ticket
no:025-1146-1992-750, Serial no:2113-05, and REFNO:BRLFGP2541206/08.

You have been selected for a cash prize of 500,000.00 (Five Hundred
Thousand Great British Pounds Sterling). The selection process was carried
out through random selection in our computerized email selection
system(ess) from a database of over 250,000 email addresses drawn from
which you were selected.

To begin the processing of your prize you are to contact the payment bank
for more infomation as regards procedures to claim your prize.

Contact the Royal Bank Of Scotland for payment with details below:
Bank Name: Royal Bank Of Scotland
Contact Person: Hamilton Reeds
Email: rbsremittance.deptuk@national-champs.com
Tel: +44 704 572 0345, +44 703 197 3826
Fax: +44 7075 0245 54

PAYMENT PROCESSING FORM:
(1) FULL NAME:
(2) FULL ADDRESS:
(3) NATIONALITY:
(4) AGE:
(5) OCCUPATION:
(6) TELEPHONE NUMBER:
(7) SEX:
(8) TOTAL AMOUNT WON:
(9) COUNTRY:

NOTE: *Winners are advised to keep their winnings confidential to avoid
Fraudulent claim (IMPORTANT) pending the prize claim by Winner.

Sincerely,
Stella Roberts (Mrs).
CORDINATOR.

—————————————————————

From: “The United Kingdom National Lottery”
To: undisclosed

Message Title: CONGRATULATIONS!!! ** JACKPOT JOY WINNER

The United Kingdom National Lottery wishes to inform you that the results of the E-mail address ballot lottery international program by Great Britain held on the of 3rd January. 2009. Your mail account have been picked as a winner of a lump sum pay out of Eight hundred and ninety-one thousand, nine hundred and thirty-four Great Britain pounds (£891,934.00 pounds sterling’s) in cash credited to file REF NO.REF:UKL/74-A0802742008. please contact your Claims Agent:

Mr.Mark Cole.
Email:cgnlgroupwinsdept-uk@live.com
CALL NOW: +44-703-192-1861

KINDLY FILL THE VERIFICATION FORM
1.FULL NAMES:__________
2.Sex:________________
3.ADDRESS:____________
4.City________________
5.State_______________
6.Postcode____________
7.Country_____________
8.Tel_________________
9.Nationality_________
10.Occupation__________
11.Choose your claims option. (1)Courier Delivery (2)Bank Transfer

Mrs. Dianne Robert.
Online Coordinator,Operator of The National Lottery.

Mr.Mark Cole.
Email:cg

—————————————————————

Strange that each one provides a different contact person and none asks me to provide my own bank information or for me to send them money. Then this would be like the Nigerian scam which claims that a huge amount of money is locked up in some bank and that they need you to help them get it out. In return, you get a portion of the amount after you have given them some of your own money.

After some digging around, I have found that the above emails are all fake. It was surprising to see how pathetic the first one was. I responded by asking for the contact info on the governing lottery organization. Hence the next two I received contained full details yet I couldn’t understand why one of the questions they asked me to provide was the amount of my winnings. This in itself seems rather obvious. I also found that in each case the contact info or email addresses which were of legitimate people as found on the web. However no one has responded.

Many people have made fun of George Bush over what has come to be known as Bushism. That is his botchery of the english language. Here are some of his famous quotes throughout the years.

-”The fact that they purchased the machine meant somebody had to make the machine. And when somebody makes a machine, it means there’s jobs at the machine-making place.” - May 27, 2008, in Mesa, Ariz.

- “This thaw - took a while to thaw, it’s going to take a while to unthaw.” Oct. 20, 2008, in Alexandria, La., as he discussed the economy and frozen credit markets.

-”Thank you, Your Holiness. Awesome speech.” April 16, 2008, at a ceremony welcoming Pope Benedict to the White House.

- “Our most abundant energy source is coal. We have enough coal to last for 250 years, yet coal also prevents an environmental challenge.” - April 20, 2005, in Washington.

-”Too many good docs are getting out of business. Too many OB/GYNs aren’t able to practice their love with women all across this country.” - Sept. 6, 2004, at a rally in Poplar Bluff, Mo.

-”There’s no doubt in my mind, not one doubt in my mind, that we will fail.” - Oct. 4, 2001, in Washington. Bush was remarking on a back-to-work plan after the terrorist attacks.

I can picture Will Ferrell doing his George Bush impression on a SNL skit using these phrases.

I was waiting for this to happen. After the recent market rally during new years, I knew that eventually reality would set in and people would soon see the light. The dark light that is.

Looking at the chart below you’ll see that this morning at the opening bell the share price of Chinese search engine Baidu (BIDU:NASDAQ) takes a leap down.

I’m using the 60 minute chart to play the short swings in this highly volatile stock thanks to the current economic climate.

Chinese Internet Search Engine Baidu

So why did it drop? Well as I had said in an earlier post, a lot of bad news was going to start coming out after new years. This list is already quite long despite the positives out there. That being the huge bailouts approved by the US government for the autosector. Unfortunately yesterdays news is just that. The majority of the rest of the news starting just two days ago goes like this.

• Alcoa announces layoffs of approximately 15,000 (13%) of its total worldwide workforce and cuts production again.
• Hang Seng Index drops 522 pts in China over night.
• Marks & Spenser cuts 1239 jobs
• Woolworth files for bankruptcy leaving 27,000 jobless
• Bank of America sells it stakes in China Construction Bank
• Intel lowers 4th quarter earnings again.
• Satyam computers says that its financial statements have been cooked for years. Indian market drops over night.
• Toyota Japan announce temporary factory shut down in February and March.
• Private sector job loses 693,000 in December. Well above the 476,000 lost in November.
• Car sales in China shrinks and GM can no longer depend on China to support sales.
• Even Jim Cramer gave this stock the boot for reasons which I don’t completely agree but nonetheless, the end result will be the same.

With all this in mind, the chances of Baidu or any stock continuing its trend upwards is quite small in the short term. Therefore we buy the Jan Put option for Baidu with a strike price of $120 at market open.

Oh and technically speaking(referring to the chart), we got a negative crossover on the MACD graph and the RSI got into the overbought territory. This means the previous MACD trend is over for now and a new one in the opposite direction will start. The RSI can be thought if as an elastic band. If you stretch it too much, it’ll snap back.

If you’re out of a job and have always enjoyed suspense spy thriller movies or watching CSI and the like, you might want to consider applying to work for the FBI. This week the Federal Bureau of Investigation has begun a hiring spree as they are looking to fill 2100 vacant professional staff positions and 850 special agents. More specifically, they are looking for computer specialists, financial experts, intelligence analysts, and language specialists. They also would like people who just want to help protect america.

Wouldn’t that be cool to go around flashing that badge investigating cases or have I been watching too many movies? It would be like living a CSI life. Just keep all the horrific violent stuff off my list of files to look at though. Side-arms issued upon acceptance of position.

Is there still a special unlisted section which investigates extra-terrestrial phenomena?

The new year is now here and it’s already time to start thinking about taxes and rrsp’s. Actually I only started thinking about it because I just ran across an article from canadianliving.com which was reran on the lifestyle.sympatico.msn.ca network. In it David Trahair argues why one should not bother with an rrsp program. His argument is valid as I have stated in a previous blog entry of my own.

When it comes to banks and especially banks recommending to clients investment and savings products, the person telling you what to buy or put your money into generally doesn’t know what they are doing. They are paid to sell their product and the bank and possibly your investment advisor or fund representative earn a commission. Everyone else but you gets paid for their services regardless of how good or bad they manage your money. In the end, you are left holding a bag of whatever is the end result of what they have gained on your behalf or completely obliterated.

The only thing of true value from your advisor is their initial explanation to you on the levels of risks associated with each type of fund you purchase within your rrsp plan. That is, discerning the difference between buying pure equities as opposed to sticking with conservative income funds such as bonds and treasury bills.

But getting back to the main point, while it is true that simply dumping money into an rrsp account and taking your banks suggestions on what to buy is supposed to be enough, I believe that you still have to manage your funds personally on a regular basis and become educated on it. Unfortunately, this can be a rather time consuming task and for the most part, counterproductive if the individual does not take pleasure in such activities.

I saw a television documentary which discussed the merits of having a 401k plan. This is sort of like the american equivalent of the canadian rrsp plan. I forgot the name of the program for proper reference but in this one hour long episode, a state examiner studied the track record of hundreds of thousands of people who had enrolled into the program and looked at their performance. What he found was the following.

• that only the higher salary earners tended to maintain a high return of rate year over year and build their portfolios into million or multimillion dollar retirement levels which the programs claim to provide.
• in specific cases, it was found that these higher salary earners also tended to be more educated and spent more time managing their accounts.
• the vast majority of 401k contributors were not able to obtain a descent level of return on their investments and would eventually retire with insufficient funds. This could be anywhere between $45,000 to $130,000.
• In specific cases, the lower income earner had to go back to work because their savings and benefits was not enough to provide for a general life expectancy lasting into the late eighties or nineties. And this is before the current financial crisis had taken into effect.
• The 401k program was initially written in as a loophole for one company and its executives to avoid taxes from the government in the early 1900’s. During that time, the government didn’t really know what to do but it wasn’t odd to frequently add in clauses to serve unusual circumstances or specific parties. This clause eventually became de-facto in what we now know as the 401k in the United States.

The 401k plan has become more of a marketing ploy by investment funds through large workplaces as employers were able to get employees to sign up because the companies began making contributions as well. So if you were in a large company and didn’t know what to do with your savings or had no savings program and your employer told you that they would help you by providing access to these products whereby investment funds came to you in your place of work, all would appear to be good. Unfortunately, those funds will simply take your hard earned money, use it to fund other peoples ideas in the marketplace, and you are left to bear the final outcome whatever it may be. It’s just another way for them to borrow money from you at your expense without going to the credit market.

Here’s another key point to remember for the average person. When was the last time a bank or mutual fund company called you up and told you, “we advise that you sell or redeem your share in abc mutual funds”. The mutual fund managers may have cashed out a large percentage of the portfolio and put it into cash while others who are more aware may have already sold their shares causing the value of what you have to continue downwards. The only time I have heard of this is through people who have direct contact with their investment managers on some sort of personal or business affair which in all fairness is what one could say that a capitalistic society is based on. The other is just human nature.

The other day I saw an article where HSBC investment advisors were criticized for selling JPMorgan securities (I can’t remember which form) when many knew the securities could be worthless. As a professional advisor, HSBC responded by saying that they simply sell the product but do not advise on the value or reliability of those securities. Yet in their own advertisements, HSBC claims to want to provide investment products built on good relationships. What kind of a relationship is that?

Remember, an RRSP plan is only good if the returns on your investments are good as well.

Beautiful crystal flakes fill the air and cover the ground in a blanket of feathers. The temperature drops down and so does everything else. More and more companies announce layoffs, postpone projects, cancel projects. Retailers hope for the rush of xmas shoppers when the weather steps in to trap people at home. Forget the shopping. Forget the materialism of the holidays. Dash the hopes of retailers as everyone spends the last weekend before xmas digging out of their neighborhoods and playing in the snow instead of looking for deals. Who can shop when they’ve lost their job and don’t know if they’ll have a job after xmas. How many more companies will announce cutbacks on January second?

Kodak filed for bankruptcy on Friday.

Electronic Arts announced it will close the software company Black Box in Vancouver last week. That’s ten percent of its total workforce worldwide.

The canadian government just announced 4 billion dollars in aid to the canadian auto industry. Nobody kept the public current with minute by minute reports on the dire condition of the canadian auto industry as it is in the states thus building up the hoopla surrounding the whole situation. Car manufacturers also announced extended factory shutdowns this month.

Real estate prices have already begun to fall in Vancouver. Mortgage defaults have begun here in British Columbia and I know of people who bought into the market earlier this year and are now fretting on how they are going to get out of their impending predicament. All the reports of how strong the canadian banks are was just a false impression given to canadians so that we do not panic. Fact is, many people in Canada were given mortgages which would not hold in a falling market. Therefore the exact same thing will happen in Canada as has happened in the states. It’s just taking much longer and with much less publicity.

Wouldn’t it be nice if everything could just be put on hold to allow everything to just settle down for a bit. Meanwhile, snow has begun to fall outside. A lot of it.

A couple of months ago, canadians were wondering why we were being forced to go to the polls for an election when Prime Minister Stephen Harper was just elected not too long ago. In fact a little over two years. I didn’t realize this but in Canada, there is no set length of term. Stephen Harper can hold his position for the rest of his life if he was able to. Nonetheless, despite the recent powerplay election to gain majority in parliament, it is looking like it may be all for not as the minority parties have announced that they will group together to take on the prime minister’s party. What appears to have started all of this is the prime ministers plans to cut back political funding which all the other parties needed for elections and promotions. Without this, I suppose no party can survive. Marketing is everything. No ad campaigns. No party recruiting stations. It’s like the life blood of a minority party. Push comes to shove and canada now has a coalition party. Could this be Stephen Harpers shortest second term? A little over two months?

I think the days of high valuations for company stocks are probably over. Especially for high tech and the internet. Share prices based on company valuations are all but thrown out the window when fear takes over. Run for the hills! Save yourself! Every man, woman and children left to fend for themselves.

Chinese internet search engine Baidu was sort of just humming along barely keeping its head above water for a number of months when news broke out of its less than onerous business practices. That being selling and promoting ad placements for unlicensed medical companies in China. Now they are also being accused of blocking out websites of companies who did not pay for keyword ad placements in favor of licensed or unlicensed paying companies. A class action lawsuit has already been filed.

Share price of Baidu is pretty lofty with a price to earnings ratio of around 29. Even google isn’t that high and is falling. Baidu will probably fall down to the eighties if not more. No matter how little or small the damage is from everything that has been said in the news, all the market needed was for a single straw to be broken and that straw has been broken.

So how do we as the ‘investor’ profit from this? We short the stock. In a bear market, we need not always look for stocks that are going up. We can go with the stocks going down too.

Today I was asked to host the family business for the annual company christmas dinner. The staff had already gone ahead and decided on a day for the dinner. The problem was that the official family rep couldn’t agree with the date and I didn’t want to take his place. Why? Well its not really my place. So the staff already gets union rates with all their perks and bonuses so I don’t hold that much sympathy for them as far as giving them more bonuses on top of whatever the unions have already negotiated for. Also as a partner in a family which owns the business and has already donated many hours of our own time without similar compensation, I feel that it is a good time we make the staff do the same. If not for just one meal.

I just read an article which said that the number of donations to the food banks this year has dropped and I would venture to guess that donations at most charities of any kind will probably drop as well. I met a person who works for a charity recently and everyone there is already talking about expecting a fifty percent drop in funding this year. As a business owner I know that paying for a xmas dinner can build employee esteem but so should having everyone know that they are contributing to a worthy cause supporting struggling people within their own community. I just sent the suggestion to my partner. I will probably find out tomorrow how much the staff either object or like the idea. However I think if it is presented correctly, then there shouldn’t be much problems in gaining acceptance.

I filled out an application to become an Olympic torchbearer in vancouver for 2010. In the application, you had to specify some meaningful contribution to the community or world at large. I had chosen to donate food.

My friend asked me this question the other day and in normal times the answer would seem to make sense. However in the current economic environment, what investments would you want to risk your money on regardless if it is in or out of a tax shelter?

There are three reasons people should maximize their registered retirement savings plan contributions during tax time.

1. All contributions are tax deductable.

2. Deferring the income allows you to declare it when it is withdrawn later on in your life when your income will be lower since you will probably be retired. This means that it should be taxed at a lower rate.

3. Money in an RRSP grows faster because it is tax sheltered. Contributions grow faster because it doesn’t have to lose part of its gains every year to taxes. The retained interest or gains is then allowed to compound completely.

As I said in the beginning, this would be good in normal times when trust funds and stocks would have much larger returns than boring old GIC’s and term deposits. Today a number of sites came out with Berkshire Hathaways spending spree in the recent quarter. America’s wealthiest and probably the most well known investor has been busy buying and increasing interest in a wide spectrum of stocks. From Coca Cola, Bank of America to Conoco Phillips. So thats consumer goods to banks to major oil.

Referring to market psychology, when everyone is most fearful and bailing, the smart investor is brave enough to dive back in and buy. It appears that Mr. Berkshire Hathaway firmly believes that the market is basically at the bottom.

With this in mind, hopefully people will still feel confident enough to keep contributing to their RRSP’s if their income allows them too.