Thomas Hawk

Member since: Oct 31st, 2005

Thomas Hawk's Latest Comments

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Recent Comments:

Announcing some changes at the top (Engadget)

Jun 8th 2007 11:50PM Congrats Ryan!

Hava wireless place-shifter reviewed (PVR Wire)

Oct 6th 2006 1:39PM It seemed like the article was written saying this thing is great for the Media Center PC. Why not just use Orb for free with the Media Center?

Does O'Reilly own Web 2.0? (Download Squad)

May 26th 2006 1:13PM Get your own "Tim O'Reilly, Original Web 2.0 Asshole" graphic here:

http://www.flickr.com/photos/thomashawk/153656919/

It's Creative Commons licensed and all, feel free to use it all you like!

Memes - Doing the Wave in the Blogosphere (Blog Maverick)

Mar 29th 2006 8:06PM Ok, so being (one of?) the bloggers who pissed off Mark Cuban with the four things meme in the first place I couldn't resist the following: http://thomashawk.com/2006/03/anti-meme-memes-in-my-rss-reader.html All in good humor of course. wink, wink.

TiVo Series 3 HD DVR in beta? (Engadget)

Feb 16th 2006 11:03AM Koz, it's not about them screwing over DirecTV. Nobody would like to have this product support satellite than TiVo. The issue is the encryption of the HD signal. As this product is CableLabs certified it allows them to unencrypt the HD cable signal via CableCARD. There is not a CableLabs equivalent with the satellite providers, per se, but they would need to make their HD stream avaialable to this device in order for it to work with satellite.

Just speculation on my part but I suspect that you may actually see this in the future. Sean Alexander over at Microsoft has already blogged about that fact that DirecTV will offer an aftermarket support product which will allow new CableLabs approved Vista PCs to record high def off of DirecTV. I would suspect that DirecTV (and possibly DISH?) might offer similar aftermarket support products for TiVo Series 3.

DirectTV does not want to lose customers to cable for everyone who buys a Series 3 TiVo. The technology is already there to do this as is evidenced by the current DirecTV quad tuner TiVo box. The difference is that that is a proprietary DirecTV box whereas this is a standalone product.

It will be up to DirecTV to decide to create an aftermarket way to support this TiVo unit, but it would not surprise me if we see one. This is based on no personal information that I possess, but just speculation on my part based on what Microsoft and DirecTV are doing.

The Stock Market is for suckers.... (Blog Maverick)

Jan 4th 2006 3:45PM Robert. 1. If you buy a low cost index fund it does the same thing as the index. 2. If you buy a basket of stocks roughly correlated to an index irrespective of what gets dropped or not you will approximate the index return irregardless. To say if you had bought and held the original stocks that made up the original basket at any point in time you would have been slaughtered is a gross overstatement and the empirical data does not support it -- at least historically. This is not to say the stock market is a good or bad investment going forward but you would be hard pressed to show a negative performance of any basket of original stocks over any 30 year rolling period in the last 75 years.

The Stock Market is for suckers.... (Blog Maverick)

Jan 4th 2006 12:22PM Oh and one final thing. Back to the inevitable need for cash and liquidity, rainy day, etc. For those of us that own homes you can always get a home equity line to hold you over for any short term tragedies. Let your home equity line be your safety net (not to withdraw and spend and abuse by the way) and instead of having all that money sitting around in cash for your rainy day the next 20 years put it in something with better growth potential. And speaking of real estate. Now THAT is something I'm really scared of right now. But every American should strive to own their own home.

The Stock Market is for suckers.... (Blog Maverick)

Jan 4th 2006 12:16PM Oh and one other point. On your interest bearing CDs and the what not you are taxed at full ordinary income rates EVERY year. For many of us that means giving over a third of our investment return to the government. On a buy and hold stock portfolio with a tax loss harvesting strategy as outlined above your taxes are zero on your unrealized capital gains each year. In fact you get the benefit of a $3,000 DEDUCTION each year. And your dividends (what little of them there are) are taxed at a more advantageous 15% dividend rate vs. ordinary income. And (at least under present tax law) when you do realize that large built up gain over the next 20 or 30 years you would not only be receiveing a great tax deferral but you'd be eventually realizing your gain (again based on tax law today) at a more tax advantaged 15% rate.

The Stock Market is for suckers.... (Blog Maverick)

Jan 4th 2006 12:05PM Thanks for replying Mark and I appreciate your thoughts very much. The good news is that hopefully you and I both will be around in 20 years and we will be able to revisit this post and review the results of having invested money in a low cost diversified basket of stocks vs. short-term interest bearing accounts. Heck for kicks we'll come back in revisit it in five years even though five years is more luck than investing. I do honestly believe that if two people invested an equal amount of money in any of several diversified approaches to the stock market vs. ordinary interest bearing products that in 20 years the one with the stock market investment will come out ahead. Certainly there is loads of statistical evidence that will show that this has historically been the case, but as well all know past performance is not indication of future results and as such we must look forward. In your post you say, "You can have as long a term horizon as you want, but like most other long term plans we have, most peoples lives don�t match up to their �horizons�. It�s amazing how life intervenes. Kids, whatever. its a fortunate few that can just shell it away and never touch it. Your �horizon� hits a dead end when you have to put money into a checking account." How very right you are. But also how very wrong you are as well. Every year millions of people die and leave money to their heirs. Ordinary middle class people die with money in their IRAs every single year. The truth is that most middle class working people never do completely run out of money. They never hit rock bottom. Although some do, most never invade their IRAs and 401ks and many will in fact either use these funds for their actual retirement or end up leaving them to their heirs. Most of us are hard wired to survive and rather than actually run out of money we will change our lifestyle, budget, etc. -- most of us. Even with kids, many of us save through 529 college savings plans, invest money away for our children's future college education, still save for retirement and work to build more for the future. Perhaps the biggest danger to one's long term financial health is an over concern about the need for short-term liquidity. The fear that, as you write, we will need to put our long term money into our checking account any day drives millions of Americans each year to keep money in low interest bearing accounts (much to the pleasure of the banking establishment) for that inevitable rainy day when they will need the money. For many of us that rainy day never comes. For most of us actually that rainy day never comes unless we have serious financial hardship near the end of our lives when we can no longer work. When you invest in the stock market you are not investing in a ponzi scheme, you are investing in businesses. You are investing in (hopefully) smart management teams building products or offering services that people will need and want and doing so profitably. Despite the rash of unprofitable companies coming to market and failing earlier this decade, most companies in the S&P 500 do actually make money. Perhaps the most basic gauge of the valuation of these businesses is the Price to Earnings ratio. Over the course of the last 20 years, the Price to Earnings ratio on the Standard & Poor's 500 has averaged roughly 22.96. That is to say that most large stocks have been valued at roughly 23 times what they earn each year. The high on the P/E ratio was on March 29, 2002 when it was at 62.74. The low was on November 30th 1988 when stocks traded at 11.59 times earnings. At present the P/E ratio on stocks based on last year's earnings sits at 18.47. Based on next year's perhaps overly optimistic estimates the P/E ratio on the S&P 500 sits at 16.62. These ratios are on the lower rather than the higher side of the 20 year average. You mention Warren Buffett by the way. And yes, it would be nice if we had the kind of capital that Buffett did and could open the business doors and opportunities that he can. More than anything though the key to Warren's success was the fact that he loaded up on the stock market when the P/E ratio of the market was low. When the P/E on the S&P 500 was at six in December of 1974, whooo hooo, what a time to buy! By the way, if you want to invest alongside Buffett (and not a bad strategy by the way) it's pretty easy actually. Where is $42 billion plus of Buffett's money today? In Berkshire Hathaway stock (a reasonably diversified baskets of among other things common stocks). Even if at $89,990 per share his class A shares are too expensive for you to buy, you can still buy his class B shares (which will provide an approximate return) for about $2,985 per share -- and it's ok to buy even only one share. You ask, "Lets say you buy into what the brokerages and funds are selling. Buy and hold, or whatever. How do you pick from the 17k funds ? By reading some websites ? By talking to some friends ? By watching the commercials ? By selecting among the options your company gives you in their plan ?" This is a very good question. There are several low cost ways to invest in the stock market. Vanguard has a wide variety of low cost index stock funds that allow you to buy the market. The Vanguard Total Stock Market Index is one place to consider. Recent offerings by iShares also offering comparable low cost ETFs. Perhaps the best strategy though (if you have a large enough nest egg to use it) is to simply collect, buy, and hold a widely diversified portfolio of common stocks. Your stock portfolio should be roughly representative of the sector and market cap weightings of the total stock market and no any one individual position should represent more than 4% of your portfolio. When energy stocks run up and energy becomes overweighted in your portfolio, don't put any more money in energy stocks until it become underweighted again. Instead look for what's been down and add your new investing dollars and capital there. Why is it to your advantage to own an individual stock portfolio over a low cost index fund or ETF? Because you can manage the portfolio for tax advantage better and also a zero management fee is even better than a super low management fee (such as the 16 basis point fee that Vanguard charges on their flagship S&P 500 fund). If you follow a buy and hold strategy your commission expenses will be minimal and there are many places to get discounted commissions yet today. The tax advantage is derived in a couple of ways. Rule number one. If you buy a stock in your IRA or 401k don't sell it until you have less than 10 years before you'll be spending the money. True buy and hold. For every stock that you buy that crashes and burns another that you buy will truly surprise you with a 400% return. Don't try to be smart and outpick the market just hang on. With your taxable account on the other hand, sell every stock that you lose 10% or more in -- irrespective of how you feel about its prospects going forward (remember, we are buying markets and need to avoid human emotion). By systematically selling your stocks when they decline 10% you will effectively be tax loss harvesting your losses. At present you can deduct $3,000 a year on your tax return every year (that never expires) that you have losses to use and you can also push these losses forward to future years when you will eventually begin selling off your stock portfolio to take the money out and live on it. Your stocks that don't decline 10% in your taxable account? Begin selling them as you will need the money in the next 10 years. In effect what you will done is built a giant tax deferred portfolio giving yourself a $3,000 yearly income tax deduction from your losses. (unrealized gains are not taxed until you realize them). Of course if positions begin to do so well that they become greater than 4% of your total portfolio the

My Investment advice for 2006 (Blog Maverick)

Jan 3rd 2006 12:56PM Mark, while I can appreciate the honesty of your opinion in your advice I do think that you may be potentially steering people the wrong way. Certainly trading stocks (and especially at high fee brokerage houses) is not a path to riches. But there is something to be said for someone with a long time horizon (30 years plus) holding stocks as a long term investment. I worry that people will see the endorsement for under 5 year fixed income products and conclude that this is right for them when they have many many years before they will be touching their savings. Even if you bought into the market in 1968 (when the Dow traded down and didn't recover to the same level until 1980), you were still better off if you had 18 years on either side of that 12 year stint. Sometimes when things are the worst, for a long term investor dollar cost averging into the stock market makes sense. Also the tax treatment of capital gains and dividends associated with equities is at present superior to the taxation of taxable income from interest earning accounts like CDs. You of all people had some great insight and perhaps luck in making some significant timing decisions related to specific companies and specific sectors of the market. The market as a whole though either through low cost mutual funds, ETFs, or comparable buy and hold individual stock portfolios still may represent a solid long term strategy for many.