Last week, I wrote about how few “retail investors,” that’s folks like you and me, have come back to investing in the stock market after the craziness of the Great Recession. The market has made significant gains, erasing the losses of the Great Recession, but many investors are still on the sidelines.

Then came word that the Japanese stock market, the NIKKEI 225, dropped 7.32% on Thursday (Wednesday night for us in the United States). It was the worst percentage decline since the earthquake and tsunami in March 2011. The fall continued into the FTSE 100 (London index), which shed 2.1%, but given better than expected numbers here in the U.S., the drop didn’t translate to anything significant here. For the year, all of the stock markets have been going gangbusters. The NIKKEI was up 50% year to date before the fall but no one (meaning retail investors) saw it coming, which adds to this feeling of loss of control.

On Wednesday, a perfectly happy U.S. stock market was up until Bernanke started talking and it ended up down for the day. The market was down to open Thursday but eventually made its way pretty close to even. For someone like myself with a time horizon of decades, these gyrations are kind of scary but with thirty years to go, they’re not that scary. But there is a feeling that I have no control over it. It makes me wonder if I can trust the stock market. I know people are telling me that investing is the path to wealth… but is it?

7% single day drops, even if it’s the NIKKEI, doesn’t give me much confidence that I can trust the stock market. Any stock market.

How do you feel about the market? Trust it? Don’t care?

(photo: credit)

Yesterday, Miranda wrote a post that talked about how marketers are using zip codes to reach new customers. It made me think about the research we’ve done when looking at real estate investments (we dabble a little here and there). One interesting tool I wanted to share with you is ZipSkinny. You give it a zip code and it gives you a ton of demographic data including race, age, gender, but it also includes social and economic indicators. It’s all taken from the 2000 Census, so it’s a little dated but still works quite well I think.

This is probably a light version of what marketers use but probably not that different. 49.3% are in the same home for 5+ years. 28.9% never married, 55% are married, and 9.3% are divorced. You have household income breakdown, occupation (in some broad categories), and even unemployment and poverty. It’s amazing what is available on census alone.

I had two questions – have you ever researched data like this and does it bother you that marketers are using it?

(Credit: Eric Fischer)

Here’s an interesting question – is taking advantage of an exploitable bug in something inherently illegal? By luck and lots of playing, John Kane discovered a bug in the Game King video poker gaming system (this is true of all systems, not a single unit, in which certain settings were turned on) that would give him a significant advantage. I won’t go into the exact exploit, it gets pretty detailed, but Kane was charged with a violation of federal anti-hacking law even though he didn’t tamper with anything. He simply looked for a setting (or asked that it be turned on) and used his workaround. He also worked with others to visit several casinos over and over to use the exploit to the tune of hundreds of thousands of dollars.

The exact charge wasn’t that they hacked the unit itself, since they didn’t, but that they exceeded “their otherwise legitimate access ‘to obtain or alter information in the computer that the accesser is not entitled so to obtain or alter.’” In other words, they discovered this workaround, used it, and made lots of money. They found a bug (the thing the accesser is not entitled to obtain or alter).

Personally, I don’t think what they did should be a crime. The manufacturers of the Game King system didn’t test their systems enough and now turning this into a legal case just brings more exposure to their oversight. This is big news only because of all the recent news about Aaron’s Law (named after Aaron Swartz), and the fight over internet regulation laws.

Did they do something ethical? No, certainly not. But you could argue that gambling is hardly ethical either (and being unethical in an unethical place… well, that’s not two wrongs make a right either!). That said, gamblers are always trying to beat the house when they play any rigged game (all casino games favor the house), these gamblers simply found a way to work things in their favor. I applaud them!

What do you think? Did they commit a crime?

(Credit: midom)

We’ve covered the issue of money buying happiness a few times in the past (just look at the Related Posts below and you’ll see a few fine examples). However, the last time we even mentioned it was several years ago and there’s new research! There is always new research… the question is whether that research says anything new.

This one does.

The study looked at the question of “satiation.” In plain English, they simply wondered if there was ever a point in which you earned “enough” to be happy. If you earned enough where your basic needs were met, like food and shelter, would you be happier if you continued to make more. Is there a point at which you no longer happier?

Some people have likened it to air. It’s no fun when you don’t have enough to breathe but you really don’t gain extra by have more air. Well, the results of the study suggest that the answer is that there is no point at which your happiness stops. The richer you get, the happier you are about it.

Do you think that’s true?

(Credit: stevendepolo)

To help combat impulse buying, j_stack shared his tip on Reddit:

To curb my impulse online shopping tendencies, I use Amazon wishlist instead of dumping everything in my shopping cart. I leave the item in there for a month or two, and come back to it later to see if I really want it. I almost never still want the item, and if I do still want it, I’ll know it’s something I’d really like to have.

edit: If I decide I don’t love something enough to ever buy it, I’ll nix it from the list, but the stuff that I stay on the fence about for a while can sit in my cart for almost a year. Then it becomes my christmas list.

This is the digital equivalent of waiting a day before you buy something you like and it’s a good tip.

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Here’s a good question for you sports fans out there – Do you owe your friend a beer if he takes you to a game? The basic gist is that someone (James) wrote in that he sometimes gets tickets to games from his employer and when he takes a friend, he expects the friend to buy him two beers. Drew Magary, always an entertaining and outspoken writer, responded that he shouldn’t expect it because James was getting them for free from work (and if the tickets are to see the Golden State Warriors… I would agree!).

Personally, I can see it from both sides. As the giver of tickets, I don’t think you can ever expect anything. You can’t give gifts and expect something in return, that’s just a bad way to go about life because, honestly, you’ll be met with a lot of disappointment. People don’t appreciate things that are free, they appreciate things they have to pay for.

As the recipient of tickets, you should buy your friend some beers. You don’t need to buy as much as the value of the tickets but some sort of thank you would be nice and a couple beers is cheap relative to many tickets. James cited $425 NBA tickets and while I suspect there are probably more $20 baseball tickets than $425 NBA tickets, it’s still more expensive than a $7 beer. The only exception to this is if you get tickets to a box where the food and drink are free… then you’re both making out like bandits anyway and griping about beers is like stealing ball point pens during a bank robbery.

What do you think? Do you owe a beer to a friend if he gets you free tickets? Do you expect a beer or some free food?

(Photo Credit: bryce_edwards)

One of the big problems many retailers face is the issue of “showrooming.” That’s when customers go to your store to check out products but then leave to buy them online, where they are cheaper. There are plenty of smartphone apps that will do the online search for you after you snap a photo of the bar code, that way you know whether or not it’s available for cheaper online. I do this all the time using an app called ShopSavvy.

So I laughed when I saw this article about an Australian store charging $5 per person who enters the store. You get the $5 back if you purchase something. I think it’s foolish, no one is going to pay a cover to go into a store.

What do you think of this grand plan?

(Photo Credit: matteson.norman)

The average tax refund is always in the neighborhood of three thousand bucks and we always enjoy asking you what you plan on doing with yours. Some people use it like “forced” savings and put the whole slug away for a rainy day. Others look to pay down debt. I always like hearing the stories of people who take a fun trip with the funds or buy something for themselves. Whatever it is, I want to hear it.

We typically don’t get a refund, we usually owe a tiny amount on our tax return, so I don’t get to weigh in on this particular topic this time. To help make this Your Take a little extra fun, we’ll be giving away a $50 gift card to the Cheesecake Factory.

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