Archive for January, 2013

So my kids and my co-workers have been ordering stuff from Amazon like crazy.    I slowed down my Amazon shopping ever since they started collecting sales tax in my state but then a funny thing happened.   I asked my kids and co-workers what they were ordering and it was a bunch of cheap stuff from China and Korea.   It seems that a new business model is forming – direct from china to consumer.   It used to be you’d have a ton of middlemen involved in transactions for the same toy, gizmo, gadget, whatever coming in from China but now it’s direct from manufacturer to consumer.

People at work are into dashcams and the kids are into all sorts of iPhone/iPad accessories that they’re getting for pennies on the dollar.   My daughter ordered a 10 pack of styluses for about $1.10.   The downside is that you have to wait a few weeks to a month to get your merchandise but if it saves you 90% off they’re willing to wait.

I got myself into the mix and ordered an iPhone case + wallet combo.  The photo of the merchandise I ordered showed a wallet with room for money, credit cards and an iPhone with many positive reviews from shoppers and at $5.00 what is there to lose?  I think it’s coming direct from South Korea and I won’t get it for a few weeks but I’m in no hurry to get it anyway.  The best part is that there is no sales tax.   Seriously, why bother setting up ANY shop in any U.S. state when you can just have your distribution center in China and ship by sea?

So it seems to me that all Amazon has to do is establish a legal entity in China and start selling the same stuff direct to US consumers.  I’m sure its not as simple as that but seems easy way to avoid the whole sales tax issue.

I have had a long standing theory about the stock market for quite some time:  baby boomers would suck the market dry to survive over the next 20 years.   Ironically, we seem to be on the same path that Japan was 30 years ago and Japan hasn’t really recovered in that period of time.   Is the U.S. going to be the same way?

Every day, 10,000 baby boomers hits retirement age which means they go on government health care, stop contributing to their 401k’s and start pulling money out.  If you want to know how bad seniors will have it Japan has a preview here.  I think the major depletion of the market has largely been masked by the Federal Reserve’s QE-Infinity where the government keeps printing money and this won’t end well for either seniors who live on fixed incomes or the general population which will end up paying $10/gallon of gas in a few years.

Interestingly, as I peruse financial blogs, there isn’t much to read.  Gone are the days of young, hungry and enthusiastic finance bloggers wanting to make money or share some interesting financial advise.   Personally, I had expected the economy to improve quite a bit by now but I can tell it’s still a struggle for many people out there.  I know a few families that live in nice homes but supposedly don’t eat red meat because it’s too expensive.   Until someone mentioned this to me, I had never paid attention to the price of meat and when I did, it did occur to me that it has gotten a bit expensive.    Various cuts of beef now go for $8 to $12 per pound while my favorite kobe beef steaks have remained steady at $30/lb.

I’m taking a gamble on the market this year and betting on some improvement but to lock in some gains, I have largely sold covered calls all the way through 2014 to at least lock in a 12% return for the year on some accounts.