Tuesday, August 16, 2011

Thoughts and Predictions for the up-coming College Football Season (Guest Posting)

The following is a guest posting by my brother, a die-hard Alabama fan.  Enjoy this semi-objective prediction of the upcoming SEC football season:

Hello all, hope the summer has treated you well and you are ready like me for the College Football season. Here are my predictions and thoughts for each SEC team.
I'll start with the West:
Alabama: 12-0, 8-0 (can you tell I'm a Bama grad/fan). Schedule sets up really nicely, about as good as I've seen in a while. Only 3 teams coming off byes LSU, Ole Miss, and Vandy, and Bama comes off a bye the same week as LSU so that one really doesn't count. And the other two, I'm not real worried about. Look for the offense to play conservative, at least for the 1st half of the season, and Richardson and Lacy to have over 1500 yards before making it to the bye. I think Richardson will have a comparable season to the one you got from Ingram in 2009, but he will have better receiving stats. Toughest Win: Mississippi State. I'm worried about this one the most, as it comes on the road after a huge game at home against LSU which will be hyped out of this world. State doesn't have a bye the week before but they get BYE, UK, UT-Martin leading up to the Bama game. In case you haven't figured it out, I like Dan Mullen and the Bulldogs this year (but more on them later). I look for the Tide to be in Atlanta with even with an 11-1 record, I wouldn't be disappointed.
LSU: 9-3, 6-2. Have a tough run right out the gate with Oregon, Miss State, and UWV all away from Tiger Stadium the first four weeks of the year. Get out of that unscathed, and your are talking major showdown in Tuscaloosa Nov 5. I just don't see it happening, with the questions on offense and a OC carousel. I think Jefferson is a nice athlete but I don't think he is going to finish the year as the starter. Big Tex may be the starter vs Bama. After all that about the offense, I believe LSU's defense will be nasty (again). After UWV, they play 5 of 7 in Death Valley with the two road games being in Oxford and T-Town. They will finish strong. Just not strong enough. Losses: Oregon, Mississippi State, Alabama. Toughest Win: Arkansas has played the Tigers really tough and I see this one being no different. Great football game on Black Friday. Probably a Cotton Bowl for the Tigers with the outside chance of Capital One or Sugar if Bama goes to NCG.
Mississippi State: 9-3, 5-3. I just can't say enough good things about Dan Mullen. Nine wins in the regular season for Mississippi State is like winning the National Championship at Alabama. Actually, it might be even harder to do than that. I just don't see anyway the Boogs let State out of Opelika with a win after all the Cam Newton stuff that went down in the last 12 months. The fans will be absolutely bonkers when the Bulldogs come rolling in week 2. You can bet, Cheeze-it has been preparing for this one all summer. Some pretty big wins in there for State. I think Relf has a surprising year and will end up being the 2nd best QB in the conference behind Murray. Losses: Auburn, Georgia and Alabama. Toughest Win: No doubt, LSU. MSU was so close last year, Bulldogs are hungry and get it done in Starkvegas by a touchdown. 
Arkansas: 8-4, 5-3. I just don't see it like everyone else for this team. I know Bobby P is supposed to be this genius on offense (he is very good) Tyler Wilson just will not produce like Mallett. Period. I think the running game will be better throughout the season, as Petrino learned last year, you can't win big games in the SEC throwing it 50 times. Hogs have a brutal road slate with games at Alabama, Texas A&M and LSU (three of the four best teams on their schedule). Losses: Alabama, Texas A&M, Mississippi St, LSU. Toughest Win: Vanderbilt. I know. I know. Call me crazy but I just see this as being a really close one. Coming off a week against Army, 'dores should be in relatively good health heading into the game with the Hogs. South Carolina game will be a good one too.
Auburn: 6-6, 3-5. Danny Sharidan seems to think anything less than 9 wins for the Tigers this year will be a disappointment. Maybe so, but I just don't see it happening with the schedule and the experience coming back. I think the defense will be middle of the pack with not much of a pass rush and the back 7 couldn't cover anybody last year with Nick Fairley hitting every QB 2 seconds into the play (sometimes 3, 4, 5 seconds after the play). The offense will be run heavy, but I think they are going to have to throw the ball to score enough points to win. Thats where the holes are. They will be lucky to get half the production from the QB position they got last year. Pretty easy home slate except for Alabama. Road games are rough though. The trees at Toomers will not get near the wear they did last year. Guess they can use the extra tissue to cry in. Probably will just throw it at a Bama fan. Losses: Clemson, South Carolina, Arkansas, LSU, Georgia, Alabama. Toughest Win: Mississippi St. will be a good to great team. But the fangs come out for this one. No way the "Family" lets this one get away.
Ole Miss: 4-8, 0-8. I see this as the last year the Rebels play in the Nutt House. When a guy transfers in and he is handed the starting job, it sends the wrong message to a team. I think the Reverend has lost them. Defense was pretty awful last year and that was supposed to be the strong point of this team. I don't think its getting any easier, although I do feel like this is a better team than last year. They just play in a division that is similar to the AL east. The schedule does have lots of opportunities for upsets, with (at my count) 4 big conference games in Oxford. Unfortunately for the Black Bears, all 4 of these teams are much better than them and the home field advantage isn't going to be enough of one. Another point on the schedule, if you swapped the home/away of the 8 SEC games, I think OM would have a good shot at 4-4. But it doesn't set up that way. Maybe we get to see Gus Gus or an shafted pirate at a place where they "redshirt Miss Americas". Here's hoping for a change in 2012. Losses: Vanderbilt, Georgia, Alabama, Arkansas, Auburn, Kentucky, LSU, Mississippi State. Toughest Win: Fresno State. How on earth an SEC team is playing in Fresno in football, I will never understand. But then again, I never would have pictured Bama playing in Duke's 30,000 seat shack.
And now for my thoughts on the East:
I just want to start by saying I think the East will be much more competitive this year, although I still see most of the power in the West. It was really tough to pick a winner here, I think it will come down the UGA and USC like most of the talking heads, and I really wanted to pick Georgia, but SOS wins out.
South Carolina: 10-2, 6-2. No doubt SOS's best team outside of Gainsville. Lots of talent and key positions. I'm still not sold on the QB. But with AJ and ML, as long as he keeps his head out of his ass I think they take the division. This still maybe too much to ask for Garcia. Georgia game in week 2 is obviously huge and if they can go in and win (I'm guessing Garcia will make it to the 2nd game), then they have a great chance to start out 6-0. This is the type of team and season Gamecock fans were hoping for the SOS came on as a coach and I'm pretty happy for them. This fanbase has endured some hard times and deserve something good to happen to them. If the ol coach keeps recruiting the way he has the last 2-3 years, he might be there longer than Saban is at Bama (blasphemy, I know). I see them dropping a couple of tough road games to the west at Starkville and the long trip to Fayetteville will be too much. Losses: Mississippi State, Arkansas. Toughest Win: Navy. Coming off a hugh win on the road against Georgia, Navy will be pesky and ready for a fight. Haven't really performed well after big wins lately (see week after Alabama win 2010).
Georgia: 9-3, 5-3. This situation is quite volatile. I could just as easily see this team losing 5 games. There is already some unrest among the bulldog faithful, but if the Bulldogs lose to BSu is that first week in ATL, then we're talking about a whole new level. Along with being the butt of all SEC jokes for the coming year(s). With all that said, I think the schedule plays in their favor. They get Mississippi, Mississippi St, and Auburn from the West this year, with the two tougher ones at home. This will be a young, talented team, which is why I don't have them winning the East, but if they take down USC in the 2nd week, all bets are off. Very thin at several positions most notably RB. Not to say they don't have talent back there, but Crowell will need a "Marcus Lattimore" type year along with staying healthy for UGA to make a push for the division. Murray is easily the best QB in the conference and look for him to have a really nice year. The defense will also be better this year with another year in Martinez' defense. Losses: South Carolina, Tennessee, Florida. Toughest Win: Boise St. Everyone knows the Broncos have a one game season, and the Bulldogs don't have much to gain with the game in Atlanta and with the regional bias against BSU. I know all SEC fans want a blowout in this one, but we should all just be happy for them to escape alive (right, VaTech).
Florida: 7-5, 4-4. I know when you look at the record, it looks like Muschamp was a bad hire. I don't think that's the case, but I do think they will have some growing pains this year going from Urban's spread to Charlie's Pro-style offense. I do see them having an excellent defense next year, and with the head coach's defensive background, I'm sure that won't surprise you. I see offense being an issue. Weis' offense depends alot on the QB's decision making and execution, and I think if Brantley were a Freshman or Soph, then it wouldn't be as difficult a transition. He has no confidence left, and will have to unlearn all the bologna that was told to him by Steve Addazio. Schedule isn't easy with Alabama at home and at LSU and at Auburn from the west. Then you have games at Columbia and the Cocktail Party in Jacksonville. So that's the 4 toughest conference games with 3 on the road. And then Bama at home. Its very possible they could win one of these game, possibly 2. But the big year for UF will definitely be 2012, when Weis gets the QB's going and that defensive talent will be juniors and seniors. Losses: Alabama, LSU, Auburn, South Carolina, FSU. Toughest Win: Georgia is always a game for the Florida team, and its a rivalry that no matter who is coaching, seems to go in UF's favor. So even though I think Georgia will have a better team, I'm going historical here. Georgia loses a close one to Muschamp and gets the Gator fans off his back for a week.
Kentucky: 6-6, 3-5. Joker makes it another bowl game, although I don't see it being anything to write home about. Gone is all purpose all-everything Randall Cobb, so I see the offense making a big dip back. But the defense should be pretty solid with I think the most underrated defensive player in the conference Trevathan at LB. The biggest pill to swallow for the UK fans will be the fact that Louisville will be moving past them this year. Road games against LSU, USC and Georgia will be too much to handle. Thanks can be to the Athletic Dept. for scheduling three easy wins in the non-Conference to get the Cats back to Birmingham in Jan. Losses: Louisville, Florida, LSU, South Carolina, Mississippi State, Georgia. Toughest Win: Tennessee. There are a ton of fans that have parents that don't remember the last time UK beat UT. They finally get the Smokey off their backs this year in Lexington and for one Sat. late in November, forget about basketball.
Tennessee: 6-6, 2-6. Doolander is a great guy. Let me just get that out of the way. High character. Great discipline. Learned from the best (Saban, daddy), and great hair. Just not sure if he can manage a program the size of UT. He reminds me of Shula a little at UA, just in way over his head. Its hard to hate him though. As an Alabama fan, I enjoyed the Kiffen/Fulmer coaching scenario better. Much easier to hate those two. If Tennessee had this schedule next season, I would be putting them in contention for the east, but I just don't think they are ready, depth wise to handle these big games. IF they can manage to beat Florida in Gainsville, I think UT has a great shot at being undefeated going into the Georgia/LSU game combo which will be some hyped games in Neyland. Then UT looks at a Alabama/South Carolina combo next. That's 4 toughest teams in the conference, 4 weeks in a row, with 3 being at home. I actually like the match up against USC, but after playing LSU/UA they will be pretty beat up, and Cocky comes in with a bye. I really hope Dooley will be a successful head coach, I just don't want it to be in Knoxville. Losses: Florida, LSU, Alabama, South Carolina, Arkansas, Kentucky. Toughest Win: Georgia. Although I think Vandy will come to play as well and really can't stand losing to the Vols. I give UT the best chance to knock off the Bulldogs, with it coming at the beginning of their 4 game season crusher.
Vanderbilt: 4-8, 1-7. Expectations. Something Vandy doesn't have in football. Enter James Franklin and next year we may be singing a different tune. For what looks to be a top 25 recruiting class in the mix for next year, this is something that is coming soon. Expectations. But this year, we'll see some frustration. I see now reason why Vandy can't be competitive in 8 of the 12 games they have this year. South Carolina, Alabama, Georgia and Florida have already won this game. It's the Kentucky's, the Army's, the Wake Forest's that will judge just how good Franklin can be in Nashville. How competitive will they be in these games? Will they get better as the season goes along? You may not see it in Wins/Losses because of how the schedule sets up, but when UK, UT roll around at the end of the season, will this team fold up, or still be trying to play hard? I think this is a great hire, and we could see some unprecedented success from the 'dore's in the near future. Losses: South Carolina, Alabama, Georgia, Army, Arkansas, Florida, Kentucky, Tennessee. Toughest Win: Wake Forest. I see this team getting better and better as the year rolls along and finally breaking through with a big win in game 12 on the road.
SECCG: Alabama 28 USC 10
Coach of the Year: Dan Mullen
Offensive Player of the Year: Chris Relf
Defensive Player of the Year: Courtney Upshaw
Freshman of the Year: Jadeveon Clowney
Hope you guys/gals enjoy reading and responding to these comments. I really enjoyed writing this up, so here comes the fun part. Watching and talking about what actually happens. Roll Tide!

Monday, August 8, 2011

My Thoughts on the Downgrade

Recently, S&P decided the long-term outlook of the US's economic situation concerned the rating agency enough to move the US Government out of investment-grade status.  For the first time in US history, the credit rating of the US Government has been downgraded (to AA+, from AAA).  This should bring a host of concerns for everyday consumers, because this could ultimately affect interest rates in the future if the government doesn't get serious about significant debt reduction, and NOW.

From what I've read, the downgrade had as much to do with the "brinkmanship" policy making in Washington as anything.  The strategy for both parties seemed to be to wait for the other side to flinch.  This inability to collaborate on a long-term debt reduction that would have met the "requirements" set forth by S&P in essence triggered the downgrade.

Given the performance of the equity markets over the past few weeks, investors are already on edge regarding the global economic outlook.  The gains in the DJIA (Dow Jones Industrial Average) for the year have been wiped away.  The performance today has been especially sickening.  The Dow dropped over 600 points to under 11,000, down nearly 7% for the year. This has an effect on consumer confidence that, along with stagnant unemployment, will most certainly hurt the ability to pull out of this downturn.

The suprising thing is that, in spite of the move from investment grade, 10yr treasuries were still in demand, which tells me that the concerns are not just limited to the US government's potential to default.  There are still significant global concerns that are pushing the equity markets down as well.

When the details of the debt ceiling deal came out, I thought they were a bit underwhelming.  Apparently, Standard & Poor's felt the same.  The fact that Social Security and Medicare were off the table should have been an ominous sign.

(Here's a really good article on the debt ceiling negotiations, through the lens of "game theory":

Here's hoping our elected officials get the message sent by S&P and get serious about debt reduction.

Thursday, July 28, 2011

Passive Income Ideas

We are familiar with the routine.  Get up.  Go to work.  Come home.  In a week or so, get paid for the work we did.  Start over again.  Go to work. Come home.  Get paid for the work we did.  Some have come to accept it as a fact of life.  Well, to other more savvy and financially independent (or those aspiring to be) have probably heard of the idea of "passive income".  The concept is defined something like this:

"Passive income is an income received on a regular basis, with little effort required to maintain it"

That being said, most passive income streams do require an additional effort or monetary commitment to get set up.

Here are a few common ones:

  1. Rental Property - does require some upkeep or a reduction in income to subsidize the management of the property.
  2. Bond Investments - investing in bonds can be expensive (the usually cost around $1000 each + trading fees, and like most investment vehicles, can lose up to 100% of their value (although this is unlikely in most cases)
  3. Dividend Income - income from equities that pay a cash dividend;  these are usually financially strong and established companies such as Southern Company ($SO) and Verizon ($VZ).  There are also trading fees associated with purchasing stocks.
  4. Pension- Social Security (until it runs out) or other funded pension program you are vested into, more than likely from working somewhere that offered this as a benefit.
Additionally, there are other alternative ways you can earn "passive income":

  • Blogging - advertising and other referral sales income (if you weren't already blogging in some form, this really isn't that passive, but can be fun)
  • Vending Machines - owning vending machines can be a little work to stock and maintenance them, but is an interesting alternative way to generate a "side hustle" income
  • Royalties - recurring cash flow from the licencing of a patent, sale of booksmusic, etc.  A useful invention or phone application 
Frugal Dad has also had some pretty interesting ideas on the topic.  

I would love to hear other creative ideas for passive income....

Tuesday, July 26, 2011

A new player in Daily Deals! (Watch out Groupon)

Look, I'm a sucker for daily deals as much as the next guy.  I love a good discount, especially when it's for something I was already in the market for anyway (hello, discounted oil change) or for a restaurant I frequent or have been wanting to try (still waiting on Highlands Bar & Grill to show up on Groupon).  The market leaders (Groupon and LivingSocial) have captured significant subscriber lists and currently have serious clout with local businesses.

A new player has come into the market recently called The Customer Advantage that offers a new spin on this Daily Deals concept.  While GLS (my new acronym for Groupon/LivingSocial) offers referral bonus credits for both signing up users and getting friends to buy offers, TCA incorporates a MLM (multi-level marketing) aspect into this business concept.  However, the negative aspects of MLM usually revolve around paying an entry fee of having to his some sales threshold in order to benefit from signing up.  Amway comes to mind for sure.  This service is different in that a) there is no initiation fee and b) no minimum thresholds to meet in order to benefit.  By signing up members, when they purchase a deal, you get a cut.  It's just that simple.

Someone named Carl Willis has reviewed the service as well.... click here to read.

If you'd like to sign up for The Customer Advantage, you can click HERE.  The site has launched and is now offering deals.

At some point I'd like to talk about LivingSocial's pending IPO, but I'll save that for another posting.

NOTE:  There appears to be some people who are what you would call "less than fans" of the MLM concept and of the creator John Milanoski.  A Google search will pull some of his detractors.  I would say come to your own conclusions...

Saturday, July 16, 2011

The redbox Model

Redbox.  I remember the first time someone told me about redbox.  What an awesome idea.  At this point, Netflix ($NFLX) had pretty much made the traditional movie rental model obsolete.  One of the main problems with this model - extremely high overhead, was solved by Netflix by using lower cost (per unit of inventory) distribution centers and letting the USPS handle there logistics.

In a sense, redbox has done this as well, except the distribution centers are just kiosks that resemble a high tech, uber-marketed vending machine.  The kiosk acts as a movie rental store, except there is not associated labor costs, expensive lease to manage, or other utilities to worry with.  The business model is so simple, and yet such a great idea.

Coinstar ($CSTR), who owns Redbox, has also diversified this model (which they have dubbed "automated retail") to include BluRay and Games.  This got me thinking....what other business models could be disrupted by instituting the "redbox model"?  There is one I can think of:  the airport "Best Buy" kiosk.  Another good way to remove some of the overhead to an increasingly low margin industry (in this case, consumer electronics).

Eventually, streaming video content will make the DVD itself obsolete, in the way Netflix has made the traditional movie rental store obsolete (I'm looking at you, Blockbuster).  But the "automated retail" idea will always be able to be utilized as a low-cost distribution model for retail products.

Thursday, July 14, 2011

Should the government subsidize home ownership?

Home ownership.  It's certainly an issue in today's economy.  Speculation, 100% financing, and predatory lending practices during the heat of the housing bubble certainly points to the cause of the crisis.  But this post is not about that.  What this is about is home ownership.  Certainly there is an emotional element to this topic.  But I propose that in a time when the government is on the brink of default, the federal debt is growing to unfathomable levels, should they be subsidizing America's financing of home ownership?

Mortgage interest, for the majority of filers, is the largest single deduction itemized each year.  I know it has been for me for the past several years.  I certainly enjoy getting that credit back from Uncle Sam for the money I've been paying into my home each year.  By getting credit for these interest payments, the US Government) are giving a discount on these interest payments, providing an additional incentive for someone to rent vs. own via mortgage financing.

Am I saying I want to give up this deduction, the largest personal deduction for me when filing my income taxes? On a personal level, of course not!  But, when thinking about ways the government can increase revenue to close the budget gap that is a serious mid to long term problem for our government, this "loophole" seems to make sense.  I, personally, would like to see a cap put on this deduction.  I think that's the best solution.  By capping, you are not eliminating the deduction for low and middle income homeowners.  At the very least, capping is a way to phase out this deduction (if that is what is ultimately decided by our legislators).  

I am sure this would have a short term negative affect on the demand for housing.  No doubt, as people rationalize and look at the pros and cons to buying a home, interest deduction is one of the benefits listed.  This would reduce the pool of already small buyers, further shrinking already slow demand for housing.  But the greater problem, in my opinion, is the inflated inventory of foreclosures on the market.

Would love to hear any of your thoughts/comments on this idea.

Currently Reading:  Fast CompanyFirst Time Dad by John Fuller

Sunday, July 3, 2011

Welcome to Gemini Finance - Business and personal finance for everyman

Welcome to my new blog, Gemini Finance.  It's goal is to be an interesting and entertaining read for personal finance, observations from the world of business, and general musings I think someone other than me will find interesting.  My goal is to make this little piece of cyberspace (1) interesting, (2) entertaining to read, and (3) hopefully informative on some level.

I welcome any comments on my thoughts - I don't claim to be an expert in any of the fields I post on, just my take on them and something I found interesting enough to write about.

It may help to learn a little bit about me and some of my interests regarding these fields I plan to post on.  I live in Birmingham, Alabama and work in the field of risk management.  But what I really do is solve problems, answer questions, and do my best to think the things that are put in front of me through to the best of my ability.  This aspect of my job is not unique to me - I'm sure there is some aspect of this in anyone's job - but I think my enjoyment of this aspect helps me to succeed at it, at least to some degree.

I enjoy reading books that make me think, and expand my understanding of fields of interest to me.  A couple of books come to mind:

I'm also a big fan of the periodicals "Fortune" and "Bloomberg BusinessWeek", so you may see me post on some topics they cover as well.  This is more than likely not coincidence, and I'll try and make it known my muse for the post if it comes to me.

Personally, I'm also a huge college football fan, so I can't rule out a post or two on this topic, although I'll do my best to give a business/finance slant to it (but, hey, I make no guarantees).   

I think you'll get to know me and my interests pretty well by following this journey that is Gemini Finance.  My hope is that will be fun for both me and you (the reader) and we'll both learn something - about finance and about ourselves.