A former fed official once said that it was his job to “take away the punch bowl” just as the party was getting started. He’s talking, of course, about interest rates that the federal reserve is in charge of pushing up and slowing down the flow of money just as the party gets going or the economy starts to rebound.

One of the reasons we are seeing the market do what it is doing today, is because the word came down over the weekend from the G20 meeting in Scotland, that the punch bowl is going to stay in place for the time being. Lower interest rates are good news for corporations and good news for the stock market, even if  the economy hasn’t really turned. The S&P 500 is now up about 20% year to date.

Gold continues to move higher, today it’s because of India purchasing two hundred tons of gold. Basically, exchanging gold for dollars. They sold American dollars to buy gold and other central banks could do the same at some point as they diversify their holdings. A lot of folks are wondering about gold. Now, one thing to remember about gold is everyone is most bullish right at the top….I’m not saying we are right at a top, especially since we could see inflation nine, twelve, fifteen months down the line. So gold could go higher, but you always want to make sure you have a sell discipline. A basic sell discipline of the past few years that would have worked very well is sell at least a portion of your holdings when you are at a record high. Imagine if you had done that with real estate. Imagine if you had done that with the stock market when the dow was at 14000. Now gold is chugging along, but it is at a record high of  above $10,090 an ounce. How high will it go? Well, nobody knows. Make sure you have some thought process as to when you want to sell some of that gold.

So is Warren Buffett a patriotic capitalist or a capitalistic patriot? I would argue the former. Yes, he loves to make big statements. Yes, he loves to lend confidence to the American investor. He did it last October when he purchased a big chunk of Goldman Sachs and  loaned them some money. He did it today when he bought Burlington Northern Railroad calling it an “all in wager” on the American economy. Make no mistake, the man is about making money…he is truly a capitalist. The interesting part about Warren Buffett is that for a man who is nearly 80 years old, his time horizon is still amazingly long! This is not a short-term play. He believes though, that as the railroads get more efficient, they will become very useful in moving goods around the country as this economy improves. He also believes railroads in general are undervalued BUT make no mistake…he is a capitalist with patriotic tendencies.

We learned a lesson in October about “Ignoring the Noise” (that is the stock market). You cannot get caught up in the day-to-day gyrations, even triple digit gyrations, of the stock market. When you look at October, you see many days when you are up triple digits and then down triple digits. At the end of the month we were exactly where we began the month, within one half of one point. The lesson is…keeping your eyes on the horizon. Keep looking out at the horizon and don’t worry about what’s going on right in front of your toes. Keep your eyes on the horizon on your goals, and if the money you have invested is retirement money, you ask yourself the question ”Will this economy be better off one year, two years, three years down the line?” If you believe the answer is yes, ignore the noise. However, if you are going to need that money in six, nine, twelve months, then perhaps the stock market is not where you should be  because it is very tough to take your eyes off the daily gyrations when you’re going to need that money in a matter of months.

These days you hear a lot about companies trying to go “paperless”. To go digital to scan all of their documents. We hear about it from the President when he talks about making our medical system more efficient – that all hospitals and medical offices should be paperless; all medical records should be digital. We hear from law firms, insurance companies, and financial firms as a way of not only going “green” but going more efficient. It makes sense for the environment, but it also makes business sense as well. Think about how in some cases you have offices that have rooms FULL of files with literally millions of documents stacked floor to ceiling. Think about what you are paying in rent on the room….to heat that room and light that room. Do you really need to do that? Not to mention the liability if you were to have a fire or flood and lose many of those documents and records forever. Another reason to consider going “paperless” and if you are thinking about doing so, let me put in a little plug here for my friends at Cristo Rey High School. Cristo Rey High School is a school for low-income kids and it gives them a college prep education. Part of their education is working, so Cristo Rey has teamed up with Caltronics. Cristo Rey provides the manpower. Caltronics provides the hardware, software, and expertise. As a team, they can go into your office and make you “paperless”. Not only do they do what’s called the back scanning of all the documents you have already created, but they will come up with a plan by which you will stay paperless as more documents are created and more files are made as your business grows. How do you stay paperless? How do you continue on in a digital form? If you have any questions, give David Brown a call at the school at 400-3386.

IBM has a big research team and they say they are seeing a real spike in “phishing”. Those are folks who mainly go after your web email. So, if you have Windows Live, Gmail, Yahoo mail, AOL…look out because they are looking for those email addresses as their portal to do bad things to your credit, your bank accounts, and your social networks. Make sure you take care and change those passwords every now and then.

Think of the way companies have been impacted by the digital revolution. Travel agencies, banking (we talked about that just a few days ago)  and how you can actually scan checks now and deposit them that way. Take a look at newspapers…newspaper circulation down 10%  from the last reporting period across the country. The Bee down 14% and The Chronicle down 25%. We’re talking about just over the last six month period. That is astounding! Obviously we have a recession, but think about how businesses use the term “Barriers to Entry” .  Are there “Barriers to Entry” that would prohibit people from getting into your business? In the newspaper business there used to be. Why? You had to own big printing presses and a huge distribution network  to get your paper out there. Now you don’t. Now you start a website, you aggregate content and “BOOM” you are competing against these local newspapers. Now these newspapers will tell you that their total readership may even be going up, if you add on the eyeballs to the website as to what they are getting in terms of print papers that are being delivered to someone’s door, but still it is an industry that is changing in a hurry.

Millions of people have not set foot inside a bank for many years. Why is that? Well, because they use an ATM for their deposits, withdrawals, and they use their computer to pay bills. They have no reason to step inside a bank. Well now you many not even need the ATM. It turns out that a number of credit unions and banks in the Sacramento area will now allow you to scan a check and email it to them and that money will go into your account. Also, there is a bank in town that is now offering its customers the option of taking a picture of their check ,via their iPhone, and sending it in that way and it will count as a deposit. So everyone could kind of see where we are going in terms of  not needing to see the inside of a bank with the nice marble floors anymore. Boy it’s coming quickly to the day when you won’t even need your ATM in the supermarket!

It’s hard to believe Michael Jordan’s son is in college. His name is Marcus & he accepted a scholarship to the University of Central Florida (UCF). A little bit of a headache being caused though and here’s why…UCF has an apparel deal with Adidas. It’s a multi-million dollar deal where all the basketball players are supposed to wear Adidas. Of course, if you’re Marcus Jordan and your father was “Air Jordan” and earned billions of dollars for Nike, what do you think you want to wear? Marcus says that while he was being recruited, he told UCF that he wanted to wear Nike “Air Jordan’s” and the school said “that’s fine”. Now UCF is in negotiation with Adidas to extend their partnership and it appears the predicament with Marcus Jordan is holding up the talks.

Over the last few months, airlines have found new ways to “Nickel & Dime” customers…baggage fees, food fees, security fees. Some airlines are even charging fees to use the bathroom! But now there’s a new one, WestJet (they fly mainly from Canada to Hawaii) and they are now offering you this option…You give them an extra $20 on top of your ticket price and they will put you in a row where they do not fill the middle seat. I’m sure we’ve all been stuck there where you’re with someone and you’re either in the middle seat or you’re in a packed row and people are a little too large for those airline seats. It makes for a very uncomfortable flight. If that middle seat is empty and you know it is, it’s going to make you feel like you are in business class, no doubt about it. To pay $20 for nobody to be in that middle seat (for WestJet anyway) for a 7-8 hour flight, from Edmonton to Calgary and all the way to the beautiful islands of Hawaii, “I WOULD PAY THAT FEE”.