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2008 20s Money Year End Awards

29 December 2008 3 Comments

This has been one crazy year. Here are my random year-end awards:

Biggest Loser of 2008: America

2008 saw the collapse of the U.S. economy driven by the financial and real estate markets. While the poor blame the rich, the responsible blame the stupid and the politicians all blame the opposing party, our economy continues to deteriorate. Unfortunately for all of us, it seems that very few of our leaders know what to do about our economy (and the incoming President is not one of them). The bottom line is that Americans are broke and so is the government. The only real outcome to this mess is a slower economy which might be painful for many.

Even Bigger Loser of 2008: Capitalism

It’s a shame, but it seems that mature democracies and economies are unable to hold onto the free market principles that made itself great. America clearly has reached a point in its history where we are unable to allow free market natural corrections in our economy. Our leaders pursue votes over long term economic health; and you cannot pursue votes by doing the right thing for our economy which would be to let it contract.

Government interference is responsible for creating the massive bubbles that, when they go bust, create extreme pain economically. Government was 100% responsible for the real estate bubble by creating artificially low rates and encouraging risky loans. These government induced bubbles are never sustainable and too many get hurt by them when they pop.

2008 saw, perhaps, the official end to free market capitalism in America. Government is taking over industries, bailing out companies and organizations left and right and wants to even bail out individual home owners. Furthermore, with the election of Obama, clearly, we are heading towards a bigger government with a bigger role in the economy. Sadly, I think our incoming President believes that assembling an economic “dream team” of people who are smart enough to micromanage the economy is the right path to take. This will only end up being a disaster. There is nobody smart enough to run the economy. A healthy economy runs itself and companies going under (AIG, Lehman, Bear Stearns, GM, Ford, shall I keep going?) is actually a sign of a healthy economy punishing bad companies and extreme risk taking.

Good bye capitalism and good bye to future economic growth. The only way our economy will not contract will be if the government funds growth, and I promise you there will be ramifications to this action. Can you say currency collapse?

Biggest Event of 2008: Barack Obama Becomes President

Like him or hate him; it is an historic event. We have our first black President. We’ll have plenty of time to judge his future successes and failures.

Worst Political Campaign of 2008: John McCain’s Run For President

What an absolute disaster of an attempt at winning a public office. While the Republican party was probably doomed this election year, the attempt of McCain to beat Obama at Obama’s game was a downright train wreck. McCain quickly joined the crowd of bashing the greed on Wall St and calling for a bailout of homeowners which put him in the same camp as Obama. Then, he decided to go along with the awful $700 billion bailout that passed in Congress. This sealed his fate.

Biggest Newcomer of 2008: Sarah Palin

This would be Obama but Obama was well on the scene before 2008 rolled around. Sarah Palin came out of nowhere to join McCain as his VP candidate. She rocked the Convention and became a rock star in the political scene. I like her personally but don’t really see her as a V.P. I hope she runs for Senate for Alaska since I like her views and think she is a fresh face for Washington.

Best New Blog of 2008: 20s Money!

It’s been a great first year since we launched in April. The traffic and subscription base have increased steadily and I have truly enjoyed writing for the blog! It has been one heck of a learning experience!

Look for a future article detailing everything about the blog’s first year of existance and what the future holds; including details regarding how much money I’ve made through the blog and some of the surprises of running my first blog.

Biggest Surprise of 2008: Oil Collapses

While I figured a pullback in energy prices would happen after we hit such as a high, I would not have guessed that we would have dropped below $40 a barrel! What might be an even bigger surprise in 2009 is a potential huge shoot up in energy prices from current levels. With energy companies cutting production, a global economic rebound might result in much higher energy prices in the future.

Best Trader of 2008: Tim Sykes

While the market tanked, Tim Sykes and his penny shorting strategy is up approximately 250% in the past year plus. He is #1 on Covestor with regards to performance and popularity. His strategy might surprise you but his numbers don’t lie. Click the link above to learn more about his strategy. I recommend his TIMAlerts service which will provide you with real time stock alerts based on his actual trades.

Best and Safest Investment of 2008: Gold

Gold held up great in 2008 and looks like it will finish another year up. While gold stocks got punished, the price of gold itself is still well over $800. If you read my blog, you know that I like gold heading into 2009 due to my extreme bearishness on the U.S. dollar.

Worst Investment of 2008: Banks

The financial sector utterly collapsed this year. They were overleveraged and the furthest thing from transparent. The bottom line is that the financial institutions will have to rethink how to make money heading into the future. Stay away from banks. The number of banks in our country is likely to continue to contract heading into 2009.

Biggest Scam of 2008: Madoff

Madoff’s Ponzi Scheme is all over the news. Sadly, it’s another example of greed and fraud. Unfortunately, it will be used as ammunition in class warfare and taxing the “evil rich”. I just wish the biggest Ponzi Scheme of all time (Social Security) would garner the same level of outrage.

Biggest Jerk of 2008: Blagojevich

In the same week that we learned about Madoff’s Ponzi Scheme, we found out about the huge scandal to sell a U.S. Senate seat! Blago’s taped conversations were appalling and outrageous. Sadly, I find it hard to believe that this is a rarity in American politics. Blago is probably just one who was dumb enough to get caught unfortunately. Also, what a filthy mouth this guy has!

Biggest Victim of 2008: Retirees

While I hate to call anyone a victim because stocks do have an inherent level of risk associated with them, retirees who saw their assets get chopped in half definitely are the ones who lost big time with this year’s economic collapse. As a 20-something in a pretty good financial state, I can ride out this storm and have plenty of years ahead to grow my money. Unfortunately, people who are retired or looking to retire just lost a good chunk of the money that they need to live on.

Best Consumer Device of 2008: iPhone 3G

This is the easiest award on the list! After accidentally dropping my Blackberry in water (I should have done this sooner), I decided to move to an iPhone and it was the best decision I could have made. What an absolutely amazing device. If you want to read my thoughts on the iPhone, I will refer you to some of my past articles: My Official iPhone Review and Projections.

Best Retailer of 2008: Wal-Mart

Retailers got killed this year and this Holiday season is shaping up to be a disaster of a season for the retailers.  Wal-Mart, however, continues to dominate with their incredible distribution system and low costs.  Also, Wal-Mart is one of only two stocks in the Dow to rise this year.

Best Innovator of 2008: Apple

I know, I know, I’m bias towards Apple but it’s amazing that they continue to push the envelope across their product lines.  In 2008, we saw the release of the second iteration of the iPhone as well as a new Macbook line.  Their Macbooks even came with an entire new manufacturing process where the Macbook shell is a solid piece of aluminum.  With a massive warchest of cash, look for Apple to continue their innovation in 2009 while competitors struggle.  Apple’s stock will continue to struggle in the short term because of the U.S. consumer, but their company is as strong as ever.

Biggest Joke of An Industry: U.S. Automakers

I almost threw up when I watched some of the hearings in Washington of the Big 3 CEOs asking for tax payer’s money. It is such a shame that we run an economy that rewards crappy companies with flawed business plans. If we would let these awful companies go under, the result would be a vibrant auto manufacturing industry. Unfortunately, we won’t get that and eventually I see Obama taking over the auto companies and our wildly efficient government will then be in the business of making cars! Great!

My advice: Fire the management, scrap the unions and file for bankruptcy. Then, let other entities come in and buy up the assets and start building quality cars for a profit.

The Group With The Biggest Opportunity In 2008 (And 2009): 20-Somethings!

Falling stock prices and home prices might be frustrating for new investors and home owners but this is nothing but a great thing for 20-somethings. Remember, an economic down turn, if it has to happen, is best to happen to you earlier in your life than later. For one, you don’t have as much dependents in your 20s so an income shortage isn’t as big of a disaster as if you had a home, a wife and a bunch of kids.

With regards to investing, now is the best time for you to supercharge your savings and investing. Buying more and cheap prices mean you will accumulate many more shares than you would have even just a year ago. With that said, just because stocks are lower doesn’t mean all stocks are winners. Don’t invest blindly, but don’t be afraid to be aggressive if you know where to put your money.

With regards to real estate, homes are much more affordable than they were in recent years. Also, mortgage rates are at historic lows. If you can comfortably afford a home and are very confident of your job security, I would recommend looking into buying a home. Your home value might go lower in the near future, but for me, it is a trade off worth taking for the comfort of having a permanent home for my family.

With regards to business and income, this is a great time to start your own business or start up an attempt at a side income stream. A blog or an online business is a great pursuit that I talk about frequently on this blog.

The bottom line is that there are incredible opportunities ahead for 20-somethings, even in this down economy. I am committed to helping you find ways to increase your wealth through investing, real estate, income and other means. Don’t be discouraged by this past year, but be encouraged because the reality is that there are ways to make money no matter what the macro-economic picture looks like. Keep reading 20smoney.com and I will continue to document my pursuits in this area of my life. Happy New Year!

3 Comments »

  • The weakonomist said:

    2007 was the year for apple. 2009 might be good for them too. But in 08 their stock was hammered and no truly inovative products were introduced.

    I’d give it to google for all their free products and services. Google chrome has changed the way every browser developer builds their software. Android is still iffy (though only bc of hardware), but it is the only OS out there that will compete with apple in the mobile market.

  • kevin duffey said:

    What stock wasn’t hammered in 2008? Google got clobbered also. Not taking anything from Google, they are amazing also.

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