bought stocks for Macon road

20-Dec-2010



Sold Vanguard total bond fund (VBTLX) and prime money market (VMMXX) and bought Vanguard S and P 500 (admiral shares) and Vanguard Small cap (admiral shares).  Split the money 50-50 between SP 500 fund and Small cap fund.

Sold Total bond fund (VBTLX) -- approx $530,100
Sold Prime money market VMMXX -- approx $288,884

Bought Vanguard S and P 500 (VFIAX) - $115.31 -- 3554.39 shares  -- approx $409,856 total
Bought Vanguard Small Cap (VSMAX) -  $34.97 -- 11,747.78 shares -- approx $410,820 total

Bought stocks for NBC

In mid December 2010 bought about $100,000 of each of the following stocks for NBC
Amerigas Partners LP -APU - $48.3299-- 2070 shares
Conoco Phillips - COP - $64.48 -- 1550 shares
Johnson & Johnson - JNJ - $61.818 --1617 shares
Kraft - KFT - $30.65 -- 3263 shares

Altria - MO - $24.57 -- 4070 shares
Merck - MRK - $35.98 -- 2779 shares
ATT - T - $28.76 -- 3477 shares
Walmart - WMT - $54.28 -- 1842 shares

Google - GOOG - $591.81 -- 169 shares
McDonalds - MCD - $77.13 -- 1296 shares
Proctor & Gamble - PG - $63.65 -- 1572 shares
Autozone - AZO - $264.70 -- 378 shares

Bought about $100,000 of each

Tracy Caldwell Dyson - astronaut, russia

A Soyuz descent module carrying Russians Alexander Skvortsov and Mikhail Korniyenko, and NASA's Tracy Caldwell Dyson came back to Earth September 25, 2010 from the International Space Station and landed safely in Kazakhstan, a day after an initial attempt to return was aborted after latches holding the Soyuz TMA-18 craft to the orbital station failed to open.

Why are companies bulging with cash and should gov borrow more or less?

From Jason Thomas article in National Affairs.  There are 2 theories about why companies have amassed so much cash right now and are not spending it.  One is that there are no customers right now and so why build new plants and shops?  The other is a David Ricardo theory that when businesses see an increase in government debt, they start to save more because they know taxes will rise in the future.

Which is true?  If the second one is true then the almost $1 trillion stimulus program by the fed gov is bad because it will make things worse because gov had to borrow more to get the money for the stimulus.  So instead of stimulating, the stimulus will cause businesses to invest even less in new projects and save more. This is because the businesses will see that they will have to pay even higher taxes in future due to the higher gov debt.

Also, even more borrowing by US fed gov could finally exhaust the willingness of bond holders (like Chineese gov and others) and make them demand higher interest to keep buying US bonds.  Interest rates are very low right now (fall 2010).  If rates go up enough it will cause recession and crush US economy.

But others say that US gov should continue or even increase US gov debt level because to start to balance the Fed budget (by lowering gov spending) as was done between 1936 and 1938 will cause a massive slow down and drop in output that will cause an increase in unemployment.

Bought International stock fund for GTNC

TOday I bought $45,000 of VGTSX Vanguard Total International stock fund for GTNC.  We had too much cash and bonds, so I bought some stock. Share price was $16.09.

sold intermediate bonds for GTNC Vanguard account

Todat I sold 250k of intermediate bond fund VFIDX and bought short term bonds VFSUX.  I did this because I still anticipate interest rates going up at some point.

Bought Ivy fund and more municipals from John Snowden

Yesterday John Snowden called me and told me I had 100k in cash in account due to sale of longer term municipal bonds.  I told him to buy 30k of Ivy New Opportunity fund (INOAX) which he had told me about, and 70k of municipal bonds less than 5 year maturity.  This is in Morgan Keegan non IRA account.