In the January issue of the “print product,” Marty Cortland offered some financial advice in an article titled “A Realist’s View of the Market: Aaarrgh!” The short version: Marty suggested you get out of the market. The article prompted a letter from Daniel Miller, of Dallas, which ran in the March issue:
It is irresponsible to advise people not to have any exposure to the stock market after such a decline. A better idea, even if you buy into some of your predictions, would be to have 85 to 90 percent of your money in high-grade municipal bonds and U.S. Treasury bonds, and 10 to 15 percent in out-of-the-money call options on stocks. If you get a bounce in the market, sell those calls and roll up to a higher strike. Your downside would be totally defined and your upside would be handsome, should your prediction of the end of the world as we know it not come to pass.
Marty asked for some space to rebut Mr. Miller. That space is provided after the jump:
A certain Daniel Miller has taken issue with my financial advice — calling it “irresponsible” in his letter to the editor in the most recent issue of D.
Golly, since I wrote the article, the nation has shed almost two million jobs (with no end in sight), January 2009 posted the worst January loss ever, there were fewer housing starts than at any time in the past 50 years, and yesterday the stock market closed at the same level that it was on April 11, 1997 (meaning if someone had invested a dollar per day in the stock market starting then through yesterday — a dollar every day for the past 4,335 consecutive days — that person would have lost money on every single dollar invested).
People who went to cash based on my advice would have avoided additional losses exceeding 19%. Granted, people who stay out of the market for the next two years (based on my wacky advice), and instead build cash and pay down credit card debt, will possibly miss a big run-up in the stock market (not likely, and not permanent) — but they will effectively be earning between a 19% and 29% guaranteed return (based on their credit card rate) on each dollar of credit card debt they retire. Plus, they will have a cash cushion if they become part of the unfortunate multitude who lose their jobs.
So, “irresponsible”? Really?
22 comments
So what happens if everyone sells every investment they have in the market?
My car runs on hope and change…..I’m in good shape.
Q: how many Marty’s does it take to screw in a lightbulb?
A: the world will never know.
Bring Marty back to D every month. His contribution on the back page was the first thing I flipped to when a new issue hit the mailbox. Yes we have all read about food, a hottie, a concert, or whatever but MC’s twist on life in Dallas was alway fun, light, and made me laugh.
Bring Marty back for good! I could care less about hair or children’s guns. Really.
Thanks, Mom.
A:
Marty doesn’t change his own lightbulbs. He has a devoted team of Pygmy manservants for that express purpose.
Sometimes, he even asks them for advice in marriage or some other intimate matter; often, he’ll banter with them as they change a lightbulb (a perilous task for a Pygmy, which is why they must work as a team), taking genuine delight in the little people’s snappy rejoinders. This serves to “humanize” him and remind the audience that this Marty Cortland is no snob — rather, he’s a democratic-spirited, magnanimous appreciator of Pygmy make-do and know-how.
The title of the movie is Cruel Smug Bastard, but we quickly discover that it’s intended ironically.
Marty – mind answering my question?
the market needs buyers AND sellers so if everyone “tried” to sell but there were no buyers, no orders would fill.
Dear Troll and Chuckie:
D Magazine has a total readership of fewer than 500,000. The total volume of trades on the NYSE and Nasdaq today was more than 4.2 billion shares. If every single person who read my article in D followed my advice, I think we would still be fine.
Best,
MC
If you have 3 million in T-bills, not only do you have about $90,000 annual yield but you also have 3 million in corpus, and nowhere that you have to go to 50 hours a week, not really equal, eh?
My guess is that Daniel owes Marty money.
Bring back Marty and restore my relevance!
$74 million in 2009 EBITDA will restore your relevance, but nothing less.
@ Fake Cortland: stick to soccer.
I don’t owe Marty money. I am, however, a Pygmy. You’re damned right I’m bitter!
For the record, Daniel is a complete professional at work and checks any animosity he has at the door. And he is correct regarding not owing me any money: he has repaid his entire balance, on time and without complaint. I wish I had 10 other Daniels working for me.
Marty,
No animosity, honest. Just goofing. And I’d hasten to point out that you do have 10 other Daniels working for you. Hell, it takes six of us just to change that damn bulb in your breakfast nook that keeps going out. And don’t get me started on the “great room”!
What do you mean, don’t get you started on the Great Room? You should be done with it by now. You have a long day ahead of you on the grounds, dredging the lake and re-seeding the meadow.
Okay, okay: I do have some animosity. You seem to have hired me and my family strictly for sadistic kicks. Why else would you hire 10 Pygmies to do a job that would only take three lesbians, or five Aggies?
Pygmies are half-priced, and they’re smarter than Aggies. (And I have the lesbians doing something else.)
Yeah, singing moody confessional folk songs at the Cortland family Sunday brunch — those lesbians just have it so tough.
Just bring him back! It was a great way for Dallas men to get a good snicker out of the ridiculous nature of Dallas at times.
Guns, Hair, Marriage – you boys at D are trying but its not the same. Really.