When journalism goes bad

[Mo]

Not sure if we have a thread for this, aside from OFFS, but here's a thread for dumb things written in the press (this should hit 1,000 posts in about an hour).

To kick it off:

When someone asks me if I've changed my mind yet and now want one of Apple ( AAPL: 348.45*, -0.18, -0.05% ) 's new iPads, I tell them: "Well, even if I did, I probably wouldn't want to spend $2,000 on one."

They generally looked at me, baffled. "What do you mean, $2,000? I thought they started at $500."

But I figure $2,000 is the minimum that Steve Jobs's new toy is going to cost me.

How come?

Simple. If I don't spend that $500, I'll invest it.

Historically, the stock market has produced average long-term returns of maybe 5% a year above inflation.

At that rate, in 10 years' time my $500 will have grown to about $800. That's in today's dollars—after inflation. In 15 years it'll be about $1,000, and in 30 years, $2,000.

Does he apply this logic to all of his purchases? Is the beer he gets at a bar worth $20? Is the candy bar worth $4? However, you would also need to inflate all of your earnings the same amount, therefore making everything cost the exact same in relative terms as they did before he ran through this stupid exercise.

[Jennifer]

If my parents had never ever bought me any toys, candy or amusement-park tickets, and chosen instead to invest that money for me ... Mo, if you and your wife have kids you must never, ever waste money buying them anything fun.

[dbcooper]

You should also live in a factory or office.

[Mo]

And go to no restaurant fancier than Taco Bell.

[dbcooper]

Dude, you should be cooking in Taco Bell, or atleast rent out the kitchen in the building where you sleep.

Also, what are we doing wasting productivity by living on a planet? We should be living in a dyson sphere.

[Sandy]

Does he really need to inflate his income? To me it looks like just another explanation of the time value of money.

Where it breaks down of course is his implicit substitution of a hacked Nook for it.

[thoreau]

And go to no restaurant fancier than Taco Bell.

Instead of slagging the quality of food at Taco Bell, I suggest that you watch Demolition Man before you embarrass yourself any further.

[Stevo Darkly]

Dude, you should be cooking in Taco Bell, or atleast rent out the kitchen in the building where you sleep.

Also, what are we doing wasting productivity by living on a planet? We should be living in a dyson sphere.

Why waste time "living" when we could be jacked into a virtual reality 24/7/365, feeding via intravenous tubes, and powering the world-controlling machines via our randomly twitching muscles and neuro-electricity or something like that?*

* (Although I would think even solar and wind power would be more efficient at this. But it's just some idea I heard about somewhere.)

[Jake]

I caught a bit of CNN this morning while getting my complimentary bowl of stale cereal at the motel. They were talking about some person or persons who won a $300,000,000 (roughly) lottery jackpot and speculating idly about "what took them so long to come forward." Anyway, in this discussion, one of the talking heads said that their odds of winning were "one in one hundred forty-three."


I waited for the other talking head to correct her. But no, neither one appears to have had any indication that there was anything unbelievable about that claim.


So I finished breakfast and left. That's all I know.

[dbcooper]

*Buys at least 134 lottery tickets*

[D.A. Ridgely]

The best strategy is to buy lottery tickets the day after the drawing. They cost next to nothing and your odds of winning are almost as good.

[Mo]

Does he really need to inflate his income? To me it looks like just another explanation of the time value of money.

Where it breaks down of course is his implicit substitution of a hacked Nook for it.

If $500 in consumption costs him $2000 in 2040 savings than a salary of $100K/year is $400K/year in 2040 savings.

[JD]

Does he really need to inflate his income? To me it looks like just another explanation of the time value of money.

Where it breaks down of course is his implicit substitution of a hacked Nook for it.

He has understood the time value of money in a mathematical sense, but not in a very meaningful one, IMO. Yeah, if you save that $500 now, it will eventually grow into $2000. EVENTUALLY. IN THIRTY YEARS. That's what he doesn't seem to be getting. The iPad now is not comparable to $2000 now.

[JasonL]

The best strategy is to buy lottery tickets the day after the drawing. They cost next to nothing and your odds of winning are almost as good.

Lotto arbitrage! But it isn't as convenient as buying lottery tickets when you are already at the quickie mart swapping your public assitance check for beer. I mean, once they run out of beer and you have money left, what are you supposed to do with it? KLASS WAAARRR! ( I hate public lotto monopolies, they are among the most cynical regressive bits of statism I can think of).

[lunchstealer]

Does he really need to inflate his income? To me it looks like just another explanation of the time value of money.

Where it breaks down of course is his implicit substitution of a hacked Nook for it.

He has understood the time value of money in a mathematical sense, but not in a very meaningful one, IMO. Yeah, if you save that $500 now, it will eventually grow into $2000. EVENTUALLY. IN THIRTY YEARS. That's what he doesn't seem to be getting. The iPad now is not comparable to $2000 now.

By the same logic, spending $600 on a computer in 1981 would've gotten him a Commodore 64. If he'd saved his money instead, he could now buy a $2400 machine that would've rivaled the biggest defense-department super computers of the day costing millions of dollars. Let me repeat that by his measure, he'd basically be making himself MILLIONS OF DOLLARS! And the only thing he'd have to do is MISS OUT THE ENTIRE HISTORY OF COMPUTING FROM 1981 TO 2011. But nothing much happened in that time, so no big.

My officemate also points out that he'd just now be learning to post his stories on the interwebs.

[JD]

On a similar note, here's something from money.msn.com:
http://money.msn.com/saving-money-tips/ ... 502c7945f7

I think the lesson she's trying to put across is "be wise with your pennies, and you'll do OK", but really what comes across more is "be a jerk to your granddaughter, which might mean you have no real relationship to her, but it's OK because when you die you'll be able to leave her some cash."

[Kolohe]

1) There is a personal finance point to be made (which, as a presumable professional personal financial journo, he did not make, thus the malpractrice*) on opportunity costs. But one illustrates it, especially in cases like this, by comparing the purchase not to the 'do-nothing' option, but to the cost of having something similar and maybe not as gucchi, but good enough. The most frequent example of this is foregoing the 2 (or 4) dollar starbucks, and making your own coffee - and then pocketing (and/or investing) the buck fifty a day difference

2) Definitely was a malaproprism (and again 'professionals' don't get the bennefit of the doubt) but to be fair when at the 300+ million payout, powerball/megamillions is one of the few times where the theorectical expected value of playing the lottery is actually positive. (the actual expected value is more convulted, because of among other things* the split jackpots - that's why you still shouldn't play patterns either numerical or geometric)

*in both Mo's & JD's links

**and because of taxes, and because the series payout is different than the lump sum.

[Mo]

On a similar note, here's something from money.msn.com:
http://money.msn.com/saving-money-tips/ ... 502c7945f7

I think the lesson she's trying to put across is "be wise with your pennies, and you'll do OK", but really what comes across more is "be a jerk to your granddaughter, which might mean you have no real relationship to her, but it's OK because when you die you'll be able to leave her some cash."

I bet one of his golf outings could have bought her dozens of penguin clocks.

Also, is a person who needed a $10,000 windfall inheritance and $500 in eBay sales to wipe out her credit card debts in any position to give personal finance advice?

[JasonL]

So I have really strong feelings about personal saving as a hedge against the wackiness of life, as a liberator to pursue the kind of life you want to lead, and even as probably the greatest defense a wealthier free society has against rising demand for transfer payments. People should understand future value and opportunity costs of key purchases.

If the question is "Hi, I'm not contributing to retirement or health savings at all, I make $30k/year and I want an iPad, whaddaya think?" I might have a response somewhat like the one noted here.

Financial planning is liberating because it allows you to truely know what your ipad fund looks like after you have gotten key areas like expensive debt, retirement and health savings, and a cash buffer addressed. You know it's okay to get your ipad if you have a plan for those other things. If whim governs your financial life, the iPad could be a symptom of larger sorrow.

ps: I heart my ipad2. I'm a little app wacky right now. I do mindless strumming on garage band even though I can't seem to access the How To manual (link 404s out). Angry Birds. Gryll on the go (that I can actually read). Food and Wine for ipad is beautiful. I shall not be bored with it anytime soon.

[dhex]

couldn't that guy just have said "no, i'm not going to buy an ipad" and leave it at that?

[Sandy]

couldn't that guy just have said "no, i'm not going to buy an ipad" and leave it at that?

But it's an APPLE. They're slightly more expensive and I can't afford them, therefore anyone who likes them is an ASSHOLE.

[Mo]

couldn't that guy just have said "no, i'm not going to buy an ipad" and leave it at that?

But it's an APPLE. They're slightly more expensive and I can't afford them, therefore anyone who likes them is an ASSHOLE.

Except in the tablet space, where they are the same price or cheaper than the competition, with a more robust ecosystem. I considered a Xoom prior to the announcement until I realized: a) it wouldn't save me money, b) Android 3 gets pwned on app selection and c) I really don't care that much about having an SD card slot or a Flava Flav style clock on my desktop.

[pistoffnick]

But it's an APPLE. They're slightly more expensive and I can't afford them, therefore anyone who likes them is an ASSHOLE.

[lunchstealer]

I agree with the basic premise that Congress and the executive should go without pay during a shutdown, but I can't go more than about three sentences through this Grey Lady op-ed without shouting "Oh, For Fucking Fuck's Sake!"

http://nyti.ms/gerS54

The upshot is that federal workers who do important work for the public — cleaning up toxic waste, enrolling sick people into lifesaving medical trials, answering medical hot lines, running national parks, processing passport applications — risk being sent home and going unpaid.

GOD FORBID we don't have people running National Parks while we try to figure out how to fund our THREE-TRILLION-DOLLAR-IN-THE-RED-GOVERNMENT!

And his bitchy little conclusion?

]In my travels lately, I’ve been trying to explain to Libyans, Egyptians, Bahrainis, Chinese and others the benefits of a democratic system. But if Congressional Republicans actually shut down the government this weekend, they will be making a powerful argument for autocracy. Chinese television will be all over the story.

Yeah, that's the fucking thing.

The difference between China/Egypt/Libya and liberal democracy isn't necessarily that government runs perfectly in democracies. The difference is what happens if happen to voice your opinion that the government is sucking. In the US, NYT or Fox News bitches at you (depending on who's currently running the Leviathan). In Egypt/China/Libya, you get your shit thrown in jail if you're fucking LUCKY.

I'm pretty sure that some guy getting tortured in some prison somewhere, or getting shaken down by some Party apparatchik would fucking LOVE to shut down their government.

[thoreau]

I agree with the basic premise that Congress and the executive should go without pay during a shutdown, but I can't go more than about three sentences through this op-ed without shouting "Oh, For Fucking Fuck's Sake!"

linkee?