August 16, 2007

What's the State of Your Estate?

I believe the saying goes something like, "Once is chance, twice is coincidence and the third time is a pattern." In my recent radio show research I've come across the concept of having a Revocable Living Trust four times, so this being beyond the magical third time, I must share.

I confess that I really hadn't given estate planning much thought until I came across it in Suze Orman's "Nine Steps to Financial Freedom." But she writes about it so passionately that I've had it the back of my mind ever since. In asking around in a kind of straw poll, it seems that most people do have wills, but not much beyond that. She suggests having something called a Revocable Living Trust.  A Revocable Living Trust is a way to avoid some of the the major challenges that come from having only a will and nothing else. The biggest one being the cost and hassle of having your will wind up in probate court.

For a solid understanding of the differences between the two, I tapped Suze Orman's website and here's the gist:

A  Revocable Living Trust is a trust established while you are living. It is revocable, so you are able to make changes whenever you want, as well as reclaim the property transferred into it. It describes how your property should be managed while you are alive, and how it should be distributed upon your death. A will designates where your assets go upon death. But sometimes you need someone to make these decisions when you get sick. This is why you need a Revocable Living Trust. You can appoint yourself as the trustee when you are well and a successor trustee if you become incapacitated. This makes it easier to get money to your beneficiaries without going through probate court, which can take between 6 months and two years. A Revocable Living Trust with an incapacity clause will cover all of the bases.

Finally, I mentioned the book "The Wealthy Barber" by David Chilton on one of our recent radio programs. This is another great resource for estate planning ideas. Check out chapter five entitled "Wills, Life Insurance, and Responsibility." Although not a very exciting topic, I think it would benefit just about everyone to read up on it.

P.S. I also mentioned another book for Investing 101 called "The Wall Street Journal Guide to Understanding Money and Investing." If you've ever wondered how stock quotes are generated, how a bond's worth is determined or just about anything else having to do with money, this is a good one.

Alison Abney        

Kim Snider, Kim Snider Financial Communications and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.


Posted at 02:22 PM in Ideas | | Comments (0) | TrackBack (0)

February 22, 2007

Snider Method "Joint Task Force" Update

The following are the minutes of the first meeting of the "Joint Task Force" formed at the SIM Open Space to work on rigorously tested improvements to the Snider Investment Method™. The task force is comprised of Snider alumni as well as KSFC and Chronim staff. Thanks to James B. for running point and producing the minutes.

 

Meeting Minutes 02/15/07

 

Attendees: James, Jesse, John C., Tom, Kim, Ron, Kevin

 

Agenda topics information:

  • Volunteer information: I have now heard from all of the folks from the open space meeting as well as the 2 folks that were unable to make it. With John Cooley and Kevin Konecney joining since I sent out the spreadsheet, the current volunteer count is at 13.
  • Open space meeting minutes: I sent out the specifics of our meeting minutes. Kim has let us know that the meeting minutes from all of the sessions will be made available via the Snider Insider in a summarized format.
  • Yahoo Group discussion. I opened the topic up for discussion. We had some folks comment on the positives of a yahoo group:
    • A common place for documents
    • Allows for ‘timeshifting’ – meaning I can work on something when I have availability, and then post it, then someone else can work on it when they have time.
    • You can set it up to keep you ‘up to date’ in batch mode – rather then getting bombarded with notifications at every posting.
    • Allows for a moderator to restrict/grand access
    • Etc…
    • Decision at this time – Not Yet. If / when things get too complex for direct email communications then I/we will set one up as necessary.
  • Survey of Skills. One recommendation made by a volunteer was to take a survey of skills to we know what expertise (give or take) that we have within this group. The call attendees thought it was a good idea, so I will follow up with an email asking for folks to give HIGH LEVEL skills they posses.
  • Kim – explain “tackle the issue of stock selection criteria”. Kim explained that it is an area that she and Jim have discussed a lot since the open space meeting. Jim’s recommendation is that this team takes a hard look at all factors that could be considered to be used as additional stock selection criteria, and compare past results from the Chronim accounts to determine if there may be some criteria that could be indicative of a forthcoming ‘Dog’. We discussed at length why this might be a beneficial area for this team to start working in. The primary reasons being:
    • It is something that folks are passionate about changing – as shown by the multiple discussions of Dogs and Winters at the open space.
    • It is an area where there may be some ‘lower hanging fruit’ might be available to add criteria to the stock selection criteria.
    • It is something that this team could sink its teeth into, and possible come out with a win (suggestion) to give this group legs (to keep running).
    • It is an area where this team may be able to interact with other alumni and use their feedback and/or provide them feedback.
  • Discussion regarding historical data: Primarily Jesse and Clayce are looking into the options available for historical data (Morning Star, Value Line, the Chicago datasources, etc). Some recommendations made: Make sure it has data available that was available ‘at the time’ – meaning:
    • Before adjustments for Splits. (may run into $25 minimum price rule)
    • Before Restatements have been applied. (best case scenario, have both)
    • Updatable – keeping it up to date, as well as growing with new info at time passes
    • No one has seen a source with both Stock and Option pricing history – would have to be separate.
  • Tom shared with us a high level description of his model. He has tried to (and successfully) reproduce historically any stock beginning in any month back to Jan 2000. He has been attempting to put the decisions demonstrated in the Method Book into code. He has been gathering historical data from several sources and has backtested his own transactions (he has 6 months worth) as well as other positions that have gone into winter that others have shared with him. It is not a complete and comprehensive model. There is much to add to get the whole process in the model. (for example it doesn’t include assigned cash to other positions and stake calculations etc…) Tom (and others) shared some modeling insights:
    • Models can cause problems – you begin to believe what your model says
    • Models can be good tools to perform some ‘what if’ analysis
    • Models can be good to test what is ‘reasonable’
    • Models can help give you insight
    • There are different types of models: Empirical, Statistical, and Heuristic.
    • Having historical (and correct historical) data is VERY important
  • We then discussed      the problems with building a full blown model around the Snider Method:
    • The method itself, and the options usage in the method has only been available for a short period of time (in comparison with stocks and stock pricing).
    • Therefore, you cannot perform massive amounts of back testing (limited to really late 1990s or early 2000s).
    • Also, therefore, you cannot historically model the method against varying economic trends (only those that have occurred over the last 6-8 years).
    • Some metrics are not re-creatable based on pure historical data – like the overall ‘mood of the market’.
  • At this point the      conversation moved to the discussion of What this team could/should do, and how should/could we move forward. Several points came out of this discussion:
    • The approach of building – from day one – a completely comprehensive model to account for everything – would be TOO MUCH of an undertaking. It would take a great deal of time, and there would be little to show in terms of progress along the way.
    • Instead, we discussed taking on smaller pieces at a time. Working towards smaller deliverables, and building momentum through delivering accomplishments.
    • This led to the discussion of using the Stock Selection Criteria as an initial effort.
    • We also discussed the benefits of breaking the tasks into pieces, and having small subgroups (or individuals) work on them to help accomplish the overall goal.
    • We decided there were a few activities that can all be worked on at once (in parallel), if individuals or subgroups volunteer to take them on. The items discussed were the following:
      • Tom’s Model (TM): Tom is going to continue the work on his model
      • Stock Selection (SS): Prepare Data:
        • Chronim needs to prepare their data for availability (meaning stripping out any customer identify information)
        • Purchase the historical data
      • SS: Identify the ‘Area of Focus’:
        • Define the characteristics of the positions that this effort is trying to eliminate (What makes a position a ‘dog’? ‘undesirable’?)
        • Tag positions as Desirable vs. Undesirable
      • SS: Perform DB activities:
        • Define what database format will allow for the best flexibility
        • Create the DB structure
        • Determine the best way to load the data
        • Format the existing (stripped) .xls files for import into DB
        • Build DB structures to hold historical data
        • Import the purchased data into DB (make it usable)
      • General (G): Other general activities
        • Gather insight from unofficial Snider Alumni Yahoo Group
          • Catalog ideas for data points (factors) that are to be considered against ‘Undesirable’ vs. ‘Desirable’ positions.
          • Catalog currently circulating ‘tweaks’ to the method for the potential of identifying another area to investigate.
        • Gather insight from Open Space meeting notes
          • Catalog ideas for data points (factors) that are to be considered against ‘Undesirable’ vs. ‘Desirable’ positions.
          • Catalog currently circulating ‘tweaks’ to the method for the potential of identifying another area to investigate.
      • SS: Perform comparison activities:
        • Identify the data points (factors) that are to be considered against ‘Undesirable’ vs. ‘Desirable’ positions. – Maybe driven by historical data provided
        • Discover averages of the factors for Undesirables vs. Desirables
        • Determine if significant differences exist
        • Determine a cutoff point – compare Desirables and Undesirables that would be eliminated
        • Finally – see if any recommendations emerge

 

  • Finally, we decided to end the call, I would write up these minutes, layout for everyone the tasks identified, and see who would be willing to volunteer to work on the tasks.

     

    Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.

Posted at 01:42 PM in Ideas, The Company, The Customer, The Snider Investment Method | | Comments (0) | TrackBack (0)

Technorati Tags: , ,

February 08, 2007

An idea for optionsXpress

Snider Investment Method™ alumni Paul Crider sent the following idea to optionsXpress:

 

This is an idea for you to consider. Probably there is a significant percentage of your customers who have more than one account. I have on a few occasions made a trade in one account which I intended to make in another account. For some reason the account switched from the IRA account to the margin account or vice versa. This switch is easy to miss because the account designation button is small in comparison to the rest of the page and much of the time has scrolled off of the monitor screen.

 

Why can't different accounts have a different background color, i.e., the current white background for margin accounts, light pink for IRA accounts, and other colors for whatever other types of categories OX offers. Alternately, and probably even better, program the software so that each customer can choose a color for each account.

 

This would be helpful for the adult child who is handling his/her own account and also the same type of account for the elderly mother or father. It could very well reduce the frequency of trades made on the wrong account and the need for OX employees to "bust" trades from one account to another. I mentioned this idea to Kim Snider this weekend, and she thought you folks at OX may like the idea.

 

Here is the reply from Lou Friedman at optionsXpress:

 

Great idea Mr. Crider.

 

Happy to report this is now in the works, and will be available to you and ALL of Kim's students sometime before the end of March!

 

When it goes live, you'll have the ability to change the color of the web site in your profile settings. You will be able to choose a different color for each account.

 

Our best ideas come from customers like you.

 

Thank you for your business. Keep in touch.

 

Lou Friedmann, EVP

www.optionsXpress.com

 

I think this is a great idea - it's simple and should be useful to a lot of our students. Does anyone else have any ideas that we should pass along to optionsXpress? If so, leave them in the comments below. Thanks Paul for your follow-through.

 

Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.

Posted at 09:24 AM in Announcements, Ideas, Tools and Resources | | Comments (0) | TrackBack (0)

Technorati Tags: ,

January 23, 2007

Workshop Survey

A few weeks ago students were asked to fill out a post-workshop survey. Whether to do this survey or not had been a topic of much discussion between Kim, Alison and I for a long time. Some of our hesitancy came from the fact that we didn’t want our students to feel burdened by having to think or write at the end of 16 very full hours. Moreover, we have consistently received so much feedback from our students we assumed if there was something they wanted us to know…well, we would.

Finally we came to the conclusion that people want to be heard. I don’t mean that just as it applies to the workshop - I truly believe all people have a need to feel like their opinion matters. So, Alison and I created and passed out a very simple survey. The results are quite interesting so far. People write and write and write. They tell us what they liked and didn’t like and the feedback is incredibly useful. So far these are some of the reoccurring themes:

     We should spend more time on Bookkeeping, Cat 2 and Cat 3

     Most people need a little review of about how options work

     We should add more quizzes and hands on learning

Our goal is to make the workshop absolutely awesome. We want you to leave and say, “WOW! I got my money’s worth. I can't wait to use the Snider Method.”  So, I have some questions for those of you who attended the pre-survey workshop. What should we do/change to make the method easier to understand and easier to implement? What do you wish you could or would have let us know after the workshop?

We eagerly await your feedback. You can post here or email me directly at shelley@kimsnider.com

Thanks in advance,

Shelley Seagler

Kim Snider Financial Communications makes no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Diversification does not protect against market losses in a declining market. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk, including possible loss of principal.

 

 

Posted at 03:36 PM in Ideas | | Comments (0) | TrackBack (0)