Just Because They're Crazy Doesn't Mean They're Stupid!

Crazy people are not stupid, just crazy.   They are more than capable of making elaborate plans and also more than capable of manipulating other people.  In fact, manipulating other people seems to be their forte.

I mention mental health in this blog a lot for a number of reasons.  First, I have been surrounded by crazy people for most of my life - friends, family, co-workers, and the like.  Particularly family.

Second, if your mental health is not sound, your financial health is not sound.  It goes without saying that if your perception of the world is skewed, you cannot make rational decisions.

Even mild mental illnesses or distortions of reality can affect your ability to see through the fog of life.  Many folks think they can latch on to "the next big thing!" and if they buy Facebook stock, they will end up super-rich down the road.

Like I said, a lot of people have a skewed perception of reality.

But beyond folks who buy into payday loans and "one trick of the tiny belly" and other ripoffs, are crazy people - folks with mild to wild mental illnesses.  These are often people who take advantage of others, as part and parcel of being crazy.

At first, you want to feel sorry for such people.   And you might - until they shoot up a movie theater or an elementary school - and kill dozens of people.   If you are smart (and not crazy) you might realize at that point that maybe "feeling sorry" for the mentally ill is not a good idea.

Why?   Well, mentally ill people are not stupid or retarded, even though many lay people tend to lump them all together.   Well, heck, even professionals used to, putting retarded people in the same mental hospitals as psychotics.   There is a huge difference.   Most retarded people are generally nice, friendly, and want to be self-sufficient.  Most are harmless as a fly.  They just suffer from brain damage.

The mentally ill, on the other hand, can be abusive, manipulative, violent, evil, and a drain on your emotions and finances.   They are not retarded and they know how to get what they want - whether it be attention, money, fame, or whatever.

And this is why I say that it is best to leave mental illness to professionals.   As a layperson, trying to help or "save" a mentally ill family member, friend, or acquaintance, is only going to land you in a whole lot of trouble - and likely not help the person at all, but make their situation worse.

As I have noted before, mentally ill people are usually narcissists of the first order.   They are incredibly sensitive to their own pains - physical and emotional - but rarely register the needs of others.   The rest of the world is wallpaper to them - a surrounding diorama that is merely two-dimensional and not real.  In extreme cases  - Sociopaths - the mentally ill can play "normal" people like a cheap violin, and get away with, well, murder, literally, at least for a time.   They can appear charming and convincing, when they want to, and take you to the cleaners.

The problem with the mental illness industry (and it is an industry) is that it caters to the narcissist in the mentally ill.   When someone exhibits odd behavior, they are given extra attention, and sent to a therapist, who wants to hear about their every emotion and feeling and life experience - all of which are made out to be more important than they really are, thus amplifying these emotions in the patient.

The mentally ill person now has a hobby.   And I have known several, who will regale you for hours about what their therapist said, what drugs were prescribed, and then read to you from their own copy of the Physician's Desk Reference about the drugs they are taking.   It really just creates a feedback circuit for mental illness, where bad behavior is rewarded and amplified, over and over again.  Getting "well" is no longer a goal, and in fact, receives negative feedback (less attention).

And the patient quickly realizes that they can get attention and special treatment if they play up certain behaviors.  They can skip school, get out of work, or live off family members (or ask for money and handouts) if they just behave in a certain way.   They can even scare other people with their "crazy" behavior - which in itself is a form of empowerment (Think about it, how many horror movies are premised on the "crazy" sociopath who is the villain.  We are conditioned to be "scared" of "crazy" behavior.  Myself, I find it annoying as snot).

So, why bother trying to "get well" when that involves effort and hard work (and getting a job) when they can just appear as a helpless victim and get swag in the process?

Again - and it is the title of this posting - the mentally ill aren't stupid.  They aren't helpless or incapable of taking care of themselves.  When you read about these psychotic killers, sociopath serial rapists, or mass-shooters, the thing that comes out in the end is that while their view of society and reality was warped, they were plenty smart enough to plan their crimes in great detail, obtain weapons, plan their attacks, attract victims, and even dispose of bodies (and avoid detection by the police, in some instance, and beat the rap).  They are not dumb!

Similarly, the more mildly mentally ill are not stupid when they hit up friends, family members, and our government for money.   They know they can get by on the largess of others, if they can act in a certain way, and play to your emotions and needs.   They know, for example, that you might want to feel like a big-shot, handing out money - altruism is always suspect.   They can play on your sympathy - or feelings of guilt.

So what's the point of all this?   Well, when a friend or family member hits you up for money on the grounds they are "depressed" and need cash to pay off their credit cards or cable television bill (or pay for their pot), don't fall for it.   Chances are, they don't need your help, but professional help.  And if you enable their lifestyle, are you really helping them.

It is tempting to play the bigshot, handing out money and trying to control others' lives.  And quite a few people in the USA do this - viewing their children, siblings, or even parents as "damaged goods" who "need help" when in fact, all they want is a free ride.

I related before the children who decided to "take car of Mom" (because she was "crazy") by paying her cable bill and paying for new tires for her car.  They found her an apartment and paid the rent.   They were chagrined later on, when Mom showed up with a brand-new car.   Turns out she didn't need as much "help" as they thought she did - and if she was crazy, she was crazy like a fox.

Others like to play the helpless victim - telling you stories of how they were exploited (emotionally or financially) by ex-spouses or "the system" or whatever, and asking for $500 (always that nice round amount) nearly every month.   But when you examine their finances in more detail, it turns out they are paying for stuff you might not be able to afford - smart phones, cable TV, expensive restaurant meals, and the like.

And yea, I've had this happen to me.   Someone once asked me to pay off their credit card bill, on the basis that I "had a lot of money" and was "lucky".    But when I looked into their finances, they had cable TV (which I did not have), an expensive internet service (which I did not have) and spent at least one or two days a week at a bar having $15 drinks (which I could not afford).   I was "lucky" in their eyes, and they were "unlucky."   But if you looked at it from a neutral point of view, they were living a larger lifestyle than I was.

Helping people is fine and all.   But make sure they really need your help, first, before trying to rescue others.   You may, in fact, cause more damage than good, particularly if you give all your money away to others - and there is no one there to "help" you, later on.

Invasion of the Body Snatchers!

Check your basement for Pods....

In the classic SciFi/Horror picture, Invasion of the Body Snatchers, alien beings come to Earth, and take over mankind, one person at a time.   People are replaced with replicants of themselves, which look and act like their old selves, but seem strangely detached.

The hero watches as more and more of his friends and family start acting strange.  It is only then he realizes that the aliens are taking over - when he finds alien pods in the basement.   Of course in the climactic final scene, they try to make into a replicant as well.  "Join us" they coo, "it's not so bad!"

I thought of this movie the other day when a friend came over.   He seemed strangely detached and distracted.  We were having a pleasant conversation, and then there was a noise from his pocket, and he said, "Wait a sec, I have to get this......"

[cue: scary violin and theramin music]

....He then pulled out his new smart phone and started texting.

I nearly fainted.

"What were you saying?" he said as he texted, "I'm paying attention...."

But the conversation quickly turned into a series of "uh-huhs" from him, as he furiously worked his thumbs over the keyboard, his mind lost in distraction.

Another one, lost to the Pod people.   The iPod people!

And it struck me that the proliferation of so-called "smart phones" made me feel like the man in the movie.   Every day, another friend, family member, or even stranger, succumbs to the inevitable, and becomes a blank-faced moron, staring into a tiny screen all day long.

....And then one day, you come home, and there is a new iPod 5 on the kitchen counter.   They're in your house!   Get out, now!

Fortunately, it hasn't reached that level just yet.   But it is getting scary.  More and more people disappearing, and re-appearing, slightly changed, as alien replicants, wired with little white wires going into their ears.   Talking to themselves, it appears, as they walk down the street.  Staring for hours into little tiny boxes and tapping at them furiously.   Jamming said boxes in your face to show you photos.

It's weird and disturbing.   Normal people one day, replicants the next.  Constantly updating their Facebook page in real-time, or texting the Grandchildren while you are at a restaurant.    Messaging each other in their secret alien code.   Even detecting the presence of other replicants with something called a "grinder app."

They swerve all over the road, plugged into these boxes.  Apparently aliens don't know how to drive.  I suspect they are trying to run me off the road, suspecting (correctly) that I am not "one of them."   They cannot take their attention away from the boxes implanted by their alien masters.   All good in life must come from the box!  All hail the little boxes!

They were once fun people to be with.  Vivacious and full of life.   Able to look you in the eye when they talked to you.  Now they are as sullen as teenagers, plugged into the alien machinery, taking orders from who knows what far-off alien lord, enthroned on his spaceship - preparing for the final invasion, to wipe out resisters such as myself.

I will be holed up, stocking my house with canned goods.   Armed with nothing but my Motorola Flip-Phone and an AT&T GoPhone plan.   I haven't got a chance, I know.  But I'd rather go down fighting.  Better to die on your feet than live on your knees!

I can hear them gathering around the house now.  I can see the eerie lights from their little Pads and Phones.  There is no way out! 

I wonder if it will hurt...

The Man Who Had Everything and Yet Nothing

Having a lot of stuff is nice, but does it really make you happy?

In one of my recent postings, I mentioned a fellow who made and lost a ton of money on the Internet, through shady dealings, well before he was 30.  And the article in the Atlantic that describes him, tells of boozy trips to Las Vegas, and glitzy suites, fancy cars, and model-like girls on his arms.

To some people, that would be the definition of happiness - having all that "stuff" and money to throw around, surely would be the cat's ass, right?  And all those hot babes - that has to be the life, right?

I am not so sure.   To me, Las Vegas is a thin veneer of glitz covering a huge stinking mound of dogshit.   There is a lot of bad going on there, from underage prostitution, to compulsive gambling problems, drug use, alcoholism, organized crime, corruption, and of course, just plain old street crime.

What's not to like?  It's all so glamorous.  Right?

One thing the article failed to mention was whether the fellow had a spouse and was married or not.  In fact, the article seemed to be very silent on that subject.

Can you really be happy with Vegas call-girls - or the type of women who are just attracted to you because you have a lot of money to throw around?

Is having a lot of "stuff" really going to make you happy?

I think not.

We are planning a trip to the Keys this year, and it is the first time we have been in nearly a decade.  We used to go by plane, car, camper and even boat, and we know the place pretty well.   Sadly, a lot of what attracted us there has since changed.   But that's another story.

We met a fellow down there once - and his partner - and they seemed, on the surface, to "have it all".  They had a showplace house in a very desirable neighborhood.  The house was used for catalog shoots, it was that nice.  And they had a second home, up North, in New England, on over 100 acres of land, with their own small lake.

And of course, they had the granite counter-tops, stainless steel appliances, and the fancy German cars and whatnot.

They had everything, it seems, but happiness.  Why?

Well, to begin with, when I say "they" had all this junk, that really wasn't true.   HE had all the stuff, and his live-in boy-toy had little or nothing.   And this isn't a Gay thing, either.  How many heterosexual men have tons of money and a "trophy wife" who is little more than a Barbie-doll (to be disposed of once the plastic surgery stops working)?   It is the same deal - people with no real relationships in their lives.

Oh, sure, they have lots of "friends" in the sort of Facebook sense - people they know, sort of, but don't really know.  They are the "right people" to know - connections and social status and all - but not the sort of friends you share your troubles or secrets with.   Because, let's face it, in that sort of social set, you don't admit to having troubles.  You put on a facade of perfection and happiness, and try to get everyone to buy into it.   Why not?  You've bought into theirs.

Anyway, getting back to the story.  We hung out with these guys for a while.  But the expensive crap they owned wasn't a help, but a hindrance to the friendship.   That sort of thing  just gets in the way, sometimes.  You get tired of "ooohing" and "aaahing" over their expensive crap - and wonder whether they really want you around just to be an audience for their lives.

Anyway, the inevitable happened.   HE decided to dump the young boy-toy when he became too high maintenance.  And he sent us an e-mail saying horrible things about his former partner - who disappeared from the face of the Earth.   We went to see him one last time.  He had a new "friend" - the gay equivalent of a "trophy wife" - a dumb-as-stone 20-something who spent all his time in the gym, and felt that living with a rich guy was a pretty neat gig, even if he would never end up being a real part of any of it.

We sort of drifted away from them at that point.  It was, well, Icky.  The fellow with all the dough wasn't really a very nice person - just a guy with a lot of money and crap.  How he treated people was readily apparent.  He was only concerned about his own existence, and I am not sure he was ever really happy - or ever in love.

And that last sentence right there is the key.  The best things in life are free, they say, and it is true.  And love is the best thing in life and doesn't cost a thing (and no, you can't get it from a hooker in Vegas, or a trophy wife or a boy-toy).  Real love, based on a real peer-to-peer relationship, one that lasts a lifetime (and not just until you lose your looks or money) is a priceless thing.  And the poorest person in the world who is in love is as wealthy as Carlos Slim (who from all accounts, really loves his wife).

It has been a decade since we have been back to the Keys, and from what I can see online, it appears our rich friend has sold his house there.  Maybe he is retired now (he was about 60, over a decade ago when we met him).  Maybe he is dead.   But the lesson I learned from him was that having a lot of fancy shit was really not such a wonderful deal, if underneath it all, you are unloved and unhappy.

And as for his fancy house?  Well, I could rent it, if I wanted to - or one just like it.   What's the big freaking deal about having a fancy house?   I know from experience that living in a haunted house is no fun at all.

So if you never make a ton of money in life, don't sweat it.  If you are comfortable, have a place to live and three squares a day, you are pretty lucky.   And if you have someone to share it all with, you are the luckiest person in the world.
 

Legalized marijuana! How is that going to play out?

Whoa, dude!  Legalized marijuana!  How is that going to play out?

Marijuana for recreational use (as opposed to industrial use) is now legal in Colorado.  How is this going to play out?

I have expressed my views on pot before.  Yea, it saps the life blood out of people - particularly when you are young and trying to get ahead.   Pot smokers are more likely to see themselves as passive victims of external forces, rather than proactive people who take charge of their lives.  But as I noted in my many postings, you can't tell a po-thead anything, so don't bother wasting your breath on that issue.

And part of me wants to see how this experiment works out.  After all, just as prohibition expanded the role of organized crime in the USA, the illegalization (word?) of marijuana has lead to a lot of criminal activity both here and around the world.

It also will be interesting to see how it plays out with regard to the users.  Will they be the responsible stoners that claim they will be?  Now that pot is legal in Colorado, will their legal troubles be behind them?  Or, will their lives continue to be a series of "hassles" with authority figures - that turn out to have nothing to do with pot being legal or not, but rather how it affects their brains.

Like I said, it is an interesting experiment, and the pro-legalization forces will have a lot to prove.

From a practical standpoint, there are still going to a whole lot of problems.  Marijuana is still illegal on a Federal level, and while the present administration might decide not to enforce the laws in Colorado, you can be sure they will do elsewhere.   And bear in mind the present administration said they wouldn't bust medical marijuana dispensaries, but went ahead and did, anyway - and then changed their mind yet again.

Can you imagine how this will play out if the GOP takes the White House?   The legalization in Colorado may become meaningless in short order, if the Feds decide to enforce Federal Law in the State.

But taking that aside, what is going to happen?

Denver Airport has already announced that they will fine anyone carrying marijuana through the airport - if they are searched for some other reason and marijuana is found.  The fine is a whopping $900, which to a lot of pot smugglers is chump change.

Yea, pot smugglers.   It doesn't take a lot of imagination to figure out that a LOT of people are going to fly, drive or walk to Colorado and buy "legal" marijuana and bring it back to their home States.   This will surely piss off the drug cartels in Mexico, but they still have the lucrative cocaine business to deal with.

Speaking of which, another aspect of this experiment will be to see whether legalized marijuana leads to more consumption of other drugs.   In other words, the legalization folks will be able to show whether marijuana is a "gateway" drug or not.   Stay tuned, it will be interesting.

There is also the issue of products liability.  One article already notes that some companies are offering "marijuana tours" of the State and mentions that one couple on the tour "got so paranoid, we had to take them back to their hotel room."   The marijuana of today is very potent compared to years ago.   Will people be able to sue for a bum trip?   Interesting possibility.  What about the liability of a dispensary who sells to a mentally disturbed person?  Or if someone tokes up and wrecks their car - is the dispensary liable as a bartender would be?

And do they have to put warning labels on the packaging - like the cigarette people do?  Smoking anything is bad for your lungs - is marijuana exempted from this?   And who handles quality control?  Do they monitor THC and other content and is this printed on the packaging - or should it be?   A lot of questions, to be sure.  When you productize marijuana, it has to pass the basic safety tests that other products have to.

But getting back to smuggling - the worst that can happen in the Denver Airport is you are fined $900 and they take your pot.  OK, that's cool.   But what about when you land in Dallas or LA?   Will there be drug sniffing dogs meeting flights from Colorado?   It would seem like a no-brainer from the viewpoint of law enforcement.

And if you drive to Colorado, you can be sure the police in Nebraska, Kansas, Utah, New Mexico, and Wyoming will be waiting at the border to search cars that look suspicious.   Think I'm kidding?  They already do this at the State lines and near Indian reservations to search for illegal fireworks.   All it takes is one broken taillight for a Tarry-type stop, and a drug sniffing dog for "probable cause" for a search.

But those sort of risks are already know to drug smugglers today, so I doubt it would deter them.   What remains to be seen is whether the supply in Colorado will replace illegally imported marijuana currently coming into the country.   Rather than crossing an International border, smugglers need only cross a State Line - and that is pretty easy.  So I think you will see importation of marijuana from other countries drop off the map.  Why bother when you can just move it from State to State?   And it is such a hassle to smuggle across borders, due to its bulk.

I just got done reading Last Call: The Rise and Fall of Prohibition by Daniel Okrent.  In that book, he describes how ridiculously easy it was to smuggle booze across the border from Canada.  Prohibition, in addition to making the Mafia a national organization, also created the house of Segram.   The Canadians were making a lot of booze - more than enough for every man, woman, and child in Canada.  It was the worst-kept secret that the huge excess was crossing the border into the States.

Similarly, one wonders what will happen when marijuana production in Colorado skyrockets, and it becomes embarrassingly clear that a majority of production in Colorado will be for "export" to other States.

I think, at first, it will be like prohibition was.  In the early days, people drove their boats across the river into Canada (or even drove across the ice in the Winter) loaded up with a case or two for their own consumption, and then drove home.

But more ambitious operators made a business of it.  And pretty soon, there was a lot of competition for the business - and fights for control of the distribution of booze.   And organized crime stepped into the picture, marking out "territories" for distribution and setting basic ground rules - and killing each other off in turf battles.

This is already going on in some cities today - as gang members vie for control of distribution territories for drugs, including marijuana.  I wonder how they will feel about amateurs taking a cheap flight to Colorado and coming back with a suitcase of pot?

(Note: The new Colorado law limits possession to one ounce.  So a smuggler would have to employ a number of buyers to each buy one ounce at a time, from numerous dispensaries, in order to accumulate enough to export to other States.   While the State Police can't bust people for buying an ounce legally, they could go after people "accumulating" marijuana for smuggling purposes.   It is unclear whether dispensary records could be used to track users and establish consumption patterns.   A person buying several ounces a day would certainly raise eyebrows, if the records could be reviewed or subpoenaed.    Will smugglers hire non-users to buy marijuana for them?  This would not be illegal, as you can "gift" an ounce to another person, after you buy it.   Perhaps Granny might derive a second income by being a straw-man in such transactions.   The law raises more enforcement questions than it answers!)

Like I said, it is an interesting experiment.   And these sorts of ancillary problems are the result of marijuana being legal only at the State level, for the time being, anyway, and our crazy patchwork of laws from State to State.

The new law forbids smoking pot in public - just as public consumption of alcoholic beverages is generally illegal.  But what about in a bar?  Or does that go against the general ban on smoking (I checked, Colorado Statute 25-14-204 covers "tobacco and marijuana smoke").   So no pot bars, unless they have an outdoor enclosed patio - or is that smoking pot in public?

There are other foreseeable problems as well.   Many employers now require prospective employees to take a urine test - and randomly test existing employees as well.   For some jobs involving security issues and the like, such tests are required.  I know a fellow who lost a job as a safety inspector, in Colorado, after failing a urine test.   Does he get his job back, now?

I don't think so.  While marijuana may be legal in the State, I don't think the law requires employers to hire pot smokers.   So while you may have the right to use the drug, your use of it may limit your options, in terms of employment and economic success.

Again, it will be interesting to see how this plays out - will someone sue over this, claiming that an employer cannot discriminate based on legal drug use?   I am not sure they will have much of a case.   But laws can be changed, as the Colorado legalization initiative illustrates.

Some are arguing that Colorado may become America's Amsterdam - with pot tourists flying into the State for a marijuana vacation.   I am not sure if this is going to play out or not, as marijuana is pretty readily available as it is (at leas the people who smoke it never seem to have trouble finding it) and flying to a State just for a weekend high seems kind of costly.

But it will be interesting to see if resorts and bars and other establishments offer the drug - or have licensed dispensaries located within or nearby.   It will be interesting to see if licensed dispensaries crop up in border towns - just as liquor stores do near the borders of dry counties.   Back when the drinking age was raised (State-by-State) to 21, some States lagged behind.  Many New York teens would drive to Connecticut to buy booze, with predicable results (drunk driving accidents).  Will similar things happen to thrill-seeking kids in Nebraska.

Which brings up another interesting question - drug use by youth.   Teenagers are a huge market for marijuana as it is.  While the Colorado law limits the drug to those 21 and over, will there be "leakage" into the youth market, via intermediate buyers, fake IDs, and the like?  Will the Police setup sting operations to see if a dispensary will sell to a minor (I'm betting they will, as they do this for alcohol now).   Will drug use rise among teenagers?   And if so, how will this affect school performance, grades, etc.?  It will be interesting to watch.

These are just a few issues that I can think of, off the top of my head.  I am sure there will be others that crop up as well.  It is an interesting experiment, and both sides of this debate will no doubt use the results to "prove" their point of view is correct.

Good luck, stoners!   You'll probably need it.....

Will the Market Go Down in 2014? Sure, Why Not?

2013 is over and 2014 has started.
Today, I am wealthier than I have ever been before in my life.
Will this trend continue?

The market has gone nuts in the last four years - and not too many are talking about it.  In the media, we are treated to sob stories about people who can't pay back their student loans, or how people out of work for five years are going to lose their unemployment benefits.  The general tone of the press is "ain't it awful" and there are a lot of depressed people out there who still cite the "down economy" as reasons for whatever it is they want to justify.

But in the real world, well, inflation is non-existent, unemployment is about at an average level, and the economy has been growing at a slow but steady rate since Obama took office.  People who complain about conditions today really need to go back in time to 1979, 1959, or 1929 and see what a real recession is all about.

The Dow, as I noted in my recent posting on gold, has gone from 6,000 to over 16,000, nearly tripling in value.  All of my investments (except perhaps, Real Estate) have gone up about 10% a year - or more - in the last few years.  I am wealthier today that I have ever been in my life, unless you count those few short crazy years around 2005, when, on paper, I might have been wealthier, as I was sitting on over two million dollars in Real Estate (and holding over a million dollars in mortgages!).   But unrealized gains are not real profits, and the brief crazy inflated prices of that era popped quickly and came back to Earth.

All in all, I can't complain.  I got out in time, for the most part, and managed to keep most of it.   Life is good.  I'm set to retire.  What could possibly go wrong now?

Well, like anything else, what goes up, can go down.  And in 2014, I think we will see a leveling of the market, and perhaps a few dips.  Or maybe that is what I am hoping for - rather than a collapse as we saw in 2009.  Time will tell, and my time machine is out of order.

But I don't see another year of dramatic gains, despite all the economic good news.   Why is this?

1.  Inflation is picking up, as the economy recovers.  This will increase prices and squeeze profits somewhat.

2.  Interest rates are ticking up as well, as the Fed reduces "quantitative easing".   Higher interest rates mean fewer homes sold, fewer cars bought.

3.  As stock prices rise, the effective rate-of-return decreases, as with higher interest rates, stocks have to compete with other investments.

The last one is probably the most important.   Right now, a company can get by with an Earnings Per Share of less than 5%, often less than 3%, as interest on bonds and other investments are pathetically small.  When the Treasury is paying in fractions of a percent, getting 3% on a stock seems like a good deal.

But suppose interest rates go up?  Suppose we go back to the "good old days" when your passbook savings account paid 5% interest?  Or even 4%?   Then a stock which has an EPS of 3% looks pretty sad.   And one with a dividend of 1% looks pathetic as well.

In order to keep the stock price up, companies will have to increase earnings and dividends, which in turn means cutting cost or raising prices.   And since you can only cut so many costs or raise prices so much, this could mean than stock prices drop - slightly.

For example, assume ACME company pays a 2% dividend.  That 2% is based on a share price of $100 a share (or $2 a share).  Not a very sexy investment, but 2% is better than what the Treasury is paying, so you hang onto the stock.     

A year later, interest rates rise, and many government bonds are now paying 2% or more.  So you sell your ACME stock and invest in government bonds?  Maybe.  The thing is, people looking at ACME stock now think, "This isn't such a hot investment" - and the stock price drops.

Say it drops to $66 a share.  That same $2 dividend now represents a 3% rate of return on your investment.  The rate of return has gone up, merely because the share price has gone down.

Now, assume that in a growing economy, ACME is able to profit more.  They have cut costs to the bone in the last few years, and are now raking the benefits of that cost-cutting.  And as the economy recovers, they make more sales.  So instead of paying a $2 dividend, they pay $2.50.   For a 3% rate of return, the stock price may settle at $83 a share.

You can play with the numbers.  The point is, the share price is based not just on what "people are willing to pay" but also on an analysis of the rates of return.   And if people expect a certain rate of return in a market, that may affect the share price.

Of course, there are a whole host of other considerations - will ACME go out of business?  Or will they buy out a competitor and double their business?  Much of the "gambling" aspect of stock prices is based on people trying to perceive the future of the company in this way.

But overall, I think the economy will continue to grow.   With the GOP now willing to negotiate with the Democrats, we may avoid these idiotic "shutdowns" and "showdowns" for at least another year.  And the resultant stability will result in an improved market - and a better worldwide perception of the value of the dollar and the security of American debt.

But what will actually happen is anyone's guess.   A meteorite could wipe out the Earth.  War could break out.  Who knows?  The best you can hope to do is diversify your portfolio and try to be prepared to bad things to happen - as well as good.

But here's hoping 2014 is another year of nice steady growth.