Some other fun statistics: 6,000 burgers are cooked, along with 4,800 slices of pizza, 3,000 calzones, 2,000 baked potatoes, 1,800 hot dogs, 1,100 brownies, 400 gallons of vegetarian chili (who wants to have chili after biking that long?) and 70 kegs of beer, among other items. 2,800 volunteers come together to make the event go smoothly, which it almost always does.
Because of our recent wedding and honeymoon (seems so long ago now), my wife decided to take the "easy" route; she biked from Wellesley, Massachusetts down to Bourne on Saturday... a mere 84 miles in just a few hours. Her aunt pushed the limit a bit more, heading from Wellesley to Provincetown (the very tip of Cape Cod) over two days, trekking 163 miles in the process.
The Benefits, and Cost, of the PMC
Clearly this is a worthy cause, and when I first started dating my wife a few years ago, I was taken aback by how much she was personally able to raise. But then I discovered a surprising fact, at least to me--once you sign up for the event, you have to raise a certain amount of money. And if you don't? They charge your credit card for the rest!
Obviously, the PMC is trying to attract the big fish, and having thousands more riders who are raising just $50 or $150 wouldn't be worth it, considering the cost of running the event.
In my wife's case, she personally was on the hook for $3,000 from day one. Her aunt's route had to raise $4,000. Just to sign up costs $150, regardless of what route you ride--that's how the PMC can afford all those burgers and dogs and beer. Plus, the amounts are usually increased by 10% or more each year. In my wife's case, she's quickly closing in on her goal (you have until October or so to raise it all) and should raise it no problem.
The sad part is that, for the first time, she's not sure if she'll do it again next year. It's becoming a bit too much of a commitment--not just the fund-raising, which gets harder during a time of economic stress like now, but the training as well.
Yet the results speak for themselves, and if the PMC can find, say, half as many riders who can raise three times as much, then more money will be put toward cancer research. And for that I'm happy; it doesn't take a medical genius to see how much progress has been made in treating many types of cancer in recent years.
But it's too bad that many people are likely dissuaded from participating because of the huge money requirements, as well as the punishment if you fall short. Time will tell if my wife will make the worthy journey in 2009.
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To totally switch topics, I wanted to touch upon one of the big bugaboos with investors--taxes. I regularly talk to subscribers who say something to the effect of, "I can't sell that; I've owned it since 1997 and will have to pay huge taxes if I sell!" As we approach the end of the year, I inevitably hear "I can take that loss--I have gains to offset anyway."
This is not the correct way to think about taxes. The trick is to think about taxes before you invest ... like today, as the stock market builds a bottom to its 2007-08 bear market.
Now, you might be thinking "Thanks Mike ... just the thing I want to think about more. Taxes. Terrific!" But I began figuring this into my thinking a couple of years ago, and it's helped tremendously.
Before you do this, you must make an assumption. You have to believe (really, know) that you're going to make money over time. Not every month, not even every year, but you must have the conviction that you're not going to be carrying losses over for years at a time ... like many did post 2000.
With that in your back pocket, you should also know your marginal federal and state tax rates. An average investor in Massachusetts might be paying a 28% Federal rate, plus a sobering 12% short-term capital gains tax to the state.
Translation: 40% of every dollar made in the market (assuming you hold the stock less than a year) goes to the government. To most, this would seem to be a stunning figure ... it might even make you want to skip investing altogether. But it's no big deal, as long as you consider the consequences beforehand.
Given the figures above, you should be investing MORE than you normally would. Stop thinking of a $5,000 profit as a $5,000 profit--it's really a $3,000 profit (assuming a 40% tax rate). And the same goes for losses; a $5,000 loss is really only a $3,000 loss.
Or, said another way, if you double your money in a stock, the reality is actually made much less ... because Uncle Sam is going to take 40% (in this example) of that profit. The same goes in the case of a loss, over the long-term, because your losses will be used to offset your gains.
All of this is a way of saying that you really have less money at risk then you think--win or lose, the government is going to take a significant chunk.
Thus, you should be taking taxes into account when investing, and the proper time to do that is BEFORE you buy a stock ... i.e., when you're deciding how many shares and how much money to invest in the first place.
Disclaimer: I am not a financial advisor or tax consultant (thankfully!), so do your own due diligence when it comes to your tax status. And, of course, the above cannot be taken to extremes--you can't lose all your money, for instance, and then cheerfully say, "Gee, I only lost 60% of it because of tax loss breaks!" That's insane.
As a general rule, you shouldn't risk more than 1% or 2% of your portfolio after taxes, at most, on any single trade. I personally tend to keep my risk around 0.5% or sometimes less.
But my main point is to consider the taxes before you invest--if you do, you'll have a truer grasp of your portfolio.
For my stock pick in this issue, I'm going to highlight a stock I first began researching in 1999 ... right before the bubble burst. Today it's transformed itself into a money-producing "spend management" software company--and I think it's heading higher.
The company is Ariba (ARBA), which was first profiled in Cabot Top Ten Report a couple of weeks ago. Here's what I wrote then:
"Making its first Cabot Top Ten Report appearance, Ariba has the expertise and the software to help companies manage their spending. For obvious reasons this is called Spend Management, but the purpose is clear. Ariba works with companies like ABN AMRO, BMW, Chevron, Cisco Systems, Hewlett-Packard, and Unilever to make keeping track of spending easy, saving time and money. Ariba isn't selling just a glorified bookkeeping system; rather, its subscription-based software keeps track of vendors and suppliers, contracts, invoices, expenses, payments and all the documents associated with each process. Ariba was founded in 1996 and had a big ride in the Tech Bubble and a big fall after. Now it's back and making money again; last Thursday's quarterly report revealed big growth in subscription revenue and a 63% earnings jump."
While software companies generally scare me--any firm can develop a faster-better-cheaper version--Ariba appears to have a lot going for it. Namely, a growing customer base, solid growth trends and most important, a proven management team (unlike during the bubble days).
I also like the fact that the stock is not well known, and it really didn't participate in the last bull market. I have a growing conviction that many of the big winners of the last bull market--commodities, some solar power stocks or big-cap winners like Apple and Google--will not perform overly well in the next bull phase.
That's making me look at stocks like ARBA more closely. Given the stock's bullish reaction to its earnings report a few weeks ago, I believe the stock has a chance to be a leader in the next bull market.
All the best,
Editors Note: A new bull market is going to be led by new leaders, and the best source of new ideas is Cabot Top Ten Report. Every week, editor Michael Cintolo uses a proprietary method to screen thousands of stocks, finding those with the strongest buying power. Cabot Top Ten Report has a terrific history of uncovering all the market's leading stocks and sectors--and Mike expects it to do the same for the upcoming bull market. If you want to be onboard the big winners of the next upcycle, I strongly advise you to subscribe to Cabot Top Ten Report now.