Your Questions About Money Making Stocks For 2010

Carol asks…

What are some good stocks to invest in for 2010?

So i have to win in this stock market simulator and i’m given 100,000 to invest in stocks.
Which should i invest in?

John answers:

A great stock to invest in would be cardio genics. The Ticker symbol is CGNH. Its a little low for the time being but it will pick up here very soon. The company produces heart transplants parts. That means there going to be producing thousands of parts and big bucks for stock holders. I have about 15,000 shares in the company, But my account is with Share builder. This year is going to be a great year for stock investments with the bounce back of the economy. Do your research if need be but im telling you it will be a money making stock.

Linda asks…

What are some good healthy foods I can stock up on?

I’m trying to eat healthy, but I also not sure what are the best foods to get as well. Plus I want to be able to eat and be full after each meal and a lot of these healthy foods don’t seem filling unless you eat it at huge amounts and that takes a lot of time or money. Which is hard nowadays.

And are hemp seeds good for you? What are the best seeds/nuts to eat? And beans?

John answers:

Dried beans, canned beans, chickpeas, split peas, lentils in red, green and the black ones I think are actually green, brocolli, potatoes. Potatoes, potatoes and more potatoes. Sweet potatoes. They keep for ages, too. Parsnips, cabbage. Red cabbage will last nearly a month in your fridge as long as you don’t keep it in plastic or covered with anything. Brown rice. Wholegrain pasta. Pureed tomatoes to make all kinds of bases for a load of different foods. Canned diced tomatoes. Herbs and spices. Refried beans in cans. All these foods last ages. Flax seeds, either whole or ground and grind them as you use them. Much cheaper than hemp seeds.

To buy nuts, go to a store where you buy them by the kilo and pick how much you’re buying and they’re not packaged. Just raw, loose and fairly cheap compared to at a supermarket. I like macadamias, cashews (great to always have some for cooking things like alfredos, cheese, sauces etc), brazilnuts, almonds by the kilo are good because they’re easy to make milk out of so if you run out it’s easy to make some, hazelnuts are more expensive but if you only buy a handful at a time it’s a cheap snack if you think of it that way, same as for macadamias.

Once you’ve got those, that’s pretty much a pantry. On top of that, just buy fresh fruits and vegetables, and if you feel like having a wrap or tacos etc you can buy them as you need them. But they’re more for presentation/decoration than anything else really. You can kind of just put the fillings on a plate and call it a meal and eat it with knife and fork. I always like to have tomato sauce, chilli sauce and a supply of minced garlic, and a stash of different herbs and spices. Once you’ve bought one in a jar you can refill it cheaply by buying the herbs either loose or in a packet and reuse the jar.

Tofu is fantastic and very versatile, but it’s a bit more expensive than foods I eat more of, and the thing is unless you use it all up before it goes off you have to throw it out, so if you’ve got it in the fridge remember to eat it all or use it in cooking. Arborio rice is always good so you can make rissottos.

Here are some recipe sites:
http://www.theppk.com/2011/08/chana-masala/
http://www.vegkitchen.com/recipes-galore/
http://vegweb.com/
http://whyveg.com/recipes/list.php
http://cookeasyvegan.blogspot.com.au/p/recipes.html
http://www.holycowvegan.net/p/recipe-index_25.html#.Uc7Cbsr8rDc
http://mouthwateringvegan.com/2010/12/12/scrumptious-spaghetti-%E2%80%98meatballs%E2%80%99-in-rich-tomato-sauce/
http://ohsheglows.com/recipage/
http://www.adaptt.org/recipes.html

Laura asks…

How does financial aid work and when will I get my money?

I already applied but im thinking of changing colleges from a different city its still in texas though how does it work if I want to change colleges ? (community college) that is. And when will I recieve my money ??

John answers:

How the process works. If you change colleges, make sure its one you listed on the FAFSA, if not, log back on and add it.

FAFSA. Free application for federal student aid.http://www.fafsa.ed.gov/

What is federal student aid: It includes grants, work study and loans. Filling out the FAFSA you are applying for all the federal aid listed on this page, plus others certain states and colleges have individually: click the different federal aid programs on the left http://studentaid.ed.gov/PORTALSWebApp/students/english/grants.jsp

Great site all about financial and its funding: http://studentaid.ed.gov/students/attachments/siteresources/Funding_Education_Beyond_HS_2011-12.pdf

When apply for FAFSA? Jan 1 of the year you will attend to maxime your award.You want to do an estimate FAFSA using the previous years taxes and send it through. Just choose will file. Then ASAP when you can you do the taxes for that year and go on the FAFSA where it says make corrections (has to be processed first) and put in the actual tax information. . Why file an estimate: Because colleges are all given so much grant/work study money and its given to students first come, first serve, even if you qualify if you file later, it may be gone. So file early!

How much do you get: Federal aid is offered given to students based on their financial need. Your financial need is determined based on the questions you are asked on the FAFSA which will be about income, amount in banks, property owned, stocks and the like, as well as questions about your current home situation, how many, how many in college at the same time etc. These questions will determine your financial need. They use all the info to determine your EFC, estimated family contribution, this EFC is the result of a formula the use of all your answers to determine your financial need, the lower the EFC the more financial aid help you need. If you have a 0 that does mean you dont pay anything but it does mean you have great need for financial aid help. This EFC amount is subtracted from the cost of the attendance (also called school budget) and the result of this is your financial need. COA/student budget is tuition, books, travel personal expenses, housing, fees. Even if you do not qualify for federal grants or work study you may qualify for federal loans which most all students have. This EFC and recap of your FAFSA will be put in a report called SAR, student aid report. You get an email this is ready in a week or two if you did it online and a link in that email to view your SAR..

The only way you will know what federal aid you qualify for is the colleges you listed on the FAFSA will be sent your SAR and a financial aid award created for you based on your financial need. Each college award will be different, as the cost of attendance is different, colleges have their own aid to offer, and what funding they have left (again why I said to file earily) and when you apply makes a difference in what aid they have available to offer. You need to look at all the offers, obviously cheaper colleges will require you to need less loans and if you are very low income there are no loan colleges. If your federal aid grants, work study and federal loans do not cover your cost of attendance you will need to pay with money or get a private loan to cover the rest like from a bank or lender, so it may be smarter to pick a cheaper college where you need the least loans. Rule of thumb, your total college loans for your education should not exceed your first year salary in the degree you are pursuing.

How do you get your aid once you accept it: It gets deposited into your college account, usually by semester not all at once on certain disbursement dates your school has where everyone will get their money disbursed on a certain day. We applied Jan 1 2010, school started 9-1, our semester federal aid was disbursed 8-25. The colleges takes out their charges for housing, meals, tuition, and fees. We did have money left over and if you do you get a refund either a check or card system depending on the school, and we got that a week after school started by card system. Use that refund if any for books, materials etc.

Helpful sites:
All questions FAFSA, financial aid: http://www.finaid.org/
http://www.gocollege.com/financial-aid/student-loans/benefits-of-loans.html
Click BEGIN THE PRESENTATION: http://www.nextstudent.com/financial-aid-tutorial/financial-aid-tutorial.asp#
http://www.knowhow2go.org/

http://studentaid.ed.gov/PORTALSWebApp/students/english/timeline.jsp?tab=applying
http://studentaid.ed.gov/students/publications/student_guide/2009-2010/english/typesofFSA_grants.htm

Chris asks…

Mr. President, can you explain the difference between earned income and capital gains?

Can you explain why the tax rates might be different for capital gains than for earned income? Do you feel there is a rate that when attained will discourage investment? Did Warren Buffet have earned income in 2010? What rate did he pay on it? Did his charitable deductions decrease his tax rate?

John answers:

Okay the difference is that you are investing money as opposed to making money at a job. Consider this, if you saved $200,000.00 in a savings account, you were already taxed once for making the money thru your salary. You then invest this money into the stock market where you could potentially lose money or make money. It would be unfair to over tax the gains, since it’s a gain on your own money. There is no investment with regular income and if you have a loss or lose your job there is unemployment. If you lost your $200,000.00 the only thing you would receive is a write off for the next few years. It’s important for us to invest in American Companies and we should not discourage that, even if they are Billionaires. Truth is most investors are regular Americans that work and have investments.

James asks…

Why do researchers disagree about the role of stock market, banks and finances?

Is it because they use different research models? I do not understand. For instance, in the one hand we have Robert Lucas who says that the role of finance is overstressed and, on the other hand, we have Ross Levine who says finance, stock market and banks are important for economic growth.
Thanks in advance,
Toto.

John answers:

You’ve answered your own question, to at least some extent.

In your example, it isn’t that they disagree on the roles, or on the the fact that they are important, just on how important. And how do you measure that?

Then there are other reasons, both good and bad, most rooted in the fact that economists are people too.

1. Lucas is very well now as Chicago school neo-classical economist who believes that everything should come out of micro-economics. That means, among other things, that

A. He is likely to be strongly influenced by the classical idea of the neutrality of money even though everyone now knows that those ideas are wrong
http://en.wikipedia.org/wiki/Neutrality_of_money

B. The Modigliani-Miller theorem argues that under some (very tight) conditions (never actually met in the real world – like much of neo-classical theory), it makes no difference whether a firm is financed by debt or by equity:
http://en.wikipedia.org/wiki/Modigliani-Miller_theorem
If you believe this, then indeed, the details of how firms are financed, whether by stock markets or by banks, etc. Are irrelevant, and so neither banks nor the stock market can be all that important.

C. Then there are differences in values. Many (most?) economists are interested primarily in promoting economic growth. They note that because human beings are irrational, maximizing growth requires a little bit of inflation:
http://pages.stern.nyu.edu/~nroubini/NYT/krugeconairu.htm
and so the money supply is important in controlling the economy and promoting growth.

On the other hand, Robert Lucas has built his entire career on the assumption that economic actors are rational. For him and others of this persuasion, price levels shouldn’t matter. For example, Milton Friedman argued that (again, under very constrained and unrealistic situations), a nominal interest rate of zero is the optimum. Since real interest rates are rarely going to be negative, this implies long term deflation:
http://en.wikipedia.org/wiki/Friedman_rule
Most economists argue deflation is bad for growth:
http://delong.typepad.com/sdj/2010/10/hoisted-from-the-archives-delong-1999-should-we-fear-deflation.html

D. Then there are political differences. It is clear that financial sector profits are very high on an historical basis:
http://www.tradersnarrative.com/deja-vu-all-over-again-financial-sector-profit-soars-3949.html
Does this represent real value-added or does it represent theft?

No one is going to argue that the “invisible hand” _always_ produces the best possible result,
http://delong.typepad.com/sdj/2010/12/what-do-econ-1-students-need-to-remember-second-most-from-the-course.html
but classical economists and free-marketeers generally believe that the exceptions are few, far between, and so can be generally ignored. Other economists are much more sensitive to the failures of over-simplified general theory:
http://rodrik.typepad.com/dani_rodriks_weblog/2007/08/why-do-economis.html
In the context of the financial sector:
http://www.time.com/time/magazine/article/0,9171,1933210,00.html
http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/7364/

2. Then there are the real hard questions about the roles of the financial sector. For example, suppose one of these institutions (banks, stock markets, etc.) did not exist. What would be the effect on the economy?

Analyzing counterfactuals is hard. Especially when the results vary over time. For example, it is clear that the Communist economy of Russia grew quite rapidly with central planning and no banks or stock markets for several decades before eventually petering out. And everyone points to the central planning aspect as the primary cause of the petering out. So maybe stock markets and banks are not that important in general, but only in some economies? Etc.

And then, even if you succeed, different elements of the economy are affected in different ways and to different degrees. How do you come up with a single metric?

I’d go on but Yahoo Answers has limits on the number of URLs one can include in an answer, and answers without references are just words – not to be trusted.

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