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Project shows success in microcosm

I recently spent a contemplative weekend at the bottom of Concord's Nautilus Aquatics' 12-foot pool struggling to qualify for my scuba diver's certificate.

The exercise in which the instructor deliberately turns off the air reminded me of running a small business. Business on a small scale offers decisionmaking with an immediate cause-and-effect relationship.

Not the same game as the '60s

'Don't confuse brains with a bull market."

I was reminded of that aphorism the other day when an acquaintance mentioned that they had a friend who was offering to manage their 401(k) money with monthly moves between cash and equity funds.

This self-styled "advisor" was suggesting that they move everything out of international funds for the moment until "international funds became more reasonably priced ... possibly in a month or so."

Be optimistic, yes, but have insurance

"It's dangerous to make predictions -- especially about the future."

Everyone from Mark Twain to Yogi Berra is given credit for that line. Meanwhile, what a difference a week makes.

Last week, I was just a nattering nabob of negativism with regard to the economic impact of rising interest rates. Searching for good news to lift me out of my funk, I found plenty of offsetting optimism in columns like that of Paul Lim in the New York Times, as well as the informative bulletin from the ubiquitous Ken Fisher. Then, there's always Bob Brinker and Norm Fosbach.

Rising bond rates give and take

Uh-oh. The headlines are bewailing the fact that interest rates are rising in the bond markets. This could be trouble.

Of the many factors that influence stock prices, bond interest rates have the most influence.

Rising rates make it more expensive to borrow, and companies paying more money in interest have less profit dropping to the bottom line. Homeowners with adjustable rate mortgages have less money to spend on "stuff."

Market rises 'on a wall of worry'

We all need a friend in the box business.

Mine happens to be John Tatum, whose collection of companies includes a fully-automated corrugated cardboard assembly line that operates like something out of Willie Wonka and the Chocolate Factory.

A slurry of recycled paper at one end comes out as fresh new cardboard about 100 yards away. John says that cardboard box sales are slowing down, and that's a forward indicator of future economic conditions.

Here comes private equity

How do they rip us off? Let me count the ways.

Who is the "they" in they? Call it what you will; the Establishment, Big Money, guys waiting to tee off at a restricted country club.

And then there's today's granddaddy of them all, "private equity."

Private equity is coming out of the woodwork these days and snapping up major chunks of publicly-owned corporate America. This is not all bad, I hasten to say, but here's the rub.

Mr. Refund, meet Mr. 401(k)

"King Kong vs Godzilla" is a cult classic movie of the 1960s.

I was reminded of this film when my column last week on automatic 401(k) enrollment prompted a call from Mike Kolar, a Chicago CPA who has pioneered a seamless electronic tax refund program known as "Mr. Refund" offering a better mousetrap for taxpayers filing electronically.

McDonald's, GM and other large companies as well as the Army have adopted the program, but its use is voluntary on the part of employees.

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