Lazy Man and Money

Oils Well That Ends Well

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I’ve been really surprised that the Dow Jones industrial average continues to drop. The last time it dropped to 8,200 I thought it would be the last chance at those prices. As I write this, the mark is at 7,500 and some indications seem to say that it could go even lower. Despite that, we’ve been buying some index funds with our Zecco account. Specifically we’ve been picking up Vanguard Total Index (VTI) and Vanguard All-World Ex-US (VEU).

However, one of my worst investments seems to have been PowerShares DB Oil Fund (DBO) which generally moves with oil prices. If you’ve been following gas prices you’ve seen the drop they’ve taken lately. What did I see in DBO that interested me? I remember that a barrel of oil was around $150 this summer towards it’s peak. Recently with it $60-65 it seemed like a tremendous bargain. Consider this 6 month chart of DBO:

Here is where I made my mistake. I didn’t look at the big picture. If I had, I might have remembered that $150 was due to speculation. I might have looked at this 20-month chart:

The chart might be a little small (you can play with a full version here), but if you Rip Van Winkle’d 2008, the price of DBO might seem in line with 2007.

The price of oil just broke below $50 and some are saying that it get as low as $30. If it gets below $40, I may have to dollar cost average and pick up some more of DBO. I can’t help but feel that at some point in the next 3 or 4 years we’ll see $100 oil again.

What are your thoughts?

Best Buy Extended Warranty

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About a year and a half ago, my fiancee bought a laptop and decided to protect it with the extended warranty. I know that usually they aren’t good investments, but when I did my research, getting one for a laptop seemed to be the right thing to do. When it failed to work in early September, she was happy she had gotten the protection.

However, since then, it’s been a nightmare. Best Buy sent it out for repairs and four weeks later it returned with a new motherboard that, without the protection, would have cost more than what we paid for the computer. We hadn’t been home for 15 minutes, before the monitor failed, a new side-effect of the fix, I surmise. We brought it back to Best Buy and again they confirmed the problem and sent it out for repairs. Just yesterday, it was ready for the second time. We had it home for about 20 minutes this time before it froze on us… three times. I’m a software engineer, so I know this just isn’t normal. On reboot it gives a blank screen for 10-15 minutes before it decides to get to the initial Windows loading screen. It’s funny because when we took it back to Best Buy that’s about exactly how long it took for the technician to get the manager. Just when the manager shows up it works, go figure.

He wanted to run an overnight diagnostic on it, but at this point, I think it’s time to honor the extended warranty and replace it. Even if he does it get to work at this point, I want them to extend the extended warranty because at this point, I’ve lost a lot of confidence that it’s going to continue working. I expect it’s going to die the day after the warranty is done. The most frustrating part of this is that for 6 weeks now she’s been without her computer. Someone needs to come up with a loaner plan like they do with cars.