Saturday, April 12, 2008

Tax Day, Morning Thoughts

Today is tax day. Off I go to H&R Block. I have been using the same tax accountant for the last three years. I am not very good at figuring out taxes and investments. This is why I go. Maybe, it is because numbers don't agree with me completely on tax forms.

I will be making some posts later today on books, but first I have to have my taxes done. This is like a visit to the dentists office for me. I would like to avoid it at all costs. A lot of people have been coming into our library to have their taxes done. The AARP offers free tax help to seniors. You can search for tax help by zipcode.

A lot of people have been coming in for the tax rebate offered to people who file in the United States, $1200 as a stimulus for people who earn less than $72,000 a year for a couple. This is adjusted downwards for people who earn more.

We have a community room in the libary where the AARP-- American Association of Retired People helps people with taxes. A lot of senior citizens have been calling for this who are on social security who haven't filed for taxes for years. Also a lot of people who have not been part of the tax roles for a while. I think the government will suddenly have a much larger tax roll in the future and will make money from this down the line. They are casting out their net to catch the fish (taxpayers).

We also leave free tax forms in the lobby for people to pick up. This gets replenished in the morning for people to pick up state and local tax forms. Tax season ends soon, so if you are an American go do your taxes...

My tax man asked me how come I always made a small amount of money in stocks. My advice was that I could not give advice on individual stocks, but that there were two really excellent books which should go into anyones investment library. They are Benjamin Graham, The Intelligent Investor, and Philip A. Fisher, Common Stocks and Uncommon Profits. Benjamin Graham is considered the father of value investing, and Philip Fisher is considered the father of growth investing. Warren Buffett claims that The Intelligent Investor is the best book ever written for lay investors.

I tried to read The Long Emergency Surviving The Converging Catastrophes of the Twenty-First Century by James Howard Kunstler. However, when I started reading his thesis, I found huge holes in it. First off, our industrial transportation sector does not rely on gasoline, it relies on diesel for trains and trucking. Diesel is virtually interchangeable with biodiesel. This also applies to the public transportation systems like subways and buses. These will not be hit as hard with a gasoline crisis, because it is much easier to run the public transportation system on alternative fuels. Private transportation like small cars and air transportation will be hit a lot harder than public transportation.

The other thing to consider is that most of the utilities and industrial energy is not produced from gasoline, it is produced from coal, and other energy sources. Slowly wind is gaining traction as well as biomass.

I see a very different future than James Kunstler sees. I see the future being supplied by biorefineries, companies that use biological feedstocks to create multiple products, much like an oil refinery does. MGP Ingredients is an excellent example of this. In fact, I see this as a potential future replacement for oil refineries.

Patricia Woertz vice president of Chevron recently became the CEO of ADM in 2006. We are being fed an ethanol future by the oil companies under the table. We need to have more of a say in the future which is coming to us.

There are other developments which make me see a very different future than the one James Howard Kunstler describes. I had to put the book down before page 50. I simply could not believe what he was telling me. Some parts of it might be true. There will be a long period of conflict before oil is replaced as a transportation fuei, but it is inevitable.

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