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Business Ownership and Wealth Management

Dana Barfield

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Top Stories by Dana Barfield

While tracking the market today, I expanded the S & P 500 graph time window from the normal mode of a month or a year, to run from 1970 through the present. What I found illustrates a fascinating principle of wealth building. The blue line represents that value of the S&P 500 index. I overlaid the bright pink line to show what would have been the normal path of the economy had the trend from 1975 to 1995 persisted. Obviously it did not. The period from 1995 to the present represents a time of unprecedented “activity”. What we can also see is that activity produced no sustainable, wide spread, wealth as right now the index has returned to its normal path. Considering this period from 1995 to 2009 carefully it occurred to me that this “unprecedented activity” brought about sweeping change 1) In the widespread use of hedge funds, 2) Ridiculously easy credit, 3) An increas... (more)

S & P Downgrade of the U.S

Let’s make clear what is happening today, what relationship this bears to the Standard & Poor’s downgrade of the U.S. financial system, and how it affects your plan for retirement. There is some legitimacy to the concern over the debt rating reduction. For as long as anyone can remember the United States of American has been the gilt-edged standard of financial wherewithal and responsibility (70 years to be exact). To be downgraded, though somewhat symbolic, is a shock to the system. S&P’s concern is the amount of debt we now have; in excess of $14.5 trillion today, which is $ 4 ... (more)

Unemployment – Causes and Consequences

Somewhere on the internet last week, mention was made that unemployment for high income people was (essentially) non-existent, while extremely high for low income earners. I was able to track down that data for the fourth quarter of 2009. Here it is by income: As you can clearly see the lower income levels are experiencing the greatest difficulty finding jobs. Interestingly enough, this data is not making its way into the mainstream. But even more interesting is the set of “circumstances” that has caused this, or at least occurred in the same approximate time frame. Minimum Wage... (more)

BP as a Prospective Investment

Typically, when an event occurs that causes a stock’s price to drop significantly we would look at that stock as a potential investment. This is not and will not be the case with BP. Our first criteria for investment, is that the business be one of significant quality. BP cannot be considered quality. As David Leonhardt pointed out in his May 31 New York Times article entitled “Spillonomics: Underestimating Risk”. BP has been a company seeking profits to the exclusion of other equally serious responsibilities. Leonhardt wrote, “Years before the Deepwater Horizon rig blew, BP was ... (more)

Expect Liability Issues to Increase

Timeline of the 2010 Gulf oil spill legal cases: — April 20, 2010: An explosion and fire on the BP-operated drilling rig Deepwater Horizon kills 11 workers. Thousands of gallons of oil begin gushing into the Gulf of Mexico from the blown-out well. — June 16, 2010: BP agrees to put $20 billion into an escrow fund to settle economic injury claims by fishermen and various Gulf industries. — December 15, 2010: The Justice Department files suit against BP and eight other companies over the accident, asking they be held liable for removal costs and damages caused by the explosion and s... (more)