I don't read as many books as I should, but when I do, I stick with non-fiction things related to history or finance or humor. In the latter category, my favorite humorist has always been Dave Barry. In the 80s and 90s, Barry wrote a hilarious, weekly syndicated column for the Miami Herald, which I always read because it was printed by the Des Moines Register. At the same time, he authored many humor books that I read, some original and some a collection of his Miami Herald columns or essays.
Unfortunately, Barry dropped off my map in the late 90s when he gave up his weekly column, at which time he continued to write a variety of fictional books. In the past several years, he's been using social media more, and gone back to writing more non-fiction again. He's published a new humor book in each of the past two years.
With that as background, I recently took his newer books with me on a trip, and it was just like old times. It is very, very hard to write in a way that's laugh-out-loud funny, but Barry and his books will do it. It's impossible to fully describe his observational writing style, but he gets help from his "many alert readers" who send him crazy newspaper stories. Among his favorite topics are exploding or flaming items (including cows, toilets, Pop-Tarts, and Barbie dolls), and the emotional differences between men and women.
He also has a few common sayings. For example, when distinguishing fact from hyperbole, Barry frequently asserts, "I am not making this up." Also, "would be a good name for a rock band" is a statement Barry often applies to certain phrases. (This reminds me of a softball team I once coached, where the first name had to be a color and the nickname was an action. Our team drew the name 'Purple Riot' which I immediately said would be a good name for a rock band.)
If you have a chance, and you want a good laugh, read more Dave Barry!
Tuesday, March 24, 2015
Sunday, March 15, 2015
No Thanks Necessary
Your investments had a great 2014, or so it appears. Your portfolio went up over 15%, and now you want to go out of your way to thank your investment advisor.
Instead, you ought to be looking for a new advisor. If your portfolio went up that much last year, it means virtually all of your money was invested in U.S. stocks. In turn, that means your advisor did not focus on something that should have been of equal concern: Risk.
No doubt, U.S. stocks performed well last year -- but what if they hadn't? History has taught us that no one can accurately predict the short-term direction of the investment marketplace. No one, investment advisors included, knows exactly when the market will go up or down, or when to jump in or out.
So managed properly, your investment portfolio would include more than just U.S. equities. It would include other asset classes whose returns don't always move in the same direction, nor with the same volatility, as the overall domestic stock market. These risk-diversifying assets would include things like corporate bonds, international stocks, government bonds, and real estate.
Last year, most of these 'non-correlated' asset classes did not perform as well as the U.S. stock market, and if you had them in your portfolio, they reduced your overall return. However, those assets also substantially reduced your risk of having a horrible year, from which it could take many years to recover.
If your investment advisor had focused on risk as well as performance, then it was mathematically improbable to generate a 15% return in 2014. They deserve no thanks.
Good investment advisors, and you, should focus instead on risk-adjusted return. You may not have huge shorter-term investment gains, but more importantly, you'll likely avoid huge losses.
Instead, you ought to be looking for a new advisor. If your portfolio went up that much last year, it means virtually all of your money was invested in U.S. stocks. In turn, that means your advisor did not focus on something that should have been of equal concern: Risk.
No doubt, U.S. stocks performed well last year -- but what if they hadn't? History has taught us that no one can accurately predict the short-term direction of the investment marketplace. No one, investment advisors included, knows exactly when the market will go up or down, or when to jump in or out.
So managed properly, your investment portfolio would include more than just U.S. equities. It would include other asset classes whose returns don't always move in the same direction, nor with the same volatility, as the overall domestic stock market. These risk-diversifying assets would include things like corporate bonds, international stocks, government bonds, and real estate.
Last year, most of these 'non-correlated' asset classes did not perform as well as the U.S. stock market, and if you had them in your portfolio, they reduced your overall return. However, those assets also substantially reduced your risk of having a horrible year, from which it could take many years to recover.
If your investment advisor had focused on risk as well as performance, then it was mathematically improbable to generate a 15% return in 2014. They deserve no thanks.
Good investment advisors, and you, should focus instead on risk-adjusted return. You may not have huge shorter-term investment gains, but more importantly, you'll likely avoid huge losses.
Sunday, March 8, 2015
Life After High School Sports
We are right in the middle of the most recent edition of the girls and boys high school state basketball championships in Des Moines. As it's been the past several years, there are a number of players with whom we are acquainted as the children of friends or relatives.
Along with just about every sport these days, lots of these kids play basketball on a year-round basis, thanks to competitive (typically AAU) programs. The real thanks actually goes to their parents, who have made a great sacrifice of both time and money to allow it to happen.
The question is, what is the real benefit, and is it worth the price? In this case, the price isn't just monetary, it's also the price paid in missed events with family, and all of the missed school time.
If you make it to the state tournament, and even win a state title, does that once-in-a-lifetime memory make it worth spending the thousands of hours and dollars, also resulting in other missed memories? Maybe, maybe not.
What about getting a college athletic scholarship? Most would answer yes to that, including me. Still, that's a crapshoot, and regardless, how much of that success can be directly correlated to the extra effort?
In the end, the 'cost' of a kid playing competitive sports throughout the year probably can't be determined until five or so years after high school. From my perspective, it's all about what kind of person the kid turns out to be when high school and college years are over.
Assuming they aren't one of the less than 1% that becomes a professional in their chosen sport, it depends on whether the kid becomes a productive member of society. If they did, it doesn't mean the extra athletic time helped them, but at least it didn't hurt them.
Along with just about every sport these days, lots of these kids play basketball on a year-round basis, thanks to competitive (typically AAU) programs. The real thanks actually goes to their parents, who have made a great sacrifice of both time and money to allow it to happen.
The question is, what is the real benefit, and is it worth the price? In this case, the price isn't just monetary, it's also the price paid in missed events with family, and all of the missed school time.
If you make it to the state tournament, and even win a state title, does that once-in-a-lifetime memory make it worth spending the thousands of hours and dollars, also resulting in other missed memories? Maybe, maybe not.
What about getting a college athletic scholarship? Most would answer yes to that, including me. Still, that's a crapshoot, and regardless, how much of that success can be directly correlated to the extra effort?
In the end, the 'cost' of a kid playing competitive sports throughout the year probably can't be determined until five or so years after high school. From my perspective, it's all about what kind of person the kid turns out to be when high school and college years are over.
Assuming they aren't one of the less than 1% that becomes a professional in their chosen sport, it depends on whether the kid becomes a productive member of society. If they did, it doesn't mean the extra athletic time helped them, but at least it didn't hurt them.
Sunday, March 1, 2015
Non-representative Democracy
One of the reasons the United States is the greatest country in the world is our governing system of representative democracy. Too bad it doesn't always work that way.
When is a representative democracy not a representative democracy? In Iowa, the answer is when it comes to legalizing medicinal marijuana.
This week, a Des Moines Register Iowa Poll found that 70% of adult Iowans favor the legalization of marijuana for medicinal purposes. This is up from just 59% last year, and 58% the year before that.
It's over. It doesn't take a rocket scientist to figure out that this issue has been decided, and Iowans are ready to follow the rest of the country into making this rational, albeit long overdue choice.
Unfortunately, Iowa's elected state legislators don't seem to be any closer to legalizing marijuana for medical uses. Basically, we've elected a bunch of old, white, close-minded, and mostly Republican males (including the governor) who will always believe pot is evil, regardless of its proven therapeutic uses or the desire of their constituents. They continue to use the intellectually dishonest argument that the 'unintended consequences' of legalization will lead to serious drug abuse in Iowa. Simultaneously, they attend numerous political receptions where they, along with many others, can legally drink non-medicinal booze without a thought of the 'unintended consequences' of alcohol abuse.
Some Iowans seem to be buying that 'unintended consequences' argument, because the same Iowa Poll reports that only 30% of adults approve legalizing marijuana for recreational use, a number unchanged over the past two years. We are still years away, or more likely, one big fiscal deficit away, from joining the few other states that have done this.
Oh well. One thing we know about representative democracy it that it works, it's just a matter of time. So it will be with legalizing marijuana use in Iowa and in the U.S.
When is a representative democracy not a representative democracy? In Iowa, the answer is when it comes to legalizing medicinal marijuana.
This week, a Des Moines Register Iowa Poll found that 70% of adult Iowans favor the legalization of marijuana for medicinal purposes. This is up from just 59% last year, and 58% the year before that.
It's over. It doesn't take a rocket scientist to figure out that this issue has been decided, and Iowans are ready to follow the rest of the country into making this rational, albeit long overdue choice.
Unfortunately, Iowa's elected state legislators don't seem to be any closer to legalizing marijuana for medical uses. Basically, we've elected a bunch of old, white, close-minded, and mostly Republican males (including the governor) who will always believe pot is evil, regardless of its proven therapeutic uses or the desire of their constituents. They continue to use the intellectually dishonest argument that the 'unintended consequences' of legalization will lead to serious drug abuse in Iowa. Simultaneously, they attend numerous political receptions where they, along with many others, can legally drink non-medicinal booze without a thought of the 'unintended consequences' of alcohol abuse.
Some Iowans seem to be buying that 'unintended consequences' argument, because the same Iowa Poll reports that only 30% of adults approve legalizing marijuana for recreational use, a number unchanged over the past two years. We are still years away, or more likely, one big fiscal deficit away, from joining the few other states that have done this.
Oh well. One thing we know about representative democracy it that it works, it's just a matter of time. So it will be with legalizing marijuana use in Iowa and in the U.S.
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