Last week I noticed the Songwriters Hall of Fame announced its new inductees. Along with the songwriter I wrote about way back in Part V of this anthology (Yusaf Islam, formerly known as Cat Stevens) was the name Tom Petty.
Awesome.
Tom Petty led his band The Heartbreakers onto the rock scene in the late 1970s with a distinctive sound and cool, easygoing lyrics. Some of the best known songs included The Waiting, Free Fallin’ and , You Don't Know How It Feels (To Be Me).
All of those songs are lyrically terrific, but I'm going with Learning To Fly as my example. While there is certainly a drug double-meaning, Petty himself said it was really about failing and trying and failing and trying again. I highly recommend listening to it in its slower, acoustic form:
Well I started out, down a dirty road
Started out, all alone
And the sun went down, as I crossed the hill
And the town lit up, the world got still
I'm learning to fly, but I ain't got wings
Coming down, is the hardest thing
Well, the good ol' days, may not return
And the rocks might melt, and the sea may burn
I'm learning to fly, but I ain't got wings
Coming down, is the hardest thing
Well, some say life, will beat you down
Break your heart, steal your crown
So I've started out, for God-knows-where
I guess I'll know, when I get there
I'm learning to fly, around the clouds
But what goes up, must come down
I'm learning to fly, but I ain't got wings
Coming down, is the hardest thing
Sunday, October 26, 2014
Saturday, October 18, 2014
Don't Buy The Fake
Society doesn't accept emotionally fake people, right? People who mislead in order to make themselves look better are eventually exposed, then ostracized by others.
It's the same for intellectually dishonest people. If someone lies about the facts in order to make themselves look better, society is usually quite efficient at discovery and excommunication.
Then why are we so willing to accept physically fake people? Those folks are also doing something to make themselves look better, yet others often encourage them to repeat that behavior.
From plastic surgery to artificial hair to indoor tanning, people have plenty of ways to pull off the physical-fake. Unless it's taken to the extreme, we accept that it's better to look good (and younger) than to feel good.
I suppose faking the physical self isn't harming others, so we let it go. But is it really harmless?
I'm not so sure if obscuring the physical-you is any better than obscuring the emotional-you or intellectual-you. I don't buy that faking it should be allowed in anything. (Yes, even that.)
In matters of integrity and trust, I'd rather deal with someone being honest in all three.
It's the same for intellectually dishonest people. If someone lies about the facts in order to make themselves look better, society is usually quite efficient at discovery and excommunication.
Then why are we so willing to accept physically fake people? Those folks are also doing something to make themselves look better, yet others often encourage them to repeat that behavior.
From plastic surgery to artificial hair to indoor tanning, people have plenty of ways to pull off the physical-fake. Unless it's taken to the extreme, we accept that it's better to look good (and younger) than to feel good.
I suppose faking the physical self isn't harming others, so we let it go. But is it really harmless?
I'm not so sure if obscuring the physical-you is any better than obscuring the emotional-you or intellectual-you. I don't buy that faking it should be allowed in anything. (Yes, even that.)
In matters of integrity and trust, I'd rather deal with someone being honest in all three.
Wednesday, October 8, 2014
Charlie
I've written on several occasions about the Berkshire Hathaway annual meeting. Most associate it with Warren Buffett, but it also stars his vice-chairman, Charlie Munger. Both are very smart and witty, but Munger has a slightly more acerbic style.
Last week someone forwarded an article to me with 29 of Munger's most interesting quotes. They are the kind of things he says at the Berky meeting all of the time. The guy is awesome. I'm just going to throw out a few of best ones (in my opinion), and this is just a short sample:
"The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best [spouse] you can find that will have you. The rest of life is the same damn way."
"What do you want to avoid? Such an easy answer: sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are. You're going to crater immediately. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability."
"Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know. ... Knowing what you don’t know is more useful than being brilliant."
"Another thing that does one in, of course, is the self-serving bias to which we’re all subject. You think the 'True Little Me' is entitled to do what it wants to do. And, for instance, why shouldn’t the True Little Me overspend my income. There once was a man who became the most famous composer in the world but was utterly miserable most of the time, and one of the reasons was because he always overspent his income. That was Mozart. If Mozart can’t get by with this kind of asinine conduct, I don’t think you should try."
"The highest form that civilization can reach is a seamless web of deserved trust — not much procedure, just totally reliable people correctly trusting one another. ... In your own life what you want is a seamless web of deserved trust. And if your proposed marriage contract has forty-seven pages, I suggest you not enter."
"Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. Wisdom acquisition is a moral duty. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know."
Last week someone forwarded an article to me with 29 of Munger's most interesting quotes. They are the kind of things he says at the Berky meeting all of the time. The guy is awesome. I'm just going to throw out a few of best ones (in my opinion), and this is just a short sample:
"The right way to make decisions in practical life is based on your opportunity cost. When you get married, you have to choose the best [spouse] you can find that will have you. The rest of life is the same damn way."
"What do you want to avoid? Such an easy answer: sloth and unreliability. If you’re unreliable it doesn’t matter what your virtues are. You're going to crater immediately. Doing what you have faithfully engaged to do should be an automatic part of your conduct. You want to avoid sloth and unreliability."
"Some people are extraordinarily good at knowing the limits of their knowledge, because they have to be. Think of somebody who’s been a professional tightrope walker for 20 years – and has survived. He couldn’t survive as a tightrope walker for 20 years unless he knows exactly what he knows and what he doesn’t know. He’s worked so hard at it, because he knows if he gets it wrong he won’t survive. The survivors know. ... Knowing what you don’t know is more useful than being brilliant."
"Another thing that does one in, of course, is the self-serving bias to which we’re all subject. You think the 'True Little Me' is entitled to do what it wants to do. And, for instance, why shouldn’t the True Little Me overspend my income. There once was a man who became the most famous composer in the world but was utterly miserable most of the time, and one of the reasons was because he always overspent his income. That was Mozart. If Mozart can’t get by with this kind of asinine conduct, I don’t think you should try."
"The highest form that civilization can reach is a seamless web of deserved trust — not much procedure, just totally reliable people correctly trusting one another. ... In your own life what you want is a seamless web of deserved trust. And if your proposed marriage contract has forty-seven pages, I suggest you not enter."
"Wisdom acquisition is a moral duty. It’s not something you do just to advance in life. Wisdom acquisition is a moral duty. As a corollary to that proposition which is very important, it means that you are hooked for lifetime learning. And without lifetime learning, you people are not going to do very well. You are not going to get very far in life based on what you already know."
Tuesday, September 30, 2014
Iowa Election Handicapping 2014
We've got an open (non-incumbent) U.S. congressperson election going on in central Iowa, as well as an open U.S. senatorial seat and a gubernatorial race. Time to opine on the candidates.
Congress: Staci Appel (D) vs David Young (R)
When 'friend of John Boehner' and incumbent Tom Latham (R) unexpectedly retired to open this district seat, the major political parties were obviously unprepared. How else do you explain these two poor candidates? Appel is an uninspiring former state senator with an image problem, and Young is a boring, no-name protege of Iowa Senator Chuck Grassley. Good lord, is it too late for me to start a write-in campaign? I think Young wins this, because voters will prefer a boring nobody with some national political experience over a boring nobody with no such experience.
Senate: Bruce Braley (D) vs Joni Ernst (R)
This race reminds me a lot of eight years ago, when then-Congressman Jim Nussle ran against state politician Chet Culver for governor of Iowa. It should have been no contest -- Culver was a buffoon. But the anti-Republican fervor was too much that year (George W. Bush was mismanaging Iraq and Afghanistan) and Nussle didn't try hard enough. Culver won, and proved his buffoonery by being Iowa's worst-ever governor. Here, Braley = Nussle, Ernst = Culver, and Obama = Bush. Braley is the better candidate, but it isn't looking so good for him right now. He needs to hope that Ernst -- a National Guard member but also someone who clearly isn't the sharpest tool in the shed -- makes another mistake to sway independents, like reminding people that Sarah Palin endorsed her.
Governor: Jack Hatch (D) vs Terry Branstad (R)
Multi-decade governor and certified grumpy old man Branstad will win this easily. Make no mistake, it won't be because he's so beloved, it'll be because Iowans would rather dance with the devil they know than with the devil they don't know. Hatch isn't well-known outside of Des Moines, and frankly, he isn't that well known inside of Des Moines if you aren't a real estate developer. I might vote for Hatch just as a silent protest to Branstad's stance on medicinal marijuana.
Congress: Staci Appel (D) vs David Young (R)
When 'friend of John Boehner' and incumbent Tom Latham (R) unexpectedly retired to open this district seat, the major political parties were obviously unprepared. How else do you explain these two poor candidates? Appel is an uninspiring former state senator with an image problem, and Young is a boring, no-name protege of Iowa Senator Chuck Grassley. Good lord, is it too late for me to start a write-in campaign? I think Young wins this, because voters will prefer a boring nobody with some national political experience over a boring nobody with no such experience.
Senate: Bruce Braley (D) vs Joni Ernst (R)
This race reminds me a lot of eight years ago, when then-Congressman Jim Nussle ran against state politician Chet Culver for governor of Iowa. It should have been no contest -- Culver was a buffoon. But the anti-Republican fervor was too much that year (George W. Bush was mismanaging Iraq and Afghanistan) and Nussle didn't try hard enough. Culver won, and proved his buffoonery by being Iowa's worst-ever governor. Here, Braley = Nussle, Ernst = Culver, and Obama = Bush. Braley is the better candidate, but it isn't looking so good for him right now. He needs to hope that Ernst -- a National Guard member but also someone who clearly isn't the sharpest tool in the shed -- makes another mistake to sway independents, like reminding people that Sarah Palin endorsed her.
Governor: Jack Hatch (D) vs Terry Branstad (R)
Multi-decade governor and certified grumpy old man Branstad will win this easily. Make no mistake, it won't be because he's so beloved, it'll be because Iowans would rather dance with the devil they know than with the devil they don't know. Hatch isn't well-known outside of Des Moines, and frankly, he isn't that well known inside of Des Moines if you aren't a real estate developer. I might vote for Hatch just as a silent protest to Branstad's stance on medicinal marijuana.
Thursday, September 18, 2014
Crash And Recovery
Two weeks ago, after nearly twenty years and approximately 30,000 over-the-road miles, I had a moderately serious crash on my bicycle.
I fell to the pavement at between 15-20 mph, and ended up with a variety of scrapes and bruises and even a few gash-closing stitches. It could have been much worse, had I not been wearing a helmet and/or had there been vehicle traffic near me.
Last week, although I wanted to get right back on my bike, I had to stay off while I recuperated from my injuries. I spent some of that down time thinking about all of the ways I might have avoided the crash.
After a few days, I started to wonder just a little bit too much about it would feel the next time I went cycling.
This week, I got back on my bike, On the first ride, never did I grip the handlebars more firmly, or pay more attention to my surroundings, for such a long period of time on a ride. It got better the next time out, and the next time, but it's going to be a while before I'm back to being totally relaxed in the saddle.
Twenty years of confident bike-handling, and now all of this caution. It's true what they say -- once you fall off a horse, the best thing to do is get right back on it -- if you can.
I fell to the pavement at between 15-20 mph, and ended up with a variety of scrapes and bruises and even a few gash-closing stitches. It could have been much worse, had I not been wearing a helmet and/or had there been vehicle traffic near me.
Last week, although I wanted to get right back on my bike, I had to stay off while I recuperated from my injuries. I spent some of that down time thinking about all of the ways I might have avoided the crash.
After a few days, I started to wonder just a little bit too much about it would feel the next time I went cycling.
This week, I got back on my bike, On the first ride, never did I grip the handlebars more firmly, or pay more attention to my surroundings, for such a long period of time on a ride. It got better the next time out, and the next time, but it's going to be a while before I'm back to being totally relaxed in the saddle.
Twenty years of confident bike-handling, and now all of this caution. It's true what they say -- once you fall off a horse, the best thing to do is get right back on it -- if you can.
Friday, September 12, 2014
Abusing Money
This week the NFL is in the midst of a full-blown scandal over its handling of the domestic violence charges against one of its star players. Among the side issues is why the victim, engaged at the time, still married her assailant. She is in fact still married to him, and supporting him.
My initial reaction was probably ignorant; I felt like money was the motivating factor. This NFL player was making millions of dollars a year, why else would you stay?
However, a more holistic view of this revealed that it's not unusual for victims of abuse to handle things this way. For a variety of reasons, many people in an abusive relationship will stay with their abuser. The nation learned that in cases of domestic violence, we should not judge the victim.
Look, I don't know why she stayed with him. Maybe she grew up in an abusive household and this seemed normal to her. Maybe she was scared of him. Maybe her family pressured her. Maybe she wanted to keep her family together, since she already has a 2-year old child with the man. Like I said, I don't know.
But there's a more than zero percent chance that maybe, just maybe, she stayed (stays) with him because he's a multi-millionaire, and by marrying him, she'll never have to work another day in her life. Ignoring the role that money may have played in her decision is unreasonable. Might it also have made her family encourage her to forgive and forget?
However, it's so politically incorrect for anyone right now to suggest that money was a factor, I haven't seen anyone even mention it. Heck, I probably wouldn't mention it if I made my living off of writing or broadcasting about it, because you'd be suspended or fired.
That said, it's not insensitive to bring it up the role that money plays IN ANYTHING. Money changes people. Money makes people do dumb things, like making men think they can smack around their girlfriends. And yes, money can be a reason some of those girlfriends stay.
It doesn't make it right -- actually, it makes it more wrong. But let's at least agree that in this situation (obviously it isn't true in most domestic abuse), we can at least mention the money factor, for those of us not afraid of being judgmental.
My initial reaction was probably ignorant; I felt like money was the motivating factor. This NFL player was making millions of dollars a year, why else would you stay?
However, a more holistic view of this revealed that it's not unusual for victims of abuse to handle things this way. For a variety of reasons, many people in an abusive relationship will stay with their abuser. The nation learned that in cases of domestic violence, we should not judge the victim.
Look, I don't know why she stayed with him. Maybe she grew up in an abusive household and this seemed normal to her. Maybe she was scared of him. Maybe her family pressured her. Maybe she wanted to keep her family together, since she already has a 2-year old child with the man. Like I said, I don't know.
But there's a more than zero percent chance that maybe, just maybe, she stayed (stays) with him because he's a multi-millionaire, and by marrying him, she'll never have to work another day in her life. Ignoring the role that money may have played in her decision is unreasonable. Might it also have made her family encourage her to forgive and forget?
However, it's so politically incorrect for anyone right now to suggest that money was a factor, I haven't seen anyone even mention it. Heck, I probably wouldn't mention it if I made my living off of writing or broadcasting about it, because you'd be suspended or fired.
That said, it's not insensitive to bring it up the role that money plays IN ANYTHING. Money changes people. Money makes people do dumb things, like making men think they can smack around their girlfriends. And yes, money can be a reason some of those girlfriends stay.
It doesn't make it right -- actually, it makes it more wrong. But let's at least agree that in this situation (obviously it isn't true in most domestic abuse), we can at least mention the money factor, for those of us not afraid of being judgmental.
Thursday, September 4, 2014
A Working Model
In the investment business, there are three basic models that firms utilize to deliver investments and/or advice to their clients. They don't all work well for investors.
Let's start with the commission model. In this model, the advisor (known as a 'Registered Representative' of a 'broker-dealer' firm), is compensated for the investments that are utilized. Many securities, including virtually all annuities and life insurance, are sold this way. Those commissions pay the advisor an up-front, often substantial amount, which the investor ultimately repays directly or indirectly via account deductions.
Another model is called fee-based, and it's essentially the commission model with a twist. That is, these advisors usually have licenses which also allow them to give advice for a fee, in addition to their Registered Representative licenses. These dual-licensed advisors are called fee-based, because they can provide investment advice for a fee, but they primarily continue to utilize commission-based compensation for making a sale.
The third model is the fee-only model. Practitioners of this model are licensed as Investment Advisor Representatives (IAR) of a Registered Investment Advisor (RIA). Many of them also have attained the Certified Financial Planner® professional designation. The term 'fee-only' acknowledges that they are only compensated by the transparent, negotiated fees (not unspecified commissions) their clients pay.
Unfortunately, most advisors aren't fee-only, even though that model makes the most sense for those seeking help. Consider the possible conflict of interest when a commission-based advisor sells an investment product -- can the investor truly know if the size of the commission impacted the sale? By not receiving commissions for the investments recommended, a fee-only advisor eliminates this uncertainty.
Also, since commissions are paid up-front, what is that advisor’s incentive to provide ongoing client-service? Fee-only advisors charge a flat amount, or a percentage based on the assets they manage -- but in either case, it isn't paid until AFTER the work is done. Since this fee is only a fraction of the commissions that would otherwise be paid, the fee-only advisor must continue to work diligently, as the client can end the relationship at any point.
I am a fee-only advisor. I remove the conflicts of interest that could otherwise exist between investors and advisors, because our interests are the same. That shared interest shapes how we interact, to create and maintain the trust needed to successfully work together.
Let's start with the commission model. In this model, the advisor (known as a 'Registered Representative' of a 'broker-dealer' firm), is compensated for the investments that are utilized. Many securities, including virtually all annuities and life insurance, are sold this way. Those commissions pay the advisor an up-front, often substantial amount, which the investor ultimately repays directly or indirectly via account deductions.
Another model is called fee-based, and it's essentially the commission model with a twist. That is, these advisors usually have licenses which also allow them to give advice for a fee, in addition to their Registered Representative licenses. These dual-licensed advisors are called fee-based, because they can provide investment advice for a fee, but they primarily continue to utilize commission-based compensation for making a sale.
The third model is the fee-only model. Practitioners of this model are licensed as Investment Advisor Representatives (IAR) of a Registered Investment Advisor (RIA). Many of them also have attained the Certified Financial Planner® professional designation. The term 'fee-only' acknowledges that they are only compensated by the transparent, negotiated fees (not unspecified commissions) their clients pay.
Unfortunately, most advisors aren't fee-only, even though that model makes the most sense for those seeking help. Consider the possible conflict of interest when a commission-based advisor sells an investment product -- can the investor truly know if the size of the commission impacted the sale? By not receiving commissions for the investments recommended, a fee-only advisor eliminates this uncertainty.
Also, since commissions are paid up-front, what is that advisor’s incentive to provide ongoing client-service? Fee-only advisors charge a flat amount, or a percentage based on the assets they manage -- but in either case, it isn't paid until AFTER the work is done. Since this fee is only a fraction of the commissions that would otherwise be paid, the fee-only advisor must continue to work diligently, as the client can end the relationship at any point.
I am a fee-only advisor. I remove the conflicts of interest that could otherwise exist between investors and advisors, because our interests are the same. That shared interest shapes how we interact, to create and maintain the trust needed to successfully work together.
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