Another school year ends, another commencement-style address begins:
To the college graduates of 2018:
Are you paying attention?
Not to me, not to any words of wisdom you might get from thousands of different college commencement address speakers. Are you paying attention to what's going on in America? To what's going on in the world?
Paying attention to civilization is the most important thing you should be doing now. I know, it wasn't your strong suit the past several years. You did enough to get your degree, but listening to long, boring lectures doesn't lend itself to paying attention. For anyone.
If paying attention hasn't been your thing the past four (five? six?) years, it needs to be now. Bad stuff is happening. Stuff that has the potential to make your future miserable. I'm not just referring to your job future, but your future of life, liberty, and the pursuit of happiness.
Through a mixture of inattentiveness, conniver-y, and outright lying, certain individuals have been given power that far exceeds their ethical and moral capacity to handle it. This has led to them placing other ethically- and morally- challenged people in powerful posts.
The not-so-surprising result is a government that isn't actually working for the people. It's only working for, well, let's just say your chances of success are currently for less dependent on whether you have a college degree and for more on whether you are a white, heterosexual, Christian male.
Are you paying attention now?
The way to fix our broken government is to know what's going on. The best way to know what's going on is to stay abreast of current events, and I don't mean by keeping up with your Instagram or Twitter feeds. That isn't nearly good enough.
Watch the news, nationally and locally, and preferably on more than one channel. Read a bunch of different papers, articles, and books. Talk to a lot of people, and not just to your friends, who probably already think the same way as you do, or they wouldn't be your friends.
Show a little bit of passion for having a government and political system that works the right way, under the rule of law -- after all, you're paying for it, even if you don't have a job. Then, when election day rolls around, vote.
Pay attention!
Oh, and congratulations.
Saturday, June 2, 2018
Sunday, May 20, 2018
Berky Meeting Nuggets 2018
I managed to attend another Berkshire Hathaway annual meeting this month. I'm still not sure how many of these I've been at over the years, but I have a Warren Buffett-signed program from 2003 hanging on my office wall, so it's been more than 15 years now.
A general observation: I've never seen as many people at this meeting. Attendance had seemingly reached a peak once the meeting began to be live-streamed a couple of years ago. However, this year there were more folks than ever waiting to get inside the arena at 7a.m., and more than ever in the overflow rooms. I had my worst arena seat in years (although not bad) and I was a single. But I got a great seat after lunch, and that's when the best Q & A happened anyway.
Some other observations:
On Buffett and Charlie Munger's active oversight of the organization
Buffett joked that he'd been semi-retired for decades. He said, "I think, actually, semi-retired probably catches me at my most active point." Charlie Munger then adds, "Warren is very good at doing nothing."
On Berky's huge investment in, and impression of, Apple
Buffett liked that Apple is spending a lot of money buying back shares. That means Berky's stake will grow on its own. Apple is similar to Berky in that they both have over $100 billion in cash to invest, and it isn't easy to find companies to acquire that are large enough to move the needle.
On cryptocurrency
Buffett and Munger couldn't say enough bad things about it. "Cryptocurrencies will come to bad endings," said Buffett. He mentioned how it's similar to gold as in that it's not a productive asset, so price was dependent on people who want it, not actual value. Munger was more blunt, with what I though was the best line of the day: "(It's like) someone else is trading turds and you decide you can't be left out."
On Amazon and Google (Alphabet)
Buffett and Munger both said they admired those companies, although Munger said he had been to the Google campus and thought it looked like a kindergarten. They wished they'd have invested in them, but they took their lack of foresight in stride, with Buffet saying, "There is not a penalty in investing if you don't swing at a ball in the strike zone as long as you swing at something eventually."
A general observation: I've never seen as many people at this meeting. Attendance had seemingly reached a peak once the meeting began to be live-streamed a couple of years ago. However, this year there were more folks than ever waiting to get inside the arena at 7a.m., and more than ever in the overflow rooms. I had my worst arena seat in years (although not bad) and I was a single. But I got a great seat after lunch, and that's when the best Q & A happened anyway.
Some other observations:
On Buffett and Charlie Munger's active oversight of the organization
Buffett joked that he'd been semi-retired for decades. He said, "I think, actually, semi-retired probably catches me at my most active point." Charlie Munger then adds, "Warren is very good at doing nothing."
On Berky's huge investment in, and impression of, Apple
Buffett liked that Apple is spending a lot of money buying back shares. That means Berky's stake will grow on its own. Apple is similar to Berky in that they both have over $100 billion in cash to invest, and it isn't easy to find companies to acquire that are large enough to move the needle.
On cryptocurrency
Buffett and Munger couldn't say enough bad things about it. "Cryptocurrencies will come to bad endings," said Buffett. He mentioned how it's similar to gold as in that it's not a productive asset, so price was dependent on people who want it, not actual value. Munger was more blunt, with what I though was the best line of the day: "(It's like) someone else is trading turds and you decide you can't be left out."
On Amazon and Google (Alphabet)
Buffett and Munger both said they admired those companies, although Munger said he had been to the Google campus and thought it looked like a kindergarten. They wished they'd have invested in them, but they took their lack of foresight in stride, with Buffet saying, "There is not a penalty in investing if you don't swing at a ball in the strike zone as long as you swing at something eventually."
Friday, May 4, 2018
Old Business / New Business
I’ve taken the last month off of blogging because I’ve been a little busy with something else. Over the past month I've started my own financial planning firm.
This is something I’ve wanted to do for a while, but I didn't until now thanks to a need for medical insurance. In this case, Necessity was truly the Mother of Invention. (That's a long story, and maybe one good enough for a separate blog entry another time.)
Thanks to a lot of planning, I only had about 10 different things that needed to be done in the last month, down from a list of more than 20 when I began. While I probably had a few more things to do than other start-up businesses thanks to state and federal securities regulations, I have new respect for anyone who starts their own organization.
In my case, I'd compare starting your own business as similar to building a new house rather than moving into a nice existing house. It doesn’t take anywhere near as much time to buy an existing home, and frankly, you get more bang for your buck with fewer problems. The house has settled, the landscaping is done, the window treatments are in place, etc. It’s just a much simpler process.
But that existing house isn’t going to be exactly what you want. Maybe it isn’t quite in the right location, or maybe the layout isn’t exactly the best, or maybe it could use new appliances. In the end, if you really want to customize your lifestyle, you have build your own house, and that comes with a lot of extra time and expense and contracting headaches. For all that work, however, you’re going to have things the way you want them, or at least very, very close to it.
When I joined another financial planning firm in the past, it was analogous to moving into an existing home. The branding was completed, the accounting was set up, the compliance work was done, and so forth. It could have used a few updates (people), but it was really only a matter of moving in the furniture in getting started.
Starting my own firm, though, I had to build or re-build all of those things from scratch, and it takes a lot of time and effort. I fully expect it will be worth it.
In the future, I’ll probably write more specifically about a few of the decisions I made -- some that worked, and some that now only seemed like a good idea at the time.
This is something I’ve wanted to do for a while, but I didn't until now thanks to a need for medical insurance. In this case, Necessity was truly the Mother of Invention. (That's a long story, and maybe one good enough for a separate blog entry another time.)
Thanks to a lot of planning, I only had about 10 different things that needed to be done in the last month, down from a list of more than 20 when I began. While I probably had a few more things to do than other start-up businesses thanks to state and federal securities regulations, I have new respect for anyone who starts their own organization.
In my case, I'd compare starting your own business as similar to building a new house rather than moving into a nice existing house. It doesn’t take anywhere near as much time to buy an existing home, and frankly, you get more bang for your buck with fewer problems. The house has settled, the landscaping is done, the window treatments are in place, etc. It’s just a much simpler process.
But that existing house isn’t going to be exactly what you want. Maybe it isn’t quite in the right location, or maybe the layout isn’t exactly the best, or maybe it could use new appliances. In the end, if you really want to customize your lifestyle, you have build your own house, and that comes with a lot of extra time and expense and contracting headaches. For all that work, however, you’re going to have things the way you want them, or at least very, very close to it.
When I joined another financial planning firm in the past, it was analogous to moving into an existing home. The branding was completed, the accounting was set up, the compliance work was done, and so forth. It could have used a few updates (people), but it was really only a matter of moving in the furniture in getting started.
Starting my own firm, though, I had to build or re-build all of those things from scratch, and it takes a lot of time and effort. I fully expect it will be worth it.
In the future, I’ll probably write more specifically about a few of the decisions I made -- some that worked, and some that now only seemed like a good idea at the time.
Sunday, March 25, 2018
Best Song Lyrics (Part XX)
I admit it, I'm a fan of acoustic music. It doesn't matter if it's original acoustic music (think Norah Jones), or MOST modified acoustic versions of older songs. (There are major exceptions, for instance, nobody needs to hear an acoustic version of Hey Ya! by OutKast, but I've heard it on the SiriusXM CoffeeHouse channel more than once.)
Earlier this month, one of my favorite acoustic musicians, Jack Johnson, was the musical guest on The Late Show with Stephen Colbert. Colbert was obviously a huge fan, singing a duet with Johnson on his song Sleep Through The Static, and also posting a separate impromptu rehearsal excerpt on the web.
A former champion surfer who still lives in Hawaii, Johnson has been a full-time singer-songwriter for about 15 years. I've been listening to him on and off for about 10 years. In my opinion, Johnson is best known for the songs Better Together and Upside Down, but as an acoustic guitarist outside of mainstream popular music, most people would not be able to identify even those tracks.
You get a definite Hawaiian vibe from his music, but he's also great with lyrics, much of them espousing progressive causes. Let's go back to a verse and chorus from Sleep Through The Static, a 2008 song which uses smart lyrics to spite the reasoning behind the 2003 U.S invasion of Iraq, and the subsequent never-ending war:
Trouble travels fast
When you're specially designed for crash testing
Or wearing wool sunglasses in the afternoon
Come on and tell us what you're trying to prove
'Cause it's a battle when you dabble in war
You store it up, unleash it, then you piece it together
Whether the storm drain running rampant just stamp it
And send it to somebody who's pretending to care
Just cash in your blanks for little toy tanks
Learn how to use them, then abuse them and choose them
Over conversations relationships are overrated
I hated everyone said the sun
And so I will cook all your books
You're too good looking and mistooken
You could watch it instead
From the comfort of your burning beds
Or you can sleep through the static
Who needs sleep when we've got love?
Who needs keys when we've got clubs?
Who needs please when we've got guns?
Who needs peace when we've gone above
But beyond where we should have gone?
We went beyond where we should have gone
A former champion surfer who still lives in Hawaii, Johnson has been a full-time singer-songwriter for about 15 years. I've been listening to him on and off for about 10 years. In my opinion, Johnson is best known for the songs Better Together and Upside Down, but as an acoustic guitarist outside of mainstream popular music, most people would not be able to identify even those tracks.
You get a definite Hawaiian vibe from his music, but he's also great with lyrics, much of them espousing progressive causes. Let's go back to a verse and chorus from Sleep Through The Static, a 2008 song which uses smart lyrics to spite the reasoning behind the 2003 U.S invasion of Iraq, and the subsequent never-ending war:
Trouble travels fast
When you're specially designed for crash testing
Or wearing wool sunglasses in the afternoon
Come on and tell us what you're trying to prove
'Cause it's a battle when you dabble in war
You store it up, unleash it, then you piece it together
Whether the storm drain running rampant just stamp it
And send it to somebody who's pretending to care
Just cash in your blanks for little toy tanks
Learn how to use them, then abuse them and choose them
Over conversations relationships are overrated
I hated everyone said the sun
And so I will cook all your books
You're too good looking and mistooken
You could watch it instead
From the comfort of your burning beds
Or you can sleep through the static
Who needs sleep when we've got love?
Who needs keys when we've got clubs?
Who needs please when we've got guns?
Who needs peace when we've gone above
But beyond where we should have gone?
We went beyond where we should have gone
Wednesday, March 7, 2018
The LOST Loss
I’m a big believer in behavioral science / economics, which is essentially the idea that people are motivated in all facets of life by potential gains or losses, and their calculation of the underlying risk in achieving / suffering those gains and losses. The gains and losses are often related to money, but can also be based on things like religion, politics, or relationships.
Unfortunately, many times humans do not properly calculate the underlying risk, leading to bad decisions / behavior. I thought about this again this week, when the residents of my county were asked to vote in favor of voluntarily and regressively taxing themselves via a sales tax increase.
The local option sales tax (LOST) has been around for a while in Iowa, as a way for county localities to raise additional tax revenue by tacking on another 1% to the statewide sales tax. When it was first introduced around 15 years ago, the idea was to allow counties to use the money solely for school infrastructure improvements over a 10-years taxing period. As with most new tax ideas, I've hated it from the beginning.
Over several years, every county in Iowa passed a LOST, increasing the total sales tax from 5% to 6%. And as a result, we have the nicest school infrastructure in the United States. For real. I’ve been to most other states, and their school building suck compared to Iowa. (Of course, there’s absolutely no evidence that nicer bricks and mortar mean smarter kids, but that’s another story.)
But then something happened that was only predictable to those of us with common sense: The LOST never went away. In fact, after the school districts mismanaged their budgeted improvements to the tune of millions of dollars, the state decided to simply make the statewide sales tax 6%, and allow another, new LOST for counties to use as they wish.
97 Iowa counties have piled on to this regrettable legislation, leaving only two that have not voted for a new LOST that increased sales taxes from 6% to 7%. (Note: That isn't a 1% increase, that’s a 19% increase, a math computation the LOST supporters don’t want anyone to know about.) My county is one of the remaining two, and this week, after an affluent neighboring suburb passed a LOST a few months ago, my county decided to have another vote.
Which brings me back to behavioral economics. Why would anyone vote to tax themselves, especially with no explicit guarantee that local government would spend the money on non-essential services? Yet, it happens quite often – as I mentioned, it recently happened in 97 out of 99 other instances in Iowa. It’s usually backed with nothing more than a promise that the sales tax it would help to offset some other tax burden (this time it was property taxes) or that it would not be permanent (see above).
My answer is, it’s another matter of not properly calculating the risk. Many people don’t recognize the cumulative impact of a regressive tax. They think of it in terms of ‘just an extra penny on the dollar’ rather than a whopping 19% increase on every Average Joe that will probably cost hundreds of dollars a year, and many thousands of dollars over many years.
As in past LOST votes, I voted no, and I’m pleased to day this time it failed (barely). I’m not against paying for essential government services, but I’m totally against voting to tax myself for undisclosed services I may not need, to be administered by government bureaucrats that haven’t been truthful, and who aren’t good stewards to begin with.
In other words, I’m for properly assessing risk and behaving appropriately.
Unfortunately, many times humans do not properly calculate the underlying risk, leading to bad decisions / behavior. I thought about this again this week, when the residents of my county were asked to vote in favor of voluntarily and regressively taxing themselves via a sales tax increase.
The local option sales tax (LOST) has been around for a while in Iowa, as a way for county localities to raise additional tax revenue by tacking on another 1% to the statewide sales tax. When it was first introduced around 15 years ago, the idea was to allow counties to use the money solely for school infrastructure improvements over a 10-years taxing period. As with most new tax ideas, I've hated it from the beginning.
Over several years, every county in Iowa passed a LOST, increasing the total sales tax from 5% to 6%. And as a result, we have the nicest school infrastructure in the United States. For real. I’ve been to most other states, and their school building suck compared to Iowa. (Of course, there’s absolutely no evidence that nicer bricks and mortar mean smarter kids, but that’s another story.)
But then something happened that was only predictable to those of us with common sense: The LOST never went away. In fact, after the school districts mismanaged their budgeted improvements to the tune of millions of dollars, the state decided to simply make the statewide sales tax 6%, and allow another, new LOST for counties to use as they wish.
97 Iowa counties have piled on to this regrettable legislation, leaving only two that have not voted for a new LOST that increased sales taxes from 6% to 7%. (Note: That isn't a 1% increase, that’s a 19% increase, a math computation the LOST supporters don’t want anyone to know about.) My county is one of the remaining two, and this week, after an affluent neighboring suburb passed a LOST a few months ago, my county decided to have another vote.
Which brings me back to behavioral economics. Why would anyone vote to tax themselves, especially with no explicit guarantee that local government would spend the money on non-essential services? Yet, it happens quite often – as I mentioned, it recently happened in 97 out of 99 other instances in Iowa. It’s usually backed with nothing more than a promise that the sales tax it would help to offset some other tax burden (this time it was property taxes) or that it would not be permanent (see above).
My answer is, it’s another matter of not properly calculating the risk. Many people don’t recognize the cumulative impact of a regressive tax. They think of it in terms of ‘just an extra penny on the dollar’ rather than a whopping 19% increase on every Average Joe that will probably cost hundreds of dollars a year, and many thousands of dollars over many years.
As in past LOST votes, I voted no, and I’m pleased to day this time it failed (barely). I’m not against paying for essential government services, but I’m totally against voting to tax myself for undisclosed services I may not need, to be administered by government bureaucrats that haven’t been truthful, and who aren’t good stewards to begin with.
In other words, I’m for properly assessing risk and behaving appropriately.
Friday, February 23, 2018
Too Much Snowboarding
After watching the 2012 Summer Olympics, I made a comment about every sport. All 36 of them.
In contrast, there are only 15 official Winter Olympic sports. With the exception of the kinda-crazy bobsled / luge / skeleton, most of them are related in some way to your basic skiing or skating. (One sport that refuses to be categorized is curling, a family favorite, and one that deserves as much attention than the media darling of figure skating.)
One of the newer sports is snowboarding, and that's my topic today -- how the events within the snowboarding sport have gotten completely out of hand.
It started out simple enough, with half-pipe and aerial events. But now the list includes big air, parallel slalom, giant parallel slalom, slopestyle, snowboard cross, and team ski-snowboard cross. These all apply separately to men and women.
I'm not saying I don't enjoy watching these thrill sports. I'm saying that we don't need this many Olympic events for snowboarding. We've taken these boutique, millennial-driven, X-Games activities and put them on the same level as mainstream sports that require far more fitness.
Whatever. At least it's good for the United States' medal count, because the U.S. tends to dominate these snowboarding events. Suck it, Norway!
In contrast, there are only 15 official Winter Olympic sports. With the exception of the kinda-crazy bobsled / luge / skeleton, most of them are related in some way to your basic skiing or skating. (One sport that refuses to be categorized is curling, a family favorite, and one that deserves as much attention than the media darling of figure skating.)
One of the newer sports is snowboarding, and that's my topic today -- how the events within the snowboarding sport have gotten completely out of hand.
It started out simple enough, with half-pipe and aerial events. But now the list includes big air, parallel slalom, giant parallel slalom, slopestyle, snowboard cross, and team ski-snowboard cross. These all apply separately to men and women.
I'm not saying I don't enjoy watching these thrill sports. I'm saying that we don't need this many Olympic events for snowboarding. We've taken these boutique, millennial-driven, X-Games activities and put them on the same level as mainstream sports that require far more fitness.
Whatever. At least it's good for the United States' medal count, because the U.S. tends to dominate these snowboarding events. Suck it, Norway!
Friday, February 9, 2018
Jamaica Mon
I spent a few days away on a family vacation in Jamaica last month. It was my first time in the Caribbean – not to mention my first visit to a country outside North America. As with other travels to new places, I have some observations to share:
- Jamaica is a beautiful country – except for when it isn’t. The coastal areas, foliage, and tropical colors were all great. However, on the 1+ hour travel each way from the airport to our resort, the outdated and run-down roads, buildings, and housing structures were a deep contrast to the beauty.
- Driving on the left side of the road, with a right-sided steering wheel, is weird.
- I have never interacted with a group of friendlier people than the Jamaicans. I’m well aware that I only visited the tourist-y places, and friendliness under those conditions may be a self-fulfilling prophecy. Still, this was a deferential friendliness, as if someone feared offending me by just stepping across my path. So I think there’s something more to it, something related to their laid-back living styles and frames of mind.
- I saw plenty of people smoking joints, but I frankly expected to see a lot more cannabis than I did.
- The food was a bit hit-and-miss for me, although I might not have been adventurous enough. Among the most notable items, the Caribbean jerk chicken was very good, and I absolutely loved my daily serving of fresh papaya.
- There wasn’t much time for watching TV, but I had no idea there could be that many televised cricket matches.
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