It's a beautiful evening, not hot, not cold, and importantly, not buggy. It's an unusually good summer evening to sit on my back deck with a beverage and some music, and take a look around.
First I see my neighbor to the east. She’s been widowed for years now. She’s out doing yard work, which she seemed to have enjoyed a lot more 10 years ago, but not so much now that she’s around 80 years old. A few weeks ago, she told me she recently retired, and was spending more time with her great-grandchildren. Unfortunately, she doesn’t get to spend as much time with them as she wants, because now she has a houseful to help take care of, too. That’s because in the past year, she’s allowed four people to move in with her: Her partially disabled, adult son (or brother, not sure); her grandson’s mother-in-law, who is effectively renting her basement for $100 a month; and now her adult granddaughter and the granddaughter’s boyfriend. Let’s just say, this neighbor has some people taking advantage of her Iowa Nice.
Now I see the adult granddaughter and the boyfriend. They walked out to check the mail, although it isn’t clear why that task needed both of them. Maybe they were on one of their outdoor smoke breaks? My neighbor allowed them to move in with her a few months ago – even though she doesn’t approve of them living together. She told me she’s hoping to ”straighten out” the girl, implying social/legal problems in the past. Since the couple has lived there, there has been no sign they’re working, they clearly have no ambition to help with any yard work, and their dog disappeared (or more likely, ran away from them). Clearly, there is a lot of straightening out still to be done.
Now I see my neighbors to the northeast. He and his wife, daughter, and daughter’s boyfriend are just returning from an afternoon of boating. They have a nice boat they keep at home, and they’re very good about getting out with it in the summer. He runs his own business out of his garage, has some nice toys (like the boat) and keeps a clean property, although in 15 years I’ve never seen his wife or daughter do any of the work on said property. The daughter is a bit of a wild child, and although she’s still in high school, he’s mentioned that he’s ready for her to move out. We’ve heard shouting matches many times over the years, although on this evening, like the weather, it’s calm.
Now I see the wife carrying their old, grungy-looking dog outside and setting it on the front lawn. This is her version of walking the dog. It’s been this way for years, probably since the month after they got the dog, after ‘new puppy’ syndrome wore off. Within a minute, the dog poops basically in the same spot where it was set down, and hobbles back to the front door to be let in again. Every year, this makes for an interesting patchwork of deep green grass next to the lighter greens and brown parts of the lawn. Of course, the whole thing is pathetic – and I mean both the dog and the way it’s treated. Good grief, why do people keep dogs that they don’t want to care for properly?
No time to worry about that now. It's still a beautiful evening, and only a few minutes have passed. Time to enjoy the simple pleasures of my more uncomplicated life.
Thursday, June 30, 2016
Friday, June 17, 2016
Saving Investors From Themselves
One of the smartest financial journalists I follow is Jason Zweig. He isn't a media darling, but he's fairly well-known for writing a column for the Wall Street Journal, and he's also authored books and operates his own web / blogging site at jasonzweig.com.
I was looking at his blog archive recently, and came across a gem from three years ago called, "Saving Investors From Themselves." He's writing about financial journalists, but he could just as well be writing about financial advisors.
Here's an excerpt -- if you don't want to read it all, at least read the last sentence.
I was once asked, at a journalism conference, how I defined my job. I said: My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself.
That’s because good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.
In practice, for most of the media, that requires telling people to buy Internet stocks in 1999 and early 2000; explaining, in 2005 and 2006, how to “flip” houses; in 2008 and 2009, it meant telling people to dump their stocks and even to buy “leveraged inverse” exchange-traded funds that made explosively risky bets against stocks; and ever since 2008, it has meant touting bonds and the “safety trade” like high-dividend-paying stocks and so-called minimum-volatility stocks.
It’s no wonder that, as brilliant research by the psychologist Paul Andreassen showed many years ago, people who receive frequent news updates on their investments earn lower returns than those who get no news. It’s also no wonder that the media has ignored those findings. Not many people care to admit that they spend their careers being part of the problem instead of trying to be part of the solution.
My job, as I see it, is to learn from other people’s mistakes and from my own. Above all, it means trying to save people from themselves. As the founder of security analysis, Benjamin Graham, wrote in The Intelligent Investor in 1949: “The investor’s chief problem – and even his worst enemy – is likely to be himself.”
From financial history and from my own experience, I long ago concluded that regression to the mean is the most powerful law in financial physics: Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.
But humans perceive reality in short bursts and streaks, making a long-term perspective almost impossible to sustain – and making most people prone to believing that every blip is the beginning of a durable opportunity.
My role, therefore, is to bet on regression to the mean even as most investors, and financial journalists, are betting against it. I try to talk readers out of chasing whatever is hot and, instead, to think about investing in what is not hot. Instead of pandering to investors’ own worst tendencies, I try to push back. My role is also to remind them constantly that knowing what not to do is much more important than what to do. Approximately 99% of the time, the single most important thing investors should do is absolutely nothing.
I was looking at his blog archive recently, and came across a gem from three years ago called, "Saving Investors From Themselves." He's writing about financial journalists, but he could just as well be writing about financial advisors.
Here's an excerpt -- if you don't want to read it all, at least read the last sentence.
I was once asked, at a journalism conference, how I defined my job. I said: My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself.
That’s because good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good.
In practice, for most of the media, that requires telling people to buy Internet stocks in 1999 and early 2000; explaining, in 2005 and 2006, how to “flip” houses; in 2008 and 2009, it meant telling people to dump their stocks and even to buy “leveraged inverse” exchange-traded funds that made explosively risky bets against stocks; and ever since 2008, it has meant touting bonds and the “safety trade” like high-dividend-paying stocks and so-called minimum-volatility stocks.
It’s no wonder that, as brilliant research by the psychologist Paul Andreassen showed many years ago, people who receive frequent news updates on their investments earn lower returns than those who get no news. It’s also no wonder that the media has ignored those findings. Not many people care to admit that they spend their careers being part of the problem instead of trying to be part of the solution.
My job, as I see it, is to learn from other people’s mistakes and from my own. Above all, it means trying to save people from themselves. As the founder of security analysis, Benjamin Graham, wrote in The Intelligent Investor in 1949: “The investor’s chief problem – and even his worst enemy – is likely to be himself.”
From financial history and from my own experience, I long ago concluded that regression to the mean is the most powerful law in financial physics: Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.
But humans perceive reality in short bursts and streaks, making a long-term perspective almost impossible to sustain – and making most people prone to believing that every blip is the beginning of a durable opportunity.
My role, therefore, is to bet on regression to the mean even as most investors, and financial journalists, are betting against it. I try to talk readers out of chasing whatever is hot and, instead, to think about investing in what is not hot. Instead of pandering to investors’ own worst tendencies, I try to push back. My role is also to remind them constantly that knowing what not to do is much more important than what to do. Approximately 99% of the time, the single most important thing investors should do is absolutely nothing.
Friday, May 27, 2016
Dear Graduating Class of 2016
So ends another school year, and so begins another attempt at imparting wisdom upon this year’s graduates. In the past, I’ve sometimes had messages for both high school and college graduates. I’m going to ignore the scholastic grads this year, maybe from this point forward. 18-year-olds are so brainwashed from living in the same social-political-economic environment their whole lives, I don’t see how they can process an outsider’s advice anyway, much less execute it. But college grads – they have no excuse.
So to the college graduates of 2016:
Let me start by saying that I’m withholding my congratulations. Oh sure, you may have done enough to get your degree, but what’s the accomplishment in that? I've previously chided the act of celebrating high school diplomas, and as for you, was there ever a doubt that with enough time and money, you would eventually graduate?
Let’s get real. With apologies to the rocket scientists out there, getting a college degree isn’t rocket science. Heck, you didn’t even need to GO to college to get a degree. Thanks to technology, not to mention lower standards, you can get a degree on-line for the most part. If it was going to take a massive effort to get degree, you probably wouldn’t have gone to college in the first place.
As for what's next, like I've said to your predecessors, if you haven't figured that out yet, you've already made your first real-life screw up. That's what the last 4 or 5 or 5+ years were for. If that's you, then you're probably headed back to live in your all-too-willing parents' basement for an undisclosed period of time. So much for repeating my best advice from last year to “go out there and try to never move back in with your parents!"
However, regardless of whether you are unemployed and living with your parents, or you are planning to travel the world and live day-by-day, or you actually have a job, there are still important things you now must do. Be responsible. Be accountable. Be socially aware. Have an opinion. Have a sense of humor. Improve yourself. Positively influence those around you.
Most of all, figure out a way to contribute to the betterment of society -- it's not so hard. For some of you that might mean staying in your parents basement, so if that's what you were going for, it all worked out.
So to the college graduates of 2016:
Let me start by saying that I’m withholding my congratulations. Oh sure, you may have done enough to get your degree, but what’s the accomplishment in that? I've previously chided the act of celebrating high school diplomas, and as for you, was there ever a doubt that with enough time and money, you would eventually graduate?
Let’s get real. With apologies to the rocket scientists out there, getting a college degree isn’t rocket science. Heck, you didn’t even need to GO to college to get a degree. Thanks to technology, not to mention lower standards, you can get a degree on-line for the most part. If it was going to take a massive effort to get degree, you probably wouldn’t have gone to college in the first place.
As for what's next, like I've said to your predecessors, if you haven't figured that out yet, you've already made your first real-life screw up. That's what the last 4 or 5 or 5+ years were for. If that's you, then you're probably headed back to live in your all-too-willing parents' basement for an undisclosed period of time. So much for repeating my best advice from last year to “go out there and try to never move back in with your parents!"
However, regardless of whether you are unemployed and living with your parents, or you are planning to travel the world and live day-by-day, or you actually have a job, there are still important things you now must do. Be responsible. Be accountable. Be socially aware. Have an opinion. Have a sense of humor. Improve yourself. Positively influence those around you.
Most of all, figure out a way to contribute to the betterment of society -- it's not so hard. For some of you that might mean staying in your parents basement, so if that's what you were going for, it all worked out.
Friday, May 13, 2016
Berky Meeting Nuggets 2016
About this time of the year, I post my annual recap of items discussed at the Berkshire Hathaway annual shareholders meeting. This year, instead of concentrating on topics, I'm going to concentrate on some of the more interesting / funny statments from either Warren Buffett or Charlie Munger:
On the choices of women:
If the choice is between two old rich men, choose the older man!
On getting advice from relatives:
A lot of people have terrible relatives.
On a town with no population growth:
Every time a girl got pregnant, some guy had to leave town!
On successful debating:
You should know the other person's argument better than he does.
On working in difficult businesses:
Somebody has to occupy the tough niches in the economy!
On competition:
Win fairly and lose wisely.
And finally, since the meeting was live-streamed for the first time ever this year, I'm going to link to that, and tell you to watch from the 2:42 to 2:55 mark, where Buffett gives a can't miss lesson about successful investing by minimizing expenses.
https://finance.yahoo.com/brklivestream/
On the choices of women:
If the choice is between two old rich men, choose the older man!
On getting advice from relatives:
A lot of people have terrible relatives.
On a town with no population growth:
Every time a girl got pregnant, some guy had to leave town!
On successful debating:
You should know the other person's argument better than he does.
On working in difficult businesses:
Somebody has to occupy the tough niches in the economy!
On competition:
Win fairly and lose wisely.
https://finance.yahoo.com/brklivestream/
Saturday, April 30, 2016
A Good Use Of Twitter
Several weeks ago, there was some media attention given to Twitter's tenth anniversary. Some of that attention focused on the negatives of Twitter, namely that it makes some people believe they're more important than they really are. (I'm looking at you, B-list celebrities and athletes.)
However, one article I read was someone's list of the 100 funniest jokes in the history of Twitter. It seems odd, but while some jokes are funny when spoken, others only work in print. The latter is one of the best things about Twitter, and it's made even better by the fact they have to work in 140 characters or less. The joke has to be short, therefore, it has to be smart.
Here are a few of my favorites from that list of 100, most of which would only work in print:
Most cutting thing you can say is "who's this clown?" because it implies they're a) a clown & b) not even one of the better-known clowns
ME: honey, it's really muggy out today
WIFE: if I go outside & all our mugs are on the front lawn, I'm leaving u
ME: *sips coffee from bowl*
When you’re cutting wrapping paper and your scissors start to glide is what I imagine heroin feels like
[ordering cake over phone]
"and what would you like the cake to say?"
[covers phone to ask wife]
"do we want a talking cake?"
"Anybody here named Jeff?"
Jeff: "Yes"
Geoff: "Yeos"
The best thing about trying to name a baby is realizing how many people you hate
-The name's Bond. James Bond.
-I've written Bond now.
-Oh. Can you change it or is it too late?
-When your coffee's ready they'll call Bond
I put the "baller" in "I just ruined my daughter's ballerina recital."
COP: u were swerving a lot so i have to conduct a sobriety test
ME: ok
COP: lets get taco bell
ME: no
COP: text ur ex
ME: no
COP: ok ur good
When parents say to kids "go to ur room & think about what you've done" it's really good practice for what you'll do every night as an adult
What my girlfriend thought, first 4 dates:
1. Nice shirt.
2. Wow. A second nice shirt.
3. Okay, first shirt again.
4. He has two shirts.
(•_•) (•_•)
<) )╯ ALAS
/ \
(•_•)
\(•_•)
( (> POOR
/ \
(•_•)
<) )> YORICK
/ \ (•_•)
However, one article I read was someone's list of the 100 funniest jokes in the history of Twitter. It seems odd, but while some jokes are funny when spoken, others only work in print. The latter is one of the best things about Twitter, and it's made even better by the fact they have to work in 140 characters or less. The joke has to be short, therefore, it has to be smart.
Here are a few of my favorites from that list of 100, most of which would only work in print:
Most cutting thing you can say is "who's this clown?" because it implies they're a) a clown & b) not even one of the better-known clowns
ME: honey, it's really muggy out today
WIFE: if I go outside & all our mugs are on the front lawn, I'm leaving u
ME: *sips coffee from bowl*
When you’re cutting wrapping paper and your scissors start to glide is what I imagine heroin feels like
[ordering cake over phone]
"and what would you like the cake to say?"
[covers phone to ask wife]
"do we want a talking cake?"
"Anybody here named Jeff?"
Jeff: "Yes"
Geoff: "Yeos"
The best thing about trying to name a baby is realizing how many people you hate
-The name's Bond. James Bond.
-I've written Bond now.
-Oh. Can you change it or is it too late?
-When your coffee's ready they'll call Bond
I put the "baller" in "I just ruined my daughter's ballerina recital."
COP: u were swerving a lot so i have to conduct a sobriety test
ME: ok
COP: lets get taco bell
ME: no
COP: text ur ex
ME: no
COP: ok ur good
When parents say to kids "go to ur room & think about what you've done" it's really good practice for what you'll do every night as an adult
What my girlfriend thought, first 4 dates:
1. Nice shirt.
2. Wow. A second nice shirt.
3. Okay, first shirt again.
4. He has two shirts.
(•_•) (•_•)
<) )╯ ALAS
/ \
(•_•)
\(•_•)
( (> POOR
/ \
(•_•)
<) )> YORICK
/ \ (•_•)
Friday, April 15, 2016
Mayo-praise
Due in part to a major medical issue from 15+ years ago, I occasionally go to Mayo Clinic in Rochester, Minnesota for diagnostic testing and check-ups. It started out as a kind of second opinion on treatment I'd already received, to help determine if there was a different / better course going forward. I got comfortable with doctor(s) I saw there, and it morphed into semi-annual, then annual, and now once every 3-5 years deal at my discretion.
I made my latest Mayo visit this week. It's about a 3 hour, one-way trip, and although I've done the entire visit in a day, I usually add a one-night hotel stay. When I go now, I'm contemplative about the prior visits, and why I still go there.
The bottom line is, Mayo is different than other health care providers. In dozens of testing appointments over the years, I've rarely had to wait. The staff has always been 'Minnesota Nice' in those times. Perhaps best of all, the diagnostic testing reports are done immediately, so I can visit the doctor, often in the same building, within a couple of hours to hear the outcome.
Factor in that the Mayo Clinic doctors are salaried staff. They don't get paid more for seeing more patients, or for ordering more tests. It's a very patient-friendly model, and from that perspective, it's almost infuriating that health care organizations aren't all mandated to operate in that same way.
However, it isn't the most financially-friendly model. It's definitely more expensive, for both the testing and the doctor visits. So, if you don't have insurance coverage, there may be a question of value, something that can't be overlooked.
Fortunately, I have insurance. I also have a desire to go to a place where I'll know about any medical breakthroughs related to my condition / treatment, if and when that happens. I still feel the trip to the Mayo Clinic is worth the extra time and cost.
I made my latest Mayo visit this week. It's about a 3 hour, one-way trip, and although I've done the entire visit in a day, I usually add a one-night hotel stay. When I go now, I'm contemplative about the prior visits, and why I still go there.
The bottom line is, Mayo is different than other health care providers. In dozens of testing appointments over the years, I've rarely had to wait. The staff has always been 'Minnesota Nice' in those times. Perhaps best of all, the diagnostic testing reports are done immediately, so I can visit the doctor, often in the same building, within a couple of hours to hear the outcome.
Factor in that the Mayo Clinic doctors are salaried staff. They don't get paid more for seeing more patients, or for ordering more tests. It's a very patient-friendly model, and from that perspective, it's almost infuriating that health care organizations aren't all mandated to operate in that same way.
However, it isn't the most financially-friendly model. It's definitely more expensive, for both the testing and the doctor visits. So, if you don't have insurance coverage, there may be a question of value, something that can't be overlooked.
Fortunately, I have insurance. I also have a desire to go to a place where I'll know about any medical breakthroughs related to my condition / treatment, if and when that happens. I still feel the trip to the Mayo Clinic is worth the extra time and cost.
Friday, April 1, 2016
Ratings > Perspective
Today there was a funeral for a Des Moines police officer, one of two killed last week in a late night interstate highway collision. The officers were transporting an inmate from another jurisdiction when they were hit by a presumed drunk driver, who was driving on the wrong side of the road.
As with the other officer buried earlier in the week, there were scores of other law enforcement personnel in attendance from other parts of Iowa and the country. That’s not a surprise. What is a surprise, at least to me, is the production scope of the visitation and funeral ceremonies, and the media attention being given to these events.
For the past four days, main roads have been shut down for extended periods so the bodies could be transported from funeral homes to churches to burial sites. These transports have included processions of dozens, perhaps hundreds, of police and fire department vehicles, with hundreds, if not thousands, of people paying their respects at the churches, or by standing along these procession routes. And in something I believe to be unprecedented, there has been live TV coverage of the funerals on multiple stations.
Don’t get me wrong, the death of these police officers (plus two others, including the driver of the other car and the prisoner being transported) is tragic. But can we at least agree that relative to other tragic deaths, the amount of attention being given to their funerals is somewhat disproportional to what happened.
Yes, they were on duty, and the law enforcement code rightfully gives them and their families an outpouring of support and respect. However, they were not doing anything heroic. Being killed by a (allegedly) drunk driver isn’t the same as being killed by taking a bullet, or running into a burning house, or trying to quell a riot. The manner in which they died could have, and has, happened to countless others before them, both on the job and off. And while those incidents often garner much support and attention, it isn’t anything like this. Not even close.
To put it into more perspective, consider a military member killed on the other side of the world in Iraq or Afghanistan or some other god forsaken place. Yes, the military gives that person tremendous respect, and the funeral is given much attention. However, it receives nowhere near the attention that the public and media are giving to these officers. And let’s be real, that military member deserves at least as much, probably more attention, given their sacrifice. They are doing something extraordinary, just being on the other side of the world for months or years, regardless of the cause of death.
I blame the local media for whipping up public sentiment beyond the pale. They’ve made it a race to see which TV or radio or newspaper or even social media outlet can show that they have more empathy about the local police officer deaths. Consequently, people are paying more than the usual amount of attention. That isn’t the fault of the officers, or their families, or I suppose even the police department. But the whole thing is out of proportion nonetheless.
It reminds me of many years ago when Princess Diana died, and then Mother Teresa of Calcutta died days later. Diana’s funeral became worldwide spectacle, covered live by international media. Mother Teresa’s funeral deserved every bit as much coverage, probably more given the circumstances, but only grudgingly got some. Ratings, you know. It might have gotten none at all without the guilt of the networks for their over-the-top coverage of Diana.
I’ve privately mentioned my surprise to a few folks, and no one disagrees, but no one dares say it out loud. Let’s just say the next time a local soldier is killed, I’d better see wall-to-wall media coverage about it. It’s just a matter of time before another law enforcement or military funeral doesn’t have the same coverage, when there will be some public backlash.
As with the other officer buried earlier in the week, there were scores of other law enforcement personnel in attendance from other parts of Iowa and the country. That’s not a surprise. What is a surprise, at least to me, is the production scope of the visitation and funeral ceremonies, and the media attention being given to these events.
For the past four days, main roads have been shut down for extended periods so the bodies could be transported from funeral homes to churches to burial sites. These transports have included processions of dozens, perhaps hundreds, of police and fire department vehicles, with hundreds, if not thousands, of people paying their respects at the churches, or by standing along these procession routes. And in something I believe to be unprecedented, there has been live TV coverage of the funerals on multiple stations.
Don’t get me wrong, the death of these police officers (plus two others, including the driver of the other car and the prisoner being transported) is tragic. But can we at least agree that relative to other tragic deaths, the amount of attention being given to their funerals is somewhat disproportional to what happened.
Yes, they were on duty, and the law enforcement code rightfully gives them and their families an outpouring of support and respect. However, they were not doing anything heroic. Being killed by a (allegedly) drunk driver isn’t the same as being killed by taking a bullet, or running into a burning house, or trying to quell a riot. The manner in which they died could have, and has, happened to countless others before them, both on the job and off. And while those incidents often garner much support and attention, it isn’t anything like this. Not even close.
To put it into more perspective, consider a military member killed on the other side of the world in Iraq or Afghanistan or some other god forsaken place. Yes, the military gives that person tremendous respect, and the funeral is given much attention. However, it receives nowhere near the attention that the public and media are giving to these officers. And let’s be real, that military member deserves at least as much, probably more attention, given their sacrifice. They are doing something extraordinary, just being on the other side of the world for months or years, regardless of the cause of death.
I blame the local media for whipping up public sentiment beyond the pale. They’ve made it a race to see which TV or radio or newspaper or even social media outlet can show that they have more empathy about the local police officer deaths. Consequently, people are paying more than the usual amount of attention. That isn’t the fault of the officers, or their families, or I suppose even the police department. But the whole thing is out of proportion nonetheless.
It reminds me of many years ago when Princess Diana died, and then Mother Teresa of Calcutta died days later. Diana’s funeral became worldwide spectacle, covered live by international media. Mother Teresa’s funeral deserved every bit as much coverage, probably more given the circumstances, but only grudgingly got some. Ratings, you know. It might have gotten none at all without the guilt of the networks for their over-the-top coverage of Diana.
I’ve privately mentioned my surprise to a few folks, and no one disagrees, but no one dares say it out loud. Let’s just say the next time a local soldier is killed, I’d better see wall-to-wall media coverage about it. It’s just a matter of time before another law enforcement or military funeral doesn’t have the same coverage, when there will be some public backlash.
Subscribe to:
Posts (Atom)