Year: 2000

Picking up where we left off yesterday . . .

Several years ago, a brokerage firm promoted put and call options on futures as “limited risk” investments. Their reasoning was that you couldn’t lose more than 100%, while in a futures contract a total loss just begins to scratch the surface of the misery that can befall you. Even so, “losing everything,” as most people who bought these things did, is not what most people think of when they hear the term “limited risk.”

Defining “risk” is one of the trickiest and most important keys to good asset allocation. Most of us would consider an investment that will probably become worthless within a few weeks . . . risky. Probably the only thing less suitable for investment than options and futures is lottery tickets (sadly, the primary investment choice of the poorest 10% of the population: many of those who buy lottery tickets spend over $600 per year, yet claim they cannot afford to start a $50 per month mutual fund investment plan that could make them semi-millionaires over their working careers).

Here’s a helpful definition by Robert Jeffrey, the estimable Less Antman found in the Fall 1984 Journal of Portfolio Management:

“Risk Is the Probability of Not Having Sufficient Cash with Which to [Pay for] Something Important.”

This seems a more useful definition than:

“Risk Is the Possibility an Investment Will Drop Below What You Paid” (as most do at some point, at least for a while, unless you happen to have bought at a never-to-be-seen-again low).

So when you are considering the appropriate risk to take, you need to start by knowing when you need the money and how much you’ll need.

If you are saving to make a $20,000 down payment on a house in five years and have the ability to save $4,000 per year toward that goal, you need take no risk whatever.

On the other hand, if you save 20% of your income each year toward retirement for your entire working life, but get no growth, you will end up with enough to live on for only 8 years. Perhaps the riskiest thing you can do during those working years is take “no risk” with your retirement investments.

Rationally, the most important determination of your risk tolerance is your time horizon. On a daily basis, or even an annual basis, the stock market is a crapshoot. Over the long haul, much less so.

But that’s rationally. Neither the market nor its players are entirely rational. Which leads me back to yesterday’s column and the importance of starting where you are. If you have your entire 401(k) in a money market fund, you are too risk averse. But don’t switch it all into stocks tomorrow and then say you’re following my advice. The stock market works best if you’re patient. So you might consider switching a large portion of your 401(k) to stocks — but slowly, through dollar-cost-averaging. Direct your new 401(k) contributions to stocks, and gradually reallocate your existing funds, perhaps a third right away and then some more each quarter.

But, with a 401(k), you don’t necessarily want to put 100% into stock funds, even gradually. Don’t feel dumb if you have a portion — maybe 40%? — in some safe, high-yielding alternative.

In the first place, because the yield is sheltered from tax, 8% of cash income is just as good as 8% long-term appreciation. Either one will ultimately be taxed as ordinary income at withdrawal.

If the markets were incredibly low here and you were 26, I’d beg you to put your entire retirement plan in stocks. But it’s not, and you may only look 26, or be 26 in spirit (I am, myself, 14), so don’t feel dumb having a portion of this money in fixed income if that makes you more comfortable, or if you feel your time horizon is relatively short. (If you really are 26, consider putting 100% of your retirement money in broadly diversified low-expense stock funds, anyway — planning to do so consistently for decades. If the market drops, that’s great — you’ll be getting future shares on sale.)

In the second place, if you have enough income and discipline both to fully fund your retirement plan and to set aside some extra money, do your riskiest investing outside your retirement plan. Your long-term gains will be lightly taxed when you sell, and any losses you decide to harvest along the way will help reduce your current taxes.

OK. Retirement is not a small thing — with luck, you may be enjoying 30 or 40 years of it. But what about money for which you don’t have such a long-term time horizon?

Tomorrow: Where to put money you’ll need in 5 years.

One of you writes: “I find very little advice available on how to select the most efficient mix of bonds and stocks. And once that has been determined, what % should be put into the various categories of Morningstar boxes, i.e.: Large, Mid, Small Cap Value, Growth, Blend. The same for the categories of bonds? Your Personal Fund site is wonderful for the next step of selecting the particular fund product in those categories — but how do you know how much to put in each category?”

Well, I think you have them ranked properly: the percentage allocation among stocks, bonds, and cash is probably the single most important factor in determining your results. How your money is then allocated in general terms within the universe of stocks and the universe of bonds is second. Choosing the right specific funds (or individual stocks) is probably the least important issue (though costs do matter).

This is too big for one column, but let’s see how far we can get. (The rousing conclusion, Friday, will be Treasury Inflation Protected Securities, followed by Series I Savings Bonds next Monday. But bear with me.)

Deciding how much to put into equities and how much in fixed dollar investments is a very personal decision based on both rational and emotional considerations.

I’m not too fond of the popular shortcut that suggests you keep 100% minus your age in the equity markets — e.g., 79% in stocks if you’re 21 — because it’s obviously too simplistic. (If you’re married with children, whose age are you supposed to use? Does it matter whether you’re employed? Disabled? The granddaughter of doting, aging, billionaire grandparents?) But how do you go about making this decision? Where do you even start?

Easy: START WHERE YOU ARE. It says something about you that shouldn’t be ignored. You won’t stick with any strategy if it doesn’t fit your personality. Also, big changes in asset allocations are normally made for the wrong reason. If you have nothing at all in the stock market and you are thinking of diving in now just because everyone you know is getting rich daytrading (by the way, everyone is lying to you), or because you think you need to make big money quick, then you’re about to make a really stupid mistake. If you’re 100% in the market and you’re thinking of selling everything, you’re probably not making a rational asset allocation decision but attempting to time the market (and, as my friend and sage Less Antman says, “the next inductee into the Market Timing Hall of Fame will be the very first”).

No decision that has to be made immediately is going to be a good one. So wait at least 24 hours to decide. Isn’t that a convenient excuse for ending today’s column.

Tomorrow: How should you allocate that 401(k)?

Mike Baker: “I plan to begin a small portfolio, I realize long-term is the way to go and that each time I tinker with trades, I must pay a fee. Is it cost effective to buy, say, $1500 in a company and then add to that a little each month?”

It can be. Check out, for example, www.stockpower.com . It puts small shareholders together with big companies that have “direct purchase” and “dividend reinvestment plans” (DRIPs). You can buy shares in BP Amoco, for example, with as little as a $250 initial investment and then in $50 increments — with no fees to buy whatsoever, and only a modest fee to sell.

Lisa B: “1. My husband and I are interested in finding a mutual fund that contains Tiffany’s – can you give us some direction?”

This is a very strange way to choose a mutual fund. Why not just choose an index fund and buy a few shares of TIF directly?

“2. We are also looking for a financial planner — any suggestions on how to go about finding one in our area?”

I don’t know what area you live in, but I do know you could save money and perhaps avoid being sold stuff you don’t need by “taking control” yourself. Go to the library and read (or make my day by buying) The Only Investment Guide You’ll Ever Need.

Going around the Net: “Only in America do drugstores make the sick walk all the way to the back of the store to get their prescriptions while healthy people are offered cigarettes at the front.”

FREETRADE.COM

Thorsten Kril: “There is a much better broker available where trades are free — American Express. You wrote about it yourself some time ago. I have been using it for 5 months now, and it works fine. Fine service — no commission. [Others have reported Amex being overwhelmed, at least temporarily, by all the demand for its no-commission accounts, and not such fine service.] Of course, you need a minimum balance of $25K there for free buys, but on Freetrade you can only buy round lots for free [so small investors do have to pay, just as with Amex]. With American Express, I can take my monthly investment money of a few hundred bucks and evenly distribute it among the dozen or so stocks where I already have a position for free. That’s perfect dollar-cost averaging for me, especially in these volatile days.”

LOWER UTILITY BILLS?

Jeff: “SmartEnergy.com constantly shops for energy — gas, oil, electricity, etc. — from the cheapest source (which it can do thanks to deregulation), and passes it on to you. All you have to do is enter your zip code and they will tell you if they can save you money — or put you on an emailing list to let you know when they serve your area and can save you money.”

Jeff has a small stake in this enterprise, and I’m not recommending it. But it is interesting to take a look.

(RELATIVELY) CHEAP ART

Craig: “My mom and I were at a Martin Lawrence gallery recently, and she was eyeing an Andy Warhol signed print. (She owns some Warhols that have gone up a lot since she bought them). It was selling for just over $14,000. Back at her computer, we surfed the Internet, and found the same print for sale for just over $8,000. Such is the ease of comparison shopping on the Internet! The owner of that site (artbrokerage.com) says, ‘don’t pay retail.'”

I say: Tear off some old magazine covers and frame them as a collage.

MYM DOS USERS

Well, the easy quote updates from CompuServe seem finally to be over. But . . . Gregory Lawton: “The freeware program authored by Kurt Wolfsberg (YAH-MYM2.ZIP) works quite well. It is available on the CompuServe Moneyforum in the section 18 library. You download portfolio quotes from Yahoo Finance in CSV format, then run a batch file that runs programs to convert the Yahoo CSV data file to compuserve.out. A little bit of extra hassle, but I can’t do without MYM. I doubt that I would be as well off today as I am if it had not been for MYM.”

Me neither.

Jane Balk: “Thank you for pointing die-hard MYM12 for DOS users like me to the ConvertTrack software, so we can continue to download prices from the Internet to our MYM12 software. It works great. I will use MYM12 for DOS as long as I have a computer that can handle it. I’m not a Windows hater; but nothing gives me the information as fast and well-organized as MYM12.”

No sane person, even if he could find a copy, would switch to this dinosaur. But for those of us who already have our lives in it, it works well.

NOTES FROM THE MARCH

Robert Sartain: “Coolest T-shirt slogan: I can’t even march straight! Coolest hand-lettered sign: If God hates fags, why isn’t it raining? [Those people were there with their signs. It was a spectacularly sunny day.] Coolest story: Saturday night before the march Chris and I were at the Metro Center Metro station waiting for a train to take us back to our hotel. We struck up a conversation with a man carrying a tuba. (A tuba in a Metro station is a great conversation starter.) We talked with him for ten or fifteen minutes, then talked with a bit with a woman who asked us how long we’d been waiting for a train. Here’s where the story gets cool. She is a high school English teacher who was one of several chaperones escorting kids from her school to the march. The TWO kids were the ENTIRE Gay-Straight Alliance in their high school of 350. The kids held raffles and raised money to come to the march, and when they were still a few bucks short, their principal kicked in the difference. She told us of how the kids’ faces lit up when they saw the pride rainbows and balloons at the festival and the march, and how the kids felt so great to be part of a community, not to be freaks or outcasts, at least for a weekend. When someone asks me why I marched, I think of those kids.”

Next week: I really, really promise to do the Treasury Inflation Protected Securities column.

Sunday, April 30, 2000
By SHARON UNDERWOOD
For the Valley News (White River Junction, VT)

Many letters have been sent to the Valley News concerning the homosexual menace in Vermont. I am the mother of a gay son and I’ve taken enough from you good people.

I’m tired of your foolish rhetoric about the “homosexual agenda” and your allegations that accepting homosexuality is the same thing as advocating sex with children. You are cruel and ignorant. You have been robbing me of the joys of motherhood ever since my children were tiny.

My firstborn son started suffering at the hands of the moral little thugs from your moral, upright families from the time he was in the first grade. He was physically and verbally abused from first grade straight through high school because he was perceived to be gay.

He never professed to be gay or had any association with anything gay, but he had the misfortune not to walk or have gestures like the other boys. He was called “fag” incessantly, starting when he was 6.

In high school, while your children were doing what kids that age should be doing, mine labored over a suicide note, drafting and redrafting it to be sure his family knew how much he loved them. My sobbing 17-year-old tore the heart out of me as he choked out that he just couldn’t bear to continue living any longer, that he didn’t want to be gay and that he couldn’t face a life without dignity.

You have the audacity to talk about protecting families and children from the homosexual menace, while you yourselves tear apart families and drive children to despair. I don’t know why my son is gay, but I do know that God didn’t put him, and millions like him, on this Earth to give you someone to abuse. God gave you brains so that you could think, and it’s about time you started doing that.

At the core of all your misguided beliefs is the belief that this could never happen to you, that there is some kind of subculture out there that people have chosen to join. The fact is that if it can happen to my family, it can happen to yours, and you won’t get to choose. Whether it is genetic or whether something occurs during a critical time of fetal development, I don’t know. I can only tell you with an absolute certainty that it is inborn.

If you want to tout your own morality, you’d best come up with something more substantive than your heterosexuality. You did nothing to earn it; it was given to you. If you disagree, I would be interested in hearing your story, because my own heterosexuality was a blessing I received with no effort whatsoever on my part. It is so woven into the very soul of me that nothing could ever change it. For those of you who reduce sexual orientation to a simple choice, a character issue, a bad habit or something that can be changed by a 10-step program, I’m puzzled. Are you saying that your own sexual orientation is nothing more than something you have chosen, that you could change it at will? If that’s not the case, then why would you suggest that someone else can?

A popular theme in your letters is that Vermont has been infiltrated by outsiders. Both sides of my family have lived in Vermont for generations. I am heart and soul a Vermonter, so I’ll thank you to stop saying that you are speaking for “true Vermonters.”

You invoke the memory of the brave people who have fought on the battlefield for this great country, saying that they didn’t give their lives so that the “homosexual agenda” could tear down the principles they died defending. My 83-year-old father fought in some of the most horrific battles of World War II, was wounded and awarded the Purple Heart.

He shakes his head in sadness at the life his grandson has had to live. He says he fought alongside homosexuals in those battles, that they did their part and bothered no one. One of his best friends in the service was gay, and he never knew it until the end, and when he did find out, it mattered not at all. That wasn’t the measure of the man.

You religious folk just can’t bear the thought that as my son emerges from the hell that was his childhood he might like to find a lifelong companion and have a measure of happiness. It offends your sensibilities that he should request the right to visit that companion in the hospital, to make medical decisions for him or to benefit from tax laws governing inheritance.

How dare he? you say. These outrageous requests would threaten the very existence of your family, would undermine the sanctity of marriage.

You use religion to abdicate your responsibility to be thinking human beings. There are vast numbers of religious people who find your attitudes repugnant. God is not for the privileged majority, and God knows my son has committed no sin.

The deep-thinking author of a letter to the April 12 Valley News who lectures about homosexual sin and tells us about “those of us who have been blessed with the benefits of a religious upbringing” asks: “What ever happened to the idea of striving . . . to be better human beings than we are?”

Indeed, sir, what ever happened to that?

Sharon Underwood’s e-mail is: sundervt@hotmail.com. I had the chance to speak with her yesterday. Her son is doing fine now, the first in his family to graduate from college.

If you have friends who think Jesus would have been a Republican — on the side of billionaire Pat Robertson, et al, in opposing Hate Crimes Legislation, opposing the Nuclear Nonproliferation Treaty, and, yes, opposing Vermont’s extension of economic benefits to same-sex couples — please feel free to forward this column to as many of them as you like. Can’t you just see it? Jesus arm-in-arm with the NRA trying to maintain the gun-show loophole? Stumping the Holy Land in favor of a massive tax cut for the rich, while opposing a hike in the minimum wage? Somehow, I think not.

Tomorrow: Back to Business. (Probably.)

Ron Heller: “Since I don’t have the resources to buy office buildings and shopping malls, I’m thinking of putting about 10% of my portfolio in REITs. Should I try to pick a couple of good REITs, or go with the Vanguard REIT Index fund?”

Either is good. The index-fund route is safer, obviously, because you spread your risk over far more REITs. What you lose buying is Vanguard’s small annual expense charge each year — about a quarter of a percentage point.

(You also lose “tax control” — the ability to sell individual losers for a tax loss while using individual winners for your charitable giving. But tax control doesn’t mean much in this case. REITs tend to move fairly modestly, and together, in the opposite direction of interest rates. With a “high-tech” fund, by contrast, one component might triple in a month while another drops 80%. There, tax-control can be quite useful.)

Because REITs are largely income vehicles, and most or all of that income is taxable as ordinary income, they are particularly good in a tax-deferred retirement account.

There are many kinds of REITs (office buildings, hotels, shopping malls, residential, mixed; equity REITs that own properties, mortgage REITs that write mortgages on properties; regional REITs, geographically diversified REITs).

By and large, they should be sensibly valued by the marketplace. I.e., some have better managements than others, but that is reflected in the stock prices. There is the (slim) risk the Internet will bankrupt all physical retail stores and, thus, mall owners, but that is reflected in the stock prices. And so on.

I own two REITs. One, Vornado (VNO), is generally considered to have great management and good growth prospects, so it yields “only” 5.4% — $1.92 dividend on, currently, a $36 or so stock price. The other, BF Saul (BFS), is generally considered to have mediocre management and to entail more risk, with less growth in store, so it yields 9.5%.

REITs will tank if long-term interest rates rise (and then recover if they fall). They would fare badly in a real estate slump (whether recession- or overbuilding- or Internet-related). Individual REITs could do really badly because of poor management or factors beyond the control of even a good management. But for 10% of your portfolio — why not? Vanguard’s REIT Index Fund symbol is VGSIX.

Sorry to be late. We were marching.

George H: “I like the Bigcharts site you recommended, too, but for historical quotes I prefer Yahoo’s offering.”

George is right. Yahoo! has done a great job with this. It lets you specify a date range over which to view the daily, weekly or monthly closing prices. It shows dividends, stock splits and volume — and then in a final righthand column translates the old price (Intel sold for $86 on January 15, 1974) into today’s terms, adjusted for splits (21 cents). But don’t delete your Bigfoot bookmark. These Intel numbers come from Bigfoot. Yahoo!, when I went to check them, said it had no Intel stock-price data from January 1974.

Parks Stewart: “Bigcharts also has historic PE’s, which allows you to see how a stock is being valued respect to where the market has been valuing it. For instance, MSFT never seemed to break a 75 (!) PE. Whenever it got there, it tanked. I waited for one of those p/e peaks to sell mine.”

Richard Factor: “I just read an article about an experimental program in Texas that puts your ‘pay for auto insurance at the pump’ to shame. There is an insurance company that is actually using GPS to track the location of your car and the hours that it’s driven. They then charge according to how much you drive, the risk of the location, and the time. For example, daytime driving is safer, so the charge per hour is less. The more you drive, the more you pay. They don’t mention tracking such things as speed, but it could be done easily, and they could charge speeders more even if they were never cited.”

The experiment is by Progressive Insurance, which always has been progressive. But while very possibly good for Progressive, which may gain market share and profit, and definitely good for low-mileage drivers, this actually wouldn’t do much of anything to make auto insurance as a whole less of a mess. In most states (Michigan is the prominent exception), you would still have the same incentives to inflate or invent claims that you have now (there is no such incentive in Michigan), the same high costs overall, and thus the same levels of uninsured motorists.

The two modest systemic advantages I see:

• To save money, those who signed up for such a plan might drive a little less or at less dangerous times or less dangerous routes (or slower). But I think this effect would be slight, and it would come with a cost — having to curtail their driving. With pay-at-the-pump, by contrast, you could cut your insurance cost without driving less, by choosing to buy more fuel-efficient cars.

• Because they felt they were getting a fairer shake, those who benefited from this plan might be a little less likely to inflate or invent claims. But the kind of driver who would find this plan appealing might not be the kind of driver most likely to inflate or invent claims in the first place.

With this new system, you would still have states like California and Florida where half or more of the liability portion of your auto insurance premium goes to pay the costs of lawyers and fraud. Basically, the system would (not unfairly) lower costs for some kinds of drivers, who drive less or in safer places or at safer times (or slower speeds) and shift them to the rest of the driving public. But not lower the overall cost of the system.

I hope it catches on, because I don’t drive much.

PS: After yesterday’s column, a few of you wrote to tell me that PS stands for Post Scriptum and belongs after the signature. Not any e-more. It stands for e-Prior Signatorum. Please reread that column.

ANNUAL REPORTS III

Randy Mahoney: “As a shareholder of Service Corporation International (SRV), I was delighted to receive their annual report today. Considering their share price dropped over 70% in the last year, they have begun some much needed belt-tightening. This year’s report is simply the SEC ‘plain-Jane’ annual filing, stapled to the inside of a white paper jacket. Probably saved millions!

“One good thing, though: Since SRV is the largest provider of death care services in the world, I’m glad they didn’t include free coupons!”

FIRST CLASS II

Aaron Stevens: “This is in response to your column today. I am a Premier Executive 100K with United. I generally get the free upgrades for the best flyers, but yesterday, I declied the upgrade on my flight from San Francisco to Chicago, realizing that I had a window seat, and it’s only 3 1/2 hours, and I’m keeping kosher for Passover, so I wouldn’t eat the first class food anyway… So the flight was fine.

“So we arrive in Chicago, and as we’re leaving the plane, this old guy sitting in front of me asks me, ‘So, you work for Cisco, huh?’ To which, my standard reply ‘How did you guess?’ (I’m wearing a Cisco golf shirt, my employee badge, and my briefcase luggage tags are business cards.) So we make small talk a minute, and then I notice he’s wearing a ‘Cisco 1996’ jacket. ‘You work for Cisco?’ I ask. ‘Yes, I do,’ comes the reply. So I venture, ‘what do you do there?’ ‘I’m the Chairman. John Morgridge,’ he introduces himself with a gentlemanly handshake.

“Interesting. This man was CEO of Cisco for 8 years, took the company public, grew sales from very small numbers to the hundreds of millions of dollars range… and owning roughly 43,000,000 shares of Cisco, he’s got to be about the tenth richest man in the USA.

“And do you know what it feels like to shake the hand of a $15 Billionaire? Just like shaking any other guy’s hand feels, after he’s been on a plane for 4 hours, and in coach to boot!!

“I guess this serves as good testimony for our corporate value of frugality. Everyone flies coach at Cisco.”

FREETRADE II

Last week we got a peek at a new free all-electronic trading sit, sans humans, called Freetrade. I said I wouldn’t be signing up any time soon, but that I thought it was fascinating and worth a look. I still do, but have encountered another reason not to sign up just yet.

Rob: “One really, really nasty red flag, in my opinion, is where they say: ‘We will not accept account transfers. We do not want securities sent to us, nor do we want to send any out.’ If they won’t do a transfer out, that means that if you don’t like their service, you get to choose between just putting up with it . . . or else having to sell everything and take a tax hit — and then buying it all back with another broker, thus paying some of the fees you avoided in the first place. That really sucks, IMO.”

Yes, that would be nuts, and I assumed it was not the case. (I assumed they wouldn’t transfer specific shares out, but that, naturally, if you ever wanted to shut down your account, they’d transfer all your positions to the new broker.)

But we asked Freetrade, and they promptly and candidly replied, “Rob: Your red flag analysis is correct. Freetrade.com only promotes procedures that can be utilized from the Internet, i.e., does not promote any procedure that requires paper. Transfers of Account are a paper process at this time and thus are not processed. We’re working on automating this and other services/procedures and when these additional services are automated we’ll roll them out.”

I think Freetrade has to fix this. In addition to taxes and commissions, you’d even have the hassle of wash-sale rules for those stocks you sold at a loss but then bought back in the new account. (The IRS requires that you to wait 31 days, or postpones the loss until you eventually sell the position.) And if you wanted to give long-term appreciated securities to charity, you couldn’t do that, either.

Freetrade should raise this red flag very clearly on its web page, or — better — offer to transfer securities for some fee . . . and offer to close out an entire account for free after 2002 (by which time they would have worked out an electronic way to do this, or else absorb the cost if they haven’t). Something like that.

A couple of other points . . .

In its description of its revenue sources (how do they make money if you trade for free?), Paragraph 4 is confusing. All its really meant to do is criticize the stock exchanges for charging for trading information, because the information they’re charging for (the price and volume of each trade) is information, in Freetrade’s view, that came from you (and people like you), who make the trades. Freetrade wishes they could make this information freely available. But because the exchanges charge Freetrade (and everyone else) for stock quotes, Freetrade gives you a quote only when you’re in the process of making a trade, but not if you just want to check on stock prices. When you’re offering free trading, you have to keep the perks to a minimum.

Finally, Freetrade doesn’t sweep cash balances into a money fund the way many brokers do. It does pay interest on credit balances over $1,000. That first $1,000, you are loaning Freetrade interest-free.

But first: If you fly American Airlines and — because you have a gold card — qualify to buy upgrade stickers, be advised that they jump Monday from $200 to $250 for a pack of eight. So you can “earn” 25% on your money by buying a bunch now. And if the travel you do is not tax deductible, then it’s like earning 25% tax-free. Of course, tying up money has a cost, so you wouldn’t want to buy a 10-year supply (unless you thought they’d keep rising in price). In my own case, I just bought about a two-year supply.

Mary A. Black: “Hey, you are missing all the fun in the annual reports. In this week’s mail, AT&T had a 10-minute phone card, Compaq had a discount on laptops. McDonalds usually has fries or sandwich, Wal-Mart and K-Mart have had 10% discount coupons. (Like dividends in general, the little goodies and discounts are not what they used to be.) But, what I do like is seeing the incredible incestuous world of directors. There are lots of swaps — I am on your board and you are on my board. There are people with supposedly full-time jobs that are on six boards at $40,000-$50,000 per year each. Some of these people seem to make a nice living being on boards. Where do I apply? I would be happy to give them fresh outsider stockholder opinions. I recognize that voting my little shares against the professional directors is futile, but it makes me feel better and it is a toll-free call. So I am off to read a few this evening and vote!!!”

“PS,” Mary writes (appropriately placing the PS before her signature, Pre Signatorum, like every good reader of this column and, soon, e-mailers everywhere), “My personal favorite was from an international fund that did horribly. The opening line from the fund manager was: ‘The best thing about the last year is that it is over.’ Got to give him credit for honesty — but not my money.”

Several of you noted that I could stem the flow of annual reports and the Save the Earth a little by reading this year’s crop at least far enough to find the place, either in the report or the proxy statement, where they offer to take you off the physical mailing list and put you on the e-mail list for future reports.

Jon Raymond: “I agree with your assessment of company financial reports, although there is one company I own (Cognex) which has performed well despite the fact that its annual report invariably fits firmly in the category of ‘Kute to the point of Kloying.’ This year’s entry was in the form of a fitness program, I kid you not. I would also add that most of the proxies I receive lately offer the opportunity to vote online and register to receive future reports via E-mail. I’ve been reasonably diligent about doing so. Given the elaborate (and glossy) nature of so many of these annual reports, this seems like an easy way to give Mother Nature a breather. (For the record, in view of a recent discussion on this site about the importance of metal, I’d like to make it absolutely clear that I in no way wish to belittle the tremendous contribution paper has made to the progress of mankind, or to insult anyone involved in the usage or production of paper. I am merely suggesting that breaking the cycle in which these specific pieces of unwanted paper are shipped from the printer to my mailbox to my recycling bin and back again might be beneficial, and — who knows? — might even free up more time for us all to enjoy the wonders of mining.)”

Speaking of saving the earth, it’s really worth picking up TIME’s slim but very important Special Issue on that topic, on newsstands now, I believe. It’s also worth noting that Texas has the worst recent environmental record of any state in the country.

Tomorrow: A Couple of Other Freetrade Caveats