Madam, I’m Addled December 30, 2002February 22, 2017 MADAM, I’M ADAM Toby Gottfried: ‘Regarding Kermit’s statement Friday that ‘it will be more than 1000 years before a date-palindrome similar to 200220022002 is available’ . . . for those who can’t wait that long, there will be 211221122112 (9:12 PM on Dec 21), in just 110 years. A few people will experience both dates in their lifetimes – although probably unaware of both, at least as they occur. Not to mention the granddaddy of them all: 22222222222 (10:22 PM on Feb 22, 2222).’ ☞ It’s worth taking a minute to imagine the folks (Irish monks?) who, on November 11th, in the year 1111, must have paused to ponder the numerical symmetry (I don’t think they presumed to tell time to the minute, but if they did, at 11:11) – and to imagine whether people would ever think back on that day as were are thinking back on it at this moment. And it’s worth taking another moment to consider how completely the world has changed in the meantime – just nine very long lifetimes ago. And yet the ancient hatreds rage, and human nature remains very much as it’s always been. HOW IS A WIDE-SCREEN TV DEDUCTIBLE? Robert D: ‘About the wide screen TV that you describe as costing ‘$4000 ($7000) pre-tax’ – how is this tax deductible?’ ☞ It’s not – which is why I have to earn $7,000 in order to be able to buy it. WHICH SEGUES RIGHT INTO . . . Russell Turpin: ‘You were wise to pass on the Segway. I know Dean Kamen is a genius who has important inventions to his credit, especially in the medical field. But here, I think his tech savvy has blinded him to the more – um, pedestrian – realities. The Segway is neat technology, and I think it will have niche applications. If I were he, I would build a version as a cart, onto which people can pile half-a-ton of stuff, and then effortlessly haul behind them, without fear of it tipping over. Anyone who has made much use of a wheelbarrow will appreciate the importance of that! But for personal transportation, I think it is a miss. People evolved to walk. Walking is the best exercise ever invented for your back, lowers your blood pressure, improves your blood lipid profile, increases your vital capacity, helps control your weight, and is excellent exercise for your heart. Standing, which is what you do on a Segway, puts a strain on your back, knees, and kidneys. People don’t need a fancy device to scoot to the local grocery. They need to open the door, and put one foot in front of the other. And setting aside the health aspects . . . bicycling is faster; walking is more versatile in terrain, locale, and task. A Segway will be a burden on a crowded sidewalk. Segway has a hard range limit, is expensive, separates you from the people around you, and doesn’t fit on a bike stand. I would point out that it also doesn’t fit a bus’s bike rack, but I suspect the target market for Segway doesn’t travel much by bus.’ ☞ All true, but, like you, I can’t wait to try one. THE LIBERAL MEDIA Or is it the shrill, bullying right-wing media? Belated thanks to Ralph Sierra for this link. IF REASON PREVAILS . . . . . . and I don’t write a column for tomorrow, here’s wishing you (whatever your political views) a VERY HAPPY, HEALTHY, NEW YEAR!
Abducted By Elves December 27, 2002February 22, 2017 [Thanks to Laura Schultz, who reminds us that you have to act fast if you own Series EE Savings bonds you want to roll over into Series HH Retirement Bonds before the end of the year, when the rate, guaranteed for 10 years, drops from 4% to 1.5%. Click here to learn more, and be prepared to take a quick run down to your bank.] Frist I was going to do a column called IT’S BEGINNING TO LOOK A LOTT LIKE CHRISTMAS but decided the last thing any of us want at this time of year is more politics. Then I was going to do a column on what I wanted Santa to bring: peace on earth, good will to men and women, a free-range chicken in every pot, and Super TiVo just for me. Super TiVo would apply to all of life, not just TV. You could pause (‘just give me a minute to think!’), fast forward through the boring stuff, slo-mo the good stuff, and remember every bit of it. Santa brought me none of these things . . . although, in the peace department, Don Rumsfeld reassured me we could lick Iraq and North Korea simultaneously, if it came to that, while never losing our focus on Al-Qaeda. (According to Bob Woodward’s Bush at War, a key CIA briefing the week before the Inauguration informed Bush and Cheney that Osama bin Laden’s network was a ‘tremendous’ and ‘immediate’ threat. Oh, well.) I thought of getting a $4,000 40-inch flat screen TV – came this close to ordering one – and then took advantage of the 24-Hour Universal Cooling-Off Period (U-COP) to realize that, well, as gorgeous as it is (even switched off, it’s gorgeous), it would take up a lot more room than our perfectly adequate 19-inch Samsung. It would also require some setup, which might go easily, but, then again, given my thumbs, might not. Nor did it have a jack for the wireless SONY headphones we use when only one of us wants to watch. And the $269 Samsung has a VCR built in, so that when you pop in a tape, it knows and immediately begins playing. (We’re migrating to DVDs, but there are still a lot of tapes in the world.) So I saved $4,000 ($7,000 pre-tax) and a potentially frustrating day of setup, and this argues pretty strongly for U-COP – not yet an official world law, but one you can nonetheless adopt unilaterally when considering any new purchase. I yearn for a huge flat-screen TV. I know I will one day have such a TV. And that be the time I buy it, it will cost $2,500 less. I saved even more by not buying a Segway, one of those old-fashioned hand lawn-mowers with a gyroscope that you stand on and use to deliver the mail instead of mow the lawn. My thinking here was that the first people to have these for personal use will be fairly shouting, ‘Look at me! I spent $5,000 on this! Mug me!’ Not to mention the strain on a person’s heart of not walking anywhere, nor the need to tell every child you pass on the street, ‘No, you can’t try it.’ (But please let me try it.) Even without the flat TV or the Segway, I got some neat stuff, but more fun was what I gave – including $100 blank checks to each of our nieces and nephews, aged 7 to 14, which they fill in with the names of their favorites charities . . . a wi-fi card and router for Charles’s Thinkpad that should provide weeks and weeks of commercial-free music while on hold with technical support . . . and a gift subscription to Audible.com, which included an MP3 player and the recipient’s choice of 24 audible books – two a month. On my own Audible dime, I spent four delightful hours Christmas night, after the hubbub, cleaning the kitchen listening to Jonathan Franzen’s The Corrections. Huge fun. Now about the elves. I can’t say for sure when they spirited me away – it was clearly sometime the night of the 23rd or there would have been a column Christmas Eve. I have a foggy memory of their asking me to write wrap lyrics up at the North Pole, and an even foggier memory of persuading a group of Eskimos to stop eating reindeer and to microwave Boca Burgers instead. Three of the elves seemed to be moderate Republicans, the rest were too short to vote. I awoke to find myself at the matinee of ‘Catch Me If You Can,’ with Leonardo DiCaprio (great) followed by ‘The Gangs of New York,’ also with L. DiC., (we walked out) . . . and here I am, back at my post. CORRECTION: PALINDROMES AND PACHYDERMS Geoff Wisner: ‘I probably won’t be the first to tell you that a Dromedary has one hump while a Bactrian camel has two. It’s easy to remember because a D has one hump, while a B has two.’ Kermit Halperin: ‘This year, on the twentieth of February at 8:02 P.M., the following occurred: 200220022002. It will be more than a thousand years before a similar date-palindrome is available.’ ☞ And with Super TiVo, I just might be around to write about it. HOLIDAY SCHEDULE: There is no telling with these elves. I hope to see you reasonably early in the New Year, if not before. Have a great one. Wear your seat belts.
2002 1221 2002 December 23, 2002February 22, 2017 But first . . . GOT KIDS? Kevin: ‘The Utah 529 plan now has a sixth option which is split among the S&P 500, vanguard small cap, vanguard midcap, and Vanguard international growth and value index funds. That’s pretty good diversification and still the lowest expense ratio. I think Utah is still the best 529 plan.’ ☞ Good advice. Folks interested in these plans may want to check out savingforcollege.com. It’s been newly enhanced with a ‘compare’ feature and a way to request up to five state 529 information packets direct from the site. And now . . . CAN YOU TOP THIS? My friend Steve Tomlin, entrepreneur and estimable venture capitalist, imagines a Christmas bell on our front door. (We have no bell; we have a wreath.) He further imagines our efforts to entice Leona Helmsley to come over for a holiday drink. (We don’t know Leona Helmsley; we’re OK with this.) Having thus imagined the set-up, Steve suggests we lure her to our door by messengering this note up to her suite: “A Noel gong gets a fast eggnog, Leona!” Sharp-eyed readers will note that this odd exhortation is a palindrome. It has two humps and can walk for days without water. Wait, no, that’s a pachyderm – a palindrome. (No, wait, that’s a dromedary. A pachyderm has a trunk, but I’m straying from the point.) Saturday was a palindrome – 12/21! Indeed this whole year has been a palindrome – 2002! I know about Abba and Madam, I’m Adam. Everyone knows about them. But a 30-letter palindrome? And themed for the holidays? And not just gibberish? (Sure: ‘A Santa’s rats top Nat, as Satan pots tars at NASA’ – thank you, Jim Kalb – but what does that mean?) Hats off to Steve Tomlin for this inspired work. I know you have wrapping to do . . . ‘My name is Andy T / and I’m rapping you this present / may your two thousand and three / be so very, very pleasant. The ribbon here is red / and the wrapping paper’s pleated / and to all you [dum-tum dum-tums] / I say [expletive deleted]’ . . . but if you care to send in a holiday-themed palindrome of any length, it will, of course, be appreciated.
OnLine Home Base December 20, 2002February 22, 2017 To see why OnlineHomeBase.com may prove helpful to running your life, read these user testimonials. Then run through a very quick demo. It’s free, at least for now. If you still haven’t bought your TiVo, I see them here for $199 after the $50 rebate, if bought before year’s end. The 40-hour machine should be more than adequate for most people. How did we live before TiVo?. Have a great weekend. Thanks for all the AOL 5.0 disks.
A Little of Everything December 19, 2002February 22, 2017 DON’T ASK! Got a spare AOL 5.0 CD lying around? I need one. (Don’t ask!) OK, I’ll tell you. I can’t upgrade to 6.0 or 7.0 or 8.0, because AOL has a secret limit on the size of your address book, and mine is way too big to convert. So I need a 5.0 disk to install on my new ThinkPad. I’m actually working with someone at AOL in hopes AOL will either offer a higher priced ‘professional service’ that allows higher limits – a win-win for everyone – or else convert my file to an exportable form so I can switch to a competitor. (Warning: if even one of you writes to tell me how stupid I am to be among AOL’s 35 million users, I will triple the price of the subscription to this page. I don’t want to hear it.) GORE Michael White: ‘You were right to say that a lot of us don’t realize how good Gore was as VP. I learned that from Joe Klein’s excellent book about Bill Clinton, The Natural. It turns out that Gore actually took big steps in reducing the size of the federal payroll, the kinds of steps that the Republicans have been talking about for decades.’ BUSH Mike Lynott: ‘In keeping with your comments on Mr. Bush’s economic policy, Malcolm Gladwell writes in the current New Yorker (p.58): ‘This Administration’s idea of economic policy is to go from table to table at the Four Seasons discreetly asking patrons if they need help with the check.” BUT TO HIS CREDIT . . . It looks as if unemployment benefits will be extended shortly after the holidays – better late than never – and it looks as if the new S.E.C. chief, Bill Donaldson, will be getting the full $776 million, if not even perhaps a bit more, spoken of yesterday. PUT IN YOUR TWO CENTS Joel: ‘Yes, let’s fund the SEC properly . . . but perhaps you can also provide this link so that investors can comment on various proposals to change the regulation of mutual funds, etc.’ AND LET’S FUND THE IRS Ron Heller: ‘As an attorney/CPA who deals with the IRS all the time, I absolutely agree that they need more funding and better staffing. It’s not just a question of more money and more bodies, though – they need to really focus on providing answers and assistance to taxpayers. Those of us who qualify to use the special ‘Tax Practitioner Hotline’ enjoy the privilege of being on hold for 20 minutes when we call, instead of being on hold for an hour like a mere taxpayer. Current waiting time for processing an Offer In Compromise is over a year. Audits often drag on for years, with the auditor being reassigned to other duties for months at a time. Taxpayers who WANT to comply with the law (and their tax advisors) find this extremely frustrating.’ AND THE PATENT OFFICE! Chris Holley: ‘There is a similar situation at the Patent Office. The millions in Patent fees go straight to the general revenue fund and US Patent Office is left underfunded (no digitization, insufficient staff, etc.) even though it more than carries its weight.’ ☞ Did you see the new $9 million venture to provide peer-reviewed articles fast, on the Internet, rather than waiting for the traditional scholarly publications to publish? This strikes me as a great way to speed advances in technology, which generally redounds to the common good. Similarly, there is finally a movement afoot, if a recent Wall Street Journal article is to be believed (and I always do, except the editorials), to bring the slow and costly ‘title insurance’ industry into the 21st century. That would make real estate closings quicker and less costly. And so – in the same productive vein – would it not make our economy a little more nimble if patents weren’t ‘pending’ for quite so long? TIPS Diane Anderson: ‘I’d like to expand on the issue of owning TIPS directly versus buying a TIPS bond fund. Buying your own bond is better. First, as you point out, the fund has annual costs or fees. I may be cheap, but ‘only’ 0.25% a year is too high for me. Second, when you buy your own TIPS you can choose the issues that don’t come due until 2028 or 2032 (I don’t like the 2029s because their premium is higher, which would be a problem if there really were deflation). The average maturity in a bond fund may be 15 years or less. If you expect inflation, the longer you can be protected, the better. Also, the 30-year TIPS pay a higher interest rate than the 10-year TIPS. Keep promoting TIPS. They are not getting the attention they deserve because no one has a financial incentive to sell them.’ APPLE Bill Schwartz: ‘From InfoWorld: ‘The PowerBook G4 isn’t a product to watch; it’s the only notebook on the market worth spending $2,500 on, and at that price, it’s a steal.’ ‘When it was over, the PowerBooks owned us utterly. Trust us; that never happens.’ For the complete article on the ‘PC Killer,’ click here. And, yes, with a program called Virtual PC, you can actually run DOS and all flavors of Windows. It’ll be slower, of course, than on a modern PC, but from what I’ve heard quite useable. You’d want to check with Connectix specifically about any particular DOS program, but I believe they’d all run just fine. ‘As for the learning curve, I think it’s pretty minimal, especially with Apple’s truly wonderful new operating system (OS X). It is true that all computers have problems sometimes, and once in a while I myself pull out what little is left of my hair over Mac problems. But trouble is a lot less frequent (and a LOT easier to fix) than with Windows, no question. Why? First, Apple makes both the hardware and operating system software and makes sure they play well together. Second, ease of use has always been one of Apple’s most basic design values. OS X, in particular, is truly a joy, and it is almost completely crash-proof. Almost everything is plug-and-play (printers, scanners, digital cameras, Internet, etc.) My significant other’s 79-year-old technophobe mother just bought an iMac running OS X. I was sure that I’d be spending hours on the phone with her and many days traveling to her home to help her. We even bought software (Timbuktu) that allows me to remote-control her computer so I could help her with problems from my home. Guess what? She has had almost zero problems and loves her new Mac to death. ‘If you or anyone else is interested in ‘switching,’ the best idea is to go and play at an Apple Store for a while. But be careful: you might just fall in love!’ ☞ Old dog, new tricks.
Here’s an Idea: Let’s Fund the S.E.C. December 18, 2002February 22, 2017 Consider this tidbit (cribbed from The Number, an outstanding book by New York Times reporter Alex Berenson due out from Random House in March): In 1939, when a total of 260 million shares traded – all year – the S.E.C. had 1,700 employees. In 2001, when 2 billion shares traded a day, the S.E.C. had the equivalent of 2,936 full-time employees. The number of brokers and mutual funds and annual reports and proxy statements had exploded – not to mention hedge funds and all the rest – yet the agency itself was little bigger than it had been in 1939. What’s more, the loss of experienced personnel had become chronic. Why? First-year associates at major law firms earned more than senior S.E.C. attorneys. On July 30, in the wake of Enron, the collapse of Arthur Anderson, and so much else that was shaking confidence in the trustworthiness of the U.S. securities markets – a national asset of incalculable importance – the President signed the Sarbanes-Oxley bill authorizing an increase in the S.E.C. budget from $438 million to $776 million. ‘Then, astonishingly,’ writes Berenson, ‘Bush proposed that the S.E.C. not be given all the money that it had been authorized in July.’ The Bush budget would be for $568 million, enough to improve the pay of existing employees, but not nearly enough to grow the commission to the size it needs to be. The particular irony is that the S.E.C. is a net money-maker for Uncle Sam. In the fiscal year ended September 30, 2001, it collected a total of about $2 billion – $987 million in registration fees and $1.04 billion in transaction fees – or about five times its budget. Even this year, with registrations way down, and the fees themselves mandated to be a much smaller sliver, more than $1.3 billion in receipts is expected. Why not spend that on an S.E.C. that is equal to its task? Or at least more nearly equal? Today, the S.E.C. sees lots of likely frauds it simply lacks the resources to pursue. If you are a shareholder who’s been taken to the cleaners in one of these, doesn’t that gall you? Instead of giving the S.E.C. the resources it needs, the emphasis seems to be on cutting the revenue it collects. Registration fees, which nicked companies $250 for every $1 million raised in 2001 will be cut to $80.90 per million for 2003. So instead of having to tip the croupier $25,000 for each $100 million a company raises, it’s going to be $8,090. I’m all for saving the shareholders $17,000 for each $100 million raised, but let’s at least spend what’s left to fund the S.E.C. Transaction fees of $33 per $1 million of stock traded were collected from the stock exchanges in 2001 and are slated to fall to $25.20 for 2003. These fees are often passed through to us and reflected on our brokerage confirmation slips (but as there are two parties to each trade, you only get nicked half the time, when you sell). The practical effect is that if you buy $10,000 of some stock and then later sell it for $10,000, you get dinged for 25 cents. I’m a guy who – without meaning to brag – sometimes trades in amounts even greater than $10,000, so in the course of the year my share of the S.E.C. fees might total ten bucks or even twenty. But it’s a small price to pay to have cops on the beat – both to discourage deceptive practices in the first place and to pursue those that take place anyway. As usual, it comes down to priorities. The Treasury is going to collect more than $1 billion from S.E.C. fees this year. So if Sarbanes-Oxley authorizes $776 million, why not accept that authorization and appropriate it? And plan to spend even more in future years, once the S.E.C. has time to ramp up and use the additional resources appropriately? How come the Bush/Cheney administration and many Republicans in Congress (and some Democrats) generally want to underfund the agency? It’s the sort of budget appropriation only an insider trader or a market manipulator would applaud. (As has been much noted, both Bush and Cheney have some firsthand experience with these murky waters. The less S.E.C. scrutiny of outfits like Harken and Halliburton, they may instinctively feel, the better.) # [Next preposterous idea: How about adequate funding for the IRS? Much as we all hate taxes, honest taxpayers, which is most of us, should really, really want this.]
TIPS: Buy Direct or Via Vanguard? December 17, 2002February 22, 2017 Doug Gary: ‘I’m curious whether the Vanguard TIPS fund [VIPSX] is a good way to hold some TIPS. Or do you think it is wiser to hold the individual bonds?’ The only downside to ownership through a fund is the annual expense fee it nicks you for, which is just a quarter of a percent at Vanguard. The upsides are several. Click here for the details. John Lemon: ‘One of the stocks you mentioned a couple of months ago, NTII, is sneaking up on a 150% gain. So I have to ask, is it time to exercise the better part of valor?’ ☞ Discretion/valor, birds/hands, gift-horses/mouths . . . it’s all but irresistible to take the gain, no? And if you’re desperate for Christmas-shopping liquidity, you could certainly do worse. But I’m holding mine.
IBM 4 – But No More! December 16, 2002February 22, 2017 Before we start, can I just say that Al Gore is a terrific guy, did a terrific job for the nation as Vice President, and is even better than most of the people who voted for him know? OK, back to computers. Please, no more . . . but I thought these were worth passing on: Alan: ‘Always buy the barebones system from whomever you buy from (lowest memory, no peripherals, etc.). Then pick up the rest of what you need on eBay. I did this with my Dell laptop, and saved close to 50% on additional memory, the docking station, the Zip disk module, the DVD module, and on and on.’ Peter Ludemann: ‘For cheap hardware, also consider http://www.ubid.com. They provide new/refurbished hardware at good prices. I bought a PC from them that wasn’t exactly what was advertised and I had no problem getting it returned. So I bought another one and a flat screen and saved about 40% overall. I think I got an exceptionally good deal, but you should be able to save at least 20%. Stick with brand-name stuff and avoid their ‘white box’ computers unless you really know what you’re doing.’ Brad Hurley: ‘I use Windows 2000 and Mac OSX, and they’re both rock-solid (neither has ever crashed). The Mac is more intuitive and requires less time and effort to configure. But if you’re used to Windows you’ll be more productive on Windows. If you’re used to Mac, you’ll be more productive on a Mac. I love my Mac but I’m happy working in Windows as well. Both systems have problems, and both have great features. But both of them allow me to get my work done, and in the end that’s what counts.’ Jeff Cox: ‘I enjoyed your IBM saga, but I’d be careful about trusting those Mac evangelists. Macintosh makes a nice machine; I’ve used eight or ten versions over the last 18 years or so. However, I’m ready to switch to a Dell or IBM or Compaq; Macintosh customer ‘service’ is as unhelpful as IBM’s. I will say, though, after reading your experience, at least the Mac people say right up front that they won’t help.’ Dan Perkins: ‘It’s been my experience that while first-level phone support at whatever company I call will often only have canned answers (which will satisfy most callers), once I escalate a level or two, I will find someone who can help me with a specific problem not covered in the scripts provided to first-line support personnel. Go up the food chain!‘ Jeff: ‘The screen-black issue on startup persists on my ThinkPad and I have to press the Fn button on bottom left keyboard at same time as F7 button. Why? God only knows. But little quirks aside, I predict you will fall in love with it. What a beautiful, reliable machine.’ Pieter Bach: ‘A big THANK YOU to Michael Joy, who correctly put his finger on the solution: indeed, it is the secretaries who get things done, and it is all too rare that anyone actually notices.’ Dennis King: ‘I am a self-employed software developer and probably purchase more computers than most people. I am convinced that buying and servicing a computer is a crapshoot. Sometime everything runs fine and the service experience is pleasant. Other times, every possible thing goes wrong at every step of the way. ‘I had problems with an Apple G4 a few years back. Everyone at the Apple support line was great. They determined I would need a new motherboard (replaced for free under warranty) and that I could take it to a local dealer and have it back in a few days. Unfortunately (in my area anyway), the service sucks! I took my machine to a small Apple Approved place a few blocks from me. I thought I would get better service here than at one of the Big Box places. (Ha!) After waiting weeks with no computer and many calls to Apple and the dealer, I find out that there is some sort of billing dispute going on between the dealer and Apple. Apple will not ship my board to the dealer until this situation is resolved. I finally manage to convince Apple to convince the dealer to let me get my unfixed computer back, so that I can try my luck elsewhere. I then take it to CompUSA (Another Apple Approved place). Apple said that they would ship the board express to them and that I should be able to get my computer back in a day or two. After about a week, I still did not have my computer back. I call CompUSA and they tell me that their Mac guy (note that this is singular) was unavailable to replace the board. After more frantic calls to Apple and CompUSA, I convince them to GIVE ME THE BOARD AND LET ME REPLACE IT MYSELF. (Note that Apple offered to give me a better computer at this point at no additional charge. I declined because it was not that much of an upgrade and I perceived it as just further delaying my getting back to work). I took the stuff home and within an hour or two I was up and running. Apple sent me a free RAM upgrade afterward as their way of apologizing. A nice gesture, but I would have rather had my computer repaired promptly with no hassles in the first place. It would have been even better to have a computer that had a reliable motherboard in the first place. ‘About 3 or 4 years ago, I had problems with a top-of-the-line Gateway computer as well. This required me to reinstall the entire system and all the other software I was using on about a weekly basis. Once again the support people were great! Very patient sometimes on the phone with me for hours! However this gets old very quick when you do it once a week or so. To make a long story short, as nice as they were, I could not keep this machine running reliably and once again had to just get back to work. ‘The quickest and cheapest way for me to fix this at the time was to go down to the local Office(Whatever) store and buy one of these cheap new eMachines computers. Although, these computers seem to suffer from a bad reputation in the press, I have had, for the most part, pleasant experiences with them. All told, I have bought 3 for myself, a couple as gifts, and have steered numerous friends towards them. Service and reliability-wise only two had any problems. One day, my mom’s would just not start up. We shipped back to California and it was replaced within a couple weeks. The other had a bad power supply (after 2 1/2 years). I replaced this myself for about $30 bucks. ‘Certainly eMachines are not perfect, but from MY EXPERIENCE, better than the expensive big names. Bottom line is, I will NEVER buy top of the line computers again, regardless of the brand. The reliability is a total crapshoot. The service is a total crapshoot. When things are working, there is not THAT much difference in performance between a top end machine and a cheapie. Top-end machines typically have newer boards and technology, with newer glitches and as yet un-patched versions of various software and drivers.’ ☞ I think Dennis is just jealous of my ThinkPad.
Time for More Bonds? (Probably Not.) December 13, 2002February 22, 2017 Andrew: ‘I am 36, self-employed and currently have all of my retirement money (approximately $70,000) in domestic stocks. I know that I need to diversify into bonds (probably 10-15% of my overall holdings), yet I’m concerned that the bond market is too high. So, the question is whether I should take the plunge into bonds now, put more of my retirement money into stocks, or park it in cash until the bond market cools off? Which principle rules: diversification or ‘buy low/sell high?” ☞ The only long-term bonds I’d buy at today’s low interest rates are TIPS – Treasury Inflation Protected Securities. First recommended here May 12, 2000, when they were yielding 4.25% above inflation, they now yield what is still a pretty respectable 3% above inflation. The issue I own, the ‘3.375% bonds maturing April 15, 2032,’ are offered at around 111 — $1,110 for each bond. Although I was a lot happier paying $990 for these bonds a year ago than I would be paying $1,110 for them today, I would still consider them. Why? Because I’m not sure we can expect the US stock market to outpace inflation by a lot more than 3% for the next few years. So a more or less certain 3% above inflation might be a place for even a bit more than 10%-15% of your portfolio, at least until such time as stocks became so cheap (which they may or may not do) that the potential rewards are greater. That said, you are 36. If you keep investing in the market, even if it goes a lot lower, as it well might (or well might not), over the very long run you should do fine. THAT said, remember that we have a lot of baby boomers approaching retirement age. If 20 and 30 and 40 years from now they have become a drag on the market, withdrawing more from it than they put in, to supplement their Social Security income, well, this is a broad demographic dynamic that can’t be ignored. I like to think that dazzling technological advance, with the stunning increase in productivity that could accompany it . . . not to mention world peace and a gigantic young middle class in China and India eagerly buying shares that our baby boomers are selling . . . will make for a bright future. But it’s not a sure thing. One more note on diversification: Remember that there are economies outside the US. At some point, you might consider adding an international index fund to your mix. (And one more note about TIPS: They are best within the shelter of a retirement account. That’s because outside, both the semi-annual interest you receive and the inflation factor that you don’t receive are taxable as income.) Finally, note two additional options for some of your money: cash, or cash equivalents like short term Treasury bills (because even at 36, not every cent must be fully invested and exposed to risk at all times); high-yielding stocks like the ones I suggested November 25. Have a great weekend.
Twelve Twelve Twelve December 12, 2002February 22, 2017 First – as a respite from the last three days’ overlong columns – click here (especially if you have a fast connection), and enjoy the show. And now take the rest of the day off in honor of my stepdad Lew’s 90th birthday. He was born on 12/12/12 – at twelve minutes past twelve, I like to think. We should all be so sharp. Tomorrow: Friday the 13th – UH, Oh.