Advice For An 84-Year-Old Mom And a Quick Way to Check Your Life Expectancy January 15, 2004January 21, 2017 Gregg: ‘My mother is looking to me for advice and I don’t know what to tell her. She’s 84 and a recent widow. She has been advised to invest about $550,000 in the Franklin-Templeton High-Yield Tax Free Income Fund C. That money is also pretty much the extent of her assets and she needs to generate income. Social Security is the only other source. My father’s pension ended with him. The broker gave us an estimate of 5% return, with all the caveats, etc. Is that putting too many eggs in one basket? Any suggestions?’ ☞ I’m sure your mother’s broker is a nice person, but there is no need for her to pay him $6,500 a year for this bad advice – and given that Franklin-Templeton charges 1.19% in annual expenses and 12b-1 fees for this fund, that’s what she’d be paying. (Multiply $550,000 by 1.19% and you get $6,500 a year. To put that in perspective, it’s about a quarter of the income from the bonds. Indeed, $6,500 is probably close to half her entire take from Social Security!) Plus, if all your mom has is Social Security, she is not in a very high tax bracket . . . are you sure tax-free municipal bonds are the way to go? And all in a single fund that Morningstar describes as somewhat risky? This recommendation is geared to serve your mother’s broker nicely – he’d get about $1,500 a year, give or take (his firm and Franklin-Templeton get the rest) – but not your mom. It’s almost enough to make one angry. (It also brings to mind the lead front page story in yesterday’s New York Times, about some mutual funds paying brokerage firms undisclosed payments to steer their clients into those funds. Is it possible your broker had a special incentive to recommend Franklin-Templeton funds? The S.E.C. has not yet released any names.) As to where your mother should put her $550,000, that’s a much larger topic. If for some reason municipal bonds ARE where you want 100% of her money, consider the Vanguard municipal bond funds and perhaps TIAA-CREF’s Tax Exempt Bond Fund. (If she lives in a high-tax state, you may want a fund with bonds only from that state.) Or consider buying bonds not through a mutual fund but directly for her account. If you do that, stick to G.O.s – ‘general obligation’ bonds – because they are unlikely to default. One thing to consider – if you, her son, don’t mind giving up part of a $550,000 inheritance – is to use some of the money to buy a fixed-income annuity. Click here, for example, to play around with a variety of possibilities on the Berkshire Direct web site. I’m not suggesting your mother put all her money into a life annuity. (What if inflation roars back, and she’s stuck with a fixed income?) But if you did invest all $550,000 in such an annuity, Berkshire’s calculator offers her $6,300 a month as long as she lives. And because the first payments are considered almost entirely a return of her capital, it would be all but tax-free for the first seven and a half years. That $6,300 compares with the roughly $2,300 a month her broker’s plan might have provided (although, again, there is a very big difference: you’d still have the $550,000 in principal after she was gone). By all means shop with companies besides Berkshire, but stick to a VERY highly rated insurer. (‘Grade inflation’ was invented not at Harvard but in the insurance industry. Well, in the olive industry, where the very smallest olives are ‘large,’ but shortly thereafter in the insurance industry. In the insurance industry, a grade of B+ is pretty awful.) Because interest rates are low, the monthly payments any annuity will offer these days are pretty modest compared with what they might be in a year or three, when the insurer might have the prospect of earning more on their money. You might consider using half her nest egg (or whatever is the smallest portion that will produce the extra income she needs) to buy an annuity like this, keeping the rest someplace safe and short-term for now . . . and/or in dividend-paying stocks that could eventually rise to keep up with inflation. There are a million possibilities, and we may get better advice in tonight’s Me-Mail . . . but I venture to say that a majority of those million possibilities are better than the one your mother’s broker offered. HOW LONG WILL YOU LIVE? Jonathan Pond: ‘I read with interest the dialogue about planning for a longer life than most people anticipate. You might want to direct your readers to a site that allows you to answer 23 simple questions to get an estimate, to the nearest 10th of a year, no less, of your life expectancy. This site is an outgrowth of the New England Centenarian Study conducted by Harvard and BU medicals schools. I’ve been working with them for the past several years – my part is examining the financial habits of centenarians and their offspring. By the way, in my opinion the single best retirement forecaster can be found at analyzenow.com. I’m not the only one. Many others, including Jon Clements at the WSJ, have the same opinion.’ ☞ Well, it’s somewhat arbitrary, of course, but it has me living to age 88.4 – or to 89.6 if I floss more diligently – so it could be worse. HOW LONG MUST YOU GO TO SCHOOL? Emerson Schwartzkopf: ‘Twelfth grade has ALWAYS been optional for nearly every young adult in the United States. In fact, if you want to make sure that someone comes from a place that mandates at least some high school, hire someone from Nebraska or Wyoming. Take a look at this. Emerson Schwartzkopf a little later: ‘I took another look at that chart and saw that it was from 1908. However, here’s another one. You’ll still see that only 12 of the 50 states require compulsory education up to age 18. (Florida would make the total 11.)’ John Seiffer: Thanks for the reminder of Estimated Tax payments. I over paid so much last year that it’s covered all my EST payments so far except this one and, being out of the habit of it, I would have forgotten.
Straws and Blimps in the Wind And a Guy Who HAS a Hole in His Head January 14, 2004January 21, 2017 Coming soon – what Gregg should advise his recently widowed 84-year-old mom. (A throaty comedic actress from the last century, Hermione Gingold, used to tell people, ‘I have two sons, both older than I.’) But today . . . A STRAW IN THE WIND? Paul Wren: ‘I have never been moved to involve myself in the political process (beyond voting) until this president. I am so convinced that he is doing real damage that I created a website to spread the word: JustOneTerm.com. You might enjoy it! And you can get a free bumper sticker, too. My biggest surprise is that there are nearly a thousand similar grass-roots, anti-Bush sites out there (checkout linkcrusader.com).’ ☞ There is indeed, in my view, a lot to be anti (even if some of the sites this links to are left of the ‘dynamic center’ that I and many Democrats feel most comfortable in). Bush himself may be a nice fella – I know several of his classmates who swear he is (and a couple who swear he’s a bully) – but his administration’s policies are unfriendly to the unrich, unfriendly to the environment, and unfriendly to much of the rest of the world. That said, what drives many of us who take shots at this administration is not ‘anti,’ it’s passionately ‘pro’ – pro a better life for the average guy . . . pro giving kids the best possible education and health care . . . pro a clean, healthy, beautiful environment . . . pro a world order based largely on cooperation and respect. (And now that you’ve got me going – why do you encourage me this way? – pro a tax code that nicks millionaires for at least as high a proportion of their income as it does the average guy . . . pro a woman’s right to control her own body . . . pro a person’s right to love whomever he or she wants, regardless of race and, yes, even gender . . . pro the right of the people of California to pass a medical marijuana referendum or the people of Oregon to twice pass a Death With Dignity referendum without coming under attack from Big Brother in Washington . . . pro the separation of church and state . . . pro a social safety net . . . pro a minimum wage and an earned income tax credit and the Family and Medical Leave Act . . . and more.) WHAT IF IT’S NOT A STRAW BUT A BLIMP? Apologies to any blimp enthusiasts who took yesterday’s headline as anything more than a humorous attempt to tie two disparate things together in a single sentence. But c’mon, y’all – at $1 million a year to operate even Dan’s new ‘cheap’ design, this has got to be one of the first nonessentials to cut out of almost any tight household budget. Dan Nachbar: ‘I should be clear I certainly do not expect any individual to shell out $1 million a year for a blimp. Rather, a recreational blimp will cost around $50,000 to build and less than $10,000 per year to operate — this is very much in line with many existing pleasure boats, etc. The $1 million per year cost estimate is for continuous, year-round commercial operation including several full-time employees, travel expenses, etc, etc. From the outside, a million doesn’t seem to be a wildly unreasonable outlay for part of a big-time ad campaign. (But I don’t know — thus my initial query.) So, while I may not expect a stampede of blimp buyers to my front door, I don’t think I’m suggesting anything quite like drilling holes in one’s skull in order to obtain spiritual enlightenment. That said, I am delighted to be associated with penguins.’ HE HAS A HOLE IN HIS HEAD Randall W. Haws: ‘I did this procedure and I built the trepan.com website. I challenge you to read my profile and the other 14 volunteers who have willfully chosen to evolve their minds, much like the ancient cultures discovered. If you truly have an open mind, you’ll want to read the truth revealed behind the subject. Better yet, I’m open for an interview. My story is truly incredible and this procedure has helped me to gain back the top performance level of my brain that was naturally intended, but was repressed due to human evolution over the past 10,000 years.’ WHAT IF IT’S A BOGUS WEB SITE? Sharon: ‘How can one tell if a web site is legitimate. We were checking out a money exchange site called xe.com. I’ve used the site for a while for their free currency conversion calculator, but now they have a financial web page where you can do commissionless wire transfers, etc. They are listed as Verisign checked, but it’s not clear on the Verisign web page how you can check if that is genuine. A Google search on xe.com turned up nothing but the original link to xe.com. Having been previously ripped off (slightly) by Cyberrebate, I’m wary of undocumented and bogus web pages. So – can you ask your panel of experts how to check on a web page’s veracity?’ ☞ What say you, Panel? ME-MAIL Please consider this a thank you to Wesly, who sent a generous note yesterday; and an apology to all those of you who might have expected to hear back from me but, like Wesly, accidentally gave me a mistpyed e-mail address, or none at all, and thus no way (other than this) to reply. Don’t forget to send in your fourth quarterly estimated tax payment today or tomorrow, if it’s due (i.e., you have significant income not subject to withholding and will owe a bunch of tax April 15).
You Need a Blimp Like You Need a Hole in the Head January 13, 2004February 24, 2017 You know, it’s an interesting world. One of your fellow readers is building a blimp. An acquaintance keeps penguins. A third sent me an e-mail about trepanation. And don’t even get me started on chess boxing. BLIMPS Dan Nachbar: ‘Well, I’m still at it. (For details, see personalblimp.com). My work to date has focused on recreational use rather than marketing/advertising use. The main reason was speed. When I started, I only knew how to make a cheap, slow blimp. Advertising blimps need to be pretty fast in order to be at the appointed place at the appointed time, regardless of the winds. However, my work has evolved to the point where I now believe I can build a cheap, fast blimp – suitable for advertising. So, my question: I am trying to ‘size the market’ for a blimp that is less expensive to operate ($1,000,000 per year rather than the current $2,000,000 per year). But I have no idea how the decision to purchase blimp services are made or who makes them. Will a cheaper blimp be of interest? Or do only crackpots buy/lease blimps? Do you know anybody who knows about high-end advertising/marketing that might be willing to give me some idea if a cheaper blimp has potential?’ ☞ No, but a friend of mine is dating a guy who seemed to have really bad mosquito bites on his legs that he’d been scratching too hard when I met him this summer. ‘No, those are penguin bites,’ he said. And now here he is in the New York Times! PENGUINS Dress Is Formal, but the Food? Cold and Slimy By DAN BARRY THERE is a touch of swank to the place. But then the man in green appears with the afternoon’s repast in two buckets, and what had seemed like a cordial gathering turns into last call at a bad Waldorf soiree. For penguins, apparently, nothing beats the feel of a nice cold smelt sliding down your gullet. The man in green, Rob Gramzay, knows this better than most humans. Officially, he is the Central Park Zoo’s “senior wild animal keeper for polar birds and polar mammals.” Unofficially, he is Manhattan’s penguin guy, responsible for the well-being of this island’s 42 Chinstraps and 23 Gentoos. He has other charges, of course, including but not limited to 13 puffins, three polar bears, two screech owls and old Breezy, the blind sea lion whose repertory of tricks once wowed them at Coney Island. But the penguins are especially dear to his heart, in part because they seem always to be gently mocking those on the other side of the zoo exhibit’s glass partition: waddling about in comic self-importance, beaks raised as if detecting an aroma nowhere near as pleasant as a bucket of smelt. . . . TREPANATION And those two were just a warm up. You want to talk odd? How about paying someone $3,600 to drill a fair-sized hole in your head? Needless to say, I am one who thinks that anyone who would do this already has one.
Two Books and a Movie (One of the Books is Important) January 12, 2004January 21, 2017 THE AUTOMATIC MILLIONAIRE An author on the ‘Today Show’ Saturday was talking about his new best-seller, The Automatic Millionaire, and said that if you saved $5 a day – perhaps by foregoing a latte at Starbucks – you’d have $948,000 after 40 years. Which is pretty close to $1 million, but misleading. Not that I don’t fully subscribe to the slow-but-steady School of Universal Frugality. It’s what, scrimping and saving for years, has put me in the now enviable position to buy lattes without a second thought; even to buy a flat screen TV someday soon. (I am teasing myself with anticipation.) But is this really a ‘revolutionary system that in one hour will make readers rich,’ as the publisher proclaims? According to the publisher, the revolutionary principle here is to ‘pay yourself first’ by having your employer automatically deduct a retirement-plan contribution from each paycheck – a principle I subscribe to. Still, I was struck by that $948,000. For $5 a day to amount to $948,000 in 40 years requires an after-tax return of 10.4%. And for it to be a real $948,000, it has to be an after-tax, after-inflation 10.4% return. Trust me: you are not going to get this from your 401(k). If your 401(k) can grow 6% a year faster than inflation for 40 years, after the various expenses of the mutual funds it is invested in, that would be pretty darn good. But that amounts to $291,000, not $948,000, and it is $291,000 that will be subject to income tax when you withdraw it, so it might be more like $200,000 or $250,000. But that’s a lot better than nothing, and the book does seem to be motivating people to save and get out of credit card debt, which is always good (if not necessarily good for Starbucks). A MORE IMPORTANT BOOK Did you see ’60 Minutes’ last night? Here’s the link to the book that’s making all the headlines. What’s now pretty hard to dispute is that – even as Governor Bush was telling America he planned to conduct a humble foreign policy and eschew nation-building – it was his intention to invade and then rebuild Iraq. Whatever you may think about our being in Iraq today, which some applaud and others decry . . . whatever you may think of the way we went in, which some believe needlessly alienated so much of the rest of the world and made our mission so much more costly and difficult . . . whatever you may think of all that, there’s a bone to pick here simply about the lack of candor. Presumably, Governor Bush didn’t disclose his intention to go to war before the election for fear fewer people would vote for him. It’s the same way he looked into the camera and insisted that ‘by far the vast majority’ of his proposed tax cut would ‘go to people at the bottom end of the economic ladder’ – when he surely knew that in fact by far the vast majority would go to people at the top. War . . . peace . . . top . . . bottom . . . call me a stickler, but these are pretty big distinctions. If the 50,456,169 people who voted for Governor Bush (very nearly 48% of all the votes cast) had known it was his intention to take us to war . . . and to tilt the domestic playing field sharply in favor of the already best off . . . he might not today be the most powerful man on Earth. YOUR MONDAY MORNING MOVIE Thanks to the estimable (and carnivorous) Marc Fest for this three-minute modern-day This Little Piggy Went To Market. Tomorrow: You Need a Blimp Like You Need a Whole in the Head
Tidbits January 9, 2004January 21, 2017 Alan Caroe: ‘Monday, you asked: Doesn’t Barbra Streisand sing in the shower? Well, according to her October interview on NPR to promote her latest recording, the answer is no. Barbra reported that she does not sing around the house and that she will not tolerate background music. She reports that she spends her days talking on the telephone for political organization purposes. Please do your homework, keep up the financial writing and limit the political sermonizing. In Christ, Alan.’ Nancy Wolcott: ‘Re Tuesday‘s column, the Florida state legislature has already made 12th grade optional. Entering Miami-Dade high school students in Fall 2003 were given letters directing them to choose the 4 or 3 year option at the beginning of their high school career.’ Jim: ‘In determining how much of your assets to keep in stocks, how do you define ‘If you’re relatively young’ – as you state in Wednesday’s column? Not too long ago I would have answered very differently than I would today.’ ☞ Well, under 40, for sure. And under 50, probably . . . but the closer you get to the years you will no longer earn new money to keep buying more shares if the market goes sharply lower – let alone the years you might have to withdraw money from the market when it might be sharply lower for a while – the more cautious it is reasonable to become. That said, my friend Ken’s grandmother is fully functioning on her own – and can drive! – at 102 (although Ken has persuaded her to do so only in an emergency). So if you’re 65, you may have 35+ years ahead of you. Stocks would likely handily outperform safer investments over 35 years . . . so even at 65, you could well want some exposure to stocks. ‘It all depends.’ For example, if you’re 65 and stand to inherit money in a few years when your 102-year-old parent, by then 106 or 107, laughs herself to death watching an Arrested Development rerun, you’d have less reason to be conservative. (Wherever you come out on this, do NOT miss Arrested Development.) YOUR FRIDAY ONE-MINUTE MOVIE Click here.
A Republican Take on the Bushes (Well, It's Only Fair to Present Both Sides) January 8, 2004February 24, 2017 Read this. “There are many Bush-bashing books out there, but this one is quite different. Ivins, Franken, and Conason, among others, have focused primarily on the current president’s administration. This book, written by a former Republican strategist, is more wide ranging, more scholarly, and in many ways, more disturbing. Focusing on the last four generations of Bush men, Phillips brings the reader into the secretive upper echelon of the American power establishment, where connections are made in Ivy League clubs, and he shows how members of that old-boy network become the policymakers of the country. In the case of the Bushes, this resulted not only in money and power but also in links to the CIA, the energy industry, and the military-industrial complex – links that have shaped this country’s national and foreign policy for decades. Phillips explains the Bushes’ relationship with Enron and the House of Saud in eyebrow-raising detail and adds confirming information about troubling claims, including the notion that the Reagan-Bush ticket arranged that American captives would not be released from Iran until Reagan took office.’ – Booklist (Too serious? OK, click here for something completely different. Move your mouse over the bed . . . but then keep exploring. There’s always something to click that leads to something else and, well, just try not to be late for work.)
Inadvertent Hindsight – A Y2K04 Problem January 7, 2004February 24, 2017 It’s been fixed (thank you, Marc!), but we had a little Y2K04 glitch yesterday. If you clicked January 05 over there to the left, it took you to January 5, 2003, when I was telling you, among other things, that you could charge $30,000 of I-Bonds to your credit card and get the frequent flier miles. Well, bad news for 2004: The Treasury has wised up. You can no longer charge the bonds to your credit card. (‘Oh, no!’ I hear you cry. ‘Who cares about interest – I wanted the miles!’) Worse still, if you read that January 5, 2003 column to the end, you came to this teaser . . . IS THE STOCK MARKET SAFE AGAIN? I’ll give you a hint: No. Come back tomorrow. . . . and if you clicked on tomorrow, it took you to January 7, 2003. On that day, I wrote that the market was no bargain. (Completely ignoring my column, the S&P climbed 24% last year.) But in re-reading it (which I invite you to do), I’m not sure how much I would change, even now. This year – 2004 – certainly smacks of great momentum, with all the added oomph of a presidential year. It may prove to be the second in a long string of big winning years (2003 being the first of that string). But it may not. And, in any event, it’s no bargain. If you’re relatively young and engaged in a lifelong regimen of periodic investments in the stock market – wonderful! Keep it up! You never have to worry about market timing. You’ll buy more shares when they’re cheap, fewer when they’re dear, and over time, with any luck, you’ll do well. If you’re at or near the stage where you have to live off your investments, I’d be more cautious in my allocation. And even if you’re not yet at that stage, I wouldn’t be ashamed to have some fairly stodgy investments in the mix, especially inside a traditional retirement plan. (Riskier investments do better outside the retirement plan because if they tank, you can sell for a tax loss, and if they zoom, you eventually take your profit as a lightly taxed long-term capital gain, rather than withdrawing it from the retirement plan as more heavily taxed ordinary income.) The TIPS recommended here in past years (Treasury Inflation Protected Securities) are not the great value they first were, selling at or even slightly below par. (Par = 100 cents on the dollar.) Today they sell well above par, around my likely golf score if I were ever forced to play 18 holes and not far from my most likely bowling score if I were ever forced to roll 10 frames. Namely, 124. (So you made a 24% gain plus the interest plus the inflation factor.) But I’m not selling mine. They represent a nice core holding within my retirement plan. (In my case, about a quarter of it.) If stocks ever do seem an irresistible value, a few months or years or decades from now, I could shift out of TIPS back more heavily into stocks. # One other Y2K04 glitch: The Gates $$$ Clock, also at left, shows Bill with $0, flat broke. That can’t be right.
Making Twelfth Grade Optional January 6, 2004February 24, 2017 You might think rich folks in Florida have it pretty easy. The weather’s good, there’s no state income tax, and those with, say, $20 million of some stock that pays a 4% dividend saw the federal tax bill on their dividends cut by more than half, from 39.6% to 15%, for an annual saving of $196,800 a year. But that’s federal. When Jeb Bush took office, he surveyed the state’s serious problems (education comes quickly to mind) and decided that the thing to do was to cut taxes on the rich at the state level, as well. Maybe he didn’t have the power to cut them as dramatically as his big brother – because the Florida income tax rate was already zero – but he would do what he could. Jeb didn’t cut sales taxes. That would have applied to everyone. He didn’t cut property taxes. That, too, would have applied to everyone (renters ‘pay’ property tax in the sense that landlords pass it on to them). No, he found Florida’s Intangible Property Tax, which applies only to the fortunate few, and cut it, as I wrote some time ago – what else? – in half. The rate was cut from two-tenths of one percent of your stocks and bonds (outside a retirement plan, and not including Treasury securities and a few other things) to one-tenth of one percent. The guy with $20 million in stock saves a further $10,000 a year. About a year later, Bush eliminated drug treatment programs from 51 of Florida’s 55 prisons to save $13 million needed to balance the budget. Now come the forms for this year’s 2004 Intangible Property Tax, with further relief for the best off. To quote the very first copy block at upper left – ‘Effective January 1, 2004, Governor Bush and the [solidly republican] Florida Legislature have raised exemptions for individual filers from $20,000 to $250,000 and for joint filers from $40,000 to $500,000.‘ A twelve-fold hike in the exemption, saving the single guy $230 a year and joint filers $460. (Remember, most Floridians were already exempt, because this tax did not apply to their homes, cars, cash, businesses, savings bonds, or retirement plans.) The truth is, I like reforms that simplify tax filing, and raising the exemption twelve-fold will relieve quite a few folks from having to file the Intangible Property Tax at all. That’s good. But if you’re going to do this, why not make it, at the very least, ‘revenue neutral?’ That is, why not raise the exemptions twelve-fold so fewer have to file but, at the same time, hike the rate back up a hair from one-tenth of a per cent to perhaps 0.11% or 0.12%? Same revenue generated, but fewer people having to file returns and less paperwork for the state. Indeed, why not admit that Florida is failing its children with overcrowded classrooms and put the rate back to two-tenths of one percent, where it had been for so long, but with these higher exemptions? The answer is simple: For the Bushes, tax cuts for the best off are priority #1. That’s not an attack on the Bushes, just a statement of reality. Some, recognizing this for the simple fact it is, will share the Bush vision and applaud. Others will gape in wonder and be appalled. Meanwhile, Florida’s budget crunch and classroom overcrowding are so severe that there is talk in Dade County of making twelfth grade optional. I doubt that will ultimately happen, but I don’t doubt this: It is a grand time to be rich and powerful in America. Just ask any of your friends with $20 million in stock. ‘If this is class warfare, then my class is winning.’ – Warren Buffett
I’m Back January 5, 2004February 24, 2017 Two glasses of champagne, and I’m out for six days. Happy New Year! COMMODITIES SPECULATION Investment advisor Roy Hamrick: ‘My favorite Wall Street Journal cartoon is the one where the wolf is sitting hungrily in the brokerage house office, and the rep behind the desk is saying: ‘Well, we don’t actually keep the pork bellies here.” ☞ Reminder: If you speculate in commodities, the odds are extremely high you will lose your money. Computer Scrabble is free, more engaging, and perhaps better for the brain and gastric system. LAST I CHECKED, HE HAD $300 MILLION . . . But that was more than 15 years ago. He must have nigh on a billion by now. ‘I haven’t played the market at all since I retired in ’86,’ writes a friend of mine who had made $300 million in the rarest of ways – trading stocks for three decades. Who does that? Warren Buffett did it (and then some) and I know a few others whose success has convinced me the market is more than a simple ‘random walk.’ If you are really really smart and really really do your homework and, on top of that, have the right temperament, I think you can outperform the market on a fairly regular basis. But this makes you a very, very rare bird. Even my friend recognizes the difficulty of it. After he retired (as he puts it – he did not manage money for others or have a job in the conventional sense), he handed his money over to other, younger managers to run. But I couldn’t imagine he didn’t at least continue to dabble. Don’t championship golfers still play golf after they go off the tour? Doesn’t Barbra Streisand sing in the shower? So I wanted to know what stocks he particularly liked – or was short – these days. Maybe he’d toss me a tip I could pass on to you. No, he said, he didn’t have any stock picks. ‘I’ve taken at most five positions in all those years. My money managers have done better than I ever would have. I just burnt out. Keep in mind that, if you can’t outperform an index fund, you’re counterproductive. In most occupations one can be productive at a slower rate as one ages. But the market is like tennis: you win or you’re nobody.’ I’m not sure what this says about the future of Berkshire Hathaway – something tells me Warren Buffett and Charlie Munger will be winning financial tennis championships well into their nineties, regardless of my friend’s experience. But it says quite a lot, nonetheless, I think, about how hard it is to beat the performance of the simple index fund. Anyway . . . here’s wishing you a terrific 2004, even if it doesn’t bring you $300 million. We’re crawling around Mars – how cool is that? Not a bad start.