Molluskation September 22, 2010March 18, 2017 DON’T ASK/DON’T TELL What a disappointment to fall just shy of the 60 required votes. But with the President, the Secretary of Defense, the Chairman of the Joint Chiefs of Staff, the House of Representatives, a majority in the Senate, 64% of the Republican electorate and 80% of Democrats all favoring repeal – and with a Federal Disrtrict Court just having ruled the current law unconstitutional – I think we’ll find a way to have open service sooner rather than later. Stay tuned. TTT This one only seemed to drop yesterday. Suggested here earlier this month, TTT is now trading ‘ex-dividend,’ meaning that anyone who buys it now will not get the imminent dividend, which in this case is not cash but, rather, a quarter share of KHDHF for each TTT share. So at 6.80, your shares are really worth 6.80 plus 1/4 of 7.60, or about 8.70. I’m holding on. SHUCKING LIKE A GUY Finally! Last Wednesday, we microwaved corn: Zap, shuck, eat. Today (how much corn could a dumb cluck shuck if a dumb cluck could shuck corn?) we turn to clams. SHUCKING LIKE A GUY Here’s how you’re supposed to shuck clams. Simple, elegant – and I totally couldn’t get it to work, so I invented my own method: Be sure to buy cherrystone clams. They’re big and delicious and a third the price of oysters. Little Neck clams are just annoying. There’s a reason they’re called little. Maybe if you’re a seagull they fill the bill*, but not if you’re a human. Be sure they are all happy. The way to know is that they are tightly shut. If someone tries to sell you a clam that’s already open, and possibly smelly, it’s likely a clam that’s passed on to his or her reward. Take no chances. Clean the shells (“with a stiff brush,” say all the guides) because there could be bacteria on the outside that could infect an open wound, like the one you could inflict on yourself trying to open them. And now you are ready to shuck the first one. Wrap it in a dish towel of some sort . . . “Not my towels!” Charles shouts from the next room. Grab a heavy skillet . . . “Not my cast iron skillet!” Charles has now appeared for emphasis. Wait for Charles to leave and strike the towel flatly, with authority. [Important: you are not trying to smash the clam, just shuck it. A hammer is too specific; a flat skillet is perfect.] Remove any large pieces of shell, open the now completely acquiescent clam (far too dazed to feel any pain) and enjoy. That’s it. Before eating a clam, be sure its liquor is clear, not milky. ALTERNATE MOLLUSKATION Here’s how you steam them. Mmmm, mmmm! No shucking required. But you could also freeze them – just a little, for less than an hour, so their muscles go numb (again, don’t worry: for them it’s like getting stoned) – and they should open enough on their own for you easily to insert the shucking knife as demonstrated by Legal Seafoods’ head chef in the very first link, above. Or you could do the really smart thing and arrive at the Ocean Grill bar Sunday through Thursday night at 9:30pm, after which the oysters, clams and shrimp are shucked to order, half price. *Da BUM bum.
Bill Clinton on Jobs Don't Miss It September 21, 2010March 18, 2017 MUNGER John Kasley: “You write, ‘And he’s 86? Amazing.’ Meh. Maybe not so amazing. You’d never be deliberately unkind (after all, what would your mother think?). There is, however, just an outside chance that people might think that you think that as we age we are unable to do anything but sit on a park bench complain about pains, and drool on our zippers. Munger is the paradigm of ‘use it or lose it’ mental agility.” ☞ Good point. (Sorry, Mom.) Did you see Thursday’s New York Times profile of the sitting Wichita federal district court judge who, at 103, remains clear as the liquor of a properly shucked clam? May I call THAT amazing? KETCHUP, ETC. Howard Tiersky: “You write, ‘Just because ketchup turns brown and is a couple of years past its expiration date doesn’t mean it’s not basically fine…’ My company actually produced an entire web site on the topic of how long you can really keep different foods (often much longer than you’d think). Helps people save money and avoid waste.” ☞ That said, I was surprised to encounter an open, ancient, unrefrigerated jar of peanut butter that had, indeed, gone bad. It so spooked me that, against all my better instincts, I recently tossed – without even opening to sample – a container of yogurt best bought by October 19, 2007 that I found at the back of our refrigerator. It was probably fine, but I had been shaken. THE MIDDLE-CLASS TAX CUT IS FOR RICH PEOPLE TOO Peter Kaczowka: “The so-called middle-class tax cut is a tax cut for everyone, on the first $250,000 of income. If I get a raise that puts me over $250,000 a year (as if), I don’t lose that tax cut. I get it no matter how much I make. It’s a universal tax cut, a tax cut for all.” ☞ Pass it on. THE CLINTON GLOBAL INITIATIVE BEGINS TODAY Read about it here. (The central thesis: CGI seems actually to get more done than the U.N.) Watch its sessions here. BILL CLINTON ON JOBS And take a few minutes to watch what President Clinton had to say after the Daily Show ran out of time last Thursday – this is the part that only the studio audience (and now you, via the web site) got to see. It’s actually split in two parts, as you’ll see. Don’t miss the second part either.
Charlie Munger At 86, Why Worry About Being Politically Correct? September 20, 2010March 18, 2017 SHUCKS Bumped again. But again something more important has come up. And no, I don’t mean Jon Stewart’s October 30 Rally To Restore Sanity or Stephen Colbert’s fiendish and simultaneous March to Keep Fear Alive – though we have in fact booked our $117 four-star Priceline hotel room for both. Rather, Shucking Like a Guy has been bumped for . . . WARREN BUFFETT’S PARTNER CHARLIE Stephen Willey: “Here is a two-hour interview with Charlie Munger. I didn’t regret a minute spent watching. By his own admission, Charlie is a Republican, but his solutions to the current crisis could have been mistaken for your own.” ☞ Thank you for this. Fantastic. And he’s 86? Amazing. Charlie and Warren have been business partners since they were mere multi-millionaires. They are generally regarded as two of the most – if not in fact the two most – astute, level-headed capitalists in the world. Skip the introductions. The actual interview starts 8 minutes in. I like the part (about 27 minutes in) where he praises the selection of Elizabeth Warren and suggests that she may not be tough enough on the financial industry. And the part a few minutes later where he comes out against tax cuts but advocates “the biggest infrastructure program you ever saw” – with special emphasis on becoming energy independent via the sun. He is one Republican who favors keeping Social Security just as it is. But don’t think he’s a squishy liberal – he thinks Costco does more good for the world than the Rockefeller Foundation. He thinks ill of my hero Al Gore. He thinks we’re hugely fortunate both parties worked together to bail out the banking system – that things would have been unimaginably bad if they hadn’t. He thinks you should avoid gold (“even if it works, you’re a jerk”). I’ve long knocked gold, too (how is society enriched by digging for more of something whose principal value lies in its scarcity?), but Charlie ups the ante – and makes me feel a bit guilty about my own fairly recent and reluctant holding in GLD, up 36% since first suggested. May need to rethink. He’s a multibillionaire contrarian who thinks Singapore may have been the best political system, at least for its situation, of any in the world (as he explains in answer to the last student’s question) . . . . . . and he lives by Rudyard Kipling’s classic poem, “If.” I assume you know it, but just in case: If you can keep your head when all about you Are losing theirs and blaming it on you, If you can trust yourself when all men doubt you, But make allowance for their doubting too; If you can wait and not be tired by waiting, Or being lied about, don’t deal in lies, Or being hated, don’t give way to hating, And yet don’t look too good, nor talk too wise: If you can dream – and not make dreams your master; If you can think – and not make thoughts your aim; If you can meet with Triumph and Disaster And treat those two impostors just the same; If you can bear to hear the truth you’ve spoken Twisted by knaves to make a trap for fools, Or watch the things you gave your life to, broken, And stoop and build ’em up with worn-out tools: If you can make one heap of all your winnings And risk it on one turn of pitch-and-toss, And lose, and start again at your beginnings And never breathe a word about your loss; If you can force your heart and nerve and sinew To serve your turn long after they are gone, And so hold on when there is nothing in you Except the Will which says to them: ‘Hold on!’ If you can talk with crowds and keep your virtue, Or walk with Kings – nor lose the common touch, If neither foes nor loving friends can hurt you, If all men count with you, but none too much; If you can fill the unforgiving minute With sixty seconds’ worth of distance run, Yours is the Earth and everything that’s in it, And – which is more – you’ll be a Man, my son! ☞ If you think Charlie Munger may be possessed of more wisdom than Sarah Palin or Mitch McConnell . . . yes, or even Joe Scarborough . . . if you are willing to listen to a Republican capitalist who thinks the current Republican leadership has its economics all wrong . . . who has thought hard about how terrible economic times made Hitler’s rise possible . . . who remembers the Depression . . . then settle back and listen to him for a couple of hours. If only everybody would.
The Job Creators September 17, 2010March 18, 2017 “We can’t let the people who’ve been hit hardest by this recession and who we need to create the jobs that will get us out of it foot the bill for the Democrats’ two-year adventure in expanded government.” – Republican Minority Leader Mitch McConnell, arguing to extend the Bush tax cuts on income above $250,000 a year It is objectively true. Most people are doing fine. They still have jobs. Sure, maybe their retirement plan balances are down, but if they were $80,000 and now $60,000 – or their home has declined $100,000 in value – well, all told, they’re down $120,000. But if you’re rich, you might have seen your net worth drop by $10 million! Or $500 million! So don’t whine to me about $120,000. To wit: (ChattahBox Political News)—Senator Mitch McConnell (R-KY) knows which side his bread is buttered on. Yesterday the Minority Leader delivered an impassioned speech on the senate floor, supporting tax cuts for the richest Americans. He reminded his colleagues that our country has been hit hard from a deep recession. And who in America has been suffering the most? The rich. What about the poor and middle class who have lost their homes, lost their jobs and are now making weekly trips to food banks to feed their families? You know, the same people who Republicans have attacked as lazy hobos? No, sorry. According to McConnell, people making over $250,000 a year are “the people who’ve been hit hardest by this recession.” . . . ☞ They’ve been hit the hardest – and (we are constantly told) they are the job creators. Why would we tax the golden goose? But hang on. When Clinton came into office and raised the top income tax rate from 31% to 39.6% (but lowered the capital gains rate from 28% to 20%), unemployment went down. From 7.5% when he was elected to 4% when he left. Despite the tax hike, the job creators somehow managed to create 22 million jobs over Clinton’s eight years. Yet when Bush took office and slashed rates on the best off – from 39.6% to 15% on dividends, from 20% to 15% on capital gains, from 39.6% to 35% on ordinary income – unemployment went up. The job creators went on strike, creating almost no net new jobs. So why would going back to the Clinton rates hurt job creation? Democrats support targeted tax cuts to help small business (and even, when it makes sense, targeted help for big business – like the help we gave GM). The Obama Administration has been all over this. And Democrats totally support seeding vibrant new 21st century industries – see yesterday’s Time excerpt. But borrowing hundreds of billions of dollars to give all those at the top tax breaks? It makes no sense. From politicalcorrection.org: . . . expiration of the Bush tax cuts would only affect roughly 3 percent of small business owners — a fact that Boehner conceded yesterday — and McConnell has been blocking a bill to help small business owners since July. Blocking a bill to help small business. But borrowing hundreds of billions of dollars to continue Bush’s tilt toward those best off? That is a Republican must. Monday (sorry, I thought the above was more important): Shucking Like a Guy
Venture Capital September 16, 2010March 18, 2017 DEMOCRATS.ORG Check out the revamped democrats.org, launched yesterday. There’s a lot there, including links to articles like this encouraging report from Time on the stimulus: . . . Yes, the stimulus has cut taxes for 95% of working Americans, bailed out every state, hustled record amounts of unemployment benefits and other aid to struggling families and funded more than 100,000 projects to upgrade roads, subways, schools, airports, military bases and much more. But in the words of Vice President Joe Biden, Obama’s effusive Recovery Act point man, “Now the fun stuff starts!” The “fun stuff,” about one-sixth of the total cost, is an all-out effort to exploit the crisis to make green energy, green building and green transportation real; launch green manufacturing industries; computerize a pen-and-paper health system; promote data-driven school reforms; and ramp up the research of the future. “This is a chance to do something big, man!” Biden said during a 90-minute interview with TIME. For starters, the Recovery Act is the most ambitious energy legislation in history, converting the Energy Department into the world’s largest venture-capital fund. It’s pouring $90 billion into clean energy, including unprecedented investments in a smart grid; energy efficiency; electric cars; renewable power from the sun, wind and earth; cleaner coal; advanced biofuels; and factories to manufacture green stuff in the U.S. The act will also triple the number of smart electric meters in our homes, quadruple the number of hybrids in the federal auto fleet and finance far-out energy research through a new government incubator modeled after the Pentagon agency that fathered the Internet. . . . ☞ And speaking of the government-seeded Internet, democrats.org has a link to the iPhone app I’ve been mentioning that lets you join our army of door-to-door canvassers, tells you which doors to knock on, and receives your report on the results of your door-knocks to enhance our database (and keep people from having their doors knocked on too much). Pretty amazing grassroots tools, neighbor to neighbor. All in an effort to keep the country moving forward toward a brighter future. RANDOM COOKING TIPS Just because ketchup turns brown and is a couple of years past its expiration date doesn’t mean it’s not basically fine. It just means you have been unaccountably restraining your ketchup consumption. (Why? Ketchup makes almost anything better! Try it on salmon! Try it with peanut butter and bacon! Try it on tomato slices!) Or else it means you bought several cases at once, on sale, as an investment. Nicely done. You could shuck an ear of corn, spend a whole lot of time waiting for a pot of water to boil, drop in the corn and wait a few minutes more. Or you could just zap it for two minutes, shuck and eat. (If God did not intend corn to be cooked this way, why would He have invented microwaves?) Tomorrow: Shucking Like a Guy
Be Happy September 15, 2010March 18, 2017 …(third estimated tax payment due today)… here’s the form and instructions NBIX Suggested here at $2.60 half a year ago (and partly sold at $6.45 here in August), we had hoped NBIX might report good data on a depression application. Guru thought the stock would go to 8 or more if it did – or drop to 4 on bad news. Yesterday, we got that bad news and the stock dropped to $5.65 in after-hours trading. Guru doesn’t expect more news of any kind for a couple of years, but – for the reasons Guru outlined here – I plan to hold what I had not already sold in August. (And if it drops back under $4, perhaps buy a bit more.) As always: only with money you can truly afford to lose. PRIMARY ELECTION RESULTS Wow. BANK BY MAGIC Donald Stewart: “Like the Chase Quick Deposit app you wrote up, USAA Federal Savings Bank has an iPhone app which allows you to deposit checks by taking a picture. It works VERY well, and they have a $10,000 daily deposit limit.” ☞ Better still. Hurry up, Citibank. David D’Antonio: “My credit union has had this type of app for a while (with a limit of $5000 I think, not that I get checks in any amount close to that) and it’s pretty fabulous. This is living in the 21st century; I can deposit checks with my phone!” ☞ Which is the perfect segue to . . . A HEARTENING OUTLOOK From Monday’s Huffington Post: Buffett, Ballmer Predict Bright Economic Future BUTTE, Mont. — Some of the biggest names in business said Monday that they see a bright future for the economy, with famed investor Warren Buffett declaring the country and world will not fall back into the grips of the recession. “I am a huge bull on this country. We are not going to have a double-dip recession at all,” said Buffett, chairman of Omaha, Neb.-based Berkshire Hathaway Inc. “I see our businesses coming back across the board.” Buffett said the same things that worked for the country through a century of two world wars, a depression and more – all while increasing the standard of living – will work again. He said banks are lending money again, businesses are hiring employees and he expects the economy to come back stronger than ever. “This country works,” Buffett said during a question-and-answer session via video at the Montana Economic Development Summit. “The best is yet to come.” The likes of Buffett, Microsoft Corp. CEO Steve Ballmer and General Electric Co. Chairman Jeff Immelt told the nearly 2,000 business leaders, government officials, aspiring entrepreneurs and others at the summit that things are getting better. They also offered some ideas for what needs to be done. Ballmer said there soon will be more technological advancement and invention than there was during the Internet era. That will help drive business growth, he said. “I am very enthusiastic what the future holds for our industry and what our industry will mean for growth in other industries,” said Ballmer, whose company is based in Seattle. He envisions new technologies that move beyond the Internet to tie together computers, phones, televisions and data centers to create amazing new products. And the pace of innovation will increase as technology makes workers more productive. “All areas of science today are moving forward more quickly,” Ballmer said. “The speed of scientific breakthrough is accelerating.” The conference was organized by U.S. Sen. Max Baucus. The Montana Democrat said it leaves “bickering and name-calling” back in Washington, D.C., so leaders can find good ideas. Immelt said angry political rhetoric is not helpful and headlines are too focused on finding negative indicators. He said business at GE, one of the world’s largest companies, is improving. Immelt said the country is going to need to adjust, though. The economy since the 1970s has been driven by consumer credit and a misguided notion in building a “lazy” service economy, he said, and manufacturing, with an aim to reduce the trade deficit, is the key. “It was just wrong. It was stupid. It was insane,” Immelt said of the push for a service-based economy. “The future of the economy has to be as an exporter.” He said Fairfield, Conn.-based GE is now finding it profitable to build manufacturing and service centers in the United States rather than overseas, because it is more competitive to do so. More investment is needed in technology innovation, exports need to be rejuvenated, and clean energy and affordable health care need to be given top billing for policymakers, Immelt said. But the corporate leader said he recognizes a polarizing environment in Washington makes it unlikely a national energy policy and other helpful guidance will ever take hold. Instead, he urged local business leaders and government officials in the audience to come up with their own local solutions. “Anger is not a strategy. Anger does not create growth. Only optimism creates growth,” he said. “Be the contrarian. Everyone is mad today. Be happy.”
House Rules "Forayed" Is Definitely a Word September 14, 2010March 18, 2017 THE PARTY OF NO … JUDICIAL CONFIRMATIONS A smaller percentage of President Obama’s nominees has been confirmed at this point in his presidency than in any other presidency in American history. (And yet, with some exceptions, his nominees have been less ideological than those of his predecessors.) So finds the Alliance for Justice. There is a striking contrast between how the Democratic minority worked with President Bush after he “won” in 2000 – with fewer votes than Gore – and how the Republican minority has chosen to work with President Obama after he won – with 10 million more votes than McCain – in 2008. This is just one example. IPHONE SCRABBLE I’d just like to note that FORAYED is a word, and that the iPhone Scrabble app – which was not free – surely should have buttons that allow you to: Override its ignorance of words like FORAYED. Hear definitions of any of its preposterous words (you’d touch an icon to hear the definition and shake the phone violently to reject it). PECTIZES? CALLANT? ACNODES? Really? Allow a “back” function in case you accidentally touch “play” before completing your word (easy to do, especially if the vehicle you’re riding in hits a bump). You were going to make ANAGRAM for 72 points (with the 50-point bonus) but accidentally touched “play” after just AN and got 4 points instead. Allow a “back” function for when you see that the computer had the Q and an I, and you opened up a double triple letter score by placing an unexposed I just below the triple, so it could make QI in both directions for 62 points (it’s no reflection on your IQ if you are unfamiliar with QI) – and, well, you could just as easily have started your word one letter back so the I would not have fallen below the triple. Not to say you should be proud of using the “back” button in this circumstance, but what golfer is not allowed the occasional mulligan? And for heaven’s sake, you’re competing against more computing power than all of NASA had when it put a man on the moon, so give . . . me . . . a . . . break! For $2.99, can’t we expect these four? And what’s the deal with CPU – as the computer calls itself – always allowing its opponent to go first? It’s condescending. Shouldn’t it randomly generate who gets to go first? And how about a $4.99 super platinum deluxe version that gives you the option of selecting one or more of my house rules? Here are my house rules: If you have three of the same letter, which is a total drag, you may – at any time, without waiting your turn, announce that you are going to throw in one, two, or three of them, show them (not that I don’t trust you) . . . and then do so without penalty. Computer Scrable already has an “exchange” icon. If you selected this house rule, it would know not to penalize you if you did indeed have three of the same letter and chose to exchange one, two, or three of them. And of course your opponent would have the same option, so neither of you is disadvantaged. If a blank has been played, whoever has or later picks up the letter it represents may – at any time, without waiting his turn – swap the real letter for the blank. This is rule is almost Solomonic, and without having to dismember the baby. Consider: in regular Scrabble, half the time one player gets both blanks. Well, c’mon! The blank, properly utilized, is huge! How can the blankless player hope to win? But if the blank can come back and forth multiple times, there may wind up being, in effect, three or four or five or six blanks, decreasing the chance that one player will be shut out (and adding an interesting twist of strategy to the game). Feel free to add your own. CHASE QUICK DEPOSIT OMG. JPMorgan Chase now allows you to deposit checks without ever going to the bank. With Quick Deposit, you just use your iPhone’s camera to send Chase a photo of the check, front and back, confirm a few things – and you’re done. I can’t wait for Citi to offer this. (Chase limits this to checks under $1,000; I hope Citi won’t.) THE OFA IPHONE APP And, if you were too busy to try it yesterday, how cool is this? Watch the demo, download the app, hang on to Congress. TINNY I assumed all iPhone 4’s had unpleasant metallic sound quality. Turns out, only mine (and some others) do. My friend Chad had the same issue, brought it in, and got it swapped out at no charge.
Organizing for Your iPhone Liertarians on Breadlines September 13, 2010March 18, 2017 THE CHOICE Forward or back. See how you can help. THE OFA IPHONE APP How cool is this? Watch the demo, download the app, hang on to Congress. AN IMPORTANT DISTINCTION Too much government spending – on what? There’s a distinction between running to deficits to grow the federal payroll and running deficits to let contracts to private industry that will hire workers to fulfill those contracts. Consider some of the possibilities: If I spend money it to invade a country I don’t have to . . . or even just spend it to build war planes the Pentagon doesn’t want . . . almost all would agree that’s “bad” spending, not worth borrowing to do. If I spend it to expand the size of the government payroll, almost all would agree that requires a hard case-by-case look. Do we need the additional employees? Are we paying more than necessary to attract them? Can we afford the borrowing it will take to sustain them? If I spend it (through tax cuts or any other way) in an effort to get people back to their pre-recession spending on things they don’t really need and, in the scheme of things, can’t really afford, most people would agree I am not fundamentally shifting the economy in a healthier direction. But! If I spend it to contract with private industry to build 100,000 windmills (where once we built 100,000 tanks), or to modernize infrastructure, weatherize homes, dredge waterways, seed innovation and rejuvenate our manufacturing sector – well, to me, at least, that’s a very different thing. Either way, the federal budget – and the deficit – are huge. But where the Republican solution is: tax cuts! . . . which means borrowing to fuel consumption we can’t afford . . . the Democratic solution is (broadly speaking): infrastructure! . . . which means borrowing for investments we can’t afford not to make. See . . . THE CHOICE, above. TAXES AND UNCERTAINTY Daniel Stone, MD: “Warren [in his comment Friday] points out is that he’s Libertarian. That’s what people call themselves when they can afford their own healthcare, food, a roof over their head and don’t want to pay for anyone else’s. There are no Libertarians in the bread lines.” ☞ Many of the smartest, most successful (generous!) people I know – for many of whom I have affection and admiration – are libertarians. So I hesitate to post Dr. Stone’s comment. But I think he’s right. Not to start our whole thread again (he says, as he starts his whole thread again), but if this topic interests you, and you unaccountably missed my May 24 post, you’ll find my main argument here. GLDD There’s new management at our dredging company. This analyst is not thrilled with the cost of the severance packages we shareholders are paying for. But my sense is that this is good news, the costs notwithstanding, and the stock is a much better buy or hold here at $4.76 than it is a sell. Tomorrow: The House Rules
Confidence and Taxes And TTTs and AFOPD September 10, 2010March 18, 2017 Yesterday, I suggested DFZ as a company with earnings, a good chunk of cash, and no appreciable debt. Today, two more suggestions – these, compliments of Aristides’ Chris Brown, whose nose for value has served us well. All the usual caveats apply, of course. You could certainly, definitely, absolutely lose money on them in the short run, or even the long run. But these are not swing-for-the-fences all-or-nothing speculations. They are not as reckless as, oh, say, some tiny company based in Gibraltar that has no sales or customers that I’ve been touting for 11 years now. (I won’t embarrass you, B – – – – – – s, but you know who you are.) AFOPD This one, says Chris, “has roughly $4.75 in cash and liquid investments per share, no long-term debt, and a FY11 eps estimate of $0.75 from the one analyst who follows the company, so they are basically trading at 4x forward earnings when you back out the cash.” Meaning that if you subtract its $4.75 in cash from its $8 stock price, it is basically selling around $3, which is not much to pay for 75 cents in earnings. “They just had a 1:5 reverse split, which I think scared some people, [me! me! reverse splits are almost invariably the beginning of the end] but basically I think it was a first step in trying to realize shareholder value, and management seems to be willing to pursue further steps as needed. Last quarter was great, and this quarter figures to be at least as good. The entire fiber optic/optical networking industry seems to be doing really well right now in terms of revenues and earnings, so I guess the biggest potential danger is that you are catching some sort of cyclical peak. But the price is sure right.” I bought some. TTT Chris: “Basically trading at 2x their annual royalty from CLF when you back out the cash they have and their ownership of roughly half of KHDHF. TTT is our largest position. It’s not the best company in the world, but at these prices, I think you’ll be well rewarded once it gets its administrative expenses in order and announces a regular dividend policy. The caveat here is that management is pretty opaque and has not done a good job in the last couple of quarters; but if you read their last quarterly press release, you can see that at least there is some good self-assessment happening.” I bought some of this, too. Indeed, you might think of the three of these – DFZ, TTT, and AFOPD – as a trio of small value stocks that might make sense to own but only with money you can truly afford to lose, or at least not touch, if the going gets rocky, for several years (and even then, you could lose money). TAXES Warren S: “Your paragraph on taxes yesterday truly summarizes the different viewpoints on taxes between the major parties. I am no fan of the Republicans (I re-registered as a Libertarian after years of reading your columns and my disgust with their spending) but have not been swayed to the Democrats due to the tax issue – your column is symptomatic of our different viewpoints. I don’t know whether you have owned a small business. Taxes and uncertainty are major drivers for those of us who do. And both taxes and uncertainty are going up, not down. To minimize this shows either a lack of experience as a business owner or a lack of appreciation for how others may think. Some people do react to these things. For example, my income will go down even if my business were to stay the same (tough in this recession) due to an increase in taxes (capital gains increase, income tax increase, dividend tax increase, and Medicare tax extension/increase in the future). Meanwhile, my expenses will be going up – the insurance carrier for our employee health benefits just told me our premiums will be going up about 20% next year. This combination of events doesn’t give me the confidence to take risks and expand. And I can give you specific examples of projects we have declined (that would have meant increased jobs!) due to this combination of factors and our unwillingness to take the commensurate risk. It is just safer to save/hoard the money. I will grant you that all actions are not driven by taxes. However, to simply disregard the effect that taxes have, particularly combined with the current economic environment and the litany of changes that are creating uncertainty for businesses, does not show an appreciation for the effect they have on many others.” ☞ Helpful perspective. If this is how Warren feels, I can’t argue that he doesn’t. Or that he is alone in feeling this way. Still, I wonder whether the 35% small business health insurance tax credit will help some business owners defray the 20% rate hikes they, too, may face (Warren’s business has too many employees to qualify). And whether some of the other measures the President is asking Congress to pass would help. I’m all for targeted breaks for small business. Even for big business. For example, I think saving GM was a good idea; and it may wind up not having cost the taxpayers a dime. But why retain the tax cuts for income above $250,000 for the hedge fund manager who makes $7 million, or the heiress who receives $700,000 a year in investment income, or the law partner who makes $400,000 or the ballplayer who makes $900,000 or the CEO who makes $4.5 million? Ideally, no one would have to pay any taxes, ever. But were the Clinton/Gore rates really that onerous on the best off? (Or an anyone else, for that matter?) They were pretty good years. I think the uncertainty – which is a real problem just as Warren says – relates less to resetting tax rates for the best off . . . (isn’t it actually pretty certain that sooner or later we can’t afford not to?) . . . than to whether, in fact, the economy will ever recover. And to have confidence in that, it seems to me, you have to believe that, over a decade or two, we really will responsibly tackle the systemic problems we’ve avoided too long, like health care, energy, and education; scaling back to a somewhat more affordable military; renewing our infrastructure; and adjusting entitlements – modestly! – in ways I hope the bipartisan budget deficit commission will recommend. (This is the commission that Republican senators co-sponsored until the President agreed it was a good idea and then voted to kill. He wound up having to establish it by executive order.) I think the Obama Administration is working hard, and with considerable success, to begin bending those curves in the right direction. It has taken an economy in truly frightening free fall and persuaded most people that – as rough as things are – the world won’t end. My own view is that, for all the uncertainty Warren rightly feels, it would be a lot worse if we just went back to the “tax cuts and deregulation will solve all our problems” worldview that got us into this ditch in the first place. Who could have confidence in that?
Plouffe Lays It Out September 9, 2010March 18, 2017 DFZ On the theory that all many families will be able to buy each other for the holidays this year is a nice pair of slippers, I bought some DFZ yesterday. The stock was ‘on sale’ at $10 a share – off 12% – on news of a down quarter. The downdraft may not be over; but a smart friend who follows it thinks that, even in a tough environment, it could be $13 a year or two from now, with a smallish (2.8%) but potentially rising dividend along the way. About $4 a share in cash, virtually no debt; selling under 11 times earnings and 1 times sales. DRYERS GT: ‘When I learned that dryer sheets, or the lint they produce, are one of the best fire-starters available (because they’re saturated with petroleum byproducts), and that some may be carcinogenic, I stopped using them. From there it was a small step toward avoiding the dryer entirely in favor of clotheslines. Sure, as you noted, the towels are a little stiff, but on the other hand, a lot of clothes come out looking almost professionally pressed.’ Stewart Dean: ‘Time back, I would buy gorgeous true Scotch tartan plaid shirts from Lands’ End . . . and after washing and drying them 4-5 times, the colors would be dull and lifeless. I called Lands’ End to complain and got a wise older lady who said the colors were dying from the heat. Huh! So I got a 10-foot length of 1-inch diameter EMT (electrical metallic tubing) from Home Depot for maybe $3, ran some nylon line through it and hung it from a rafter in our attached garage. I washed my shirts in cold water and drip dried them in the garage. Eight years later, all my flannel plaid and Hawaiian aloha shirts are nearly as bright and colorful as ever. I have a little oscillating fan on a 6 hour timer to speed things up and the 10-foot length accommodates up to 20 shirts.’ TAXES Would you give me a break? If you make $250,000 ($200,000 single or married-but-gay), your tax won’t go up, and if you make $350,000, it won’t go up on all $350,000, just on the portion above $250,000. And not by a whole lot, either. So we’re not asking you to leave your family to fight for your country in the jungles of Vietnam (and thank you if you already did that), just – because the nation is in a bit of a crisis – to go back to paying taxes more or less as you did under the wonderfully prosperous Clinton/Gore years. And this notion that, as a result, you, the small businessman earning $350,000, or $800,000, or $2.4 million, won’t hire people for your small business because your tax rate goes back to what it used to be is just nuts. If you need people, because business is good, you’ll hire them to make even more money. If you don’t need them, because business sucks, you wouldn’t hire them even if the tax rate were zero. HOW WE WIN / HOW YOU HELP For those of us who don’t relish handing control of Congress to John Boehner or Mitch McConnell – and by extension to Rush Limbaugh, Glenn Beck, and Sarah Palin – David Plouffe lays out in this quick video how we confound the pundits. We can watch the impending train wreck – or, with a whole lot of others, help avert it.