Amazon’s New Hit Show April 24, 2013April 23, 2013 HERO ABC News interviewed the extremely nice guy who found a terrorist bleeding to death at the bottom of his boat and called 911. So far, I’m with you. Certainly interesting to hear what that must have been like. But for two minutes the chyron beneath the story read, HERO BOAT OWNER BREAKS HIS SILENCE; while the correspondent said, “people are calling you a national hero.” And that is where I just felt like mentioning — no disrespect to this truly nice fellow (who I am certain sought none of the praise), but out of respect to actual heroes, and out of regard for the English language — well . . . really? A hero? For going outside to get some air once the police sounded the all clear, as he described he did? For noticing something funny about the adjustment of his boat cover? For taking a look? For seeing a body? For calling 911? What kind of idiot, seeing a body lying at the bottom of his boat, wouldn’t call 911? For heroism to be invoked, it seems to me, two conditions must be met: first, that something of consequence was attempted and/or achieved for the good of others — be those others the football team (and thus the school or the city it represents) or the man who’s fallen onto the subway tracks or potential polio victims (wasn’t Jonas Salk a hero for coming up with a vaccine?) or all of mankind, more or less, as when Alan Turing broke the Enigma Code and turned the tide of World War II. Which brings me to the second condition: that it’s got to be dangerous. Or difficult. Or both. Running into a burning building? They may say it’s just part of the job — and maybe it is — but if you ask me, the men and women who do it are heroes. Riding a rocket into outer space? Not me, friend. I’m barely brave enough to go to Brooklyn. (Though having done so I can report: Brooklyn’s terrific.) Cracking the Enigma code? Not dangerous but virtually impossible — until one brilliant man, to the benefit of hundreds of millions of others, did it. I expect the lovely guy with the boat would agree. (And while we’re at it, would it make sense to find a word that conveys deep sympathy for and common humanity with — but not automatic heroism on — the victims of tragedies?) ALPHA HOUSE Amazon has started producing TV shows, minus the TV. For example, watch the pilot for Garry Trudeau’s new series, Alpha House. With John Goodman, no less. By Doonesbury’s Garry Trudeau, no less. Free! Funny! Pilot length (no commercials)! Don’t be late for work . . .
Hidden Gems April 23, 2013April 22, 2013 COULD THE WORLD RUN ON RENEWABLES ALONE? So asks Scientific American. Here. And this good stuff doesn’t even take into account the “passive cooling” panels described yesterday that would lower demand significantly, should they prove viable. HOW ABOUT ON STREB ENERGY? STREB is gymnastics meets modern dance meets professional wrestling (the body slams, but from greater heights) meets the circus meet Mechanics 101 — all for $25 a seat, if you can find your way to a hole in the wall in Brooklyn when they’re performing . . . or just scroll down their home page and watch the video. Amazing. COULD IT POWER THIS MALL? It’s a quite small mall . . . constructed in the basement of a Malibu mansion . . . and it has just one occasional customer — Barbra Streisand. It’s a one-man play called Buyer & Cellar that is so brilliantly conceived, written, and performed — with a top ticket price of $55, I think — that you won’t mind the somewhat ratty 99-seat theater. No special interest in Streisand is required, just a sense of humor.
Two Academic Papers April 22, 2013 “NEVER MIND” – PART III I won’t let this go, because, really, it seems kind of important: . . . Bottom line: The foundation of the entire global push for austerity and debt reduction in the last several years has been based on a screwup in a [single academic paper] . . . What’s needed is not Republican austerity. What’s needed is Democratic investment in our future. There’s so much that needs doing; so many able and eager to do it; so much cheap money available to fund their doing it. All that stands in the way are the Republicans who control the House and who — by their unprecedented use of the filibuster — paralyze the Senate. It’s madness — and it was based on a single economic paper that now proves simply to have been bogus. (Sound familiar? Our invasion of Iraq was based on intelligence from a single source we never directly interviewed code-named Curveball.) Is there any chance the Republicans, confronted with this new information, will change course? The fact that you and I both doubt it does not bode well. AND YET THERE’S SO MUCH THAT DOES! For example, this report from Stanford: A Stanford team has designed an entirely new form of cooling panel that works even when the sun is shining. Such a panel could vastly improve the daylight cooling of buildings, cars and other structures by radiating sunlight back into the chilly vacuum of space. . . . [and that] may be able to supply air conditioning without using electricity to poor and off-the-grid areas. . . . Homes and buildings chilled without air conditioners. Car interiors that don’t heat up in the summer sun. Tapping the frigid expanses of outer space to cool the planet. Science fiction, you say? Well, maybe not any more. . . . Their paper describing the device was published March 5 in Nano Letters. . . . Granted, this is based on “science,” which Rush Limbaugh brands one of the “four pillars of deceit” (the others: academia, the media, and government). Really, you should trust only Rush Limbaugh, Sarah Palin, and Joe the Plumber, not physics, Harvard, the New York Times, or the President. Still, I find it pretty thrilling. . . . Radiative cooling has profound advantages over other cooling equipment, such as air conditioners. It is a passive technology. It requires no energy. It has no moving parts. It is easy to maintain. You put it on the roof or the sides of buildings and it starts working immediately. Beyond the commercial implications, Fan and his collaborators foresee a broad potential social impact. Much of the human population on Earth lives in sun-drenched regions huddled around the equator. . . . Too cool for school.
Who Would Want Gold When They Could Have Paper? April 19, 2013April 19, 2013 “NEVER MIND” — PART II Marc Harris: “I’ve read the summation of one of those key critiques of Reinhart-Rogoff, and it’s true that one of the big problems appears to be a spreadsheet-range error. (Whoops! Turns out debt doesn’t ruin economies.) But there appear to be plenty of data issues too. Choosing the starting points and handling spans of successive years appear to be the most serious. I’m not the only one who thinks Reinhart and Rogoff owe it to the rest of us to be candid about their data selection and analysis, especially considering how influential it’s been in pushing politicians toward ‘austerity,’ also known as ‘contractionary’ policy. There should be no surprise that contractionary policy is . . . contractionary.” GOLD Some have asked what to make of the recent sudden drop in the price of GLD — more than 10% — and of course the answer is: I don’t know. Maybe it’s that . . . [Sarcasm ON] “Why would anyone want to own gold when they can own paper money?” [Sarcasm OFF] I’d love to think we’ve seen the top in gold, but for me it remains a sensible hedge. VENEZUELA UPDATE My friend writes . . . “Things have calmed down just a bit — both sides have backed off — we were worried that Capriles and Leopoldo Lopez would be in jail by the end of yesterday, which would have generated a huge commotion and probable bloodshed. It is unlikely that Capriles will be able to turn this around, despite the clarity of fraud; but on the other hand, he has already turned it around. Chavismo will never be the same, and we can anticipate its steady ungracious decline into the future, possibly (hopefully) dramatically so. No complaints whatsoever about Capriles, he has done a magnificent job (indeed, bordering on greatness), but many of us have thought that Leopoldo Lopez (who incidentally has a degree from Harvard’s Kennedy School) was the most qualified person to become the next President. Unfortunately, the government thought so too, and so took steps several years ago to ‘administratively’ disqualify him from holding public office for reasons of ‘corruption,’ something they invent all the time now, but he was the first and most prominent victim of false charges. (This was appealed to and 100% discredited in the OAS Interamerican Court of Human Rights, but the government pays no mind.) They will undoubtedly try to do this to Capriles too, except that he has too much political capital to mess with right now. . . . BTW, both Capriles and Lopez are real heart-throbs-gorgeous human beings! This doesn’t hurt, here in Venezuela, where the women win a disproportionate number of international beauty contests, and physical appearance is highly valued.” LIVE LONG ENOUGH . . . . . . and, oh gosh, you become a hypothesis. (See Basic And Applied Social Psychology 35: 176-190.) Have a great weekend.
Both Their Fundamental Premises Are Simply Wrong April 18, 2013April 18, 2013 But first . . . NO-NONSENSE NEW ZEALAND PARLIAMENTARY MARRIAGE HUMOR Four minutes — here. Really: they’re getting it all over the world. And remember: this is government-issued, civil marriage equality we’re talking about. Religions are still free to withhold the rites of holy matrimony from anyone they want. And now . . . When you think about it, the two central economic premises of our friends on the right are, first, that the rich must be lightly taxed because they are “the job creators” and second that we must cut our deficit drastically to get the economy growing faster. The first premise is simply demolished in this six-minute clip by serial entrepreneur and billionaire Nick Hanauer that I keep linking to. And it turns out there’s a bit of a problem with the second, as well: “NEVER MIND” From Salon: Whoops! Turns out debt doesn’t ruin economies A paper justifying international austerity measures had a couple of mistakes that totally undermine its argument By Alex Pareene Read it here. Basically, they screwed up their Excel spreadsheet and thus arrived at the wrong conclusion. We should be stepping on the gas not the brakes. Jim McElwee: “One wonders how many jobs could have been saved, families stabilized, schools maintained if political and economic activists had demanded peer review of the Reinhart-Rogoff data before reacting in an economy busting fashion.” This is a big deal and won’t take long to read. Infrastructure! Put people to work rebuilding our country! The world is throwing long-term money at us virtually interest free to finance this work. Nice side-benefit: it would get our economy booming again, which itself would lower the deficit as tax receipts rose and safety-net payments fell. What are we waiting for?
Up: (a) Cheering (b) Not Mucking It April 17, 2013April 17, 2013 PERSPECTIVE From Matt Ball, who always sends me the best stuff: “To cheer you up.” EVEN BROADER PERSPECTIVE Our planet in context. Let’s not muck it up. MORE FROM VENEZUELA My friend continues: Many of the foreign electoral observers, plus the USA, EU, Spain, France, England, Chile, Columbia etc etc have all encouraged a recount. The USA was one among many, and not particularly emphatic that I saw. Acting President Maduro responded by brazenly threatening to expropriate Spanish companies plus take various diplomatic and commercial measures against other countries. More ironies of life: The head of the electoral commission is strongly refusing to recount the votes, which is of course increasing the suspicion of fraud, and she has cited Bush v Gore in 2000 as an example of a close election where a recount was not needed. (At that time, the populist Chavez government correctly lambasted the USA for its democratic failings.) Acting President Maduro was a leftist student radical in his youth, known for his confrontational style at demonstrations. Yesterday, he warned the thousands and thousands of students demonstrating for a recount all across the country that he would respond with the full power of the state if necessary.
So Sad April 16, 2013April 16, 2013 Ugh, ugh, ugh. Words fail. But these were written before the bombs went off, so — meaning no disrespect to my beloved Boston, or her victims — I guess I’ll let them go live as scheduled. Yet . . . such a sad day. Utterly senseless. Come back and read tomorrow if, as would be understandable, just not in the mood today. # EQUALLY WEIGHTED FUNDS Mark Coppola: “I followed Less Antman’s advice from your January 11, 2011, column and invested in EWEM and EWEF. EWEF and EWAC have both recently closed and EWEM is on ETF Deathwatch, all due to low assets under management. I was wondering if there were other equal-weight alternatives in the international market that are worthy of consideration to replace EWEF and (possibly) EWEM?” ETF is short for Exchange-Traded Fund, and the EW in each of those symbols stands for “equally weighted.” As readers of my book know (in no small part thanks to Less), most index funds weight their holdings by market cap — so they own a ton of Exxon or Apple and relatively little E-Trade or Airgas. Equally-weighted funds would own (say) $1 million worth of each. Less responds: “I have to confess surprise at the lack of interest in international versions of the equally-weighted S&P 500 index ETF, RSP. Since its inception in 2003, RSP has produced an annualized return of 10.3% vs the 7.6% return of SPY, even though these two funds invest in the exact same 500 stocks, only differing in the weighting scheme. Unlike all the academic theories that stopped working as soon as an investment vehicle to exploit the theory was created, this theory has worked exactly as predicted, even after all expenses of trading and management, yet it still hasn’t caught fire (although RSP itself has over $4 billion in assets). . . . Nonetheless, the lack of interest is clear. . . . The good news is that virtually any alternative weighting scheme for an index should benefit from the “noisy market hypothesis” on which I based my suggestion. [Not familiar with that hypothesis? See page 166. — A.T.] This includes the fundamentally-weighted indexes of WisdomTree, PowerShares, and Schwab, any of which could serve as substitutes for the equal weighting no longer available internationally. My personal favorites, however, are the minimum volatility offerings of iShares, including EFAV, the iShares MSCI EAFE Minimum Volatility ETF (expense ratio 0.2%) and EEMV, the iShares MSCI Emerging Markets Minimum Volatility ETF (expense ratio 0.25%). These weren’t available when we made our bet, so we might have to clone them to the decedents in order to figure out who ultimately wins the bet.” REPORT FROM VENEZUELA An American college chum who has been doing nonprofit work in Venezuela for what must be going on four decades by now writes of this past weekend’s election: As I write this, I can barely hear myself think, owing to the loud racket of clanging pots and pans from thousands and thousands of windows and apartments across the land, overwhelmingly so in the major cities like Caracas, and in every little provincial city like our own, in a national protest owing to the refusal of the electoral commission to count the votes. The widespread assumption here is that there was just enough fraud with the silent acceptance and perhaps direct complicity of the strongly-biased government electoral commission, in order to squeak through a marginal victory and keep themselves (the current government) in power. The opposition candidate is demanding a recount and the streets are indignant with the sense of fraud. There are protests all over the country. This morning, a forum of international election observers, as well as the head of the OAS, stated that the presumed winner (Maduro) should NOT be inaugurated today until a full paper recount is done. The electoral commission has refused to do the recount (increasing the suspicion that the opposition did indeed win), Maduro was hurriedly proclaimed president this afternoon, and there are many denouncements that complicit military elements are already burning and otherwise disposing of boxes of the ballots, saying the election is over. The opposition candidate Capriles and his team did a simply phenomenal job, reducing the enormous government favoritism from 20+% following the death of the iconic Chavez (a completely over-rated but supposedly charismatic leader) and his chavismo movement, to basically ZERO in an extremely short campaign frame of one month. The government presumably won by 1+%, but they actually may have lost by slightly more than that. The government’s formidable vote-getting machine has always been significantly driven by intimidation, direct threats and bribery — this I can substantiate both in my personal experience and nationally. In contrast, each opposition vote was cast by an individual acting on his/her own with an underlying measure of fear in defiance of an increasingly autocratic state. I think it is fair to say that with this election, the back of “chavismo” has been broken. Chavismo as a movement can no longer count on a majority to win elections. In strong contrast to the past, the current Chavismo government is now borderline illegitimate, and no longer has the support of half or more of the population. This is an enormous step forward, but not enough — the opposition should be assuming power TODAY! The opposition candidate Capriles is demonstrating real leadership, extremely popular but with no assurance of victory in an extremely unfair scenario, carrying forth 100% at real personal risk. He has now built a strong political coalition that is the first serious alternative to Chavismo in fifteen years, and bodes well for the imminent future. What’s next: Many analysts doubt that the “elected” candidate Maduro, who is neither charismatic, nor has proven particularly competent to date, will be able to sustain this government, much less keep the highly diversified and conflicted Chavismo movement within his fold. The country faces enormous concrete problems (I mean, MAJOR) that are going to provoke considerable instability quite soon. It is not clear that Maduro will be able to keep it together, to say the least. (Some people have actually argued that it is better that Maduro inherit these problems produced by his own ideology, and then collapse on his own, rather than that Capriles have to face this – much as Obama had to resolve at considerable political cost the enormous problems that Bush left.) What is clear to me is that this is probably as non-trivial an electoral event as I have been witness to in my lifetime, like Germany tottering indecisively before Hitler in the 1930’s — one of those historical moments when a thin remaining margin of democracy faces the whole military and governmental apparatus of the autocratic state. If democracy loses, we can soon expect the few remaining independent media outlets to succumb, and the free press will continue fading away, so that even the basic information available in this brief report will not be easily available.
13.8% Versus 4.47% April 15, 2013April 14, 2013 4868 AND 1040ES You’ll probably need this today to file for an automatic six-month extension on your taxes (but not an extension on any tax you may owe, which should accompany the form) . . . and you may need this to send in your first 2013 quarterly estimated tax payment. In addition to being “the price we pay for civilization,” by the way, taxes are the way we finance our national defense and leadership role in the world. When did it become patriotic not proudly to pony up? They’re the way we built the railroads and the Interstates, the way we financed and won World War II, the way we put a man on the moon and lay the underpinnings of the Internet. When did it become patriotic not to want to be “number #1”? (Shouting it and being it, a purist might note, are two different things.) Taxes are also the way we pay for things like subsistence and health care for our elderly. What good son or daughter would deny them that? Taxes are the way we pay interest on the National Debt. What proud American would see us default on that debt — even if so much of it was racked up under Reagan, Bush, and Bush to finance over-generous tax cuts for the rich and a disastrous war of choice we opposed? A little complaining is fun, human nature, and part of our birthright. I whine, moan, and chafe like anyone else. But . . . enough already? 25 CENTS VERSUS $1.79 So if you missed Friday, because it went up Saturday (what’s wrong with you?), you missed Dennis King questioning SodaStream’s consumer value. He buys Diet Coke for 29 cents a can and figures SodaStream’s version actually costs more. I am agnostic — I just like the diet pink grapefruit soda and the idea of saving the environment — but the SodaStream website claims a 25-cent cost “per can” which, if true, really ain’t bad. And compare the claimed 25-cent cost of a liter of soda with the liter of Canada Dry my supermarket sells for $1.79. I also note that, for the newer SodaStreams like mine, you can get a CO2 cartridge for $50 that’s rated to provide 130 liters of soda instead of the standard 60 liters for $30. The math far exceeds my computational skills, but it seems to me this could bring the per-liter cost down . . . although what really brings it down is that after the cartridge is empty, you can exchange it for a full one at Wal-Mart or Staples or wherever for about half price. 13.8% A YEAR VERSUS 4.47% You also would have missed Patrick Johnson’s updated spreadsheet, bringing results up all the way to last week, and bumping the average annualized return up a hair from 14.98% to 15.10%. Daniel H: “The approach of calculating the compound rate of return by averaging the returns across the average holding periods can significantly skew the results since it can overweight or underweight each individual investment’s holding period. Fortunately, Excel gives us an easy tool to generate the internal rate of return (IRR) from a series of cash flows. On his spreadsheet, just model the outflow by a -1000 value and the resulting inflow with the corresponding final period date. I just added a column of exit dates using Patrick’s holding period added to the initial date. My stab at it using Excel’s XIRR function indicates an internal rate of return of a still very impressive 13.8%. This is the interest rate at which, if you borrowed the $1000 for each individual investment, you would have broken even at the end.” ☞ Here’s Daniel’s spreadsheet. (The “closing date” column he added is column E, which may be hidden as you view it. If you know Excel, just unhide it.) At the bottom, you’ll see Patrick’s 15.10% number, but also Danbiel’s 13.8% IRR. Meanwhile, as has been mentioned, It would be good to have a number for the annualized rate of return from, say, the S&P 500 over those same years, by way of comparison. According to this, that index would have returned 4.47%, annualized, over the 15 years 1998 through 2012, which may be a pretty close approximation. If so, $1,000 invested in the S&P for those 15 years would have grown to $1,927 — but to $6,952 at 13.8%. Which is to say appreciation of $5,952 versus $927. Here’s the blurb, just FYI.
14.98% – Part III . . . and pushback on fizz April 13, 2013April 14, 2013 UPDATED RESULTS By popular demand, Patrick somehow updated the 179 recommendations that run through last May, so his spreadsheet now runs through last week . . . Patrick Johnson: “Here it is — 11 good months for both the market and your picks. Now up to 195 recommendations by my count. Average return of 77.36%, average holding period up slightly to 4.10 years. Compounded return 15.10% — $195,000 invested became $345,861.” ☞ There will doubtless be further tweaks — and, if we’re lucky, further occasional updates. As previously noted, here and here, there are various grains of salt with which these results should be taken. Daniel H.: “Kudos to Patrick! Wow, that was a lot of work. I have to take a nap just thinking about it.” SODASTREAM Dennis King: “You mention the economic benefits of using SodaStream. I disagree with your analysis – at least for soft drinks. I rarely pay more than 99 cents for a 2 liter Diet Coke and $3.50 for a Twelve Pak of Diet coke cans. .29 cents per can. And unless you are just drinking fizzy water, you do not mention the cost of the other ingredients that go into making a carbonated soft drink. Let’s see: a 60 Liter Soda Stream Co2 cartridge — $30 at Target. Cola Syrup (enough to make 60 liters) — $67 at Target. A total of $97 for 60 Liters of cola. Versus $30, for 30 two-liter bottles, at my grocery store (on sale) or beverage store (normal price). Or about $50 for the equivalent in cans. From where I stand, it looks like “buying in” to this product will double or triple my cost of soft drinks. Around here, plastic and aluminum cans are recycled as well. A nickel (refundable) deposit per can or bottle gets a lot of them recycled. So, I am not sure of the environmental benefit either. I realize that prices are often MUCH higher in larger metro areas, but even at double the cost, it seams as if SodaStream just does not make economic sense.” ☞ You mean the CO2 cartridge has to be replaced? <LOL> I may have to rethink the economics. But I do think that not-producing-and-transporting billions of cans and bottles has environmental advantages over producing and recycling them. Stewart Dean: “Sorry to be a wet blanket about SodaStream, but [not everyone is thrilled by the joint Palestinian-Israeli factory clip you linked to] — see here. And as to why the SuperBowl ad was banned, see here. And what about Fizzgiz?” ☞ Well, Fizzgiz looks a bit awkward compared to SodaStream; and the SuperBowl link — while interesting — doesn’t strike me as a knock on SodaStream; and controversy over the disputed territories . . . well, I still found that clip persuasive. I don’t claim to be an expert in any of this, though I can tell you the diet pink grapefruit soda is good — I just finished my first liter. Bill Schwartz: “Love the SodaStream, have had it for years. Use it constantly (we love seltzer, have never used it for soda). Yes, I replace the CO2 cartridges frequently. It’s a snap; they just screw on and off. There are now many local stores where you can do the exchanges. That’s one of the big controversies about the company. Absolutely ruthless from what I’ve read in crushing anyone else who wants to refill the cylinders. The $$$ is definitely in those refills, plus the soda flavorings I imagine. Other than the (to me) iffy politics, my other lingering concern is the healthfulness of drinking large amounts of carbonated water, which is acidic. Just ordered some pH strips to test and experiment. I believe a pinch of salt should be sufficient to return it neutral pH. Not positive if it matters, but many smart people, including Ray Kurzweil, are very wary of consuming too much acidic water (and maybe food). Too much alkaline water, as some water filters make, probably not so good either, since we really want our stomachs to be very acidic when we eat, as Dr. David Brownstein for one has pointed out. Everything is complicated, even water apparently, if you make the mistake of looking too closely :-).”
Friday April 12, 2013 Yes it is. But one thing led to another. Please check back later . . . or, if you get this by email (subscribe at right, midway down the page), I hope to get it out by the end of the day.