Year: 2017

Here’s the Warren Buffett story.  The kinds of stocks I own are mostly “special situations” — but make no mistake: in a bear market, everything goes down.  So it’s arguably a mistake to hold stocks in advance of a bear market (except: what if you’re years early in selling, plus the taxes you might incur?).  But it’s more certainly a mistake, and a more common one at that, to give up — or panic — at — or near — the eventual bottom, before the thus-far-inevitable recovery.

Here’s what Stephen Colbert had to say about Las Vegas.  I have the feeling that he — or Jimmy Kimmel or Jon Stewart or Jane Pauley or Oprah — or you, esteemed reader — would make a far better president than the one the Russians selected for us.

So Saudi women are going to be able to drive — a small but hopeful sign.

Islam is at war with itself.  It is desperately in the world’s interest to have the forces of modernization win.

With that in mind, I commend this remarkable 6-minute clip — Shiite clergyman calls on Muslims to imitate Jews, who “were killed and burned” by the Nazis, but emerged to win “respect of the world through science.”

“If it’s real,” I wrote Parvez Sharma (A Sinner In Mecca), “how do we get every Muslim in the world to see it?”

He did some checking and reported that yes, this man is a Shia cleric and, yes, the clip has been subtitled accurately. But no it’s not gone viral.

To me, at least, it’s beyond fascinating.  Does one of you know how to upload it to YouTube?

Tikkun Olam.

As patriotic Americans increasingly focus on the effective attack we and much of the rest of the world have  been — and are — under from the murderous kleptocrat Vladimir Putin and the successor to the KGB, whence he came . . . an attack our unstable, incompetent, vulgar, constantly-lying President seems almost to encourage . . . I hope Republicans in Congress will begin to consider removing him.  They can, after all, interpret “treason” — let alone “misdemeanors” and “emoluments” — as they see fit.

How long will they tolerate this?  We’re at war — and we’re losing.

It seems quite possible that more Americans will die in Puerto Rico in the aftermath of Maria than died on 9/11.  It’s too early to know; one certainly hopes this will not be the case; but it’s hard to live without food, water, or — in some cases — medicine and medical care.

One difference is that 9/11 came, quite literally out of the blue– apart from Bin Laden Determined To Strike In U.S. and other urgent general warnings the President had — while Maria was predicted for all the world to see days in advance.

Where were the contingency plans in case it did hit?  Did anyone at FEMA think Puerto Rico’s electrical grid could withstand a category 4 or 5 hurricane?  Why were ships and helicopters and supplies not pre-positioned to arrive within two days rather than three weeks?

Are there not such plans on the shelf for the inevitable and long-overdue Southern and Northern California quakes?  For the even longer-overdue and potentially more devastating Cascadia quake?  For outbreaks of various diseases?  For a suitcase nuke?  For cyber attacks?

And don’t quite a few of these contingency plans involve the Pentagon in some way?

If not — if such contingency plans don’t already exist — wouldn’t they be a good idea?

I’m not saying a President Hillary Clinton would not also have dropped the ball on Puerto Rico, bragging how “fantastic” things are going there and attacking Puerto Ricans who disagree.  But somehow I suspect she would not.  I suspect she would have known it took 20,000 troops to assist with Hurricane Andrew in 1992 — impacting just one-tenth as many Americans.

But elections have consequences, as Vladimir Putin clearly knows.

Here is David Remnick’s extensive debrief with Hillary, in the New Yorker.  How is she dealing with all this?

And here, also in the New Yorker, Jeffrey Toobin’s brief review of Justice Gorsuch. 

. . . In his first fifteen cases on the Court, he joined Thomas, the most right-wing Justice, every time—and he even joined all of Thomas’s concurring opinions. . . .

I would just add that when Bush won the presidency with fewer votes than Gore, he got to add Roberts and Alito to the Court, putting Clarence Thomas (his dad’s pick), in the majority.  That led to Citizen’s United and McCutcheon, which gave the rich and powerful more electoral clout; and to Shelby County, gutting the Voting Rights Act, which gave the little guy less.

So there was the loathsome Mitch McConnell, who (as you’ll read in the Remnick piece) would not allow a bipartisan acknowledgement of the ongoing Russian attack (might the voters have had a right to know it was real?) . . . and who had made President Obama’s failure his party’s number one goal . . . saying that, no, President Obama could not fill Justice Scalia’s seat, as the Constitution prescribed.

Though a majority of voters had chosen Obama in 2008 and 2012, it would only be fair, he said, to wait nearly a year to see whether the voters still leaned toward having a Democrat fill that seat.  Which they did by a margin of millions of votes — even with the Russian attacks and Comey’s bizarre choice to suppress acknowledgement of that investigation “so close to an election” while announcing the “email” investigation.

They wanted a Justice like Merrick Garland, a moderate progressive.

Instead, we got another Clarence Thomas.

It is to weep.

McConnell and Trump deserve each other.

America, this wonderful country of ours, deserves neither.

And no, I don’t mean tonight’s premier of the reconstituted “Will and Grace”, though there’s that, too.

I mean Rachel Maddow’s first segment from last night, that begins with Russia (presumably) blowing up Ukraine’s arsenals — so their army will have no ammunition — and then tells you more about their cyber attack on our election — and lots of other elections — and our society — and even a small town in Idaho — than any of us would ever have imagined.  (The Idaho part comes in the following segment.)  Headlined, “Expansionist Russia promotes division everywhere else,” it must have Ronald Reagan spinning in his grave.  If you are any kind of red-blooded American, you simply have to watch to see how the Russians are attacking — and beating — us.  And pass the link on to everyone you know, in every way you know how.

Revlon, suggested here in May at $20, has suddenly jumped to $27.50 as I type this, and a couple of you have wondered why.  I, of course, don’t know.  But presumably it’s on news that its largest shareholder, Ron Perlman, has been adding to his stake, most recently buying 106,784 shares at an average price of $20.56.

Friend of this page Bryan Norcross writes in the Washington Post:

All Americans should be horrified by the depth of the tragedy in Puerto Rico. While we can’t forget our friends who are suffering in Texas and Florida — especially in the Keys — the Puerto Rican tragedy is on a different scale.

. . . [The] apocalyptic destruction combined with large-scale suffering remind[s] me of the scenes of devastation and isolation I saw after Hurricane Andrew demolished the suburbs south of Miami in August 1992.  . . . In the end, the U.S. Army was required to bring order to the madness.

. . .  civilian systems for dealing with a major disaster cannot handle a cataclysm, no matter the skill of the administrators or the intensity of the effort.

. . . The U.S. military is increasingly becoming involved in the Puerto Rican response effort, which is a good sign, but the comparisons with the eventual Andrew response are stark. The Andrew catastrophe zone was, perhaps, 250 square miles and involved about 350,000 people — closer to 100,000 after those that could resettle elsewhere did. It took about 20,000 troops and military-support personnel to provide security, housing, communications, and other critical services after Andrew. They were still operating the Homestead tent city eight months after the storm.

Puerto Rico is about 3,500 square miles and home to about 3.4 million people. Having seen firsthand the crisis that developed in the first few weeks after Andrew, and the seeming endlessness of the 1992 disaster zone, it is impossible for me to imagine the scope of the calamity engulfing Puerto Rico. And, having learned that only the military has the ability to deliver men, materiel, organization and leadership in the time frame required, I am left to wonder why that Andrew lesson wasn’t applied to this catastrophic situation, which is at least an order of magnitude larger.

FEMA should have planned for this possible, foreseeable — and now entirely real — catastrophe the week before Maria hit, not the week after.  If 20,000 troops were required in Homestead, a much larger force is required in Puerto Rico.

And what an opportunity to put Puerto Rican American citizens to work building modern, resilient infrastructure for the next 100 years — an effort that in itself would kick start their troubled economy . . . and for far less than we’ve spent trying to build Iraq.

There’s no column today because (a) there’s so much to watch from yesterday’s Oslo Freedom Forum post, you need the extra time; (b) the dog ate my homework.

The dog, in this case, was a book party celebrating publication of Eva Moskowitz’s memoir, which you should buy here.

There are now 46 Success Academy schools in the New York area serving 15,500 scholars.  If  they were all bunched together as a single school district, they would be the 7th largest in the state, out of nearly 700.  Populated mainly by kids of color from low-income households who are “selected” by lottery, the Success Academy district ranks, out of all nearly 700 . . . are you ready? . . . #1 in student achievement.

As I’ve written so many times before, it is a thrilling story that points the way toward breaking the cycle of poverty, crime and despair.  Great for those 15,500 kids — and their kids — but also for society as a whole.  Imagine the social, civic, and fiscal/economic impact.

Yet boy is it ever hard to get entrenched interests to accept change and embrace success, as Eva recounts here.

Spread the word.  Some charter schools suck.  Many are mediocre.  But when you find a public-school formula that works so spectacularly well?  And has been proven in not just one or two schools for just one or two years, but now 46, some of them for a decade?

C’mon, people!

Speaking of embracing a good idea, have I ever mentioned WheelTug?  (Ahem.)  Several of you forwarded this article (“British Airways Using Remote-controlled, Electric Tugs At Heathrow / Roll-out across entire narrowbody network planned”).  It’s good to see interest in improved ground operations,  but Mototok, as the tugs are called, cannot do what WheelTug will: allow the pilot to back out without waiting for and connecting to and then disconnecting from, a tug; or “twist” at the gate to allow boarding and deplaning from both front AND read rear doors.  So the all-important time savings WheelTug should provide — meaningfully adding capacity to airlines and airports without their having to buy a single new plane, hire a single new crew, or build a single new terminal — cannot be matched, or even approached, really, by Mototok.  We inch forward.

There having not been a column today (Tuesday), this must be tomorrow’s!  Have a great day.

But first: guess what?  Jared Kushner — and others — have used private email accounts to conduct official White House business.

Last week I attended a bit of the Oslo Freedom Forum — in New York — founded by a young libertarian friend, Thor Halvorssen.

You might not guess from his name that he is Venezuelan — related, several family tree branches back, to Simón Bolívar (a revolutionary far more in the mold of Thomas Jefferson than of Hugo Chávez, as he recounts here) . . . or that his mother was shot in a crowd of demonstrators by Chávez forces (relegated thereafter to a wheelchair) . . . or that his cousin Leopoldo would be Venezuela’s president today, rather than a prisoner, if the country were free.

But Venezuela is just one of the many foci of the Oslo Freedom Forum, which seeks to confront oppression wherever it is found — from Iran to North Korea to China to Russia, and beyond.

Chess champion and Russian dissident Garry Kasparov is its chair.Read a summary of his thoughts and of Oslo’s day in New York here, in the National Review.

If it piques your interest, save the registration fee and expense of a trip to New York and travel back a week in time to watch much of it here.  Session One.  Then Session Two. Then Session Three.

Freedom is precious.  Putin: one of its most effective, ruthless enemies.  One speaker vowed:

“You will not see us run. You will not see us hide. You will not see us give up.” Russian democrats do not want outside help, he says. “We have to achieve democracy on our own.” But he does ask for help in this sense: “I say to you in the West, stay true to your values. Stop supporting Putin.” Stop making it easy for him. Stop welcoming him into the circle of legitimate leaders.

I wonder what the House “Freedom Caucus” members make of Trump’s great affinity for Putin / Lavrov / et al.  (“What, you think our country’s so innocent?”)  Should they not be the first people calling for him to be gone?

HEALTH CARE:

According to Politico, Jimmy Kimmel — not Senator Cassidy — is right about his health care bill.  It is a disaster.  Read or watch.

Until we get a sensible single-payer system like the rest of the First World countries on earth, why not just make two changes to the Affordable Care Act?  (1) Add a further 2% to the tax on investment income above $1 million — which would still leave the rate lower than what we had when Ronald Reagan left office — using that additional cash to lower co-pays and deductibles.  (2) Require Medicare and Medicaid to negotiate prescription drug prices (which they are currently prohibited from doing).

HURRICANES:

According to Neil DeGrasse Tyson, in six minutes with Fareed Zakaria, we are in deep trouble.  Read or watch.

Only the Republicans don’t seem to get it.  But that matters, because at the moment they control all three branches of government.

AND, JUST TO ADD TO YOUR WEEKEND FUN:

According to this completely riveting story in the New Yorker, “An earthquake will destroy a sizable portion of the coastal Northwest . . . the worst natural disaster in the history of the continent. The question is when.”  Read (too scary to watch).

I have no prescription for this one, except to take every day as a total, miraculous gift.

But first: if you have plans to be in New York at some point, run don’t walk to Sweeney Todd.  If you’re a long time fan of the show, I need say no more: you will love it.  If you don’t know Stephen Sondheim’s demon barber of Fleet Street (really?), that’s fine: listen to the score once and you will be hooked for life.  Then come see it brought to life (and death) at the Barrow Street Theater.

There is an option to have a meat pie first.  You don’t need to bother with that.  If you’re hungry or thirsty, maybe get a bite or a drink first at The Spaniard, 100 yards away.

I have no stake in the show or the bar.

If you want to enrich me, see Spamilton.  (“Convulsively funny.” — New York Times)

It always worries me when one of my stocks goes up, let alone two — have we finally reached the top of this bull market? — but it’s still a nice problem to have.  Yesterday, I mentioned the quadruple we’ve gotten in PRMRF.  I sold some, because I don’t see how oil prices get a lot stronger as the world moves ever faster toward solar.  But clearly some people think the stock has further to run — e.g., whoever bought the shares I sold.  I’m in no rush to sell them all.

Meanwhile, FANH, our Chinese automobile insurance company — that traded under the symbol CISG when I first mentioned it nearly four years ago at $5.40 and again two years ago at $5.76 — seems finally to be hitting its stride, closing yesterday at $13.48.  I asked my smart friend, who owns a ton of it, what he thought and — for what it’s worth — he said he’s not selling.  He sees a bright future that could send the stock “much higher.”  Who knows?

The real question, of course, is whether Borealis will ever pay off for us.  I don’t know that either, but here is a link to last week’s IATA conference in Panama and — of particular interest — WheelTug’s presentation.  Some of the acronyms may be opaque, but if you’ve been following this saga for the last umpty-ump years, you’ll get the gist.  And near the end you’ll see the acronym EIS, which stands for Entry Into Service — which they show as “early 2019.”  Whether they will hit that target “on time” — or ever — is an open question.  But it’s clear from the presentation, and their inclusion in yet another IATA conference, that this is a serious effort, involving serious people.

(The WheelTug presenter, Jan Vana, integrated the Czech air force into NATO, among other things.  And I love that some years ago he took a job — in the winter, as I recall — as a ground guy at the Prague airport, with those plastic ear muffs in the freezing wind, guiding planes into the gate and seeing that the chucks (chocks? blocks?) were placed properly and the tugs connected to the nose-wheel struts — “three months?” I asked him . . . and he said, basically, “I need to know every detail of how this works, at the most granular level.”)

A bet on WheelTug’s controlling shareholder, Borealis (symbol: BOREF), may never pan out.  But the business case for aircraft that can maneuver with their little electric motor is compelling; and the company seems to be driving doggedly toward that goal.  If it ultimately fails for some reason, BOREF could hit zero.  If it succeeds, it’s not hard to imagine a $500 million valuation ($100 a share) or even several times that high.  So I hold on.

As always, buy only with money you can truly afford to lose.  And using “limit” orders — the stock is very thinly traded.

Index funds: boring and tax efficient.

You know who is never boring?  And who famously beats index funds by a mile?

Warren Buffett.

So have a little fun reading about the ten-year $1 million bet he made — and has just won.  (Namely, that 0ver 10 years a cheap index fund — with no active management at all — would outperform any basket of five hedge funds, however brilliant their highly paid managers.)

It’s rich. As is Warren.  And as are those hedge fund managers, even though they added no value.  Subtracted value, actually.

(And we haven’t even talked about tax efficiency yet.  In a taxable account, that gives index funds an even greater edge over hedge funds.)

That said, I’m an investor in one tiny hedge fund in which I have high confidence and that has, as some do, at least in hindsight, consistently outperformed.

And I don’t write off the possibility of finding undervalued stocks.  I’ve suggested lots of losers here over the years; and others that may not ultimately be losers but surely, sorely try one’s patience.  But some work out.

For example, as 2015 drew to a close, I apologized for the losers, but asked: “would this be a time to buy a little GLDD?  A little PRMRF?  A little BOREF?  Each under $5?  Check back with me in a year or two and we’ll know.”

Well, as of last night, BOREF and GLDD were essentially unchanged, but PRMRF had quadrupled.  (And you would be forgiven if you now took some or all your gain on that one, as the at least the first 400% upside has now been realized.)  I hang on to BOREF and GLDD, and to SPRT and GEC and HD and others.  Hope springs eternal.  (And in the case of HD, has panned out but may have further to pan.)