World’s Two Greatest Leaders December 30, 2014December 26, 2014 LOVE THIS POPE If you missed it, here’s his Christmas guidance to his cardinals. Loosely translated from the Latin, and summarized: “Shape up, guys. Do what Jesus would do.” Fifteen areas where they really need to get back to basics. Amazing. LOVE THIS PRESIDENT As the economic numbers get revised upward, and despite SO many Republican attempts to impede the economy — blocking the infrastructure bill and the minimum wage hike and the bi-partisan Senate immigration bill, all three of which economists agree would have boosted the economy and thereby improved our lives — it’s just phenomenal, really, to see how far we’ve come from the brink of Depression President Bush handed Barack Obama just six years ago. If you missed it, here’s his year-end news conference. And here’s Chris Hayes’s montage of clips on Republicans predicting stuff — with complete certainty — that just proved to be so wrong. (Because you know, “by any standard,” in Mitch McConnell’s still fairly recent prepared remarks, President Obama “has been a disaster for America” — stock market at record highs, health care inflation at record lows, deficit slashed, Debt growing slower than GDP, more private sector jobs created in six years than under 12 years of the two Bushes combined, gas prices down, housing start healthy, Detroit booming — just one disaster after another.) And by the way? Benghazi scandal was not a scandal after all. (“A two-year investigation by the Republican-controlled House Intelligence Committee has found . . . no wrongdoing by Obama administration appointees.”) And the President was born in America. And John Kerry really was a war hero. And Al Gore never said he invented the Internet. And John McCain really did choose Sarah Palin to lead the world in the event his presidency were cut short. And it just makes me crazy that TVs in so many airline lounges around the country are set permanently to FOX News. We need to speak up more: CHANGE THE CHANNEL. Oh, God — see? You got me all worked up again.
Turning $9.32 Into $15,600 December 29, 2014December 24, 2014 Ryan T: “I dumped all of our Vanguard S&P 500 fund (VFINX) three or four years ago when I bought your book and, on your advice, switched to the Rydex Equal Weight S&P 500 fund (RSP). Over those years, Rydex is up 10% over Vanguard (74% to 64%). That’s pretty significant. Am I missing something? I know the expense ratio is higher for Rydex, but other than that it seems like a no-brainer.” ☞ The only things you may be missing are that the higher expense ratio (40 hundredths of a percent versus 9) is already accounted for in the result (the results are net of expenses) and that 10% is more than 10% (in that a 74% gain exceeds a 64% gain by 15.6%). If you’re up $100,000, that’s $15,600 extra — less the cost of my book, currently $9.81*. A comparison of the two funds can be developed here. (Use the “compare” tab and then click “clear all” and then add VFINX.) There’s no magic to this. I’ve long recommended low-expense index funds for that portion of your wealth you’d like exposed to the stock market. As argued in my book, index funds are like a horse with a 10- or 20-pound jockey, compared with actively-managed funds that run with 200 pounds (and often a lot more) on their back. (In addition to the explicit fees, they incur higher transaction costs by trading in and out and expose you to a higher tax bill if held outside a tax-sheltered account.) Over the long run, a 200-pound jockey has to be one heck of a talent to beat his emaciated 10- or 20-pound competition. The wrinkle of equally-weighted index funds like RSP is that they will tend to own less of a stock that’s been bid up to the moon and more of a stock that’s currently out of favor. There’s no guarantee this will give you enough of an edge to justify the heavier (40-pound) jockey, let alone every single year. But over long periods of time it has and likely will continue to. (Why Vanguard doesn’t offer one of these with one of its trade-mark ultra-light jockeys, I don’t know.) *Or $9.32 instantly delivered to your phone’s Kindle app. # NORTH KOREA Not crazy about what they did to SONY? Click here to help “hack them back” — a novel approach. HILLARY Responding to last week’s Bush V. Clinton post . . . George L: “I don’t like the concept of dynastic politics. I believe it’s fundamentally dangerous for our democracy. What does it say that our system can only elevate super insiders?” ☞ Our system can’t ONLY elevate super insiders – our current president is proof of that, as were the two previous Democratic presidents, Carter and Clinton, both pretty obscure before they won. So Hillary would actually be the first Democratic super insider in quite a while. And hardly part of a dynasty — her dad was a textile wholesaler descended from coal miners; her mother’s dad, a fireman.
Interpreting The Best Little Book In The World December 27, 2014December 26, 2014 There are popes and there are popes. A lot of people don’t like the current one, I imagine, with his emphasis on helping the poor, eschewing fine raiments, restoring relations with Cuba — sounds almost socialist, if you ask me. Where’s the part about tax cuts for the rich and opposing the minimum wage? Similarly, there are evangelical Christians and there are evangelical Christians. Interestingly, in the view of a couple of professors who’ve analyzed the data, “White Evangelical Christians are the group least likely to support politicians or policies that reflect the actual teachings of Jesus.” One of my favorite evangelical Christians is Jim Wallis, founder of Sojourners and a leading Red-Letter Christian. Before I get to the point, I have to re-tell you my favorite story. It was five years ago. I’d just gotten the Google app — a new thing back then — for my iPhone, and had given a little talk referring to it. “Before, if I needed to settle a bet at dinner, I’d reach for my iPhone, go to the Safari web browser, pull up Google, and type in what I needed. Worked reasonably well. But now I just jerk it up to my ear, say what I want, and — voila!” Jim came up afterward and asked me what it was exactly I’d been talking about. I showed him my iPhone as I touched the Google icon, then jerked the phone up to my ear, got the beep, and said, “Jim Wallis,” whose new book, Rediscovering Values: On Wall Street, Main Street, and Your Street, had just come out. The common spelling would be “Wallace” – that’s how it sounds – and I was afraid my little demonstration would be a complete bust . . . but within seconds, Google was showing us this list of info on Jim Wallis. “How does it do that?!” marveled the theologian. “It’s a miracle!” replied the atheist. So that’s my story. Here’s my point: There are a lot of evangelicals who read the Bible differently from the Jerry Falwells (“AIDS is not just God’s punishment for homosexuals; it is God’s punishment for the society that tolerates homosexuals”) and the Robert Gallatys. Indeed, an estimated 23% now favor marriage equality (which is a far cry from thinking hurricanes are caused by homosexuality). Behold the January cover story of Jim Wallis’s SOJOURNERS Magazine: Tackling the Hard Questions by David P. Gushee It’s time for Bible-believing Christians to take a new look at what scripture teaches us about gays and lesbians If you or a friend or relative is having trouble accepting God’s LGBT children as, in fact, His children, well, I offer the article for your consideration. As it says near the end, “It is appropriate to wonder whether what Paul is so harshly condemning in Romans 1 has much if anything to do with that devout, loving, lesbian couple who have been together 20 years and sit in the third row at church. Their lives do not at all look like the overall picture of depravity offered in Romans 1:18-32. You certainly wonder about this when you know that couple—or when you are that couple.” (Or, harking back to a line I’ve been offering for decades now: It probably IS unnatural for two people of the same sex to lie down together — if they’re straight. If they’re gay, it’s the most natural thing in the world. No? Can’t we just leave it at that?)
Elephantine Gifts December 25, 2014December 25, 2014 Wha’d YOU get this year? I hope: health, love, and a robust Internet connection. Truly, nothing more is required. (Food? Shelter? They are a necessary condition of health, so already covered in that list. Money? A necessary condition of having food and shelter. A job? Abner and I should certainly hope not* — but same deal, if you need one to get money as a necessary condition to the rest. The list is complete: health, love, and a robust Internet connection.) But I digress. (Oh, wait: I digress further. Just watched “The Interview.” X-rated but hysterical. There’s even a puppy. See it now for $5.95. And even though it probably wasn’t North Korea that hacked SONY, consider hacking them back anyway. I have. Merry Christmas.) And now! MARK TWAIN’S ELEPHANT From Mark Twain: A Biography, by Albert Bigelow Paine [which is free, in case you wanted to know what I got you this year]: Mark Twain was the receiver of two notable presents that year [1908]. The first of these, a mantel from Hawaii . . . the morning of his seventy-third birthday. . . . Mark Twain’s second present came at Christmas-time. About ten days earlier, a letter came from Robert J. Collier, saying that he had bought a baby elephant which he intended to present to Mark Twain as a Christmas gift. He added that it would be sent as soon as he could get a car for it, and the loan of a keeper from Barnum & Bailey’s headquarters at Bridgeport. The news created a disturbance in Stormfield. One could not refuse, discourteously and abruptly, a costly present like that; but it seemed a disaster to accept it. An elephant would require a roomy and warm place, also a variety of attention which Stormfield was not prepared to supply. The telephone was set going and certain timid excuses were offered by the secretary. There was no good place to put an elephant in Stormfield, but Mr. Collier said, quite confidently: “Oh, put him in the garage.” “But there’s no heat in the garage.” “Well, put him in the loggia, then. That’s closed in, isn’t it, for the winter? Plenty of sunlight — just the place for a young elephant.” “But we play cards in the loggia. We use it for a sort of sun-parlor.” “But that wouldn’t matter. He’s a kindly, playful little thing. He’ll be just like a kitten. I’ll send the man up to look over the place and tell you just how to take care of him, and I’ll send up several bales of hay in advance. It isn’t a large elephant, you know: just a little one — a regular plaything.” There was nothing further to be done; only to wait and dread until the Christmas present’s arrival. A few days before Christmas ten bales of hay arrived and several bushels of carrots. This store of provender aroused no enthusiasm at Stormfield. It would seem there was no escape now. On Christmas morning Mr. Lounsbury telephoned up that there was a man at the station who said he was an elephant-trainer from Barnum & Bailey’s, sent by Mr. Collier to look at the elephant’s quarters and get him settled when he should arrive. Orders were given to bring the man over. The day of doom was at hand. But Lounsbury’s detective instinct came once more into play. He had seen a good many elephant-trainers at Bridgeport, and he thought this one had a doubtful look. “Where is the elephant?” he asked, as they drove along. “He will arrive at noon.” “Where are you going to put him?” “In the loggia.” “How big is he?” “About the size of a cow.” “How long have you been with Barnum and Bailey?” “Six years.” “Then you must know some friends of mine” (naming two that had no existence until that moment). “Oh yes, indeed. I know them well.” Lounsbury didn’t say any more just then, but he had a feeling that perhaps the dread at Stormfield had grown unnecessarily large. Something told him that this man seemed rather more like a butler, or a valet, than an elephant-trainer. They drove to Stormfield, and the trainer looked over the place. It would do perfectly, he said. He gave a few instructions as to the care of this new household feature, and was driven back to the station to bring it. Lounsbury came back by and by, bringing the elephant but not the trainer. It didn’t need a trainer. It was a beautiful specimen, with soft, smooth coat and handsome trappings, perfectly quiet, well-behaved and small — suited to the loggia, as Collier had said — for it was only two feet long and beautifully made of cloth and cotton — one of the finest toy elephants ever seen anywhere. It was a good joke, such as Mark Twain loved — a carefully prepared, harmless bit of foolery. He wrote Robert Collier, threatening him with all sorts of revenge, declaring that the elephant was devastating Stormfield. “To send an elephant in a trance, under pretense that it was dead or stuffed!” he said. “The animal came to life, as you knew it would, and began to observe Christmas, and we now have no furniture left and no servants and no visitors, no friends, no photographs, no burglars — nothing but the elephant. Be kind, be merciful, be generous; take him away and send us what is left of the earthquake.” Collier wrote that he thought it unkind of him to look a gift-elephant in the trunk. And with such chaffing and gaiety the year came to an end. THE PROVERBIAL WHITE ONE From Wikipedia: A white elephant is a possession which its owner cannot dispose of and whose cost, particularly that of maintenance, is out of proportion to its usefulness. The term derives from the story that the kings of Siam, now Thailand, were accustomed to make a present of one of these animals to courtiers who had rendered themselves obnoxious in order to ruin the recipient by the cost of its maintenance. In modern usage, it is an object, scheme, business venture, facility, etc., considered without use or value. *Abner sings: This thing called employment Detracts from ma enjoyment, And tightens ma diaphragm. While I’m doin’ nary A thing that’s necessary Ahm happy as a cherry-stone clam . . . If I had my druthers To choose from all the others, I’d druther be like ah am Yes ma’am I’d druther be like — ba-dum, ba-dum — ah am!
Christmas Eve December 24, 2014December 20, 2014 William Least Heat-Moon, Blue Highways, p 317 (thanks, Tom!): Joseph Smith an eighteen-year-old with small hands and big feet, a quiet and “unlaughing” boy, encountered the Angel Moroni, son of Mormon, on a drumlin alongside a little road south of Palmyra [N.Y.] in 1827. . . . There he unearthed the golden plates that he said were the source of the Book of Mormon. With the aid of an ancient pair of optical instruments, the Urim and Thummin, which Smith found with the plates, he was able to translate the “revised” Egyptian hieroglyphics, although he insisted on dictating his translation to scribes from behind a curtain. Well, of course he did. [Eye roll.] Yet the several Mormons I’ve been fortunate to know well are wonderfully decent, constructive, enthusiastic souls (who’ve been fine about my living in sin). And as the simple Ugandan woman says near the end of “The Book of Mormon,” the most profane, blasphemous, irreverent show ever . . . thereby redeeming the entire show and bringing sense to the entire religion (and not just Mormonism, all religions) . . . “Eet eez a MET-a-phor!” If you haven’t seen the show, it’s near the end. The young white missionaries have become disillusioned by the preposterousness of the story they’ve been telling the heathens, who are, of course, rather more well grounded in reality. The woman in question, agape in disbelief — these boys think we’re supposed to believe this stuff literally??? — and delivers the line. (Could someone please get this word to the Islamic fundamentalists? Or at least to those who believe God calls them to murder?) I love Santa Claus and all the good he stands for (but don’t believe he actually clambers down chimneys). I love “It’s a Wonderful Life,” and all the good it stands for (but, unlike most Americans, don’t believe in angels). I love the teachings of Jesus (but don’t believe he walked on water). I love “The Ten Commandments” (but don’t believe God parted the Red Sea). And call me crazy, but I don’t think Joseph Smith had an Urim or a Thummin behind that curtain (maybe an Urim, but surely not both). From age 10, I have been an aggressive atheist. But that doesn’t make Christmas any less magical for me, the Sermon on the Mount any less inspirational, tikkun olam any less a beacon, or “The Ten Commandments” any less stirring. Merry Christmas! In the words of Tiny Tim: “God bless us, everyone!”
The ImpactAssets Giving Fund December 23, 2014December 21, 2014 I’ve long recommended using appreciated securities (held more than a year) to fund your charitable giving . . . and funds like Fidelity’s Charitable Gift Fund to make it really easy. But wait: here’s one that gives you the option of investing your principal in socially-impactful start-ups, hoping to do even more good: good with the money you give away, as before; but now, also, good with the principal of your donor-advised fund while it grows. From Forbes: Give Like An Entrepreneur Since earning an M.B.A. at Yale in 1995, Seth Goldman has been on the prowl for socially useful and novel business opportunities. He was a vice president at the Calvert Group, the do-gooder mutual fund family, before founding Bethesda, Md. based Honest Tea in 1998 with his former Yale professor Barry Nalebuff. While he’s still CEO of Honest Tea, the 49-year-old Goldman sold the last 60% of the organic tea company to Coca-Cola in 2011, and before he did he put $1.5 million worth of its shares into a donor-advised fund at ImpactAssets Giving Fund. By donating stock before the sale, he was able to claim an immediate tax deduction for its full market value without ever recognizing a taxable gain. Using a donor-advised fund also allows him to dribble out grants to specific operating charities over time. His biggest so far: $250,000 to Yale to send M.B.A. students to the Net Impact conference, which Goldman says inspired his own mission-driven career. Unlike more conventional donor-advised funds, ImpactAssets permits Goldman to remain hands on, entrepreneurial and socially conscious when investing his charitable kitty, and he has put half into private equity deals he finds himself. His biggest win so far was a $100,000 investment in Happy Baby, an organic baby food company, which was sold to Danone in 2013, with his charitable fund receiving $180,000, an 80% return in two years. Currently he has the charity fund invested in Beyond Meat, a plant-based-protein maker; Sweetgreen, an organic-greens restaurant; and CSA Medical, which uses a flash-freezing system to destroy cancers and other unwanted tissues. He says he hears about such startups “organically”–through word of mouth–and looks for leaders who are both “fired up” about a new product and cost-conscious. Technically, Goldman can only recommend investments to Impact Assets’ board, which vets them. But once a Goldman find is approved, other donors’ funds may be able to invest, too, as they were with Beyond Meat. Goldman has the other half of his charity pot in Calvert mutual funds and seed ventures identified by ImpactAssets, including Eco Fuels Kenya (organic fertilizers and biofuel), Waste Capital Partners (urban sanitation) and Sevamob (agricultural information and health services). “My appetite for risk with this portfolio is a little higher than it is for my personal one,” Goldman explains. “If we lose money on it, we’re still supporting a good cause. Even if it’s not as high a return, the positive impact is there.” Want to follow Goldman’s giving lead? First, maximize your charitable tax break by contributing your most highly appreciated shares to a donor-advised fund, he says. Then, to increase the impact of your charitable dollars, use that fund to hold the sort of mission-driven, but risky, investments you shouldn’t be putting in your family’s retirement or college fund. If you don’t have Goldman’s contacts, a good way to find such investments is through a boutique donor-advised fund such as ImpactAssets Giving Fund or the Tides Foundation. So step one is for Borealis one day to come to fruition, giving us all a huge long-term capital gain (does 15 years qualify as long-term?) . . . step two is giving some of those at-long-last greatly appreciated securities to one of these funds (and taking a nice tax deduction) . . . step three is to find amazing start-ups to fund. Needless to say, step one is by no means assured; though I like to think we are inching ever closer. (Seth Goldman’s Honest Tea, which I backed very modestly at an early stage in January, 1999, completed its sale to Coke in 2011. These things often take time to brew even without the need for FAA certification.)
America’s Resurgence Is Real December 22, 2014December 21, 2014 Whether you like him or not, do yourself a favor and watch the President’s year-end press conference. Or at least the first five or six minutes — you can always stop if the good news and hopeful signs are just too discordant for you. But you’re paying this guy’s salary; and if you are one of those upset we’ve not okayed the Keystone Pipeline, or that we’re reestablishing diplomatic relations with Cuba, or that people have been marching out of frustration over the non-indictments . . . or whatever your biggest dissatisfactions are . . . take the time to watch. It just might get you into the holiday spirit, knowing that things are looking up and that — in the steady, rational leadership of the man charged with more responsibility than any other on the planet — we have, for two more years, a gift that keeps on giving.
Build Your Own School December 19, 2014December 18, 2014 CLIMATE CHANGE . . . . . . The surface of Mars is currently inhospitable to life as we know it, but there is [now] evidence that the Red Planet once had a climate that could have supported life . . . . . . BUT WAS IT MARTIAN MADE? If it was, they probably had a climate change denier chairing their Committee on Science & Technology. VIVE LA FRANCE Talented enfants at a high-end mall. (Thanks, Mel!) BUILD YOUR OWN SCHOOL It costs about $30,000, all tax-deductible, and helps not just children in the Third World but also at-risk U.S. youth who travel abroad to help build it. Reason enough to try to get rich — so you can do things like this. Here are photos of them building the new Allard K. Lowenstein school in El Amapara, a Nicaraguan village about 10 miles from the main road. (And here are photos of the kids with the school completed, at their new desks.) Al was a great American — everyone from Eleanor Roosevelt to William F. Buckley, Jr. thought so. The plaque at this new school reads, in English and Spanish: “He tried so hard to make a better world. Now it’s your turn.” In case you are deciding between the $93,400 top-of-the-line 97mpg Tesla and the $41,450 85mpg Mercedes, I say go with the Mercedes, build your own school, and you’ll still have $22,000 left in your pocket– plus the value of the $30,000 tax deduction. # Have a great weekend. Ho ho ho!
Bush V. Clinton December 18, 2014December 17, 2014 Jeb Bush seems now to be running, as Hillary Clinton well may, and a common feeling is that, “Oh, gosh, really? Another Bush against another Clinton?” I have a couple of words to say about each. Clinton: Objectively, she would bring more experience to the office than any other incoming president in our nation’s history. (Perhaps important?) But the thing I want to note is that, unlike John Quincy Adams or George W. Bush, she is not Bill Clinton’s child. So for those spooked by the “children of former presidents make rotten ones themselves” meme, it simply does not apply. With the Clintons back in the White House, the goal would be eight more years of peace, progress, and shared prosperity, like their first eight. Bush: Let’s assume he is a good and talented man, far more serious than his brother. That still leaves the issue of his governing priorities. My knowledge of those come from his years as my governor, in Florida, where he found a way to cut taxes only for the rich (hard to do in a state with no income or estate tax!) and then, faced with insufficient revenue, decimated the state’s drug treatment budget (and opposed smaller class sizes — one of my friends had 40 children in his classroom). You can read all about it here. What makes this particularly poignant is that even as Jeb was shutting down drug treatment for thousands, he tacitly acknowledged its importance by providing it privately for his daughter. All legal and above board; just a matter of worldview and priorities. If you want an America that seeks yet more ways to advantage the wealthy at the expense of those struggling hardest . . . continuing the record of Reagan, Bush, and Bush, widening inequality’s chasm further still . . . you have your man in another likable gentleman (and he does seem to be both likable and a gentleman) named Bush. Reagan, Bush, Bush, and Bush. Not for me; but that’s what makes horse races.
Last-Minute Holiday Gifts December 17, 2014December 16, 2014 FOR THE FOLKS Remember “All In The Family?” Archie Bunker and Edith and Meathead and Gloria? With the Jeffersons next door and Maude dropping by? Maybe you don’t, but your folks do. Would they like to spend 19 intimate hours with Norman Lear, its creator, who at one point had 120 million Americans watching the various ground-breaking sitcoms he had on the air? (“Mary Hartman! Mary Hartman!”) And who founded People for the American Way? And whose dad, improbably, was a crook? And who at 92 is sharper and more energetic than Archie ever was? Click here to have him tell you or your folks his amazing life story, Even This I Get To Experience. You could read it with your eyeballs, of course; but there’s something about the direct voice-to-brain experience I find pretty great. Maybe use this occasion to gift a membership in audible.com — which comes with your choice of a free book, so it could be this one. (How you wrap or deliver such a thing I don’t know. I just know it’s the second day of Hannukah, so get on the stick.) FOR GRAMPS How’d you like to lessen the chance your grandparent will break his or her hip? Long-time readers know I have an interest in the private company behind BrainHQ — “brain training that works.” To wit: You may have heard that doing physical exercise can be good for your brain function. But you might be surprised to hear the reverse can be true, too: doing BrainHQ can improve physical function. Two recent studies led by researchers at the University of Illinois at Chicago have shown that using a set of BrainHQ exercises significantly improves balance and mobility among older adults, reducing fall risk.1 These are the first studies to show that BrainHQ improves physical function. But many, many customers have told us how BrainHQ exercises have helped them in physical activities. Dave Demko says brain training helped him be his best in competitive skiing. Howard Newman became a better softball player. Diane Goldman felt like she had a surer step. And Morley Melden got his highest bowling score ever—at age 82. This holiday, you can give BrainHQ to the person in your life who could benefit from its many benefits—including better balance and mobility—for 25% less. Or buy yourself a subscription—they’re 25% off, too. Smith-Ray RL, Hughes,SL et al (2014) Impact of Cognitive Training on Balance and Gait in Older Adults, J Gerontol Psychol Sci Soc Sci, doi:10.1093 /geronb/gbt097.Smith-Ray RL, Makowski-Woidan,BS et al (2014) A Randomized Trial to Measure the Impact of a Community-Based Cognitive Training Intervention on Balance and Gait in Cognitively Intact Black Older Adults, Health Educ Behav vol 41 no 1 supp 62S-69S. I’d love to end this by telling you Norman Lear is so sharp at 92 because he’s one of our customers, but to my knowledge it’s simply because he’s Norman Lear.