Author: A.T.

I have here the results of the ’90 Census. You may think I’m a little tardy with this, but it took a little while to get it. Indeed, I had to settle for a copy from the second printing, in 1802. This is the 1790 census I’m talking about, our nation’s first.

Not to draw any direct connection to my recent comment on population growth, but one can’t help thinking how the country has changed since 1790 and how much of that change — though most of it is technological — has to do with population growth.

In 1790, according to the census, there were 3,893,635 inhabitants of the United States, 694,280 of whom were slaves. (Vermont counted 16 slaves among its population, all of them in Bennington County. New York had 21,324. Maine and Massachusetts had none. Virginians owned the most — 292,627, or just over 39% of that state’s total population. South Carolina, though less populous, had the highest proportion of slaves — 44%.) Add in native Americans, Hawaiians, Eskimos and the like, and the population of what are now the 50 states may have been more like 6 or 8 million (can one of you give me a better feel for this?). Today we are well over a quarter billion.

One of the things that’s striking in looking at the numbers by town is, on the one hand, how even then — 1790 — they were still the same towns as today. Islip, Brookhaven, East Hampton and South Hampton, among the towns in Suffolk County, New York, for example. Yonkers, Bedford, Scarsdale, Mamaroneck, Rye and Harrison among those in Westchester County. The other thing that strikes you is the population of those towns. Yonkers was home to 265 white adult males 16 years of age or older, 220 younger white males, 458 white females (what difference did their age make? they were women — it was not broken out), 12 “other free persons,” and 170 slaves.

For some reason, though women were not broken out by age, one of the nine columns in the town-by-town census for New York is titled “More females than males.” Blank for most towns, Pelham was noted in this column to have 8 more women than men and South Hampton, 110 more.

My first thought would have been that women would regularly outnumber men. Surely more men were lost to war and revolution than women. Could the imbalance — more men in most towns than women — be ascribed to more single men striking out, solo, to make their fortunes in the New World? In any event, the census reporters in New York apparently thought it would be worth noting where females abounded. A sort of combination census and dating guide.

And then there are the towns that have faded in significance. In Albany County (which had 3 more females than males in tiny Kattskill, but 3,191 more males than females in its remaining 20 towns — don’t you all rush to Kattskill at once), Albany itself boasted 3,498 inhabitants. But Ransselaerwicktown was more than twice as large. Ransselaerwicktown? Countywide, Albany was more populous than New York, Queens, Kings and Suffolk combined.

There were 2,376 houses in Boston, 61 in Brookline. Lexington and Concord? One hundred thirty-five houses and 293, respectively.

The second half of my little book has all the same stuff a decade later: the 1800 census. The population of Truro, on Cape Cod, had fallen from 1,193 to 1,152. But neighboring Province-Town had jumped from 454 to 812.

I would like to be able tell you what happened to those 3 surplus ladies from Kattskill, but by 1800, for some reason, Kattskill seems to have vanished from the census. One has visions of its being overrun by 3,191 males from the neighboring counties, out for whiskey and women, and basically just tearing the place apart.

Tomorrow: Fidelity Investments: Bitten by the Hand It Feeds?

I didn’t sleep in it. The only three people I know who did, Lincoln aside, are San Francisco Mayor Willy Brown, who said on CNN the other night that the mattress was lumpy, and two friends of mine, a Republican married to a Democrat, who’ve known the Clintons since 1984. They found the experience thrilling and, years later, contributed, between them, $2,500 to his reelection. (To see what anyone contributed, and to whom, click HERE.)

This isn’t to say the President may not have come close to the line of what can and cannot be done legally to raise money — or perhaps even crossed that line. I don’t know.

But as important as that distinction is, and not meaning to dismiss it, it may nonetheless be worth looking, just as a matter of interest and perspective, if nothing else, at the big picture. In managing to raise this vast sum of money — $50 million or $100 million less than the Republicans raised — was the intention to sell out the poor and middle class, which is to say the great mass of Americans, by swapping favors in exchange for campaign contributions?

I don’t think so.

One of the most fundamental things this administration did early on, like it or not, was raise taxes on the rich by a whopping 25% or so (from a 31% top bracket to 39.6%), while redistributing a fair chunk of that dough to the working poor via the Earned Income Credit.

This was no small tinker, and of course some of you believe it was terribly wrongheaded (and may have supported my friend Steve Forbes or Senator Dole as a result). But my point is that most of the fat-cat contributors to the Democratic party favor Clinton goals that — far from holding out the prospect of lining their pockets — actually cost them money, or else have no direct effect either way.

To me, there is something fundamentally different between, say, the Doles’ long-time financial support from the tobacco industry, and Elizabeth Dole, when she was Secretary of Transportation, delaying the ban on smoking in airplanes, on the one hand . . . and the kind of support the Clintons have received from anti-tobacco activists, who don’t stand to profit personally from the restrictions on selling tobacco to kids that the Clinton administration is putting into effect.

No question: campaign finance reform is needed. And maybe, in trying to get the money to win the election to stand up for the little guys who don’t have big bucks, the President or his team were too aggressive in raising funds from those that do. (Or maybe not. I’m not an expert in the law.)

But I know that the coffee I attended wasn’t remotely about asking for money (from us) or favors (from him). It was exciting to be there, of course, because it was there. But otherwise, as the President went around the table giving each of the 15 of us a chance to make a comment or ask a question, it was a pretty sleepy affair. The mayor of Burlington, Vermont, a Wall Streeter with a yarmulke, a poor but passionate believer in equal rights for gays and lesbians, a state senator from Scranton. I can’t remember the others, although I’m sure there’s a list someplace.

Anyway, let the Congressional hearings begin. As easy as it is to agree the system stinks, it sure is hard to figure out solutions that don’t trample on the First Amendment (your right to take an ad, or post a sign on your lawn, supporting the candidate you believe in, or to join with 10,000 others to post a lot of signs and take a lot of ads). Should Ross Perot or Steve Forbes not be able to shake things up just because they’re rich? Tough questions.

Alert readers will know I have thrown some cold water on the enthusiasm some feel for what’s commonly known as “The Dogs of the Dow” strategy and that I have, in return, had a bucket or two tossed my way.

Not to say it’s a terrible strategy. Just that, typically, finding these great strategies after the fact (I don’t know anyone who was recommending it 25 years ago, in advance of its great results) is not quite the same as knowing how markets will perform over the next 25 — if only because great market strategies, once widely known, become “self-disfulfilling.” (Now ain’t that a great academic term. I picked it up interviewing a Nobel laureate.) This is to financial physics what Heisenberg is to electrons. (When you shine the light of day on something, be it an electron or a secret formula for success, the mere act of shining changes the trajectory of what you’re looking at.)

Anyway, click HERE to see what the statistically savvy folks at Morningstar have to say about the Dogs. They don’t say it’s a terrible strategy, either, just that it may not be quite all it’s cracked up to be. (Heisenberg, unaccountably, is missing from their analysis.)

I know it’s a pain to click and wait, and you’re wondering why I don’t save you time and just stick their copyrighted column right here. But if you don’t think I’m saving you time, check out the URL we had to type to make HERE work — http://text.morningstar.net/news/Ms/strategist/dogs/whyitmightnot.html.

Move over, antidisestablishmentarianism.

So I had that little Valentine’s Day comment about two consultants dating. It brought forth unto my e-mail this wonderful Letterlist from a consultant at Andersen Consulting, who got it from a guy at Goldman Sachs — I wish I knew where it actually began, because I’d like to give proper credit. But whoever penned it clearly knew whereof he/she spoke.

(What’s a Letterlist? You mean you’re never awake at midnight, eleven Central, watching CBS? Dave doesn’t call them that, but surely he’s earned a dictionary entry.)

Top Ten Ways To Know You’re Dating A Consultant:

10. Referred to the first month of your relationship as a “diagnostic period.”

9. Talks to the waiter about process flow when dinner arrives late.

8. Takes a half-day at the office because, “Sunday is YOUR day.”

7. Congratulates your parents for successful value creation.

6. Tries to call room service from the bedroom.

5. Ends any argument by saying, “Let’s talk about this off-line.”

4. Celebrates anniversary by conducting a performance review.

3. Can’t be trusted with the car — too accustomed to beating up rentals.

2. Valentine’s Day card has bullet points.

1. Refers to lovemaking as a “win-win.”

* * *

Ah, but what if you fall in love with the Dogs of the Dow rather than a management consultant? Come back Monday.

When New York magazine was swallowed up by Rupert Murdoch in early 1977, I joined a bunch of other writers, retrieved my few thousand dollars in pension money, and left. Knowing that the money would have to find a home under the shelter of an IRA or else be subject to taxation, I stuck it into Mutual Shares, a fund run by Max Heine and his young protégé Michael Price.

I was reminded of this recently when I got my latest statement. According to Morningstar, Price has compounded the value of that fund at the rate of 19.6% for the last 21 years. A dollar invested 21 years ago under the shelter of an IRA is now, therefore, nearly $43. My little stake (which had had the benefit of only 20 years’ compounding, not 21) is now a six-figure stake.

They say that “past performance is no guarantee of future results,” and I know this to be true for two reasons. (Fuzzy reasons, but valid I’m quite sure.) In the first place, the last 21 years in the stock market have been extraordinary. It can’t keep up like this. Second, if Mutual Shares did continue to compound at that rate, then 21 years from now, when I’d be forced to begin withdrawing from it, each dollar originally invested in my IRA would have grown to $1,839.

Lovely, no? But barring major inflation — which would at first knock stock prices on their bottoms but ultimately drive them higher to reflect inflated values — it just doesn’t make sense that this would happen.

One could parse all this in much finer detail (noting, for example, that Price recently sold out to the Franklin Group of funds, so that, for newcomers, Mutual Shares is now a “load” fund, and its not likely to enjoy Price’s management for anything like another 21 years). But instead I’d just like to point out two very general and somewhat contradictory “themes.”

First, one really should not expect nearly as much from the market in the next decade as in the last. Second, starting early with an IRA — or any form of saving — really does make sense. Twenty years will pass, and then forty, and if you’ve been socking away your $2,000 a year in an IRA ($4,000 now for you and a nonworking spouse), you will be SO happy you did.

Kids: are you listening?

It took 10,000 human generations for the world’s population to reach its first billion. World population now grows by an additional billion every twelve years.

There’s room, of course. If you can fit 2 million people onto the island of Manhattan, you need only pave and layer 500 such areas every dozen years to fit the extra billion.

But, at least for the foreseeable future, should the goal of our species be “quantity of life” or “quality of life”? Would a species a 20 billion mostly miserable beings be more successful than a species of six billion mostly happy, peaceful, healthy ones?

In some respects, the earth’s carrying capacity is for all practical purposes limitless. We certainly have enough silicon. But in others, given current political technology, we seem already to be over the limit. And regardless of political technology — the ability to distribute jobs and wealth equitably, without bloodshed — what do you do if people would like to visit Yosemite or the Pyramids or have a nice little home at the seashore?

Each additional billion people make the lines that much longer, the likelihood of being able to ski — or even see — virgin powder that much lower.

If this resonates with you, you might wish to become a member of Zero Population Growth, or even to mark November 13 on your calendar, the night of ZPG’s (expensive) 30th Anniversary dinner in New York. ZPG works with educators and legislators to try to raise people’s consciousness on this issue. Heck: if you’re going to teach high school kids exponents, you may as well use population as your example. Compounding can be as dramatic with people as with money.

“At this moment in time, in which no-load global mutual fund would you put your IRA?” — Susan R.

The one with the best 10-year record is the Scudder Global fund. And it has done so with significantly less volatility than the average fund. Riskier, but perhaps more rewarding: Scudder Global Discovery, which buys small cap growth stocks and has actually beaten Scudder Global over the past 1, 3, and 5 years (it doesn’t have a 10-year history).

Another interesting one — I have my friend Less Antman to thank for the research on all this, along with my Morningstar disk — is the Tweedy, Browne Global Value fund. It follows a Benjamin Graham approach. (Indeed, he was a Tweedy, Browne client for years.) This fund buys the cheapest stocks in the world as measured by earnings, book value, and cash flow. Or at least that’s the general idea. As a result, it’s one of the safer stock mutual funds in existence. It’s only been around three years, but Tweedy, Browne is over 75 years old and in its third generation of family members. In their private client accounts, they’ve matched the performance of Michael Price over his entire investing life (since 1975); namely, returning around 20% per annum with about half the downside risk of the market averages. The fund has more than $1 billion under management (and, like most funds that invest abroad, a rather high expense ratio — 1.6%).

As you know, a “global fund” is different from an “international fund” in that it can include U.S. stocks as well as foreign. (We are, after all, part of the world.) If it’s strictly non-U.S. holdings you’re interested in, consider American Century’s Twentieth Century International Discovery, which invests in small non-U.S. stocks. It has a $10,000 minimum, even for IRAs (and a steep 2% expense ratio); but its bigger brother, International Growth, invests in larger non-U.S. stocks and has a $1,000 minimum for IRAs (and, again, a steep expense ratio — 1.77%).

Other excellent global funds include: Janus Worldwide (best 5-year record) and T. Rowe Price Global Stock fund (run by the same managers as T. Rowe Price International Stock fund, recent winner of Mutual Fund Magazine’s Ironman award because of its 12th consecutive year beating the average international fund). Not to mention T. Rowe Price Spectrum Growth fund, which holds about 30% foreign stocks and some natural resource stocks, making it a useful global fund for someone who wants a bias toward U.S. stocks and a hedge against the risk of inflation.

Or you could just do what everyone else seems to have done as a proxy for global investing — buy shares in Coke. Unlike global or international funds, you can buy shares in Coke (and other American-based global companies) without giving up 1.5% or 2% a year in fees. But you know what? I don’t care that Warren Buffett owns Coke or that there are a billion-plus thirsty Chinese. At Coke’s current price, I think I’d go the mutual fund route.

“At what point do you take your losses? I’m the same stubborn and egotistical person you are and it’s not fun to take a loss (and if you haven’t sold: no loss!). My investment club purchased MLG at 7 (unfortunately, it was my presentation and they never let me forget it), so with your theory and mine and those Beardstown ladies, we kept purchasing more all the way down. This week I have to face them and the price of MLG has hit the magical number of 15/16. Translation: for the price of 7 CD’s you can own 100 shares of stock. So would you have sold at say a 25% loss or at what point would you reassess a stock?” — Janelle

Clearly, this is a CD problem. You paid $700 per 100 shares of this stock, which now could be traded for seven (rather cheap) compact discs. What you were supposed to do was spend $700 on a stock that could one day be traded for seven $1,000 certificates of deposit. This is EXACTLY the kind of mistake Roseann Roseannadanna used to make, and while funny on “Saturday Night Live,” it has no place in your investment strategy. The market is not even open on Saturday night. Is this an investment club or a bunch of gals who get together with a few six packs to watch TV?

Of course, to say that I have made the same mistake myself many times would barely begin to express the depths of my empathy. I bought 500 shares of one stock at $4 (the underlying real estate alone, the expensive research report disclosed, was worth $5) that has by now led me to own so many shares at three-sixteenths bid, nine-sixteenths asked, that (a) I now own nearly 1% of the company and (b) if it ever struggles back to a dollar a share (it was once $153), I will be rich beyond imagining. Or flush, anyway.

So I feel your pain.

But I know nothing about MLG, other than it seems to be the symbol for Musicland Stores, which must be how you got confused about the CDs. If they’re selling seven for $93.75 (the value of 100 shares at fifteen-sixteenths of a dollar per share) — or $88 plus tax — that’s the first problem. They’re selling them too cheap. No wonder the stock tanked.

That concludes my knowledge of and opinions on MLG. Why not sell it for the tax loss and buy an equivalent amount of some other wild speculation like the one I’m stuck in? Common decency (not to mention embarrassment) prevents me from naming it in public. But there are loads of ridiculous under-a-buck speculations out there. If you can’t find any on the New York or American Stock Exchanges, just head up to Vancouver. Any one of them should serve to complete what seems to be your journey, on this particular flier, toward a total loss.

The real answer? Reassess whenever something major changes, either in your company itself or in the world that would affect the company (or, of course, when the stock price hits your target). And, tax considerations aside, sell when you no longer think the stock represents compelling value. It’s as simple, and as difficult, as that. Maybe you were wrong about this company, or maybe something happened that you didn’t foresee.

Then again, I remember when Compaq first came out at $10 — pre-splits — and fell to $3 not too long afterward. Holding on would have been a very, very good idea. So if for some nutty reason you think Musicland might be another Compaq, double up your position now, wait 31 days, and then sell the original shares for a tax loss.

• If you don’t wait, the IRS will disallow the loss as a “wash sale.”

• If you don’t double up — that is, if you sell now, wait 31 days, and then go to buy it back — the stock will have quintupled in the meantime. Don’t ask me how, but Mr. Market knows and takes special pleasure in maneuvers like that.

PS – One reason to take a tax loss on MLG is to shelter the gain from some other stock your club might have in mind to sell. Is there anything, with the market having risen six trillion percent in the last fifteen minutes, you feel might no longer represent compelling value?

Ford is sponsoring Schindler’s List on NBC this Sunday night — uninterrupted by commercials. When was the last time you saw three hours of commercial-free television?

I tell you this in part, of course, because it’s a wonderful film.

But what jumped out at me is that the sole sponsor is Ford. The original Henry Ford, as you may know, was anti-Semitic.

I’m sure he would never have gone so far as to condone Hitler’s policies. But what I had long assumed was just a casual bigotry on Ford’s part, backed by little actual thought on the matter, was in fact something bordering on obsession. I mean: he was really anti-Semitic. Hugely anti-Semitic.

I know this because one of the items in my little “historic documents” collection is a collection of newspaper columns financed by Henry Ford that appeared in the Dearborn Independent in 1920 and 1921. Reprinted in book form at his expense — four volumes — it is entitled THE INTERNATIONAL JEW: The World’s Foremost Problem, and inscribed, in his hand, “From your friend, Henry Ford.”

Hitler had Ford’s picture hanging on his wall.

One of the things that’s always struck me is how people are rarely all good or all bad. I like to think that — George Wallace-like — Henry Ford might be up there looking down (unless the standards are pretty high, and he’s down there looking up), thinking, “Well, I was wrong about that one. I’m glad my company has chosen to sponsor this movie.”

Monday: When to Sell?

You won’t get a lot of management tips in this space, because I’m a lousy manager. (Well, one tip: be sure the withholding from your employees’ wages gets to the IRS on time. Oops.)

But I’m on a plane from Jackson Hole, Wyoming, where I was the only human within 500 miles in a blue blazer carrying a loose-leaf binder — everyone else was in a North Slope something or other, carrying ski poles or antlers — and I learned something that may be old hat to you but made my eyes widen. (“Why didn’t I think of that?”)

Have you any idea how geeky it feels to walk into the world famous Cowboy Bar in a blue blazer? But this has nothing to do with what I learned.

I was there to interview Foster Friess (pronounced “freeze”), who manages the highly successful $11 billion Brandywine Fund. (It has a $25,000 minimum and very high turnover, so it’s out of the reach of small investors and — in my view — poorly suited to taxable accounts despite its remarkable record. But Foster sure has done well for the Nobel Foundation, among others. If you should ever win the Peace Prize, you’ll be getting a good deal more dough than you would have without him.)

Foster is a piece of work, in the best sense of the phrase, but that, too, is another story, which curious readers will have the opportunity to watch on Public Television in the fall. To be called BEYOND WALL STREET: The Art of Investing, it is being directed by the same fellow who directed CIVILIZATION (not to put the two undertakings in exactly the same league).

Anyway — leaving Foster’s investment insights ’til then — I wanted to share one of his management innovations. He has about 60 employees in Jackson, in Delaware, and in Phoenix. They tend to be highly competitive people. One we filmed is a top-notch stockpicker Monday through Friday and the world’s fourth ranked stunt pilot on weekends. She’s amazing. Another is a downhill racer. Yet Foster wants them all to be a happy family and to share their insights and ideas.

How do you get that to happen?

One way he does it is through administration of the bonus pool. The pool — which can in some years amount to 400% or more of base pay, so it’s taken very seriously — isn’t divvied up by Foster. It’s divvied up by the employees themselves. At the end of the year, Foster asks each to fill out a form showing how THEY would split the pie (themselves excluded). He then more or less averages their responses.

Think about it. All year long you know that your bonus — which can be the bulk of your pay — will be decided by your colleagues. How likely are you to be backstabbing or sarcastic? How likely are you to want to go out of your way to be helpful and constructive?

I’m no management guru, but it seems to me this scheme (which includes everyone from the receptionist up to the most senior people) sends incentives that are pretty much win-win.

Any comments from those of you who know a lot more about managing, and being managed, than me?