Author: A.T.

Curious what your car is worth? Ah, the web. Click here. My 1992 Chrysler LeBaron Convertible seems to have a wholesale value of about $8,275, plus $75 for its power seats. I’m richer than I thought. (And the estimated retail value is almost $2,000 more.)

Tomorrow: Buying a New One

Yesterday I described how the most painstakingly chosen mutual funds — Smart Money Magazine’s top eight picks for 1995 — performed a little worse than the low-expense index fund I always recommend if somebody’s having trouble choosing one.

The point? It’s just so tough to beat the market averages consistently! There will always be some who do better and more who do worse (more who do worse, because the averages are just statistics and don’t have to pay fees and commissions). But consistently better? Tough to find.

Continuing with the same theme, and switching now from June’s Smart Money to June’s plain old (but also pretty smart) Money, I was struck by an article that begins on page 27, describing an investment extravaganza 7,389 people attended in Las Vegas April 2.

Were you there?

Money’s reporting sets the scene with Elaine Garzarelli’s standing-room-only address. Garzarelli, you will recall, is the gal who predicted the ‘87 stock market crash almost to the day, and has carried considerable clout on Wall Street ever since.

(She’s bullish, Money reports, thinking that the fair market value for the Dow, based on the cash flow of its 30 member companies, is 6400, and that the bull market has another 25% to go: 7000+.)

Don’t you wish you just had someone like Garzarelli to manage your money for you? She’s one smart cookie, after all, and she is totally immersed in this stuff — lives and breathes it — where you, poor slob, may have a day job in some unrelated field.

The only catch, and this is the part I hadn’t known until I read Money, is that for a while there Garzarelli was running money for people like you and me. “During the time she helped manage Shearson Lehman’s Sector Analysis Fund,” Money reports, “the fund had an annualized return of 4.8% vs. the S&P’s 8.4%.”

So you’d have done considerably better in . . . yep, an index fund.

I called Garzarelli Capital to ask what we should make of this and so far haven’t gotten through. I’m certainly not suggesting I could do any better than she does. I’m just making the point, again today, that the market ain’t easy. You have to compete with folks like Ms. Garzarelli — and even she can’t always do as well as a monkey throwing darts.

(Except that, as I have noted elsewhere, monkeys can’t throw darts. Something about their shoulder joints I think, or maybe they just need practice. But the high-paid chimp I once worked with — we were making a film on investing — was a demon on roller skates but a total wash-out with darts. There were puncture wounds everywhere but the stock pages he’d been told to aim for.)

It’s so interesting. Here is the June cover story of Smart Money touting “Superstar Funds.” It’s the annual feature in which the editors put far more effort than you or I likely could into analyzing the entire universe of available mutual funds in order to find the very smartest picks.

When asked about mutual funds myself, I usually just punt and suggest the Vanguard Index Trust. If pressed, I point to a few other old favorites in the appendix of my book.

But here is Smart Money with a well-researched, well-intentioned, well-written report, selecting just seven funds. There’s no way to know in advance, of course, how well these seven will do. But Smart Money dutifully gives us an update on how well last year’s Smart Money Superstar picks performed. And guess what? If you had invested equally in all eight, you would have been up a whopping 27.7%. Whereas if you hadn’t done all this research and had simply invested in the Vanguard Index Trust, you would have been up 28.2% over the same period.

(And the irony is even a little sharper, because the 27.7% Superstar return doesn’t take into account the “load” some of the Superstars charge. Vanguard, by contrast, charges no load.)

Whether picking specific stocks or specific mutual funds, it’s very hard to beat the market. The no-load, low expense Vanguard Index Trust beat the eight Superstars last year by half a point. There’s no telling what will happen this year, with this crop of Superstars; but wherever they end up — up 25%, down 25% — I’d expect boring old Vanguard do pretty much as well. Why? Because with its very low expenses, it has considerably less of a handicap than the others.

Your big decision with stocks isn’t which ones or which funds to buy, it’s whether to buy them at all and how. My suggestion: an unshakable discipline to invest $1,000 a week or a month or a quarter or a year — whatever amount of “long-term” money you can comfortably set aside — in one or two or three no-load, low-expense mutual funds, and/or some individual stocks you expect to be comfortable holding for a long time (to minimize taxes and transaction costs).

The other big decision is what proportion of your stock market funds to invest in the U.S. market, especially when it’s as high as it is these days, and what proportion in funds that invest overseas.

For the record, Smart Money’s 1995 Superstar picks were John Hancock Special Equities A (up 53% from April 21, 1995 to April 12, 1996), MFS Emerging Growth B (up 43%), the Kaufmann Fund (42%), Oppenheimer Quest Opportunity Value A (31%), Oppenheimer Main Street Income & Growth (27%), Wassatch Aggressive Equity (25%), Crabbe Huson Special (7%) and Parnassus (down 5%).

This year’s Superstar picks are — well, I don’t want to keep Dow Jones from selling magazines, so go read them for yourself.

Here’s an e-mail from a fellow who wondering whether we might be cousins. He is a fee-based financial planner (the good kind, who don’t take sales commissions for steering you into particular products). His last name, coincidentally, is the same as mine. And in fact it does seem just possible that in the 15th or 16th Century we may have shared a common ancestor.

Anyway, here’s his story:

“I started my career as an accountant in NYC,” he says, “and went out on my own in 1980. I always enjoyed giving people advice, which is why I gravitated to financial planning.

“Since I’ve been in this business I’ve always found myself to have different philosophies from most of my colleagues. For example, when I was starting out I took a psychological test for a major brokerage firm. My brother-in law was branch manager, so I got to see the results. The test showed that I was the kind of individual who would feel the need to educate my clients as well as understand the investments I would be recommending. It even mentioned that I would feel the need to read prospectuses.

“It was actually pretty accurate. I was that kind of guy. But I was told I could not succeed as a broker with those attributes. And here I thought they were positives!”

So eventually he became a fee-based financial planner rather than a stockbroker.

“In the years since then, I have rarely agreed with most other advisors on issues such as insurance and investing. On a personal level, I don’t consider myself cheap, I just don’t like to throw money away needlessly. That’s why I wrote you. Seeing my beliefs in print written by someone else was amazing to me. Now I am convinced we must be cousins.”

Actually, Ben looks a little like my brother. (Well, just a little.)

Ah, the difference a single machine can make. The automobile, say. The telephone. Or how about a machine that can always tell when someone is lying — a sort of polygraph that truly works. Now wouldn’t that muck things up.

Such is the world imagined in a novel called The Truth Machine, which may be the first and only pre-publication novel posted on the Web. It won’t be in bookstores until October, but you can read it free by visiting: http://www.truthmachine.com.

Save yourself $22 by reading it on the Internet — and if you don’t like the way the plot thickens or his imagined world turns, click and shoot off a nasty critique to the author.

He is Jim Halperin, one-time Harvard whiz kid (like the book’s protagonist) turned mega-numismatist turned neo-novelist.

For me to be giving anyone advice about the Internet is laughable. But I do have one qualification: I’m as frustrated and mystified by it all as most of you.

So perhaps these revelations will be useful:

1. It really may be worth your calling AT&T at 800-400-1447 and requesting their free WorldNet software. If you are an AT&T long distance customer, they’ll provide the first year’s access free, up to 5 hours a month ($2.50 an hour thereafter) or unlimited access for $19.95. I found that even for me installation was easy, including the time I spent on that same 800-number with a human who walked me through the glitch of dual Netscape versions. More to the point, once set up, it seems to work fine. Somehow I don’t picture AT&T having quite as many glitches and busy signals as some of the newer kids on the block.

2. If you haven’t already, you should definitely visit and bookmark www.altavista.digital.com, which is the search engine from Digital Equipment. Yahoo and other search engines like it are similar to a Table of Contents at the front of the book, good for finding general areas of interest, whereas AltaVista is like the Index at the back of the book, good for finding specific items. Aha! Among other things, this makes it much better for research than the others I’ve used.

Being human, I first searched Yahoo for my own name and found nothing. I then tried it with AltaVista, and, just like an index at the back of the book, found loads of references (including one titled Andrew Tobias is a Slippery Sleazeball, or words to that effect).

3. I actually owe the revelation of this distinction between Yahoo and AltaVista, to a really neat site called www.eachmovie.com. As you’ll see if you visit, first you log in with your e-mail address, then you rate some movies you’ve seen. Then, based on your likes and dislikes, it tries to figure out some movies you haven’t seen that you might like. And it does so, supposedly, and interestingly, not just by noting that you like Demi Moore, but by building a confidential (they assure us) profile of how you rank various movies. This helps them find others who share the same tastes. Then (assuming I understand this properly, always an open question), if one of those people loved Vampire Drag Race Derby, it will suggest that you might like it, too.

In truth, the recommending part didn’t dazzle me. I doubt it works very well. But the concept is neat. (As the authors of this web site explain, if Yahoo is the Table of Contents in the front of the book and AltaVista is the Index on the back, then EachMovie is like a yellow sticker on the book jacket saying, “see page 211, I think you’ll like it”).

And even if none of that interests you, EachMovie is a quick way to find reviews and ratings and credits and summaries of hundreds of recent and soon-to-be-released movies. Was that Fear you were meaning to see or Primal Fear? Or Cape Fear? Before you head out to the wrong movie, check it out. (Have you seen The Truth About Cats and Dogs? Good flick! And shame on you for missing Sabrina and The American President! Rent them.)

4. Finally, speaking of yellow stickers, I recently installed 3M’s Post-it (TM) Software Notes. Like many of us, I use the yellow stickers a lot. Well, here’s a way to stick ‘em to your computer screen, as it were. It’s cheap and clever and the sound effects are fun. To get a free sample, click www.mmm.com/psnotes. So far, this little program hasn’t caused any loopy conflicts with my non-Windows software, or with anything else.

Yesterday I described a service that charges just a dime a minute for all calls within the 50 United States, anytime (not just after 7PM, a la Candace Bergen in the Sprint ads). If you’re someone who makes a lot of weekday daytime long-distance calls, check it out. (And if you’re an AT&T customer not getting a 20% or 30% discount and 5 frequent-flier miles for every dollar of calls, check it out, too.)

But all this phone talk made me think of something else.

You know how there’s this etiquette where, when you go to visit somebody, you have to make this big show of using your credit card to make long distance calls rather than stick your host with the 45-cent tab? (After all, it’s usually a weekend or an evening — what’s it gonna cost to call Chicago for a few minutes?) I’m not saying you can violate this behavioral code, but it’s becoming increasingly silly.

Sure, if you’re calling Kuala Lumpur or Bucharest.

Montevideo — sure. But New Jersey?

I mean, there you are drinking $4 of the guy’s Absolut and tonic, eating $14 of shrimp and that interesting chicken fricassee his spouse makes, but you’d rather spend $2 to make a credit card call than just dial direct and leave some loose change by the phone?

I do the same thing, of course. But whenever I see a guest of mine fumbling for his calling card, unless I know he does a lot of business in Japan, I insist he dispense with this foolishness immediately and just dial direct.

One thing you could do is dial via the 10811 DimeLine. If your host happens already to be a customer, already paying the flat $5 service charge, your call will cost him only a dime a minute, even coast-to-coast Tuesday at noon. And if, as is much more likely, he’s not a DimeLine customer, it will still cost him only a dime a minute. He won’t be charged the $5 access fee (unless some other guest tried the same thing last month). The first calendar month’s calls do not activate that $5 fee.

I’m not saying you should do this. I wouldn’t. But if you are going to beat your host out of the phone charges, you may as well save him a little money. (Remember, this works only on residential lines, and only really saves money in any meaningful way on weekday daytime calls.)

Boy, are the competing phone discount plans ever needlessly — and purposely — complex. It’s like life insurance: they don’t want you to be able to make easy price comparisons.

Sprint has a point about every call costing just a dime. But Sprint’s “dime lady” commercials are so cloying (even though Candace Bergen’s a swell lady), they’re reason enough to stick with AT&T. What’s more, there’s the teeny-tiny catch that the dime is actually a quarter every weekday until 7PM. That’s right: 25-cents a minute, not 10 cents.

Now comes a service called DimeLine. It’s not new, but new to me. And it really does charge just a dime a call. Anytime. Anywhere in the 50 states. Sort of.

I use AT&T. The basic daytime rate approaches 30 cents a minute, but I signed up for True USA savings, that knocks 30% off my bill if I make more than $75 a month in calls, 20% when charges run between $25 and $75 a month, 10% when they run $10 to $25. (You mean you use AT&T and you haven’t signed up for the discount? They must love customers like you. All you have to do to get it is call! Check your phone bill, and if you don’t see a line at the end talking about what you saved with AT&T True USA, try 800-222-0300.)

And I’m also signed up for AT&T True Rewards which gives me five frequent-flier miles for every dollar I spend. Assigning a value of 2 or 3 cents a mile, which is about what they’re worth to me, this becomes the equivalent of another 10% or 15% off my bill, for a total discount of 40% or 45%. (You mean you use AT&T and you haven’t signed up for this, either? They must adore you! This one doesn’t appear on your phone bill, but you get periodic statements of your rewards, and they try to get you to waste them on things less valuable than frequent flier miles. Again, call 800-222-0300 if you’re an AT&T customer who hasn’t signed up.)

After these discounts, night-time and evening calls aren’t much more than a dime for me anyway — sometimes less. But the daytime calls are still upwards of 15 cents, which no matter how you look at it is more than a dime.

I had a 76-minute call to Palo Alto last month for which I was billed $22.80, less the 30%, or $15.96. With Dime Line it would have been $7.60. I would have saved $8.36 on that one humongous call alone, plus another 46 cents in tax. Total saving with the tax: $8.82. Instead, I got 80 frequent flier miles (5 for each of the 16 or so dollars AT&T charged), worth about two bucks.

So why not switch to Dime Line for all your day-time weekday calling? A few possible reasons:

• It only applies to residential phone lines. Sorry, Sears.

• There’s a 3-minute minimum, so for those calls where you just get an answering machine and hang up or leave a short message, you’re billed 30 cents, compared with the 15-20 cents it might have cost during the day on AT&T (after your discount and frequent flier miles).

• There’s a flat $5-a-month access charge, so if you normally make $30 a month in calls on AT&T — which works out to $24.00 after your 20% True USA discount, and $21.00 after figuring in the value of your frequent-flier miles — Dime Line would save you little or nothing. Indeed, if a good chunk of that $30 was for calls after 5PM (evening rate) or after 11PM and weekends (night-time rate), then you might actually wind up spending more.

• On the other hand, for someone with, say, $100 a month in AT&T weekday long distance charges before 5PM, the savings would be on the order of $30 or $40 a month — maybe $400 a year. Not half bad! Home-office types, take note.

• If you are someone whose long distance bill is near one of the AT&T break points at which the discount falls, from 30% to 20% or from 20% to 10% (or, below $10 of charges, to zero), then carving the weekday day-time calls out of that and making them with Dime Line could be doubly dumb. First, you could lower your AT&T usage from $26, say, to $24, and knock the discount down from 20% to 10% (thus losing about $2.50). Second, if you only used Dime Line to make a few day-time calls, the $5 flat fee would swamp any savings you got from the low dime-a-minute rate.

• There’s the hassle of dialing 10811 before proceeding with the usual 1-area code-and-number.

But you don’t have to wait for a second dial tone, you just dial “straight through.” And you don’t have to do anything to sign up for this service. You’re already “signed up,” in the sense that you could start using Dime Line this instant, and would simply find a separate place on your local phone bill next month tallying the charges. And because the first month the $5 access fee is waived, you really have little to lose by giving it a try.

The Dime Line customer service rep I spoke with (800-583-5801) answered promptly and avowed that parent VarTec Telecom, Inc., a privately held company headquartered in Dallas, was founded in 1989 and is now the nation’s 7th largest long-distance carrier. (And here you thought there were only three, so how impressed can you be?) You don’t have to remember to call and cancel the service if you don’t like it, he explained. The $5 access fee is only charged in calendar months when you make calls. So you could try it a few times today, and until the end of this calendar month, with no $5 access fee, and no need to cancel the service. (Or so they promise. Don’t blame me if there’s a billing glitch! I just work here.)

There’s actually a way to beat the $5 fee altogether, it seems to me, if you’re the kind of person obsessed with cutting costs yet possessed of more than one phone number. In May, make all your day-time long distance calls on Phone #1. You’ll be charged just a dime-a-minute with no $5 fee, because it’s the first calendar month you’ve used DimeLine. For the next few months be sure not to use DimeLine with that phone number — even once. Instead, switch to using Dime Line with Phone #2. And so on.

I think the slate wipes clean after 90 days of non-use. If so, and if they don’t change it, you could just keep rotating the phone line you chose to use. Of course, you could always do the decent thing and, if you decide to become a DimeLine customer, just pay the bill. I’m going to try it for a while — for weekday day-time calls only.

Some statistics lie, but others tell the blunt truth:

Tax on a Pack of Cigarettes in:

I came upon this while filing some old stuff — the figures are dated January 17, 1995, and will have changed somewhat, with currency fluctuations if nothing else. For more up-to-date statistics, and a whole bunch of other stuff, try The Smoking Cessation Location.