Author: A.T.

I am not one of those who bash the U.S. Postal Service. First class mail is a bargain at 32 cents (although with e-mail and electronic bill-paying I use less and less of it). The postal carriers really do deliver in the worst kind of weather, and I don’t believe it for a minute when people tell me the check they sent must have been “lost in the mail.” Slowed down in the mail, perhaps. Mangled every once in a while. But lost? Virtually never, in my experience.

That said, I am looking at a preposterous U.S. Postal Service ad in the Wall Street Journal. Full page. It shows a +$12 FedEx Pak, a +$6 UPS 2nd Day Air Pak, and a +$3 Priority Mail envelope.

Down the left side of the page it lists some other advantages, besides the Postal Service’s lower price. The first: MORE AIRPLANES. “We use more airplanes than FedEx and UPS combined to make sure your priority package or envelope gets to its destination.”

And they have more trucks, and you don’t have to call for a pickup, and they deliver Saturdays at no extra charge . . .

This ad is 23 inches tall. Everything about it is nice and big and legible. Except the one footnote, one-sixteenth of an inch high. It says (if you squint) “Price comparisons are based on Priority Mail up to 2 lbs. versus 2-lb. published rates for UPS 2nd Day Air and FedEx 2Day. Priority Mail is delivered in a national average of 2-3 days, measured from Post Office to Post Office.”

In other words, this whole ad is a joke. Because Priority Mail is no faster or more reliable than First Class! Imagine if the FedEx ads said, “When you need to get it there in two or three days, positively, on average. Well, not there exactly; we’re measuring that from FedEx station to FedEx station. But certainly within 3 or 4 days most of the time and rarely more than a week or two.”

Because that’s what you get for $3 from Priority Mail.

The service may have improved, but back when the slogan was “two pounds, two days, two dollars and ninety cents,” I had one Priority Mail piece that took +two months to make it from Miami to New York. There was nothing unusual about the item. The address was correct; it hadn’t been mangled. It just took two months. (It was as light as a feather, containing nothing more than a $5,000 check. After a couple of weeks, we stopped payment and FedExed a replacement.) Two months is the record for me, but there have been others in the 7-to-10-day range.

And why not? Because if the national average is “two or three days,” you’re going to need a heck of a lot of horror stories to make up for the ones that actually get across town overnight. (In Miami, this happens with First Class mail much of the time.)

One day, with all those planes and trucks, perhaps they’ll have something worth advertising.

“We’ve gotten our act together,” such an ad would read, “and can now guarantee to deliver Priority Mail in one or two days ordinarily, but three without fail.” Something like that might be worth paying for. But until then, it’s First Class for anything that isn’t time-critical; FedEx or UPS for everything else.

And lest you think I’m complaining only about a government-sector behemoth . . .

Tomorrow: IBM: Room for Improvement

Some say money is the root of all evil; others, quoting George Bernard Shaw, that lack of money is the root of all evil. (I say: since the matter is in dispute, may as well have it than not.)

But if we’re looking for the root of evil and for fundamental problems, why start with money? It’s people who are the root of all evil, and an overabundance of us, it can persuasively be argued, that is fundamental to many of the world’s worst problems.

I don’t mean to offend any particular person. Well, maybe Mickey Rooney. But as a group, we really have to start thinking about the size of our party. Six billion?

I know, I know: Malthus. Big ol’ cry baby. Whine, whine, whine. World population has doubled in just the last 38 years — positively teeming by Malthus’s standards — yet it’s not as if people are going to bed hungry or anything.

Well, there is a bit of that, I suppose, but c’mon: if the planet can’t support an additional 90 million new consumers a year — a new Mexico each year — then what kind of self-respecting planet is it, anyway? We haven’t scratched the surface of this fine planet’s carrying capacity. Your war, your over-crowding, your infectious diseases, your red tides, endangered species and global warming — just so much kvetching from the folks who care more about snail darters than strip malls. There was plenty of war and disease and chariot traffic back when there were only a billion of us.

Still, if you’re not certain technology will solve everything as the Earth’s population doubles and doubles again, it might be worth a click to check out the Zero Population Growth website. Full disclosure: I’m on the board.

Tomorrow: Big Potatoes

An enthusiastic young friend with a lot of hair on his back has been pushing me to buy stock in ThermoLase (TLZ). When he started pushing, the stock was around 22, up from a 1995 low of 3-5/8. He explained that right now the company had just one hair-removal salon in La Jolla, but that it had a patented painless laser process to permanently remove hair quickly. And for only $3,000.

This is not one of those companies where you can go crazy with lines like . . . “and once they saturate the market here, think of the billion Chinese!” . . . because, if I have my racial stereotypes right, the Chinese tend not to be all that hairy. Still, imagine grabbing $3,000 from every hairy-backed guy in America who wishes he weren’t. And from every gal tired of shaving her legs.

So the stock was a buy at 22, my friend said — what did I think? I asked the obvious question, how many shares is this little company divided into, and, as usual, my friend didn’t know. We’ve had this kind of conversation before. (US Surgical was his last pick. Having already tripled, it would nearly triple again. Then drop from 140 to 20.)

I looked it up, and TLZ has about 40 million shares out, so at 22 the company was selling for $880 million. A lot, I thought, for a single hair-removal salon — even perhaps for one with a patented process so promising as this one.

Naturally, the stock went up. At 26 or so, I read an article in Business Week describing another company, Palomar Medical (PMTI) with a similar-sounding technique said to be just a few months from FDA approval, and said to have ties to institutions like Massachusetts General Hospital in Boston. PMTI was $9.50 a share at the time and thus, with 15 million shares out, was being valued in the market at about $145 million.

PMTI, I reckoned, could be competition for TLZ.

So I did two things. I shorted some TLZ — up to 29-1/2 by this time — and bought an almost equal dollar amount of PMTI.

If hair-removal companies ARE worth a billion dollars, I figured, then PMTI would eventually sextuple, while TLZ, already valued by the market at a billion, wouldn’t budge. Or, if they collapsed, TLZ would collapse further. Either way, I’d come out ahead.

(Important caution: I usually lose money shorting stocks. It is VERY risky, ESPECIALLY if you do it with as little knowledge and research as I do. This comment is meant to amuse you, not lead you into making the same mistakes I do.)

Two weeks later, PMTI had climbed to 11-1/4, up 18%, but TLZ had climbed almost as much, to 34-1/2 (where I shorted some more). So my gains being long PMTI more or less canceled my loss being short TLZ.

Why am I skeptical of ThermoLase? I know next to nothing about hair removal, other than that I have a little of my own I wouldn’t mind getting rid of. But even though I can afford the $3,000 I’m told TLZ charges, I haven’t rushed out to La Jolla as of yet. So based on a sample of one, me (a sample size I all too often select in making my investment decisions), the Lase craze may be overdone.

My friend DID rush out to La Jolla and reports that after another couple of visits his hair should be history. (The process, he says, gets all your current hair. But at any time in the hair cycle, you’re gonna have some nascent hairs the laser misses — like seeds in the ground that later sprout — and so return visits are advised.) He also managed to get them to come down a bit on the $3,000 price, which led me to believe the demand for this process may not yet be at a fever pitch, even if demand for the stock is.

Now, it’s certainly possible PMTI will never get approval for its method, and that a million people a year will pay TLZ enough for it to net $1,000 from each one, after taxes. That would be a $1 billion profit to TLZ shareholders — in a league with companies like Sears, Merrill Lynch, 3M and Chevron — and would justify a stock price 10 or 15 times where TLZ is selling today.

But what if PMTI does make it, and competition from the hundreds of health care facilities that have signed up to license its process, once approved, drives the after-tax profit per hairy back down to, say, $300? And what if TLZ manages to corral just 100,000 customers a year instead of a million — still a lot of customers for a start-up business in what could become a competitive industry? That’s a $30 million profit, which at 15 times earnings would justify a $450 million valuation — about $11 a share.

Not that rationality has so much to do with any of this in the short run. TLZ could be 100 or 200 before the bubble bursts, if it is a bubble.

But I’m having a lot of fun with this. If PMTI goes up enough or TLZ drops enough, I just might have enough mad money to justify a trip to La Jolla.

Tomorrow: Evil

Yesterday, I described my Jackie Kennedy Onassis letter to Rudolf Nureyev. I bought it a couple of years ago, before Mrs. Onassis died. Whatever kind of investment it may have been, you could probably tell it’s something (like that Margaret Mitchell letter you may have seen me quote last week) I just find really neat.

I couldn’t conceive of paying a million bucks to own some painting, let alone five or ten million to buy a painting by an artist I had actually heard of. But $25,000 for a letter handwritten by Thomas Jefferson 200 years ago? This I can conceive of.

I’m not recommending it (and almost all the items in my little collection cost much, much less than $25,000). And I’m not putting down those of you with million-dollar paintings by artists I never heard of. Different strokes for different folks.

I should also say there are tremendous pitfalls in buying “historic documents,” not least being the risk of forgery. There are a load of sales folk out there who will paint irresistible word pictures to get you to pay triple for something what they just paid. After all, what’s a thing like this “worth”?

Remember the Broadway musical, The Rothschilds? This is how Meyer Rothschild got his start — he managed to buy a few old Roman coins, and then dazzled the passing noblemen with stories. “Picture it — the Ides of March. Caesar, about to go off to the Senate. His wife has a bad feeling about it. ‘Julius: today, stay home from work.’” (I am quoting the play very loosely here.) He says he has to go, she says no, he says, “Tell you what we’ll do. I’ll toss a coin.” And then, Rothschild starts to sing: “He tossed a coin, he tossed a coin, saying ‘coin, it’s up to you, tell me what I ought to do’ and he tossed it — PERHAPS THIS VERY ONE!”

“I’ll take it!” cries the nobleman, no longer caring about the price.

Well, that’s the way I get sometimes with these things, and that’s how the Sotheby’s crowd got last week, and that’s how you could get if you’re not careful, so be careful. Don’t buy anything for six months, if you ever do at all. Give yourself time to get a sense of all the amazing things out there and what prices they’re offered at or sell for at auction.

That said, here’s an incomplete list of some of the dealers and auction houses that sell historic documents. You could write and request a recent catalog to get a sense of what sorts of things they offer. Prices at some can be as low as $50 or $100, with lots and lots of stuff generally in the $500 to $5,000 range (such as my Jackie Kennedy Onassis letter, quoted yesterday), and then some pretty amazing stuff on up into the tens and hundreds of thousands of dollars.

ADS Autographs
Box 806
Webster, NY 14560

Walter Burks Autographs
Box 23097
Stanley, KS 66223

Christie’s
502 Park Ave.
New York, NY 10022
(Ask for a recent “Printed Books and Manuscripts” auction catalog, with the hammer prices the items brought.)

Gary Hendershott
Box 22520
Little Rock, AR 72221

Lionheart Autographs
470 Park Avenue South PH
New York, NY 10016

Pacific Book Auction Galleries
139 Townsend St. #305
San Francisco, CA 94107

Profiles in History
345 N. Maple Drive #202
Beverly Hills, CA 90210

Max Rambod
9903 Santa Monica Blvd.
Beverly Hills, CA 90212

Remember When Auctions
Box 1829
Wells, ME 04090

Joseph Rubinfine
505 S. Flagler Dr.
West Palm Beach, FL 33401

Scott Winslow Associates
Box 10240
Bedford, NH 03110

Seaport Autographs
6 Brandon Lane
Mystic, CT 06355

I know this is old fashioned. Some of these guys, and others, must have Web pages by now. I don’t know, because I’m on their mailing lists. But let me know if you find some good web sites.

Tomorrow: Hair-Raising Price for Hair Removal Stocks?

She was great, but the mania at Sotheby’s last week is a little scary, if you ask me. A friend who’s not exactly rich, and who’s normally a bit sticky when it comes to parting with money, got caught up in it all and bought +a silver-plated toothbrush holder, estimated to be worth $200 to $400, for $7,000 (plus the 15% buyer’s premium, plus New York City sales tax — about $8,700 in all).

And this may actually have been one of the better deals. Three pillows, valued collectively at $150 to $200, that a friend of mine bid $800 for fetched $25,000 and change.

I was happy to see this. First off, it was very entertaining. Everyone had fun. Second, it showed that the Kennedy attraction is alive and well, and with it, one presumes, attraction to the kinds of ennobling enterprises they stood for (the Peace Corps? NASA?). Third, it made my own purchases of “historic” items these last few years seem a little less preposterous.

Last week, I quoted from a Margaret Mitchell (Gone With the Wind) letter I had bought. I guess today I get to trot out my Jacqueline Onassis. It’s a handwritten note to Rudolf Nureyev on three pages of thick “A.S. Onassis” note paper. She used dashes rather than commas and periods for punctuation. I bought it a couple of years ago.

Dear Rudolf –

This note brings you much love from Ari and me –

If you are not doing anything after your performance tonight – would you like to come and have some vodka and caviar with us at home – 1040 5th Avenue & bring anyone you like –

It would make us so happy to see you – as Ari goes back to Europe in a few days –

BUT MUCH MORE IMPORTANT than Ari and me – is Caroline –

She is coming to see you dance tonight with her governess and 2 little friends – they are all 13 years old – (except the governess!) – and are longing to come backstage and meet you – They are so shy about it –

Caroline remembers so well when you came and said goodnight to her in her room one night years ago – She is very envious of Tina –

Would you be sweet enough to say hello to them, if they get up enough courage to come backstage?

We will be home with 4 Greeks for dinner – if you can come by afterwards –

Could you tell Caroline if you can come – it would give her such a treat – or let us know by phone 628-0408 –

Anyway – much love again –

It’s signed “Jackie,” but also “Ari with love” — they both signed it. Looks as if she wrote it that morning and gave it to him to take to the office to have hand-delivered. So he added his “with love” and had an assistant type up an envelope (Mr. Rudolf Nureyev, c/o Miss Monique Van Vooren, 165 East 66 Street, New York, N.Y.). There’s no stamp on the envelope (since it was messengered, none was needed). It is engraved, simply, 647 Fifth Avenue, New York, New York 10022. “Onassis” is hand-typed above the engraving. Of course, 647 Fifth is the Olympic Tower, which Onassis built.

I don’t know whether Nureyev accepted — one imagines he probably did. Should I write Caroline and ask?

The last thing I would suggest is that you abandon the stock market — productive, dividend-paying investments — for collectibles like these, let alone at the insane prices people were paying last week. (I don’t know what my letter is worth, but I feel sure it is worth as much as a toothbrush holder, and I paid significantly less.)

But what fun you can have with this little scrap of history, when you start thinking about it. Nureyev defected to America in 1961, when he was 23, during the Kennedy presidency. The letter is undated, but if Caroline was 13, it must have been around 1971 (wasn’t she about two when JFK was inaugurated?).

I haven’t figured out who “Tina” is. Can one of you enlighten me?

Tomorrow: Historic-Document Sources: Where YOU Can Buy Stuff Like This

The first time I ever heard about GEICO, was 1973. Funny name for an auto insurance company. But my estimable editor at NEW YORK Magazine — a magazine published for people who by and large don’t own cars, because they live in New York, where you’re crazy to own a car — told me to check into them anyway.

I’ve been recommending GEICO (along with a few others) ever since.

For reasons too boring to inflict, I have not, however, until now, been using GEICO myself. On Easter Sunday, having just seen their TV ad urging a 15-minute phone call to see how much you could save, I gave it a shot.

Who’s at work on Easter Sunday?

Well, GEICO was, and in fine spirits, and in 15 minutes I had knocked 34% off the cost of my auto insurance for the exact same coverage I’d been getting previously. A saving of $482 a year.

You may not do as well. But 15 minutes? That number again: 800-841-3000.

Tomorrow: Jackie — Oh, What Prices!

Earth Day has come and gone, and what did you do about it? Me, too.

But here’s something you can do:

Step #1: Grab a copy of the April Atlantic Monthly at your library, or if you can still find one at the newsstand.

Step #2: Read the article by two Energy Department deputies called “Mideast Oil Forever?”

Step #3: Send copies to your Senators and Representative with letters urging them not to sacrifice our long-term well-being for short-sighted, short-term gain.

The article makes a strong case that, while not all alternative energy projects make sense, to be sure, we’re on the verge of throwing away our lead in viable energy solutions that will bring jobs, cleaner air, less dependence on foreign oil, a lower trade deficit, a stronger dollar, and greater prosperity.

Not all government programs are good, by any means. But neither are they all bad.

Tomorrow: GEICO Redux

“Moreover, despite the low 5.6% unemployment rate, wages remain relatively stagnant, and polls find many Americans worried about layoffs, job security and a perceived stagnation in living standards.” — Wall Street Journal April 10, 1996

It’s tough out there. Nothing I’m going to say is meant to minimize that.

But the perceived stagnation in living standards may be more quantitative than qualitative — and not just because the crime rate is down. (And the Los Angeles air and much of the nation’s water is cleaner.)

Here’s a letter I just got written by Margaret Mitchell, author of Gone With the Wind, in 1949 (I collect stuff like this). I bought it because, ironically, Margaret Mitchell was killed in a car crash with a drunk driver a few months after writing it. Gone Through the Windshield. But it makes another point as well:

February 3, 1949

Dear Mr. Jones:

Here is our thought about the matter of a new car. The four-door car just will not do for us. It appears to have less leg room for John than the two-door and it would cramp his legs on a long trip. The steering gear on the four-door surprised me by being set at a different angle, so odd an angle that even with the heavy driving pillow behind me I could not reach the brakes. I can’t tell you how much this surprised us and disappointed us too. Mr. Mullin was as surprised as we were. He very obligingly said he’d bring us out the next two-door you had to try again. But John and I have talked the matter over and have decided we do not want the two-door either. We nearly got killed in an accident once when a drunk drove into the back of our car and we were sitting in seats which swung on hinges such as the two-door Mercury has. That type of seat will sling the passengers into the windshield. John felt, too, that the wheel of the two-door Mercury was in my ribs and that any slight accident might cause me serious injury. I also had the problem of lowered vision.

Cordially

Margaret Mitchell Marsh
Atlanta, Georgia

She goes on at some length — they’ll just put a new coat of paint on their old Mercury and hope it holds up a while longer . . . if not, they’ll take the train. If only Mercury would come out with a car that combined the virtues of the Mercury engine, the 1918 Piece-Arrow limousine and the 1920 T-Model Ford, she laments.

So here was a wealthy celebrity in 1949, who would have killed for a car like yours or mine. I have an airbag (an airbag could have saved her life). I have adjustable seats and seat belts. You, too? There’s a good chance you have air conditioning! And — now, this is truly incredible — a radio and possibly a telephone in your car! Power steering! Anti-lock brakes!

We have computers ten times as powerful as the ones we could have bought for the same price just a few years ago. That’s stagnation?

For $300, I have a scanner smaller than a hero sandwich that will stick the original of the Margaret Mitchell letter onto my screen in seconds, then optically transcribe it from a photo to an actual word-processing document I can edit and stick into the text above, saving all that mindless retyping. I can then shoot all this over the phone lines up to a satellite down to a computer where it gets fed into the computer from which you’ve just retrieved it.

Stagnation?

We have Caller ID and Prozac and not-from-concentrate orange juice year-round with little bits of real home-style pulp floating around in it. We have electronic banking, laser surgery, and $12 AM/FM clock radios* with snooze alarm that receive music digitally recorded on compact disc. We have Friends and the Internet and fat-free cheese!

Excuse my enthusiasm (and let’s be quick to acknowledge not everyone has the cash or education to enjoy these things). But this is not stagnation. This is wondrous progress quickly taken for granted.

————————-
*I also have one of those $300 Bose radios you see advertised everywhere, but its clock broke — the big digital read-out always says 3:21 — and the sound is not worth the extra $288 to my ears.

Tomorrow: Energy:Crisis and Opportunity

The last couple of days I’ve been touting the Diners Club card.

This despite the fact that I own no stock in Citicorp, its parent (I sold too soon!), but do own stock in American Express, its competitor. And despite the fact that American Express, bless its heart, gave me a card my senior year in college. I’ve been a loyal “member” ever since, and plan to remain one.

The new Diners card is appealing. In addition to the plusses mentioned a couple of days ago, it provides $350,000 free flight insurance when you charge your tickets to the card, compared with $100,000 free from American Express.

Of course, this is kind of silly, because you only get to enjoy this benefit when you’re dead or dismembered . . . and because you’re not going to die on a scheduled airline — any more than you’re likely to be struck by lightning.

But you could be killed in the cab on the way to or from the airport — in New York or Moscow that is a very real possibility — so having this coverage can’t hurt, because it covers you in the cab, too. And, unlike Amex, it covers you when flying on free tickets.

(More details: lose sight in both eyes, you get the full $350,000. Likewise, an arm and a leg. One eye only: $175,000. One hand or foot: $87,500. But not cumulatively. And not if the accident was caused by an act of war, declared or undeclared, or suicide or attempted suicide while sane.)

Using the card to charge a rental car saves money, because you can decline the expensive collision waivers. If there’s an accident (or theft or fire), the Diners Club coverage should pay without your having to make a claim against your own auto insurance policy first. (Some restrictions apply to New York State residents.) That’s good, because making claims often leads to higher premiums. With Amex and others, your own insurance coverage has to be exhausted before the Amex coverage kicks in.

And then there’s “excess baggage insurance.” I’ve had some fun in years past writing about the coverage Amex sells. Well, the Diners Club coverage is not exactly something you need, either, but at least it’s free: $1,250 to supplement the airline’s own coverage. So if your $2,000 set of golf clubs is lost or stolen, you’d get the first $750 from the airline and the rest under this coverage.

The Diners card has its pitfalls. The first is late payment. They invite you to take a second month to pay, if need be, with no interest or penalty. Swell. But if you don’t, then you’re hit with a $20 fee plus 2.5% of the balance. Another not-so-good-deal is their cash advance program, that turns your Diners card into an ATM card — but with a 4% per transaction fee. Hey, it can take a year or more to earn 4% on your money, after tax. Why pay it to Diners Club parent Citicorp for having use of the money for a month or two?

The last thing to say about all this is that if I’m right, and Diners is offering a bit more than Amex these days, then one of two things is likely to happen fairly soon. Either Amex will up the level of its own benefits somewhat, or Diners will gradually lower its level (well, it’s already $15 more expensive: that pays for a ton of excess baggage insurance right there!). But for now, I guess Diners will be the top card on my deck.

I don’t know whether they’ll extend the 10,000-miles-free introductory offer to people who call them, but if you’re interested in learning more, call 800-2-DINERS.

Tomorrow: Stagnating Living Standards & Margaret Mitchell