Salty Weekend Reading August 23, 2002February 21, 2017 SALTED GRAPEFRUIT Mark Kennet: ‘You might also try salt plus chili powder on slightly under-ripe mangos. That’s how they eat them in Thailand, and it’s really surprisingly good! Here in Peru, I’m so happy to have a zillion different types of fresh fruit every day that I don’t bother to put anything on it – I can’t imagine anything improving a cherimoya.’ John Calkins: ‘Your “Grapefruit” column described exorbitant room service charges at a four-star Beverly Hills hotel, while “Pressing Matters” states that the grapefruit in question was delivered to your hotel room in San Francisco. Jet lag, perhaps, or did you inhale too much steam in Des Moines?’ ☞ Oops. EXECUTIVE COMPENSATION Tim Bonham: ‘Have you seen ecomponline.com? It uses SEC reports to give you the compensation of the top executives of companies. Very interesting. Looking up ones like Enron, etc. can be infuriating! I just wish they had included a line at the bottom giving the total reported profit (or loss) for the company for that year.’ ☞ Neat. YOU CAN CUT/PASTE FROM MYM12 IN WIN ’98 OR XP! Michael Rutkaus: ‘For XP Home: Click over little icon at upper left of MYM12 Screen in XP. Select Edit. Now you can mark (you do this to select what to copy) cut, paste almost like in Windows. You also have a better Find than in MYM12. Also if you don’t have the nice MYM12 Icon on your Windows XP desktop, but have a DOS looking icon, you can right click on that, select Program, then select change icon and then Browse in the MYM12 folder to find the icon. For Win98/Me and even Win95, the key, running it inside a window, not ‘full screen.’ (Right-click on the MYM icon on your desktop and select Properties and then Screen. Then tell Windows you want to run MYM in a window, and that you want to Display Toolbar. Next time you start MYM12 it will have a modicum of a toolbar at the top.’ ☞ Now they tell me. VARIABLE UNIVERSAL LIFE INSURANCE Steven: ‘An advisor wants me to buy a low load, commission-free VUL. What do you think of this product?’ ☞ If there’s a load, low as it may be, how can there be no commission? If you mean he/she gets absolutely no commission for recommending this product, that would be a reason at least to listen. But do you need life insurance? (From Steven’s e-mail address, I’m guessing he may not.) If not, don’t buy. And even if you do, why not buy inexpensive term life insurance, that’s easy to shop for, and do your stock market investing separately (and/or use the money to fund a Roth IRA)? WEEKEND READING FROM GEORGE SOROS Click here.
Health Notes August 15, 2002February 21, 2017 EIGHT GREAT YEARS Today is our eighth anniversary. I’m stuck out West asking people for money for the upcoming election, but that’s OK, because it’s part of a process. At some point a majority of Americans, and their representatives in Congress, will decide that a gay couple that’s been together eight years is entitled to the same economic rights and benefits as a straight couple that’s been together eight years. (Indeed, the straight couple gets these benefits even if they met yesterday.) And that a society that wants to encourage stable, responsible, loving relationships should recognize them. BUT WILL GRAPEFRUIT KILL ME BEFORE OUR NINTH? Kerry Moskop: ‘If you’re still taking Lipitor … well, nibbling on them … grapefruit is a ‘no-no.’ My Lipitor prescription container has a big, red warning label: ‘Do not eat grapefruit or drink grapefruit juice at any time while taking this medication.’ I don’t know if it’s because grapefruit counteracts the beneficial action of Lipitor or the two, work together, do something dastardly to you.” Vince DeHart: “From MedicineNet.com: ‘Grapefruit juice inhibits a special enzyme in the intestines that is responsible for the natural breakdown and absorption of many medications. When the action of this enzyme is blocked, the blood levels of these medications increase, which can lead to toxic side effects from the medications.’” ☞ I quit taking Lipitor when I discovered this conflict. I decided grapefruit and exercise were better for me than Lipitor and its potential side-effects. I was also offended by a slick brochure the manufacturer sent out trying to help me with a friendly warning never to split the tablets. Ostensibly, this was for my benefit. In fact, I believe, it was for theirs. At Drugstore.com, a year’s supply would have cost $678 if I had bought the prescribed 10mg size, versus $269 if I bought the 40 mg tablets and cut them in quarters. I PAID THREE GRAPEFRUITS TOO MUCH John Seiffer: “I usually go lower than you on Priceline.com. In Dallas I get 3-star hotels for $30. One time I was at the DoubleTree and asked if I could extend the stay at the Priceline rate of $30, saving them some fee I imagine they must be paying Priceline. They said no, so I went back on Priceline to extend the stay and got the same hotel for $30. They did let me keep the same room.” PHILIP MORRIS: ALWAYS LOOKING OUT FOR YOUR HEALTH Speaking of companies that have only your best interests at heart, the New York Times reported yesterday that Philip Morris and others in the 1980’s and 1990’s successfully pressured drug companies to dial back their marketing of nicotine gum and skin patches that help people quit smoking. TAKING GRAPEFRUIT WITH A GRAIN OF SALT Mike Kozlowski: “You should have tried the salt on the grapefruit. Someone told me about this, and I was very very skeptical, but: It’s good! It doesn’t taste salty at all; it just brings out the grapefruit’s taste more. Delicious.” EAT WHAT YOU WANT I became famous in our family (with just one sibling, it was hard to be an unknown) for the simple observation to my indecisive cousin – age five at the time, like me, and unsure of a piece of Thanksgiving dinner – “Michael! If you want the ham, eat the ham. If you don’t want the ham, don’t eat the ham. But let’th not asCUTH it all the time!” It is vaguely in that vein that this bit of Internetiana could be read, forwarded by Eric Loeb. You may already have seen it: The Japanese eat very little fat and suffer fewer heart attacks than the British or Americans. The French eat a lot of fat and also suffer fewer heart attacks than the British or Americans. The Japanese drink very little red wine and suffer fewer heart attacks than the British or Americans. The Italians drink excessive amounts of red wine and also suffer fewer heart attacks than the British or Americans. CONCLUSION: Eat and drink what you like. Speaking English is apparently what kills you.
Grapefruit August 14, 2002February 21, 2017 I know room service has specific menus, but from time to time I remember that at many finer hotels you can ask for more or less anything. ‘Would you happen to have a grapefruit in the refrigerator?’ I asked. It was past midnight, and I figured I’d be good for a change. How wrong can you go with a whole grapefruit as a late night snack? ‘You want a whole grapefruit? Anything else?’ ‘Just a knife. A whole grapefruit and a knife to cut it with.’ I am staying at a 4-star Beverly Hills hotel, with an amazing down comforter on the bed, a two-line line with modem, tasteful art on the walls, balcony with a view ($84 plus tax and the $5.95 Priceline fee) – so in less than half an hour there was a knock at my door. A whole grapefruit. A knife. A salt shaker (huh?). And a bill for $17.54. I plan to ask about this when I check out in the morning. ‘How can you afford to rent me a beautiful room like that for less than the cost of five grapefruits?’ I will ask. DICK DAVIS #29 – NOW HE TELLS US Item 29: Know The Downside Stock recommendations should include all the bad stuff that can happen, as well as the good. Only then will there be no surprises. But a complete list of the major negatives is rarely included in a recommendation. The only place you can get full disclosure of all the risks is in the prospectus that accompanies a new offering – and then only because it’s required by the S.E.C., and no one reads prospectuses. Think about it. If you’re buying a stock, someone is selling it to you. Why? It’s only by your knowing all the possible reasons for the sale that you can make a truly informed decision. Always seek out the downside; it may take some doing.
One Stupid Liberal Curled Up at the Movies with a Diet Coke August 1, 2002February 21, 2017 THE KID STAYS IN THE PICTURE If you’re old enough to remember movies like ‘Love Story’ and ‘Rosemary’s Baby’ and ‘Chinatown’ and ‘The Godfather’ – see it: ‘The Kid Stays in the Picture.’ And don’t leave when the credits start to roll – you’ll miss the best part. COKE AND DIET COKE Konrad: ‘I just wanted to add one of the many benefits diet drinks offer. When drinking something sweetened by an artificial sweetener and you’re outside, you’ll notice no bugs flying around your drink.’ CONSERVATIVES ARE EVIL, LIBERALS ARE STUPID Herewith an insightful column from Charles Krauthammer. Conservatives think liberals are stupid. Liberals think conservatives are evil. As a conservative, Krauthammer thinks liberals are stupid to think conservatives are evil. (As a liberal, I don’t think conservatives are evil, just a tad selfish and short-sighted from time to time.)
Gloating and Floating July 30, 2002February 21, 2017 Well, there are two ways this can go. The market can just keep generally climbing from here, leaving last week’s lows behind forever . . . with lots of people really worried that the worst isn’t really over, but the market climbing that wall of worry (this is a market cliché: bull markets climb a wall of worry) . . . until everyone is finally convinced, months or years from now, that the bull market really is real, and it really is safe to get back in – and that will be the top. There is so much money on the sidelines right now, in money market funds and the like, there could be an explosive move up. Or it could turn out that it’s already too late – that Citigroup’s 30% gain since we bought it last week is all we’ll get for a while, likewise the 21% on EPN, the 24% in MRK and the 16% in JNJ. I’d be surprised if these particular stocks tested their week-ago lows any time soon, but I’ve noticed that any time I start to gloat, it’s a sign of a top (or a bottom if I’m short), which I invariably ignore to my regret. The only saving grace here may be that I wasn’t smart or brave enough to buy very much of any of these, which is – let’s face it – probably the only reason the market gods allowed these stocks to go up. And think about it. Isn’t a lot of Wall Street decision-making little more analytical than that? Hunches and feelings and superstitions and numerology? ‘Well it’s down 80%, it has to go back up!’ (Oh, yeah? Why?) One of my best picks ever had as its symbol Charles’ initials. It’s not taught in Securities Analysis, but how can you argue with success? What I really think, of course, is that making sacrifices to the market gods or buying on a hunch is dumb. Yes, the market, and specific stocks, will go to crazy heights and depths from time to time, but always pulled back, sooner or later, toward “true value,” like one of those balls attached by a rubber cord to a paddle. What’s true value for a stock? As always, it’s hard to say and constantly changing. But it is grounded in things like profits, dividends, assets, and potential growth. And in the relative attractiveness of alternatives, like bonds. And the fact is, it’s a tough world out there, hard to show a profit (especially a real one); so it’s hard to justify paying huge multiples of earnings – even if those multiples are half what they were two years ago. Then again, with the NASDAQ down nearly 75% from its high, and the S&P down 45% or so, it’s no longer crazy to buy stocks. Risky, to be sure. Premature, quite likely. Not as smart as it was last week, you must admit. But not crazy. If you are someone who’s been putting $1,000 a month into the market for years, don’t stop! If you’re someone who’s always been meaning to do this – start! But don’t be surprised if this turns out to be just a few day or few week or even few month bounce in what could be some really tough years for the market. I’m not predicting that; but you should be aware that it’s possible. The two most important determinants: Where will corporate profits go? And where will long-term interest rates go? Profits could be robust . . . but you could also make a case that they won’t be. Interest rates could stay low . . . but with big budget deficits and a weaker dollar (which inflates the cost of imported goods), they might rise. (Rising long-term interest rates hurt stocks.) A very long way of saying: the safer the stock market begins to feel, the less safe it actually will be. FLOATING Mike Schoren: ‘Sugar is heavier than water. The CO2 in the diet causes it to float, but the sugar in the regular has more impact than the CO2 in the regular.’ ☞ That’s pretty much the executive summary in answer to yesterday‘s question. But for those who want a few more: Peter Sheldon, Associate Professor of Physics, Randolph-Macon Woman’s College: ‘This is actually a typical demonstration that is used in physics classes when we talk about Archimedes’ Principle. It is great when someone discovers it on their own!’ Randy Woolf: ‘I am but a lowly musician, but I like science, and I think I know the answer to the diet coke conundrum. There is a measure called ‘specific gravity’, which is basically density. Some liquids are denser than water, especially those with a solid dissolved in them. Regular coke has sugar, lots of it, and diet coke has aspartame / nutrasweet in its place. Apparently nutrasweet is light than sugar. So the specific gravity of diet coke is close to that of water, or less, so it floats. (Things sink because they are dense, not because they are heavy…a cruise ship is very heavy, but filled with air pockets so it isn’t very dense compared to water.) In fact, the amount of aspartame in a diet coke is really minute, because the stuff is so much sweeter than sugar. The little envelopes of aspartame one buys are mostly filler. If they gave you pure aspartame it would be such a tiny amount it would blow of your spoon. Now as to barq’s root beer (which I love, and which floats), I guess it’s not as sweet as coke, and has less sugar in it. It may also be more fizzy, with more carbon dioxide in it. I am not sure if CO2 is lighter than water, but if you fill a balloon with your breath (mostly CO2), it certainly floats. You might want to verify this with someone who actually has studied it and knows what they are talking about.’ ☞ Randy suggests this Specific Gravity web site . . . and this ‘FIFTH GRADE homework assignment webpage(!!!) that covers this exact question!’ Jim Bryson: ‘Another interesting difference, is diet Coke will freeze in your freezer (or in a car in winter) and explode leaving a big mess. The sugar in the regular Coke depresses the freezing point enough to make it very difficult to burst a can. One advantage of the diet, though (other than saving nearly 200 calories each), is that it is easier to clean up when it does burst (or spill on the carpet) – no residual sticky sugar to attract more dirt.’ Chris Petersen: ‘I typed ‘coke floats’ into my favorite search engine and found two things: 1. Hundreds of references to coke floating and diet coke not floating. From this I think we can safely assume that what you have discovered is not a manufacturing problem. 2. Sugar is heavier than the artificial sweetener. Since Coke is nearly water, the additional weight of the sugar overcomes the small air space in the can and causes it to sink. Here is a website that goes into more detail. Bob Anderton: ‘I mentioned the topic at lunch and was told that at the plants where they fill the cans they put four 12 packs on a scale at once and can tell if one of the cans is leaky from the total weight, even though most of the liquid that may escape is still inside the box and only a little bit may have escaped the box. They then scrap the entire set of four 12 packs. This suggests that the amount dosed into each can is very well controlled and that the difference you observed is probably due to the density difference.’ Bob Fyfe: ‘The real question though is how to make a Coke float. The answer of course being to add two scoops of vanilla ice cream.’
Eureka! Coke Sinks! July 29, 2002February 21, 2017 My ten-year-old friend Laura made the most remarkable observation by the pool Saturday, and I’m assuming that several of you will be able to solve the mystery. ‘Diet Coke floats,’ she said quietly. ‘Regular Coke sinks.’ Now please: how could that be? But sure enough, there were several cans of Diet Coke bobbing in the ice-water-filled cooler and several cans of Regular Coke sitting on the bottom. This so defied my sense of physics – could ‘Coke Lite’ really be light? – that I tried pushing down the diets and lifting the regulars to the surface. Guess what? The diets bobbed back up, and the regulars sank. Laura was not gloating, but I would have been had I been the 10-year-old Archimedes. I immediately got a Bud and a Bud Lite from the refrigerator. Both floated. Barq’s root beer floated. Ice, of course, floated. I charted a course of further experimentation that would have included going to buy new cans of Coke from an entirely different batch – does all Coke sink, or might the subject six-pack have come from a batch with a little less CO2 in it than usual? And what about changing the water temperature – would the same thing happen in warm water? But then I decided original research was unnecessary – I have you. I am yet to encounter a question on which some of you have lacked the answer. So – spill the beans! And would they float? Dennis King: ‘I don’t quite follow your tax loss arguments in Friday’s column. First off, why compare a $5000 loss to a $10000 loss? Also, doesn’t the loss carry forward to next year, so wouldn’t a higher limit just shorten the time it takes to claim the full loss? Of course if you have REALLY BIG losses you will not live long enough in any case.’ ☞ The reason for comparing a $5,000 loss with a $10,000 loss was to point out that small investors – who might have realized losses less than $10,000 – would get less of a benefit from the new higher ceiling. (Their $3,000 deductible ceiling would rise, in this case, by only $2,000, versus $7,000 for the larger investor.) But your larger point is valid: it’s a $3,000 annual limit, with the excess carried forward to future years. So if you had $60,000 in losses (and never again had any net gains to offset them), it would take you 20 years to deduct all your losses from ordinary income, versus just 6 if the ceiling were raised to $10,000. Steve Stermer: ‘You really had me going there for a moment Friday. Could it be that Andy was going to actually AGREE with a Republican proposal? I had to check my calendar to see if it was April 1. You made such a good case. But then I [read the rest]. Couldn’t your arguments against raising the $3,000 investment loss deduction also be used to argue for reducing this limit to zero? Why not get rid of the favorable long-term capital gains tax rate as well?’ ☞ Both the pros and the cons I set forth for raising that $3,000 annual ceiling are, I think, valid. This is not a crazy proposal. I just think the cons outweigh the pros. You look at it and perhaps feel that, no, the best-off are not, relatively speaking, better enough off . . . we need to help them more. Not because you have anything against anybody else (I don’t doubt for a minute you are a man of good will); just because you think the best-off deserve a better break. It is a legitimate difference of opinion. As for reducing the $3,000 ceiling to zero, or eliminating the favorable capital gains treatment – I guess my short answer would be: It’s a big deal to change the rules of the game -let alone rules that have been in place for decades. Sometimes doing that makes sense. I’m not sure this is one of those cases.
Is 63 Too Old to Start? May 3, 2002February 21, 2017 Gary Hidden: ‘As a 63-year-old retiree with all retirement savings in fixed income investments, I continue to have serious doubts about the wisdom of my ultra conservative approach since you as well as all the other investment gurus advise a more balanced approach with up to 70% of investments in equities. At 63, is it really too late to start as you say on the last page of your book or should I switch some assets from fixed income to equities at this late date?‘ ☞ I wouldn’t rush to switch now. Nor would I have too much of my money in low-yielding long-term fixed income investments, because I fear interest rates may rise. But if/when the market is really scary low – and to me, 10,000 on the Dow is not scary low – you should consider putting some money into index funds. Or how about this? Embark, now, on a program of putting, say, 1% a month, or maybe just 2% a quarter, into a couple of the funds recommended at the back of my book. After three or four years, by which time you’ll have 30% or 40% of your assets in the market, stop. If the market has gone up significantly, you’ll be glad you at least did this much. If it has gone down a lot, you’ll be glad you didn’t do it all at once. And eventually it will come back to where you started and you’ll have a lightly-taxed profit. There’s nothing like sleeping well. So keep a good chunk of your money safe, especially now when stocks pay such low dividends and tend to sell, still, at high valuations. (This is one of the reasons that – for tax-sheltered retirement money only – I put a chunk of my own funds into TIPS.) Then again, if you’re not a smoker and you lead a relatively happy, healthy life, your life expectancy is another 20 or 22 years. And each year, it gets a little longer. If you do make it to 85 and haven’t taken up any wild or wicked ways, your life expectancy will then be 7 or 8 more years, to 93. And at 93, it will be longer still. My God, Gary, you could be . . . The First Immortal! So don’t be too short-sighted in your investment horizon, either. MATH QUIZ If you lost 1% of your money every month, how much would you have left after 100 months? (Math Quiz Answer: about 37% of what you started with.) EVERY CARROT’S FAVORITE Robert M. Youngman, II: ‘If you like carrot juice, try this: 12 ounces chilled carrot juice and two ounces chilled vodka. In college, we called it a Bugs Bunny.’ Coming Soon: The Wisdom of Dick Davis!
Can Value Line Beat an Index Fund? April 18, 2002February 21, 2017 COOKING LIKE A HORSE Brian Adair: ‘If you like ice cold carrot juice, try this: blend equal parts carrot juice and low fat vanilla ice cream (I like Breyers). My girlfriend made me try this drink a few months ago (‘Carrot juice? That sounds disgusting’ was my exact response.) Now I can’t enough of it. I bought a juicer just to make my own carrot juice and I buy a 5 lb bag of carrots every few days. (I’ve been eyeing the 20 lb bag every time I’m in the store, but I haven’t bought it yet.)’ ANDY’S GANG! Now I see why I remembered Froggie and his magic twanger. It comes from an old show called Andy’s Gang. Thanks to Jack Kirsch and Jon Zich for these links. Click here for the history. And here for Froggie’s page. Hiya kids! Hiya! Hiya! TOBACCO Eric E. Haas: ‘I read with interest your comment about Third World cigarette distribution. I remember an interesting press conference about ten years ago. President Bush (the First) was bragging about opening China to American cigarette exports — how this was a great thing for America. What seemed especially ironic was that this was the same man who sent his army to invade the tiny nation of Panama to bring Manuel Noriega to justice. The charge: Exporting addictive drugs to the United States.’ ☞ Tobacco helped build this country – you will note the tobacco leaves on the dollar bill – and the industry has had a good friend in the Republican Party, and vice versa. The Bushes and the Doles have gotten on fine with Big Tobacco. By contrast, Clinton/Gore, not to mention Congressman Henry Waxman, were the industry’s worst nightmare. (Remember smoking on airplanes? Ah, the good old days. Those days may have ended sooner had Elizabeth Dole not been Secretary of Transportation, calling for further study.) TRADING ONE ADDICTION FOR ANOTHER Mike Lebuf: ‘Forty years ago, cigarette companies were allowed to hand out free samples on US college campuses. But no more. Instead of free cigarettes, students are now given credit card applications.’ VALUE LINE VERSUS INDEX FUNDS Mike Gavaghan: ‘You’ve written quite a bit about the near futility of trying to beat the market average over the long term (thus recommending index funds). So, what can be made of the claims by Value Line that their ‘timeliness’ rankings are highly correlated, since 1965, with stocks that both outperform and underperform the market over a 12 month period? Here’s a link where they state there case. Are they just playing statistical games here, or is this track record worth paying attention to?’ ☞ I subscribed to Value Line for many years and loved those huge looseleaf binders they’d send, with their wonderful research and ranking system – it was sort of the equivalent of the Scott’s Catalog to a 13-year-old stamp collector. And I loved the notion that they could help me beat the market. I visited their offices, met the great man (then 90 or so and the head analyst, and came away impressed. (This was, by the way, well before the invention of index funds.) Then they had a rough patch – right around the time they went public, if I recall – as their ranking system seemed to get out of whack for a while. It may well have returned to whack. But: 1. Following their lead takes some work, and – if you do trade in and out as the rankings change – exposes you to tax. (Remember, if Warren Buffett had achieved the same astounding annual returns he has, but switched positions once a year incurring tax instead of holding for the long term, he’d be a poor man today! Well, OK, not poor. But consider this: A dollar left to compound at 26% a year for 35 years grows to $3,258. The same dollar compounding at the same 26% — but subject to, say, a 20% tax every year, compounds just 80% as fast, at 20.8% — to $745. So taxes matter. And index funds keep them to a minimum.) And . . . 2. Consider the results of Value Line’s own mutual fund, which probably uses its ranking system as well as you could. Here’s what Morningstar says of the Value Line Fund: ‘This fund paints by numbers. It uses the Value Line ranking system to direct its stock picks. But this quantitative strategy has churned out so-so performance numbers relative to other large-growth funds.’ So if you really worked at it, and leaving aside Value Line’s not insubstantial fee, you might do a little better than an index fund – or you might not. Especially in a taxable account. THEY KNOW EVERYTHING Joel Williams: ‘The last time I downloaded a form from the IRS website, when I printed it out on my printer, at the very bottom of the page it said ‘Printed on Recycled Paper.’ How did they know that?’ THE MEXICAN FISHERMAN Christoph: ‘Just to tell you. As far as I know: The history with the Mexican is an adaptation of a history from Heinrich Boell and features originally a Spanish fisherman, and a German telling him to work more. It is called: Anektote zur Senkung der Arbeitsmoral . . . which would be in English something like ‘Anectote to lower the working moral.” Frances: ‘There was a book written by Paul ter Horst around 1984, Cashing in on the American Dream: How to Retire at 35. The story was in there.’ Fleming Bearston: ‘What if the fisherman gets injured? If he can’t fish for more than a few days, he and his family may starve. I don’t mean to be a party pooper – it’s just that this simplistic put-down of corporate life ignores some important issues.’ John Mahoney: ‘Not to be a spoil sport, but doesn’t the fisherman’s reluctance to expand his business explain why so many Third World countries are mired in poverty?’ Chuck Dean: ‘This reminded me of a Depression-era story: A beggar came to a household, which happened to be a whore house, and asked for work. The kindly madam asked if he could work on her accounts for her. He said no because he couldn’t figure. So, she fed him a nice meal, gave him an apple and he left. The good meal satisfied him so much that he fell asleep under a tree holding the apple. When he woke he found that someone had taken his apple and left him a nickel (remember, this is a Depression-era story). He took the money and bought two apples, which he sold. This went on. His business grew and he became known as the Apple King. When he was being interviewed by Fortune, the reporter was in awe of the rich Apple King and said, ‘You’ve done all this without an education. Think what you could have done if you had gone to school.’ The Apple King replied, ‘If I’d gone to school I wouldn’t be here now. I would be a bookkeeper in a whore house.”
Life Is Not a Business April 16, 2002February 21, 2017 SCORE ONE FOR A USER FRIENDLIER IRS Larry Taylor: ‘Well, I took your advice and called in my Form 4868. Got them on the first ring and it was very well done, i.e., easy to follow and to confirm.’ CARROT JUICE Have you ever even tried ice-cold carrot juice? I didn’t think so. You will be surprised. TWANG My computer Scrabble nixed ‘twanger.’ But that can’t be right. ‘Froggie,’ children of 1950’s TV may remember, ‘pluck your magic twanger!’ (No cracks, please.) So, determined to validate my word and and guiltlessly override the objection (without going so far as to ‘ADD’ twanger to computer Scrabble’s memory for use against me at a later date), I went to Google and got this. I have no idea what it is, but it’s fun. Click on the twangers. A HANDY BOND SITE If interest rates have bottomed, this isn’t the best time to buy long-term bonds (other than, perhaps, within a tax-sheltered portfolio, Treasury Inflation Protected Securities, such as the 3.375% issue maturing in 2032). But a good site for learning more is investinginbonds.com. Of particular interest may be the ability to get a sense of municipal bond prices, along with the spread between buying and selling. LIFE IS NOT A BUSINESS You may well have seen this one already – it flies around the Internet, as usual, unattributed – but it always brings a smile. Thanks to Bill Dunbar, most recently, for sending it: A boat docked in a tiny Mexican village. An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them. “Not very long,” answered the Mexican. “Well, then, why didn’t you stay out longer and catch more?” asked the American. The Mexican explained that his small catch was sufficient to meet his needs and those of his family. The American asked, “But what do you do with the rest of your time?” “I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs…I have a full life.” The American interrupted, “I have an MBA from Harvard and I can help you! You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy! a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers. Instead of selling your fish to a middle man, you can negotiate directly with the processing plants and maybe even open your own plant. You can then leave this little village and move to Mexico City, Los Angeles, or even New York City! From there you can direct your huge enterprise.” “How long would that take?” asked the Mexican. “Twenty, perhaps twenty-five years,” replied the American. “And after that?” “Afterwards? That’s when it gets really interesting,” answered the American, laughing. “When your business gets really big, you can start selling stocks and make millions!” “Millions? Really? And after that?” “After that you’ll be able to retire, live in a tiny village near the coast, sleep late, play with your children, catch a few fish, take siestas with your wife, and spend your evenings drinking and enjoying your friends.”
2.9 Cents a Minute? April 2, 2002February 21, 2017 MINT YOUR OWN Took two friends to dinner tonight and suggested the mint-in-the-Coke deal. They humored me (amazingly, the restaurant had fresh mint) – and . . . loved it! So, sure, Coke is about to come out with Vanilla Coke, and that will be good. But ten years from now, just watch: Mint Coke. (You are wondering how I discovered this. Answer: I had come to the bottom of a mojito, which is basically sugar water, rum and mint leaves. Having thus reached the extreme limit of my alcoholic capacity, I ordered a Diet Coke. When it came, I dumped the remaining sugary ice and mint from Glass A into Glass B – I like a lot of ice – and behold! Or, well, betaste! The rest, I feel sure, will soon become Beverage World history.) Not that any of this can compare with a good iced cold glass of Moroccan Mint Honest Tea. Available at Barnes & Noble Cafes everywhere. X-RAYS Michael Axelrod: ‘Madame Curie did not discover x-rays. That honor belongs to Wilhelm Conrad Röntgen who accidentally discovered x-rays in 1895.” ☞ Yeah – and with my luck, Suze Orman will get credit for discovering Mint Coke. LOWER YOUR BILLS EVEN FURTHER? Chris Petersen: “Lowermybills.com listed several long distance plans for 4.9 cents per minute, but you can have an even better rate! Go to Sam’s Club and pick up an AT&T long distance card. They currently cost 3.4 cents/min and can be renewed with a credit card. (Costco has the MCI card at the same price.) Not only do you save on the basic rate, you also save on taxes. It is only necessary to pay sales tax and not the various other taxes and fees that are included with regular long distance service. (I noticed that my 5 cents/min AT&T plan quickly became 7 cents/min after all the taxes and fees were applied.)” Gary Thompson: “The best rates I’ve found are at Bigzoo.com at 2.9 cents per minute. I’ve been using this for six months and have saved a bundle of money. To make it easier to use, input their access codes on the speed dial of your telephone. AND, there are NO fees or taxes added!” GREAT NEW IDEA I’m not sure every one of the ideas tossed out in Forbes’s inaugural “Why Not” column, co-written by Honest Tea co-founder Barry Nalebuff, is a winner, but this one surely is: Why not require HMOs to bundle term life insurance in with their health insurance? That way, the HMO would have a million-dollar incentive to keep you alive and well. (Right now, if you’re sick enough, your expiration would not – financially speaking – be bad news.) ANOTHER IDEA A reader named Don likes the Russian 13% flat-tax idea, but thinks replacing the income altogether, with a national sales tax, would be even better. “Under my plan,” he writes, “your supermarket bill comes out 15% higher. That’s offset by the fact that your income is at least 15% higher than it used to be. Whenever you wanted to do something with your life, you would just do it. There would be no “tax planning”. If you wanted to buy/sell an investment, you would buy/sell it. The only consideration would be “is it a good/bad investment”. This is revolutionary. (It used to be common sense.) Progressivity: you could still have it! People who want progressivity could file with the IRS and claim a rebate. If you didn’t want your rebate or you were in an income category where you were precluded from receiving one, you wouldn’t file. Therefore, the amount of tax work would be much less. Progressivity would be viewed as a kind of welfare, decoupled from the tax system. ‘IRS’ would stand for ‘Internal Rebate Service.’” ☞ Well, it’s an interesting twist, anyway.