They WILL fight back

In about 1978, IFO  attended the state convention of the Libertarian Party of Oregon. The leading LPO intellectual in the state at the time was a man named Paul Dillon. Paul gave the key note speech that weekend in Salem and his words have haunted IFO ever since.

“If we (challengers to the status quo) ever begin to be a real threat,” he warned, “They WILL strike back.”

Current candidate? Uber, the inexpensive popular car service. The company’s   executives are being charged with CRIMES in France, that bastion of liberty, equality and fraternity. /sarc

Pictured at left, Top, UberPOP CEO Thibaud Simphal. Below: French President Francois Hollande.

We’re singling France out, today, but UBER is facing violent union opposition in other locations as well, like New York City, where the company is offering free rides to protests against them.

Let’s listen to CEO Simphal – ooh-la-la!

Striking back shows up when a government entity and its hangers-on feel threatened. If possible, these entities prefer to blackmail or extort exorbitant sums from their victims. If the money is not forthcoming or doesn’t exist, they just adopt laws outlawing the offending behavior.

As the Wall Street Journal, referenced above, notes, “French prosecutors ordered two top executives for Uber Technologies Inc. to stand trial on charges that could bring fines and jail time, a rapid acceleration of France’s legal salvos against the ride-sharing firm. Uber executives Pierre-Dimitri Gore-Coty and Thibaud Simphal were released after spending a night in police custody…” [edited]

Striking back? The State? Yes. Taxi drivers alone can only fight back by competing more effectively. Why do that when they and their union can harness the power of the State to back up their calls for protection.

We saw this in the political arena when Third Party Challengers mysteriously started to show up on the ballot in years when voter disaffection was reaching epidemic proportions. IFO doesn’t believe H. Ross Perot was part of the anti-Third Party cabal.

In fact, he may have started it, when he showed the real danger of a Third Viable Presidential candidate. His candidacy was well on its way to “being a real threat” when his reputation was mysteriously trashed beyond recognition or recovery.

Back to Paul Dillon, the Libertarian. [No, not this Paul Dillon. Or this one, either, although if  you believe in reincarnation…]

He was willing to put up, so he wouldn’t have to shut up. He did challenge the status quo by running for city council in a small town. This gave him the opportunity to show Libertarian thought at work in the real world, rather than in theory.

He was quietly making his point to the pseudo-intellectuals and theoreticians and hair-splitters active then, and still active, in the party. Also, he was showing the shy that it can be done and can be enjoyed.

Dillon entertained us at many a state committee meeting and state convention following his election. He told: What it was like to be the only “no” vote. How his principled stands and friendly demeanor had won him friends on the council.

We were all devastated when he contracted and died of a fast-moving cancer just a few years later. The State didn’t even get a chance to strike back.

What do we learn from this? Never underestimate the strength of the many kinds of competition your business investment can encounter.

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Don’t panic – now’s the time to buy! (just kidding)

Why I Don’t Watch TV News About the Economy

While winnowing our Blog Roll, we revisited Bill Conerly’s Businomics Blog. It’s not a particularly active blog, but this video alone made today’s visit worthwhile.

Today’s drop of more than 350 points in the DJI really IS pretty scary, but this truly is a good opportunity to take some profits, get rid of some weaklings, abolish the stocks you are saying, “I can’t believe I fell for that one!”

There’s not much bad about a constantly rising market, such as the ones we’ve been enjoying since IFO began this blog almost five years ago, except one thing: we begin to think we are investing geniuses.

Of course, we all know better. We know that correlation is not causation, but we just can’t keep from patting ourselves on the back as we see our net worth increasing on a regular basis. So let today be the beginning of a new modesty.

We admit we are not as smart as we wanted to be, but we firmly resolve to become much smarter by reading, learning, trying new strategies, buying and selling, with the now- refreshed recognition that we still have a lot to learn.

Actually, if you follow my conservative strategy, all you have to do to “beat the market” is to stick to it, trading as little as you possibly can.

Remember: you will still get the dividends. If you are nervous about that, check in Yahoo! Finance and see how much money your companies earn per share and compare that to how much they pay out in dividends per share. That should tell you all you need to know.

A British investor who posts often on one of IFO’s favorite blogs said this weekend that, in view of the coming Greek economic crisis, he had sold almost all of his stock and returned to 80% cash! In view of taxes on capital gains, IFO wonders if that was a good idea.

On that blog, we never share actual dollar amounts of money we invest or intend to invest, so there is no way of know what he actually may have to pay. However, it looks like a potentially good idea.

It also looks as if our systems are similar, although the British website is MUCH easier to understand than the IRS website. Probably fewer lobbyists to gum up the tax code.

What kind of capital gains tax does the British government levy on its citizens? After a generous deduction of 11,100 British pounds, or USD $17,460, from the total amount of money you gained from selling your stocks (including subtracting any losses you received), you get taxed at the regular income tax rate of 18% to 28%, depending on your total income.

Now, get that smile back on your face and start reviewing your portfolio. Maybe tomorrow we’ll share with you whether ours beat the Dow and by how much.

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Non-taxable assets – memories

Ice Cream Stand in GreeceOne of the best things about traveling is that you get to keep the memories forever, thus amortizing the cost of the trip over many years. If you keep a diary and take pix, you increase the value of those assets as well, since you can keep those memories fresh and accessible.

A friend took the picture on the left of the ice cream stand. IFO then cropped herself out of it to show the beautiful fruits that were going into the ices.

Obvious, we know, but it’s amazing how we forget these obvious truths unless somehow reminded. In IFO’s case, the trigger was the current summer heat and we remembered our trip to Turkey and Greece last year.
Greek Ice Cream Stand

The food was inspiring! Even eggplant became enjoyable, though growing her own a couple of years ago showed her just how good FRESH eggplant, lightly seasoned and broiled, can be.

Mediterranean VeggiesEggplant is a funny vegetable – it’s kind of like tofu. It takes on the characteristics the chef introduces. Those ingredients are primarily from the Mediterranean, from Italy to Morocco.

Key ingredients for any dish involving eggplant are EVOO (extra virgin olive oil), fresh garlic, S&P. After that, go crazy, as IFO did for the following dish:
Mediterranean Veggies

Ingredients: one medium-size, fresh eggplant (no wrinkled skin); one large beefsteak tomato, medium size yellow onion, fresh chopped garlic, chopped fresh Italian parsley, crumbled Greek feta cheese; salt, lemon pepper, Italian seasoning. lots of EVOO, a bit of vinaigrette.

Directions: Slice eggplant into eight 1/2-inch wheels, salt on both sides and let rest for 15 min per side on a paper towel. This is the Mediterranean way – take your time. Relax. Maybe sip a little wine? For this dish, I would actually drink a dry red wine, but YMMV.

While the eggplant is releasing excess water, slice tomato and onion, also into eight rounds. When eggplant is ready, start with about 1/3 c EVOO in heavy skillet over medium-high heat. Season eggplant slices, sauté about 6-8 minutes on both sides. You probably will need to add EVOO as you go.

Place eggplant slices into serving dish and return to the skillet. Saute the tomato rounds, after seasoning, esp. w/the Italian herb seasoning, also on both sides, but only about 3-4 minutes per side. You probably won’t need any more EVOO.

Remove from skillet and place one on top of each eggplant slice. Do the same with the onions. Watch the onions carefully, they have a tendency to burn. Sprinkle chopped garlic and parsley over all, then the feta crumbles. Pour a bit of vinaigrette, and salt and pepper over all.

Serve cold or at room temperature, with fresh baked whole wheat bread or rolls.

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Heat Wave! How to stay cool

Now that summer is here, we are being treated to feature stories about older adults and overheating. It’s hard to believe that human beings can exist on this planet for 60 or more years and not learn a thing or two.

We’re going to share what we have learned about dealing with 90º-plus heat and how to avoid turning on air conditioning until the very last moment. Air conditioning units use more energy than furnaces, so the less it’s on, the better. Reclining woman illustration courtesy La Aldea.

External tips

Some of this advice requires prior planning and some expense, but is well worth the effort and $$, if you plan to live there for a long time.

* Get two thermometers – one for inside and one for outside. The inside one should be in the center of the house. The outside one should be in a shady spot.  You want to measure ambient air temps.

* If you have a choice of where to live, pick a place with lots of trees, especially on the West side. Get a reflective or white roof, if you can. We know – that is highly unlikely.

* Insulate as much as you can – walls and attic, especially.

* Get a fan – ceiling fan or room fan. With the ceiling fan, make sure it is not pushing the air down. A key point to recall from your physics class: HEAT RISES. Just move the air, don’t blow the hot ceiling air down to sitting level.

* The sun is your enemy. Stay out of it. “Mad Dogs and Englishmen Go Out in the Midday Sun.”

Interior tips

* At night, cool the house. Open all the windows wide. In the morning, as soon as the temperatures on your inside and outside thermometers are the same, close all the windows again.

* Close curtains or Venetian blinds, leaving enough natural light to keep your mood elevated. As evening comes on, watch the thermometers again and when you reach equilibrium, open those windows again.

* Wear skimpy, loose white or light pastel clothes. (see illustration above. :-)) If you MUST go outside, cover your head lightly or carry a parasol.

* Empty your ice cube trays into double plastic bags and put them in the freezer. Immediately re-fill and re-freeze water in the trays.Ice or cool water can be used on your head or arms or wrists or temples.

* Drink liquids. Be careful about coffee, alcoholic beverages or other diuretics – you may inadvertently become dehydrated. Eat a balanced diet with plenty of salt, especially if you have a tendency to sweat.

* Take a light nap in the mid-afternoon. Heat sucks the energy out of you.

* If you start to get hot, take a cool shower. Or, if  you are lucky, hop into the nearest swimming pool or lake. Beware of rivers. See our post of a few days ago on Drowning.

* For all bodies of water, acclimate to the water before jumping in. The shock can kill you.

By following these tips, you are not likely to get heat stroke, but from the link above, here are some signs of heat stroke just in case.

If you or someone you’re with has any of these signs you should seek emergency medical care immediately:

High body temperature (over 104ºF)
Changes in behavior
Fainting or feeling like you’re going to faint
Strong, rapid pulse or slow, weak pulse
Dry skin
Flushed skin
Lack of sweating despite the heat

Now, get something nice to read and a big glass of water and relax and enjoy. Summer will be over before you know it.

Don’t worry about investing. The Greek “crisis” will be pushed down the road once again, IFO is betting.

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Looking anew at ETFs and mutual funds

The summer newsletter issue of a brokerage IFO reads had an interesting article on ETFs and mutual funds. The most interesting part was the notion that buying one or more of these financial instruments is a substitute for buying individual stocks.

IFO’s question is: why? Ask yourself: Am I afraid that I am so uninformed, even ignorant maybe, and unable to look at companies, that any individual stock or bond I buy might drop to zero? But that’s why you are reading Investing for One, isn’t it?

But no. That won’t happen if you follow IFO’s advice: do your due diligence. Look at the CEO and the history of the company and its share price over five or ten years, yield, years the company has paid dividends and then pick a few stocks to buy.  Joseph D. Mansueto

A couple of ideas for finding quite safe (but not foolproof) stocks – look at the Dow Jones Industrial Index components and pick a couple of companies from there to start with. These companies are the crème de la crème. See any you like? Brands you recognize and admire?

Now, can you do that as easily with an ETF or a mutual fund?  That newsletter says there are 1,700 ETFs; about 350 Index mutual funds (funds attempt to mimic a popular index like the Standard & Poor’s various indexes, or the Dow itself); and more than 7,200 “unique actively managed mutual funds,” according to fund tracking newsletter Morningstar.

While finding the Morningstar link, IFO learned something new! Thank you, readers. You inspire me! Anyway, the newsletter company is now a publically traded publishing company (MORN:Nasdaq). This company started out as an 8-page newsletter in 1984. It was founded by its current CEO, Joseph D. Mansueto. There’s a fabulous article about him here.

IFO got her start in investing by reading that newsletter. A useful feature on the back page in the 1980s was a list of top performing mutual funds and the stocks they favored. Bypassing the middleman, she simply picked out stocks from that list one at a time as she gained confidence and capital.

By the way, the linked article was written in 2007 and it notes that there were 8,000 mutual funds, 500 fewer than the 7,550 noted in the first newsletter mentioned above. Maybe they were rounding up? Or did the financial collapse of 2009 take out a few of those “safe” mutual funds? We’re not going to look it up today – maybe another time.

It was only later that she learned about Dividend Aristocrats, companies that have been increasing their dividends for the past 25 or more years. This is another great source of ideas for conservative investors.

She has now graduated to highly speculative stocks which she only buys in her little IRA funds, a mere 8% of her total stock holdings – a necessary curb on her enthusiasm.

So, don’t be a scaredy-cat. Just get started and enjoy the ride. Oh, you might want to wait and see what the market thinks about Greece’s financial crisis before you buy anything just now. But, be ready with your picks and then decide when to jump in.

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Business opportunities in marijuana

Are there any business opportunities in marijuana? Not yet. That’s our conclusion as we watch regulators, mj-phobes, mj-philes and law enforcement people wrestle with laws adopted by an unsuspecting public.

What did the public not suspect? Well, first what did they think they were voting for or against as voters approved initiatives in a number of states. They thought they were voting for or against making it legal to smoke weed.

In reality, the laws were written in a convoluted way to satisfy a number of perceived constituencies – especially bureaucrats/government people and legalization proponents.

So, there are provisions for taxes and regulations. Had the proponents simply legalized the plant, we wouldn’t be where we are today – a regulatory morass as all actors in the drama fight it out behind more or less closed doors.

The few remaining Libertarian purists’ voices crying, “Noooo to regulation and taxation!” were ignored.

Visions of tax windfalls reduced voter and government resistance. “As big business gets ready to make millions,…” said the Daily Telegraph in 2013.

Alas, as IFO has long argued, the price of illegal drugs is unlikely to drop upon legalization and tax receipts are unlikely to bring in the revenue greedy tax collectors were drooling over. Sadly, law enforcement personnel exaggeration of demand and prices of illegal drugs fooled everyone.

Guess what? Cost to enforce prohibition will almost exactly equal cost to regulate and tax.

What everyone forgot is that marijuana is a PLANT! It is a WEED. That’s why early hippies called it “weed.” It grows anywhere and contrary to what some people think or say, it is quite easy to grow. Hence, it will become a commodity. As such, about 80% of the price will be associated with marketing and distribution costs.

Given these disappointments, could a business of more than mom-and-pop size develop, now that so many states have somewhat legalized selling mj? IFO has only seen one possibility, but it is intriguing.

The Bob Marley family is introducing what they call the first global cannabis brand of products, according to a Nov. 2014 article from the BBC News. [Note: Mr. Marley died of cancer in 1981. Just sayin’.]

A branded product is the best possible way to market mj, since users will be able to count on its safety and reliability. That’s what a brand is. It’s why we go to McDonald’s restaurants when we are in unfamiliar areas – we know what we will get.

One final comment on mj from a medical book IFO received from an uncle-in-law many years ago. “A Treatise on Therapeutics and Pharmacology,” published in 1860, discusses the medicinal uses of the plant. Internet site w/.pdf is here, if you have the patience or bandwidth to download.

Basically, it says mj is good for relaxation and some pain relief, but doctors don’t like it because you can’t calibrate the dose and don’t know when it will no longer be effective. Strength is too variable.

In Vol. II of the edition, however, there is an intriguing paragraph on use for women in childbirth. The herb increases strength of contractions and does not last as long as another medicine “ergot.”

Pot legalizers have missed that one.


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Supreme Court decisions on Obamacare and same-sex marriage

This topic reminds us of Lewis Carroll’s monograph “On the Architectural Merit of the New Belfry, Christ Church.” Highly recommended reading on this day, when words fail us.

From Lewis Carroll – Charles Dodgson correspondence. Here is the key line from this salutary essay: “§ 5. On the other architectural merits of the new Belfry, Ch. Ch. The Belfry has no other architectural merits.”

Highly recommend that you read the entire essay to improve your mental health.

Another excellent commentary may be inaccessible to most readers. An article by Caroline Dionne in the Montreal Architectural Review, p. 36, gives background of profound changes affecting thinking about language, including criticism of architecture, in the Victorian era.

IFO had to fib a bit to get into the actual article, but it was worth the effort. Here’s an excerpt:

The architectural transformation under scrutiny in Carroll’s pamphlets is the construction of the new bell tower, or Belfry, at Christ Church College (1872-1879). Commissioned by Dean Henry Liddell in the early 1870’s, the project was designed by controversial Gothic-revival architect George Gilbert Scott (1811-1878) and executed by his former student George Frederick Bodley (1827-1907).

It was seen as an important milestone, one that would end a 350-year process of building at Christ Church. As it touched upon the most pristine parts of the building, altering the physical appearance of the college as it was experienced from the main quadrangle, Tom Quad, as well as its relationship to Christ Church Chapel and to the town, the proposed transformation was from the very beginning extremely controversial.

Happy reading on this otherwise not-so-happy day.


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There’s a peak time for everything

It’s great to be on top of the world!

1. What is your favorite time of day? Why?

2. How do you feel at other times of the day?

3. Do your moods and energy go up and down?

4. Do you have a regular routine that you do every day?

Here is a post from Oct. 2, 2012 IFO had left behind in a leftovers file for this blog.. It is a lesson plan for her Teaching English as a Foreign Language class that she enjoyed for a full month in Prague, CZ  which she reprints below.

IFO began by using an article from the Wall Street Journal by Sue Shellenbarger, that was one of her best, judging by a Google-search on the title. The number of bloggers and columnists who keyed off of it was huge.

At first IFO thought it wouldn’t have any applicability to this blog, Investing for One, but on further reflection, it actually has two uses for investors.

First, it can help you determine your own best time for making investment decisions, and Second, you can use it to analyse yourself and create a daily living plan that is more in accord with your body clock.

. Useful Words and Phrases

1. Natural rhythms                                   — Body’s reaction to nighttime and daytime

2. Commuting                                           — Traveling to and from work or school

3. Schedules                                              — Things done at certain times of the day

4. Body clock                                            — How body does over time

5. Cognitive work                                     — Mental activity, thinking, remembering

The body clock ignoring alarm clocks!

Body clock ignores alarm clock!

Thinking about the title:

When is your peak time? When are you happiest? When do you feel most awake? When do you have most energy? What is the best time of day for you to study?

.                   Your Body Has a Peak Time for Everything

Pack More in a Day By Matching Tasks To the Body’s Energy; Lung Power at 5 p.m.

Continue reading

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More on CEOs – qualities, education, behavior

My gosh! IFO could be a CEO! She only lacks one of the listed qualities on this cover of one of her favorite newspapers, the Houston Business Journal.

Sorry it is so big. We can’t figure out how to crop it and make it smaller. The cover story is an award-winning piece published in Nov. 2014. IFO missed it because she was traveling at that time.

When IFO is finished with this column, she intends to do a full review of CEOS running companies whose shares she owns in her own portfolio.

However, while perusing the news this morning, she came across an interesting takeover battle developing in the world of ag chemicals and seeds.

Monsanto (MON:NYSE), based in St. Louis, MO, MC: $53.7B, has sent an offer to Syngenta (SYT:NYSE), based in Basel, Switzerland, MC: 39.5B. She doesn’t own shares in either one, but finds this an interesting case study.

Let’s look at the CEOs. Nothing on height or birth order, but plenty to think about.

First up, let’s look at Monsanto. Board Chairman and CEO Hugh Grant (really! – but not the real Hugh Grant).

THIS Hugh Grant, profiled in today’s WSJ. Here’s his recent “Letter to Shareholders” Here’s his company biography.

And here’s a link to Monsanto’s discussion in a .pdf file of the proposed takeover. IFO’s takeaway from that presentation is to note that it hardly mentions Syngenta at all. Most of it is blah, blah, blah. There’s a great chart on p. 8, though, showing that just a tiny fraction (about 12%) of the Earth’s surface involves cultivated land.

On to Syngenta –

CEO Michael Mack is an American with international management experience and degrees from Kalamazoo College, Univ. of Strasbourg, and Harvard.

However, taking the lead on the Monsanto proposal is Syngenta Board Chairman, Michel Demaré, a Belgian citizen who has long had relationships with Swiss companies.

He has just taken the unusual step of appearing in a YouTube video explaining Syngenta’s reasons for the company’s multiple rejections of Monsanto merger proposals. If you are short of time, just watch the first 3-4 minutes, then skip to minute 12:00 and watch to the end, taking special note of M. Demaré’s major change in tone.

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Measuring your investment management skills

Task force page views per day.For our more experienced investors, how would you like to looking into some more sophisticated measurement methods? Last month, one of my favorite websites – Investopedia – published an article by Gary Barohn,  entitled, “Does Your Investment Manager Measure up?


Ways to measure your performance

This is a popular evergreen topic for investing columns. We’ll lightly discuss some of Barohn’s suggestions, since his article is light-hearted, too.

He leads by suggesting that you are at a “fancy party,” where financial professionals are discussing performance metrics, but you hardly understand a word. So, he helpfully gives brief definitions of terms and links to more in-depth discussions.

For example, what do you suppose “Alpha” is? It is a way of measuring “investment performance adjusted for the risk taken,” i.e., amount of return that beats the market.

How about “Beta?” This compares volatility of the manager’s investments compared to the volatility of the overall market. “Volatility” measures how far dips fall and peaks rise.

Other metrics are R-Squared, Standard Deviation, Tracking Error, etc.

IFO remembers the term Standard Deviation from her college statistics class, though she has forgotten how to find it. The SD shows how far away a curve is from a straight line drawn through the center of it. VERY difficult concept and calculation for IFO.

One of her biggest problems with these metrics is the use of the term “risk.” We think it actually means yield or rate of return (yield plus price increase/decrease) or just plain old interest on investment.

But investment managers throw the term around like a Ping-Pong ball. Investors are urged to learn what their “risk tolerance” is. We’ve taken those tests and find them curious – kind of a moving or morphing measurement, with no firm meaning.

The other problem is that it is just too hard to do the math AND understand exactly what it means.

We leave it to our more mathematically-inclined readers to parse the article. It may actually be helpful. We, on the other hand, will stick to looking at each company’s dividend policy and CEO personality for our primary metrics. Easier and more fun and perhaps as successful as the Big Math proponents.

And now for something completely different: Normally, IFO loves the picture window which has a view of the street running by her office – but just now she saw a very tan, very fat older man, wearing ONLY black shorts, slowly pedaling his bicycle down the street. Help! Eyes! Bleach!]

What do we learn from this? Even major benefits carry serious downside risks.

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