Tuesday, December 31, 2013

A Pretty Good Year, Too

Major indices were up at least 20%. Meanwhile, Apple's price recovered from its summer bottom
to finish 2.18% higher by Dec. 31st. Including dividends, that was a return of 4.4%; really, not so bad.
By far the biggest factor behind income inequality is wealth inequality. A mega-rich mogul's billion dollars of stock holdings at the beginning of 2013 are very likely to have grown by at least $200 million (20%) by year-end, all without him or her spending an hour at the office.

On a much more common and achievable scale, it's entirely possible for a middle-class working couple to have accumulated one million dollars in investable funds by the time they are in their 50's through a program of regular saving. Here's one scenario among an infinite number: new annual savings start at $7,000 and increase by 3% per year to $16,496 in year 30; the total put away would be about $333,000. Meanwhile, if the couple earned 8% on their investments (the S&P 500 increased by an average of 10% per year from 1975 to 2013), the portfolio would have grown to $1,069,000.

The above is an extremely simplistic example, because we're not considering the negative effect of income taxes (although if the funds are stored in tax-deferred 401(k) or IRA accounts taxes are not a factor until funds are withdrawn), nor are we considering the positive effect of dividends. The point of the exercise is to show that getting to $1 million is doable, and so was enjoying at least a $200,000 increase in one's portfolio in 2013.

Billionaires are leaving everyone behind, but if they can put aside the sin of envy many will come to realize that they had a pretty good year, too. © 2013 Stephen Yuen

Monday, December 30, 2013

In Other Words, Kwitch'er Whining

WSJ tech columnist Farhad Manjoo has two words for tech observers who were disappointed about 2013: grow up.
the touchscreen smartphone (and its cousin the tablet) was a singularly novel, industry-shattering device, and we're unlikely to see anything as groundbreaking in a generation.

The smartphone and the tablet *are* the next big things, and we act like spoiled children when we claim that they somehow aren't enough. Most future advances will simply be improvements or expansions on these basic technologies...
When a sports team wins a couple of championships, some of its fans begin to expect that they will win one every year. The fans have forgotten or perhaps never even knew the amount of effort and expertise required just to perform competently, much less win it all. We often see such lack of perspective in critics who were never creators/doers themselves.

In the New Year may we strive to be more appreciative of the good in the world, rather than dwell upon its imperfections. © 2013 Stephen Yuen

Sunday, December 29, 2013

For the Foreseeable Future

We served 100 people on Dec. 29th.
The first clue was the number of boxes that were stored in the walk-in freezer; they barely fit in my station wagon. (The good people of St. Pius closely monitor the need.) The second hint was the number of cars and bicycles in the crowded parking lot.

Over the years the number of customers for a free Sunday hot meal at the Redwood City community center has ranged between 50 and 80. Lately it's risen toward the high end of the scale. Today we counted 100. One of our volunteers ran out to buy more roast chicken, which she carved at the picnic table. I baked an extra tray of chicken and rice, while someone brought more salad. Everything was consumed, and all the brown-bag lunches prepared by St. Pius were snapped up.

The likely reason for the increased traffic to Sandwiches on Sunday is the recent cut in food stamp allotments. As one who strongly prefers private charity programs to the incredible waste, fraud, and abuse of government transfer programs, I'll have to put my money and time where my mouth is, and it's likely I'll be doing so for the foreseeable future. © 2013 Stephen Yuen

Saturday, December 28, 2013

Horse Sense

The horse ambled west on Irving at a very slow pace, perhaps 3 mph. No one dared pass and risk scaring the horse, and it was a policeman riding it after all.

Horses are classified as a slow-moving vehicle in the California Drivers' Handbook:
Animal-Drawn Vehicles: Horse-drawn vehicles and riders of horses or other animals are entitled to share the road with motor vehicles. It is a traffic offense to scare horses or stampede livestock. Slow down or stop, if necessary, or when requested to do so by the riders or herders.
The common-sense course of slowing down and accepting one's circumstance, despite the temptation to speed around the horse, turned out to be written into law.

After he had gone two blocks, the policeman stopped and waved the traffic around. Both he and the drivers behaved sensibly, a sign of hope for civic life.

Friday, December 27, 2013

There's No Better Time

At this time of year the financial publications are rife with advice about income taxes. Usually the emphasis is on reducing taxes in the current year through taking deductions such as charitable contributions or dramatic steps such as moving to a low-tax state or getting married. This year, however, is different, and not just because tax rates are going up; the increase in complexity has been exponential.
With the introduction of the 3.8% net investment income tax (Sec. 1411), and the return of the 20% capital gains rate (Sec. 1(h)) and the 39.6% income tax rate (Sec. 1(i)), America shifted overnight at the start of 2013 from a two-dimensional tax system to a four-dimensional system. [snip]

The complexity of going from a two-dimensional system to a four-dimensional system is exponential, not linear, and requires a quantum leap in tax analysis methodology, tax strategy, and tax planning software tools.
It may only seem that the vast majority of Americans will not have to deal with this complexity; only if a married couple has income over $250,000 (or a single person over $200,000) will they be subject to the investment-income tax.

However, more people will be affected than just the supposedly "rich". As taxpayers approach these income thresholds, many will scale back their economic activity to avoid crossing them, just as small businesses avoid having more than 49 employees to escape the penalties of Obamacare.

Also, the interconnection between income and estate/gift taxes has become much more complicated. It is easy to be unconcerned about the problems of "wealthy" estates, which pay taxes if they are valued at more than $5.34 million, but it wasn't that long ago that having a $1 million estate was an uncommon experience.

In the view of your humble observer, society underestimates the cost of complexity. We regularly come across productive individuals---doctors, accountants, businesspeople---of a certain age who don't mind paying somewhat more in taxes; they hate the hassle of new regulations that have nothing to do with their fundamental business operations. So they are cutting back or quitting altogether. The silver lining--for them, not society--is that if they have been thinking about doing something else with their lives, there's no better time. © 2013 Stephen Yuen

Thursday, December 26, 2013

Washing Warning

"From the penthouse to the outhouse":
metaphorically, but not literally
In our house bathroom-sink soap bars have been replaced by dispensers filled with antibacterial soap, but that move is not only costly but also could be physically harmful:
Scientists at the Food and Drug Administration announced Monday [December 16] that they are revisiting the safety of triclosan and other sanitizing agents found in soap in countless kitchens and bathrooms. Recent studies suggest triclosan and similar substances can interfere with hormone levels in lab animals and spur the growth of drug-resistant bacteria.
Until the science becomes conclusive, we'll finish the bottles in inventory, then go back to washing with plain old soap and hot water. [Note that hand sanitizers, which have ethyl alcohol as the active ingredient, are currently judged safe.]

Wednesday, December 25, 2013

Mother and Child

Last week I became a grand uncle, the first time I became a "grand-" anything ("great uncle" is the more common usage according to Ngram). The occasion is no big deal to many of my contemporaries who are already grandparents; nevertheless, it's another milestone on the Great Path.

Another comment, commonplace and perhaps trite: this is the time of the year when we reflect upon our lives, somberly remembering those whom we have lost. A December baby brightens the entire outlook. An irrational reaction, but there it is.

Tuesday, December 24, 2013

Christmas Eve

Clergy prepare for the Christmas Eve service
On a cold clear Tuesday night 60 people in a Foster City Episcopal church joined millions around the world in celebration of a blessed event that occurred two thousand years ago.

It was That Event that triggered all the gift-shopping, package-mailing, card-writing, tree-decorating, party-organizing, and family-gathering that absorbs the month of December in 21st-century America. For a few hours the worshippers set aside the concerns of the world and sang of a newborn baby, joy, hope, and heavenly peace.

Merry Christmas! © 2013 Stephen Yuen

Monday, December 23, 2013

Songs of the Season - Part 1

In the late 1990's my employer had enough of a talent pool to put together a decent holiday choir (videos uploaded from VHS tape).

Saturday, December 21, 2013

Songs of the Season - Part 3

An unserious musical history of the Twelve Days of Christmas. I like the Hawaiian lyrics myself ("a mynah bird in one papaya tree").

Friday, December 20, 2013

Songs of the Season - Part 4

Have yourself a Merry Little Christmas now.



Through the years we all will be together
If the fates allow...


But the fates do not allow. Our time together is too fleeting, gone in the wink of an eye. Like the ghostly watchers in Grover's Corners, we have an eternity to mull the regrets of moments unappreciated until too late.

On this Christmas and in the New Year, resolve not to let that happen.

Thursday, December 19, 2013

Imelda Was Ahead of Her Time

In my 20's and 30's I had four pairs of shoes: two black, one brown, and sneakers. Now the count is up to seven, and I'm only working part-time. Eric Jennings, Saks Fifth men's director:
"There is an explosion of men's shoes right now. The business is on fire...It runs the gamut from classic dress shoes to designer sneakers that are extremely fashion forward."
In addition to bowing to the needs of fashion, one requires more shoes in the rotation because modern footwear is less durable. A pair of 4-year-old $200 loafers that were used about twice a month developed holes in their synthetic bottoms on a recent trip to Las Vegas.

They weren't salvageable: too bad, because the shoes were comfortable, looked decent, and were easy to slip on and off when going through airport security.

I went to the mall in Las Vegas and replaced them immediately with two pairs. Wouldn't want to get caught short again.

Wednesday, December 18, 2013

A Great Year

One week ago rumors circulated that the Federal Reserve would announce the cessation of its five-year easy money, aka quantitative easing, program. The financial markets fell.

The feared cutback turned out to be not very severe; bond-buying will "taper" from $85 billion per month to $75 billion. The markets resumed their climb, some to new highs. Last week's short-term budget deal and today's Fed announcement brought a measure of certainty to government fiscal and monetary policy, respectively.

It's refreshing to see grown-up behavior (finally) in evidence at the Congress and Federal Reserve. One only hopes that in the New Year we will see it in the Executive Branch, which lurches to and fro trying to put out fires of its own making.

YTD chart updated to 12/23/2013: if you had money in the market, it's been a great year.

Tuesday, December 17, 2013

Graton Resort and Casino, Rohnert Park

Love that new-casino smell
Everyone in the car enjoyed their first visit to the new Graton casino, and not just because three out of four brought home heavier wallets than they started out with.

Several family members are highly allergic to cigarette smoke; hay fever and asthma attacks are triggered after several hours of exposure. While Graton does permit the vice, the carpets, tablecloths, and chairs are not (yet) steeped in tobacco residue. Unlike expeditions to other nearby casinos, this trip was blessedly allergy-free.

Dining options were decent though not spectacular. The food court "marketplace" offered inexpensive choices, and four restaurants served more upscale but not outrageously priced fare. Graton doesn't bother with a buffet, probably a good thing since I would have been tempted to try it.

By far the most attractive feature is its location. Just off of Highway 101, Graton is 45 miles north of San Francisco. It took us 90 minutes to get there in normal traffic from the Peninsula and is 30 to 60 minutes closer than the nearest alternative. Closer, cleaner, and a touch classier than its competition, Graton will get the lion's share of our gaming time (but hopefully not our money) in the coming year. © 2013 Stephen Yuen

Monday, December 16, 2013

Muscio's Italian Restaurant, Novato

Attendance in our church would go up if it had Monday
night football on two flatscreens above the bar.
Arriving in Novato, a city 25 miles north of San Francisco, after 8 p.m., we found few restaurants open on Monday night. Muscio's looked promising because of the number of cars parked outside.

Upon entering, we looked up to see an unobstructed view of the roof. The restaurant occupied the original location of 123-year-old Our Lady of Loretto Catholic Church.

The waitress brought us freshly-baked garlic bread, which was consumed in short order. A second basket was used to sop up the sauce from our pasta dishes, which were uniformly excellent. Everything was made on the premises, the waitress said. She invited us to return with three discount coupons, expiring January 31st. We'll be returning to the North Bay in a couple of weeks and will take her up on it. © 2013 Stephen Yuen

Sunday, December 15, 2013

The Aisle of the Dolls

No dice on Deuce Gorgon
In the world of volunteering it's often the case that one's assigned tasks have no connection with one's background or skills. We have seen teachers keeping books, lawyers baking cookies, and engineers organizing fund-raisers. And so it was that your humble observer, the father of two grown sons, spent three confused hours in the Monster High doll section at Target and Toys'R Us. (Our church is buying presents for two families in the Samaritan House Holiday Program.)

The 11-year-old girl already had several Monster High girls and really wanted a boy doll. I rummaged through dozens of different products on the shelves, but not a boy was to be found. A check online showed high boy-doll prices that were beyond our budget and delivery dates that were too close to Christmas. Our society really needs to do something about discrimination against male role models!

After selecting a Lalaloopsy doll--I feel uncomfortable just typing those words--for the 4-year-old I took the easy way out by buying Forever 21 gift cards for everyone else, including the Monster High collector. The sales clerk, a girl barely out of high school, began patiently explaining how gift cards work. "Thank you," I said, in the most sincere tone that I could affect.  I was more than ready to go home. © 2013 Stephen Yuen

Saturday, December 14, 2013

The Profundity of Pelosi

Nancy Pelosi explains her choice of words.
Former Speaker of the House and current House Minority Leader Nancy Pelosi has produced two of the most memorable quotes of the Obamacare era: 2010's "we have to pass the bill so that you can find out what is in it" and 2013's "embrace the suck."

The latter quotation came into widespread use by the military during the second Iraq war. "Embrace the suck" means that the situation is bad, but deal with it. The phrase is vulgar, funny, and...wise. An honest appraisal of and full engagement with one's condition is the first step toward climbing out of a hole. Wishing that things were different is often an exercise in futility.

While her supporters have argued that these quotes were taken out of context, Mrs. Pelosi has never apologized or offered a retraction. Her sayings may make her an object of mockery by opponents, but they are not silly. After her party lost the House in 2010, Democrats nevertheless re-elected her as leader. Republicans would be wise not to underestimate her. © 2013 Stephen Yuen

Friday, December 13, 2013

Steamed with Good Intentions

(Image from Culicurious)
We've been increasing the mix of brown rice over white rice in our diet because of the former's high fiber content. We've also been eating more rice of whatever color because of the suspicion that the gluten found in wheat is a contributor to a family member's digestive difficulties. It now turns out that the cure is potentially worse than the disease.

In September the Food and Drug Administration released the results of a study that analyzed the arsenic content of rice. Rice--especially brown rice--contains significantly more arsenic than wheat and other cereals. These findings confirm the results in a 2012 Consumer Reports study [bold added]:
No federal limit exists for arsenic in most foods, but the standard for drinking water is 10 parts per billion (ppb). Keep in mind: That level is twice the 5 ppb that the EPA originally proposed and that New Jersey actually established. Using the 5-ppb standard in our study, we found that a single serving of some rices could give an average adult almost one and a half times the inorganic arsenic he or she would get from a whole day’s consumption of water, about 1 liter.
The reason? "Rice absorbs arsenic from soil or water much more effectively than most plants."

Disappointing....brown rice seemed to be a "good" carbohydrate, or at least one that was not as harmful as others. © 2013 Stephen Yuen

Thursday, December 12, 2013

Losing Letterman

British PM Cameron, Danish PM Thorning-Schmidt,
with President and Mrs. Obama (Getty Images)
Five years after George Bush left office, David Letterman finally took a break from bashing the ex-President and commented on Barack Obama at the Nelson Mandela memorial:
Did you see that picture where the President was using an iPhone to take a selfie? And it was him and a guy from Great Britain and the woman in charge of Norway, or whatever Denmark? And I thought it was interesting---he knows how to operate the camera to take a picture but they can't figure out to operate the Obamacare website
1) As humor goes, it wasn't much funny, but David Letterman has to start somewhere.

2) If he's lost Letterman, he's in deep....trouble.

Wednesday, December 11, 2013

Often Wrong, Never in Doubt

After yesterday's budget deal, your humble observer became optimistic about the stock market's near-term outlook. Naturally, today "stocks recorded their biggest daily loss in a month":
Markets pushed lower as speculation spread that a bipartisan budget agreement from Congress could raise the likelihood that the Fed will start paring its easy-money policies, a process known as “tapering,” as soon as next week.
Markets hate uncertainty, but based on today's action they hate the loss of easy money even more.

Tuesday, December 10, 2013

Sunny Skies Ahead

Each major stock market index is up at least 20% YTD
Everyone will find something to dislike about today's budget compromise (Wall Street Journal: "it breaks....the discretionary spending caps"; Steven Rattner, NY Times: "We’ve irresponsibly slashed spending on important domestic needs") , but the overriding fact--and surprise--was that a deal was reached at all.

With another government shutdown seemingly averted, look for the market to continue higher through year-end.

Monday, December 09, 2013

Hunker and Huddle

It's cold all across the country. Best to stay inside and huddle for warmth with a loved one.

Sunday, December 08, 2013

Trying to Warm Up.

The icy weather that has swept the nation has affected the Bay Area as well, albeit not as severely. Overnight lows in the 30's were enough to keep us from venturing out after dark; age has made us cold-avoiding wimps.

I threw a tray of lasagna and a vegetable casserole into the oven. The comfort food helped ward off the chill, and leaving the oven door open helped warm up the kitchen.

Our new furnace has been operating twelve hours a day since it was installed five days ago. The contractor just e-mailed the acceptance form, which I'll sign and return today to claim a rebate. Getting money back, even a small amount, always instills warm feelings. © 2013 Stephen Yuen

Saturday, December 07, 2013

Seventy Two

Of all the infamous dates in the past 100 years - 12/7/1941, 11/22/1963, 9/11/2001 - December 7th is the only one for which Americans received full closure. The attackers of Pearl Harbor, along with their allies, were destroyed.

Those Americans who turned ignominious defeat into victory have been called the greatest generation, and 72 years later most of them have left us. Let us remember those who are gone, honor those who remain, and in our own lives perform as nobly and selflessly as they did.

Friday, December 06, 2013

Mandela: A Great Man of History

Self-identified-conservative writer Max Boot calls Nelson Mandela "one of the giants of the second half of the twentieth century":
insurgents like Lenin, Stalin, Mao, Castro, Mugabe, Kim Il Sung, and (fill in the blank) who, while posturing as freedom fighters battling an evil dictatorship, swiftly become dictators in turn as soon as they seize power. The exceptions to that rule are some of the greatest figures of modern history–the likes of George Washington, Michael Collins, David Ben-Gurion, and, most recently, Nelson Mandela......

the largest part of the explanation for why South Africa is light years ahead of most African nations–why, for all its struggles with high unemployment, crime, corruption, and other woes, it is freer and more prosperous than most of its neighbors–is the character of Nelson Mandela. Had he turned out to be another Mugabe, there is every likelihood that South Africa would now be on the same road to ruin as Zimbabwe. But that did not happen because Mandela turned out to be, quite simply, a great man–someone who could spend 27 years in jail and emerge with no evident bitterness to make a deal with his jailers that allowed them to give up power peacefully and to avoid persecution.

Mandela knew that South Africa could not afford to nationalize the economy or to chase out the white and mixed-raced middle class. He knew that the price of revenge for the undoubted evils that apartheid had inflicted upon the majority of South Africans would be too high to pay–that the ultimate cost would be borne by ordinary black Africans. Therefore he governed inclusively and, most important of all, he voluntarily gave up power after one term when he could easily have proclaimed himself president for life.
Truly great leaders possess not only the correct policies but also nobility of character. When Nelson Mandela had near absolute power, he refused to exact revenge. He forsook self-glorification and worked for the good of all, friends and former enemies alike. He relinquished power though it was easy to rationalize keeping it. World leaders will eulogize him this week, but the best way to honor him would be to try to be half the man he was.

Thursday, December 05, 2013

Jill Gets Recognized

Seven years ago we first wrote about Jill's personal call to assemble Christmas gift bags for seniors, hospice patients, the homeless, and hospitalized veterans. Today dozens of volunteers gathered at Jill's house to make up over 1,100 gift bags, a record. The local NBC affiliate, Channel 11, ran a short piece on the 5 o'clock news. It's nice to see Jill get some recognition.

Wednesday, December 04, 2013

Cramming for a Test

1st the cup, then the pitcher, repeat in 5 hours
Wednesday was spent drinking clear liquids and a lemony concoction that kept me up all night. It was also spent within a few feet from a porcelain bowl.

Yes, tomorrow is the necessary procedure known as the colonoscopy, about which humor abounds. Four years ago the doctors found six polyps, all-noncancerous, and I was overdue for another "scope" because of family history.

People dread colonoscopies mainly because of what they must do the day before. One is restricted to clear liquids and a medication that provokes continuous, even explosive diarrhea. The day before is unpleasant and often painful; after a few hours many patients, including your humble observer, can't wait for the actual procedure to start.

I would say more, but sorry, gotta go.... © 2013 Stephen Yuen

[Update - 12/5: no polyps! But doc says that I need to eat more fiber.]

Tuesday, December 03, 2013

Sometimes Things Do Go Right

Since 2004, wires need constant fixing.
For over ten years your humble observer has had to make minor repairs to our 35-year-old heating system at the start of each winter.

However, safety concerns, energy inefficiency, and the fact that I was the only one in the household who knew how to light the pilot on the old unit finally prompted the ordering of a new Lennox SL280V variable speed furnace. We also added an air purifier and a digital thermostat.

The new SL280V
Procrastinating has another advantage besides saving money: technology is advancing at such a rapid rate that the replacement unit, even one with just average features, is leaps and bounds ahead of the unit that it replaced. The new system is cleaner, quieter, and much more energy efficient. It has an electronic ignition, i.e., no pilot light. The city inspector (the permit cost $151) said that our old gas bill of more than $200 per month should be cut in half. We'll see.

The system was installed today just as freezing temperatures blanketed the Bay Area. The furnace, purifier, and thermostat all performed like a champ. At the beginning of our busiest month of the year it was encouraging to be reminded that sometimes things do go right. © 2013 Stephen Yuen

Monday, December 02, 2013

The Blacklist

We are fans of the Blacklist, NBC's hit new series about a criminal mastermind who begins to help the FBI capture other master criminals on "the blacklist." What is Raymond Reddington's motivation? Why will he go to any length to protect junior agent Elizabeth Keen, even risking his own life (he denies being her father)?

The Blacklist is filled with violence, death, suspense, and mystery about the background and motivations of each major character. But what makes it must-see TV is James Spader, who chews the scenery as Reddington. In the direst situations he always seems to be in control.

In last week's episode, surrounded by heavily armed attackers, the weaponless Reddington comforts a grievously wounded agent with his reasons for living. His soliloquy is a quiet moment in a loud, frenetic hour of action.
Have you ever sailed across an ocean, Donald? On a sailboat surrounded by sea with no end in sight? Without even the possibility of sighting land for days to come? To stand at the helm of your destiny...I want that one more time.

I want to be in Piazza del Campo in Siena, to feel the surge of ten racehorses go thundering by. I want another meal in Paris at L'Ambroisie in the Place des Vosges. I want another bottle of wine, and then another. I want the warmth of a woman in a cool set of sheets. One more night of jazz at the Vanguard. I want to stand on summits and smoke Cubans and feel the sun on my face as long as I can. [closes eyes, feeling the sun]

Walk on the wall again. Climb the tower, ride the river, stare at the frescoes. I want to sit in the garden and read one more good book. Most of all, I want to sleep. I want to sleep like I slept when I was a boy. Give me that, just...one time.
Ray Reddington will have more time to experience those pleasures. The Blacklist has been renewed for the 2014-2015 season.

Sunday, December 01, 2013

December, Already

The to-do list for 2013 has many items unfinished, but the December calendar doesn't have a lot of room to complete them. The first order of business is to make a list--among all the other lists that we create this month--to determine how many tasks can be deferred to next year (unfortunately, not many).

December is the month when there's a final push to make the numbers, when year-end reports are drafted, and the final touches are made to next year's plan. Adding to the burden are card-writing, gift-giving, and tree-decorating, not to mention going away on vacation. And I really should take a look at last-minute tax moves for 2013.

December used to be one of my favorite months; now, January can't come too soon.