Monday, May 16, 2022

Unconstitutional and Unnecessary

Related: NASDAQ's annual board diversity matrix.
A judge has ruled that a California law that required boards of directors to set aside seats for women is unconstitutional. [bold added]
California’s first-in-the-nation law requiring corporations to include women on their boards of directors, enacted at a time when women made up fewer than one-sixth of corporate board members in the state, violates the constitutional rights of men, a judge in Los Angeles has ruled.

The law, passed in 2018, required publicly traded corporations based in California with five members on their boards to have at least one female member by the end of 2019. By the end of 2021, at least two women were required on five-member boards, and three women on six-member boards...

“The Legislature’s actual purpose was gender-balancing, not remedying discrimination,” Los Angeles County Superior Court Judge Maureen Duffy-Lewis said Friday. She said the state, in defending the law, had failed to offer evidence that corporations had discriminated against women in selecting board members. Instead, she said, the usual causes were a lack of open board seats and the inclination of boards to choose someone they already knew, such as a corporation’s chief executive.

In any event, Duffy-Lewis said, “there is no compelling governmental interest in remedying discrimination in the board-selection process.” A “compelling interest” was needed, she said, to justify sex discrimination — against either sex — in the California Constitution.
The judge could have added that the law was unnecessary. Smart and competent women have been my bosses, professors, doctors, lawyers, and professional colleagues. They all achieved their station in life without quotas.

It's indeed tough to get past the "old boys' network," and there's no doubt that some men do have sexist beliefs that women can't do the job (I've heard some of them say so). Fortunately, such people are fading into the sunset, and if there are still corporations whose leaders share those beliefs, they'll fade away, too.

Sunday, May 15, 2022

The Grace of God

(LA Times photo)
The Coastal fire in Laguna Niguel is nearly contained, and no more houses have been destroyed since Thursday.

My brother, his family and home are safe; they're lucky to have been spared despite living close enough to the flames that a change in the wind would have put them in danger.

Every year wildfires have destroyed hundreds of California homes.

Whether the structures are big or small, on the top of the hill or on the flatlands, very expensive or less expensive (none are cheap), the faces of the displaced are the same.

(LA Times photo)
Years of scrimping and saving, getting a place just the way they wanted it, and building memories with people they'll never see again, are gone in the billowing smoke.

The circumstances aren't that different that I can't imagine their misfortune happening to me.

I think, there but for the grace of God go I.

Saturday, May 14, 2022

Cutting Back

Other tech stocks show how far TWTR
could fall without a deal. (WSJ)
I rationalized last week's purchase of Twitter shares as entertainment, which has to be the consolation since it's already turned out to be a bad investment.

Early Friday morning Elon Musk tweeted that the $44 billion acquisition was "on hold": [bold added]
Elon Musk said his planned acquisition of Twitter Inc. was “temporarily on hold” because of concerns about fake accounts, a surprise twist that jolted investors and raised questions about his willingness to go through with the $44 billion transaction...

The initial announcement was unorthodox not just in its timing and format, but because Mr. Musk referenced a recent Twitter disclosure about fake and spam accounts that it has made consistently for years—and because Mr. Musk has already signed an agreement for the purchase and waived detailed due diligence on the deal.

The sudden shake-up fueled questions about whether Mr. Musk is committed to a deal that was struck amid a sharp decline in technology stocks that has made Twitter less valuable on paper than it was a month ago when he made his offer of $54.20 a share. Twitter shares, which were already trading well below that level, closed down 9.7% in afternoon trading at $40.70...

It couldn’t be determined if the latest tweets were a negotiating tactic to abandon the transaction or reprice the deal.
Elon Musk reportedly must pay a penalty of $1 billion if he cancels the Twitter deal. A back-of-the-envelope calculation shows that a final price under $53 per share will more than cover that expense.

It would be entirely rational for Elon Musk to renegotiate, especially since Twitter's valuation without the acquisition in today's falling market could well be around $25. Assuming that the final price will be $35, I will take a beating on my purchase at $51. (The reassessed expected value is $32.46, above right.)

I'll be cutting back on double-shot lattes to make up the difference.

Friday, May 13, 2022

Just Desserts

The line is onto the sidewalk at Schlok's on
Fell St. in San Francisco (Chron photo)
A lifetime of poor eating habits caught up with me last August when I was diagnosed with Type II diabetes. That means I'm going to have to engage very sparingly in a high-carb trend in Bay Area restaurants.

Overwhelming demand for Bay Area bagels is driving a new wave of expansion
The bagel demand is unceasing — and not just at this particular shop [Schlok's] but all over the Bay Area.

All of the hype is fueling serious growth: Nearly all of the Bay Area’s bagel pop-ups, many born during the pandemic, have opened or announced plans for their first permanent shops, including Schlok’s, Poppy Bagels in Oakland, Paulie’s Bagels in Napa and Ethel’s Bagels in Petaluma. Berkeley’s nationally renowned Boichik Bagels, meanwhile, is building a massive bagel factory and adding a second location on the Peninsula. Even Michelin-starred chefs are getting in on the bagel game.
I had my first toasted bagel after the first legal beer (the drinking age was then 18). A Jewish roommate introduced me to the wondrous toppings of lox, capers, and cream cheese, and that became the personal template for bagel bliss.

Today the growth in demand and the competition among suppliers have resulted in a burst of bagel innovation. I'll only be able to sample a small part of that revolution and have only myself to blame.

(Image from Schlok's website)

Thursday, May 12, 2022

Coastal Fire

(Image from Orange County Register)
The fire season has started in Orange County.
The Coastal fire has burned at least 20 homes since it swept across Aliso Woods Canyon into Laguna Niguel on Wednesday, fire officials said.

The fast-moving brush fire prompted the evacuation of area homes and a luxury resort and golf course.

As of 9 p.m., the fire had grown to 200 acres in windy and dry conditions. Another 100 homes were potentially in the fire’s path, according to authorities.
After visiting our mom in Honolulu on Mother's Day, my younger brother came home to the Coastal fire.

He sent this photo from his home, a mile northeast and downhill from the burn area.

Thank goodness he and his wife have relatives in the area, but not too close by.

Stay safe, bro.

Wednesday, May 11, 2022

Hump Day is Humming

(Image from Reader's Digest)
The explosion in working from home during part of the week, aka "hybrid work", has resulted in Wednesday being cities' busiest day.
Commuter rail lines in cities like Boston and San Francisco found Wednesday typically the busiest weekday in April. The same is true of hotel occupancy in many big cities, a sign salespeople know that is the day they’re likeliest to find contacts in the office, said Jan Freitag, director of hospitality analytics at CoStar Group Inc.

An average of 46% of U.S. office workers went to work on Wednesdays in March, said Kastle Systems, a security firm that monitors access-card swipes. That trounced Monday’s meager 35%...

The critical mass of workers on Wednesday can be self-reinforcing, some managers suggest. Employees say they like office socialization, so it makes sense to go in on the day you think the most other people will.
As a retired boomer, I've generally refrained from telling the young 'uns how tough I had it commuting for two hours, wearing a coat and tie every day, and counting myself lucky if I didn't have to go in on Saturday.

But c'mon man, Wednesday's are tough because you can't get a lunch reservation? I wasn't concerned about climate change or the national debt, but now I'm worried about America's future.

Now That's Being Truly Rich

Twitter HQ is on Market Street but may not
be for long, hints Elon Musk (Chron photo)
A Federal district judge refused to solve Donald Trump's problem.

May 6, 2022: Trump’s lawsuit against Twitter over account suspension gets rejected by S.F. federal judge [bold added]
Trump provided no evidence that the social media platform had colluded with congressional Democrats to violate his constitutional rights.

Twitter permanently suspended Trump’s account two days after the Jan. 6 mob attack, citing posts to his 88.7 million followers that the company said posed a risk of further violence. Joined by five supporters whose accounts were also revoked, Trump argued that the action interfered with his freedom of speech and sought restoration of his account and damages.

But U.S. District Judge James Donato noted that the First Amendment applies only to the government, not private parties like Twitter, and said Trump and his fellow plaintiffs had failed to plausibly allege any government involvement in their suspensions.
But Donald Trump has the richest man in the world as a supporter, at least on this matter, who will buy Twitter and give Mr. Trump what he wants.

May 10, 2022: Elon Musk Says He Would Reverse Donald Trump’s Twitter Ban
Elon Musk said he would reverse Twitter Inc.’s ban on former President Donald Trump...Mr. Musk also said that Twitter suffers from a politically left-leaning bias and that the social-media company “needs to be much more evenhanded.” He partly linked those political leanings to Twitter being based in San Francisco.

The billionaire entrepreneur, who has likened Twitter to the public square and a forum for the exchange of ideas, reiterated his desire for several changes at the platform, including eliminating bots and scams. He also doubled down on plans for Twitter’s software code to be made open source so it can be widely viewed and people can recommend changes. “You really want transparency to build trust,” he said.
If something that he doesn't own is annoying him, Elon Musk just buys it. Then he can fix or bury it so that it stops being annoying.

Elon Musk shows us what it means to be truly rich.

Tuesday, May 10, 2022

Business Etiquette: Some of it Sounds Familiar

(Image from franchetti)
The job market has been heating up for new graduates, which means that there's a new generation that needs to learn the norms of workplace behavior.

These norms, or rules, are a bit different--and some subjects didn't even exist--when your humble blogger entered the work force back in the (cough) '70's. For example:
Note preferred modes of communication. On the first day, ask: What’s the best way to get in touch? Email? Call? Slack? (Don’t text your bosses unless they text you first.) “Every manager is going to have a different preference, and simply asking signals that you are eager to contribute,” [Harvard career adviser Gorick] Ng said.

There does seem to be one common predilection among managers, which Mr. Ng calls “bundle and escalate.” Don’t ask 10 questions in 10 separate communiqués—batch them together before approaching your manager...

Virtual-Meeting Virtuoso
Zoom, Microsoft Teams, Google Meet, Webex and Bluejeans are some of the more widely used videoconferencing platforms. Find out which is deployed by your company and download the apps for your desktop and mobile device in advance, then try a test meeting, before you have to join a real one...

You’ll want to make sure you look and sound great. A little height for your webcam and light on your face goes a long way. Logitech’s $60 Litra Glow clip-on light produces soft, flattering illumination, but any lamp or nearby window helps...

Email Like a Pro
Overly long emails are a common new-grad pitfall, according to Renate Norman, general manager of global university recruiting at Microsoft. “Get to the point quickly,” she said. She recommends starting with a summary and your main point or request up top. You can add more detail later, but if it’s getting too messy, pick up the phone.
Many of these recommendations are simply updates to old standards. For example, managers have always preferred that subordinates "get to the point quickly" in meetings or memos; now we're applying that rule to other modes of communications, i.e. e-mails and videos. Another: personal phone calls were frowned upon during working hours; now we're expanding that rule to include text messages and e-mails.

In my humble opinion the new rules can be figured out from general principles: keep your personal and business lives separate; respect the privacy of others; look presentable; waste as little of other's time as possible; be prepared on the topic and technology before the meeting; and be polite even if you have negative emotions toward another person.

Monday, May 09, 2022

Guess Where They Ended Up

(WSJ illustration)
It's a common belief that letting children work out their differences teaches them how to get along as adults; they'll learn that conflict doesn't get them anywhere and that cooperation and compromise move them forward to their goals, whatever they may be.

But what if a goal is to rise in the hierarchy ? To such kids conflict can be help, not hindrance. [bold added]
Stirring up conflict is how some young children manage to achieve top-dog status, according to a study recently published in the journal Personality and Individual Differences...the study showed a pattern among schoolchildren that stemmed from aggressors creating repeated conflicts; classmates would often submit rather than engage.
Researchers asked 3rd, 4th, and 5th graders to fill out detailed questionnaires at the beginning and end of the school year.
The results showed that children who maintained a frequent pattern of aggression had raised their status at the end of the term, while those who didn’t continue their confrontational behavior failed to get the popularity boost. In short, a small number of students in each grade kept initiating disagreement, presumably with the intention to command respect.

(above the law graphic)
...“For people who care about their status, a disagreement is never just a disagreement. Whether you’re 15 or 50, everything is an exercise in maintaining and improving popularity.”

Other research has shown that such belligerent behavior, rather than being penalized, is rewarded even more at older ages.
Playground troublemakers achieve power by fomenting discord. It's clear that many of them went on to careers in news media, where inflaming differences gets rewarded by clicks and ratings,

Sunday, May 08, 2022

Mother's Day, 2022

We called a Honolulu florist to deliver identical arrangements to our mothers on Mother's Day.

The local blooms are especially colorful. During the formative years I didn't think much of them--birds of paradise, protea, ginger, anthuriums--but their scarcity on the Mainland, the passage of time, and personal regrets at--dare one say it?--not stopping to smell the flowers, has caused my appreciation to grow.

Later we called the moms, and unlike previous years, had no difficulty getting through. COVID-19 has abbreviated all in-person visits, and the extreme elderly hardly ever go to restaurants. Having already entertained visitors, the moms were rested and ready to socialize again.

Hi, Mom. Happy Mother's Day! Love you....

Saturday, May 07, 2022

Twitter: It's the Entertainment

So much for investing discipline.

After averring that I would stay away from trading stocks in general because of market volatility, or that buying Twitter specifically was too risky, I bought some TWTR on Thursday at $51. (It closed at $49.80 on Friday.)

In my defense, Elon Musk's takeover of Twitter looks very likely now that he's secured $7 billion from other equity investors. In fact $51 (actually $51.28) seems like a "fair" valuation based on a $54.50 acquisition price and a 90% probability of execution. The risk of loss is much lower than it was a month ago.

The second reason is that this was hardly an "investment." TWTR is less than 0.1% of the portfolio and the purchase was more to be kept apprised of shareholder communiqués than to make a killing. It's very rare that a small fry can be an arbitrageur.

Besides, I spend more on entertainment, and frankly after more than 40 years of being in the stock market I've never seen any story that's been more entertaining.

Friday, May 06, 2022

A Real Burrito

The number of people behind the counter has
doubled but they kept bumping into each other.
It was the culturally appropriate* thing to do; Pancho Villa Taqueria was the destination of choice for us and hundreds of others on Cinco de Mayo.

We waited in line for 30 minutes, ordered one regular and two "especials" (includes guacamole) burritos, and waited another 30 minutes for the order.

Pancho Villa is not as enticing as it was ten years ago: prices have gone up 60%, the open salsa bar is gone, and online and delivery services have extended the wait times.

When we got home, all the negatives were forgotten. The burritos were nicely wrapped, generously sized, and chock-full of meat. We normally patronize the "healthy" Mexican-themed chains that promote plant-based substitutes, offer brown rice, and advertise non-GMO ingredients, but we will have to reconsider.

On Cinco de Mayo we were reminded of the real thing and why we were so fond of it.

*"culturally appropriate"==>good, "cultural appropriation"==>bad.

Thursday, May 05, 2022

Sinking on Cinco de Mayo

WSJ graphic: the peak was yesterday's close
As of 10 a.m. PDT the stock market has given back all yesterday's gains (which were posted about below):
“The market yesterday was a relief rally,” said Seema Shah, chief strategist at Principal Global Investors. By Thursday, she said, the realities of a more challenging environment for stocks were starting to settle in.
Using a cliché--with expletives if you desire--is warranted: what goes up must come down, the market giveth and the market taketh away, etc.

Before Chairman Powell spoke yesterday, the outlook was gloomy but IMHO not apocalyptic. We're just back to where it was.

Wednesday, May 04, 2022

Stock Market: Hold, but Buy Antacids

Gloom on 4/29, more declines on 5/2, cautious rise on 5/3, snapback on 5/4.
Gloom on Friday
The NASDAQ index closed last Friday, April 29th, with the worst showing of any month since the financial crisis year of 2008:
The broad selloff has erased trillions of dollars in market value from the tech-heavy gauge, with investors souring on shares of everything from software and semiconductor companies to social-media giants.

The Nasdaq dropped 4.2% Friday, bringing its losses for the month to more than 13%, its worst showing since October 2008. The index is down 21% in 2022, its worst start to a year on record.
The explanations were high inflation, the raising of interest rates by the Federal Reserve to cool off the economy, the COVID-19 lockdown in China, a possible expansion of the war in Ukraine, and lowered corporate outlooks.

Warren Buffett prepared to speak to Berkshire
shareholders this Saturday. (WSJ photo)
Buffett: Buying Opportunities
Though the gloom was palpable over the weekend, experienced hands began to see buying opportunities. Of course, none are more experienced and successful as Warren Buffett:
As recently as February, Warren Buffett lamented he wasn’t finding much out there that was worth buying.

That is no longer the case.

After a yearslong deal drought, Mr. Buffett’s Berkshire Hathaway Inc. BRK.B 2.45% is opening up the spending spigot again. It forged an $11.6 billion deal to buy insurer Alleghany Corp. Y -0.26% , poised to be Berkshire’s biggest acquisition in six years. It bought millions of shares of HP Inc. HPQ 3.88% and Occidental Petroleum Corp. OXY 3.93% And it dramatically ramped up its stake in Chevron Corp. CVX 3.14% , making the energy company one of Berkshire’s top four stock investments.

...While he finds speculative bets “obscene,” the pickup in volatility across the markets has had one good effect, he said: It has allowed Berkshire to find undervalued businesses to invest in again following a period of relative quiet.
Wednesday Snapback
Though the Federal Reserve raised the Federal Funds rate by 50 basis points, the market had been expecting worse. As soon as Chairman Jay Powell said that a 75-bp increase was off the table, the stock market took off:
Major indexes were at first little changed Wednesday after the Fed announced it would raise interest rates by half a percentage point and begin to shrink its $9 trillion asset portfolio next month. Investors had widely expected both decisions heading into the conclusion of the central bank’s policy meeting.

What caught some by surprise was Mr. Powell saying the Fed wasn’t “actively considering” raising interest rates by 0.75 percentage point at a future meeting. Federal-funds futures, which traders use to track interest-rate expectations, had previously shown the market pricing in a 95% chance of the Fed making such a move in June.

Stocks soared after Mr. Powell’s remarks, with the Dow Jones Industrial Average finishing up 932.27 points, or 2.8%, to 34061.06, marking its biggest one-day gain since November 2020. The S&P 500 jumped 124.69 points, or 3%, to 4300.17 for its best day since May 2020, while the Nasdaq Composite added 401.10 points, or 3.2%, to 12964.86.
There's always a possibility of negative surprises, but on balance I don't think apocalyptic scenarios are likely. I am holding on to my portfolio and am neither a buyer or a seller.

Tuesday, May 03, 2022

The Coming Campaign Won't Be as Difficult as Feared

The Wall Street Journal publishes a map of where the abortion laws stand in each state if Roe v. Wade is overturned. The colors require explanation. [bold added]

Laws Restricting Abortions
States have three different categories of abortion restrictions:
Trigger Laws
Some states have so-called trigger laws on the books, which would ban all or nearly all abortions in the state if Roe v. Wade is overturned. The law would go into effect either automatically or by quick state action.

Pre-Roe Bans
A number of states have bans on abortion that predate Roe v. Wade. Such bans have been unenforceable for the past five decades, but states could look to revive them if Roe is overturned. The bans likely wouldn’t go into effect immediately if the Supreme Court abolishes federal abortion rights, leaving it up to states to decide. Instead, they would likely require some type of new state action, like an attorney general issuing an opinion saying that abortion was illegal in the state.

Post-Roe Restrictions
Instead of outright bans, some states have sought to set narrower limits on when abortions can be performed during a pregnancy. Many of these laws have been blocked in court, but could take effect if Roe is overturned.
Laws Establishing Abortion-Rights
Sixteen (16) states, plus the District of Columbia, have already passed laws establishing the right to terminate pregnancies. They're not identical; for example, California has Medi-Cal coverage for abortions.

State and local governance, aka federalism, is indeed messy and inefficient. Abortion-rights supporters seem to dread having to argue a case, in 34 jurisdictions no less, that they thought they had already won, but I suspect they'll find it easier than feared.

Everyone has had to wrestle with the meaning of fetal life for 49 years, and IMHO the majority across the United States has decided that it is less important than the health of a mother.