Numbered Days

I’m not a serious photographer who likes to fiddle with F-stops and interchangeable lenses. As I’ve written before, however, my Canon A620 has become dated; I hardly use it because its features are barely superior to those of my cellphone and certainly don't merit lugging around an extra device.

A new Canon, the S95, just may have the right mix of performance, price, and features, especially low-light capability. According to tech writer David Pogue, the S95 “can take amazing, sharp pictures in low light without the flash.” I’m gagging a little over the $400 price, so I’ll wait until the price comes down a bit. But the A620’s days are numbered.

Ah, Youth

After the all-night celebration following the Giants' National League Series victory, veteran Aubrey Huff gave advice to rookie Buster Posey as they headed back to the room. 

Huff: Don't think this happens every year, kid. 

Posey: Why not?

Giants Delusions

In a third inning filled with physical and mental miscues, the Giants kicked away their chance to win the National League pennant in front of their home crowd. The 4-2 loss to the Phillies last night was far from fatal, since the Giants have two more chances this weekend to win the deciding game. But they must do it in front of a hostile Philadelphia crowd against a team that has won a trip to the past two World Series and who some enthusiasts claim is one of the best teams of all time.

No one has ever made such an assertion about these Giants, whom few picked to even make the playoffs. But their pitching has kept them in most games, usually one-run nail-biters. The Giants blow leads, sometimes recover, then hold on for dear life in the ninth inning. After the euphoria of Wednesday’s 6-5 victory, the game 5 letdown has left some boosters despondent.

Here’s a chance for rationality to help Giants fans regain their balance. Let’s say that the Phillies are 3-2 (winning 60% of the time) favorites to win each game they play against the Giants. Combining the probabilities, the Giants are 40% + (40% x 60%) = 64% likely to win one of the next two games and go to the World Series.

Even if one thinks that the Phillies are 2-1 favorites in these home games—in other words twice as good as the Giants—the same calculation [33% + (33% x 67%)= 55%] still shows the Giants more likely to prevail than not.

Let’s stop now and not get too wonky about whether the probabilities are correct and whether the games are independent events. To paraphrase Mark Twain, let us have our delusions, Giants delusions, and statistics. © 2010 Stephen Yuen

Not Your Grandma's Shopping Mall

“In our normal lives, you really can’t go up and touch someone’s genitals,” said Fernanda Bennett, the deputy director of the Nassau County Museum of Art on Long Island.

Speak for yourself!

(H/T Ann Althouse, who's referring to this NYT article.)

A Price Must Be Paid

Temperatures dipped markedly over the weekend, so it was time to fire up the oven for comfort food.

Costco had a new bake-and-serve offering--beans with pork-rib meat--that looked close enough to the genuine New England article. I picked up a package of brussels sprouts to accompany the main dish; it took but a minute to coat them with olive oil and garlic salt. The beans, sprouts, and a loaf of garlic bread were thrown into the oven, and there was a warm feeling of satisfaction as the family dug into the high-fiber, vitamin-loaded, and cancer-fighting meal.

Today there's another feeling, but luckily I don't have appointments with a lot of people.

The Real Tax Deadline

A not-so-short stack

Yesterday, the end of the six-month extension period, was the real deadline for filing one's 2009 income taxes.

I had thought, because my income was down as an early retiree, that our financial life would be simpler. I was mistaken.

In our past life we had ignored sections of the tax code because we made too much money. Before you jump to the conclusion that we're rolling in it, dear reader, please realize that many deductions, credits, exclusions, and other incentives begin to phase out when income exceeds $100,000--and even lower levels. (Ask any Californian who makes $100,000 and who has a mortgage whether he or she feels rich.) Suddenly these provisions came into play and added calculations, pages, and mistakes that had to be corrected.

We were also late because of an all-too-common phenomenon in this economy: partnerships, Subchapter S corporations, and other pass-through entities were late getting statements to investors.

We got the numbers together, signed the returns, ran down to the post office to watch them stamp the postmark, and organized the files.

Time to get started on 2010's year-end tax planning...

The Account-Ants

I like the WSJ's Peggy Noonan, but she doesn't like me, or at least my chosen profession.

[G]overnment increasingly forces us to become: a nation of accountants.

No matter what level of life in which you operate, you are likely overwhelmed by forms, by a blizzard of regulations, rules, new laws. This is not new, it's just always getting worse. Priests are forced to be accountants now, and army officers, and dentists. The single most onerous part of ObamaCare is the tax change whereby spending $600 on goods or services will require a 1099 form. Economists will tell you of the financial cost of this, but I would argue that Paperwork Nation is utterly at odds with the American character.

Because Americans weren't born to be accountants. It's not in our DNA!

Ms. Noonan goes on about how the rich and powerful elites insulate themselves against the rules and regulations they inflict upon the rest of society. The elites can hire "armies" of accountants.

No one likes filling out forms, even us account-ants. We know that the person who receives the form that we've painstakingly completed only cares about two things: whether we've paid the balance due at the bottom and whether all the questions have been answered. Accountants would rather use their talents to build planning models and help clients make decisions, not fill out pieces of paper designed by lawyers.

The new Form 1099 requirement to which Ms. Noonan refers is a particularly boneheaded piece of legislation. The current requirement to report over-$600 in annual payments to independent contractors does allow the IRS to catch some under-reporting, but the new law is a gross over-reach; it mandates the reporting of over-$600 annual payments to everyone. Payments to the local utility, the package delivery service, and the office supply chain-store must now be added up and reported to the IRS after the vendors' taxpayer ID numbers have been obtained. The problem is: the vast majority of corporate businesses report revenue based on accrual, not cash basis accounting.

Under accrual accounting revenue is recognized when the right to receive is established, not when payment is received. If the office supply store makes a shipment to you in December and grants you net-30 terms, it will report its December income in the current tax year while your 1099 will report a cash payment in January of the succeeding tax year. The 1099 will be useless in the tax audit of the office supply store.

One can go through the trouble of performing a lengthy reconciliation between the stack of 1099's (which don't separate the payments for shipments made for the current and previous years) and the store's sales register, but there are much more accurate and efficient ways for an agent to audit revenues. The new law imposes tremendous burdens on society without any benefit to the Treasury; it was clearly designed by people who have no idea how businesses, accounting, and control systems work.

I suppose that I should be grateful that accounting is not one of the jobs that will be disappearing over the next ten years, but I'm not happy that clients are miserable when they call us, and it's a self-inflicted misery that doesn't have to be.

Where A Comma Would Be Helpful

And because of the inevitable challenge studies on sex face in persuading people to respond honestly, the findings should be treated with some skepticism.

I had to read the above passage a couple of times to figure out the proper meaning. English is a marvelous language in which words can be adjective or noun, or noun or verb, depending on context. Here a comma placed after "challenge" would have been most helpful. Yes, good grammar generally forbids a comma after an introductory prepositional phrase, but it's allowed if the phrase is long.

Ambiguous writing may be a continuation of the Wall Street Journal's subtle campaign to stretch the brains of its readers.

It's As Much for Ourselves

A few days ago we discussed how studying material that is off-kilter in form and/or content stretches the brain. Reading handwritten letters can be discomfiting but it does stimulate learning.

Writing by hand can provide even more cognitive benefits. Neuroscience has confirmed what grade-school teachers have long known:

Writing by hand is more than just a way to communicate. The practice helps with learning letters and shapes, can improve idea composition and expression, and may aid fine motor-skill development….In children who had practiced printing by hand, the neural activity was far more enhanced and "adult-like" than in those who had simply looked at letters.

It’s my guess that brain-scan technology will confirm the theory of multiple forms of intelligence. When we challenge ourselves across a broad range--musically, physically, mathematically, artistically, socially—more neurons will fire and more screens will light up. Penning (versus keyboarding) a personal letter keeps our minds invigorated. We benefit ourselves as much as the object of our affection.

Plastic Control

My finances are in ok shape, and one reason is the discipline (one of the few that I’ve stuck to over the decades) of paying off credit card balances. It was difficult in the early years when we had seemingly unlimited spending needs, yet had to service mortgage, car, and student loans as well as put something aside for retirement. We managed by deferring gratification and living with old and partially working stuff. (Consequently our ongoing priorities now include simplifying our life and clearing the clutter, but that’s another discussion.)

Credit cards have compelling advantages, e.g., they help keep records, reduce the risk of carrying cash, and give customers bargaining power in disputes. But they need to be used in moderation like other controlled substances. Below is a handy list of 15 times when you shouldn’t use a credit card.

1. After midnight.
2. When you're near your credit limit.
3. When considering an extended warranty at the car dealership.
4. [left blank - sic!]
5. If you're paying off one card with another, and it's a habit.
6. At a flea market.
7. If you think you're building your credit history.
8. If you can't pay for half of the purchase with cash on hand.
9. When it's all about the rewards points.
10. When you think prices may drop.
11. To buy something from a website with an obscure foreign extension.
12. If you don't have a plan for paying it off.
13. If you're charging things that you used to pay cash for.
14. When you feel that you'll save money by purchasing something you want rather than need.
15. When the temptation for a big impulse buy strikes.

That’s good advice, especially #6 and #11. I once used a credit card at a small music store south of Market, and a series of small purchases hit within the next 24 hours. The credit card company, Discover, reversed the charges when I complained after receiving the statement, but the lesson was learned: I pay cash if I don’t know the merchant.

Speaking of Discover, I’m using that card more, even on under-$5 purchases at fast food restaurants, because they’ve, er, discovered a weakness that’s not on the list. Each use triggers an entry in a $1 million sweepstakes. Although my rational brain knows that the expected winnings are infinitesimal, I’ll now whip out the plastic, whereas I wouldn’t have bothered before. After all, how the devil do you think this could harm me? © 2010 Stephen Yuen

Blessing of the Animals, 2010

For the fifth year running we trundled tables, chairs, and dog biscuits to the Foster City Dog Park. Monday was the Feast of Saint Francis; it was time to honor the gentle patron saint of animals and the beasts who bring us joy.

Dogs comprised the majority of the petitioners, but there were cats and guinea pigs who also received the laying-on of hands. One of the priests was allergic to cat hair, so felines were diverted to the other member of the collared duo. (It was the only instance of discrimination that I have witnessed in the Northern California Episcopal Church.)

Ladies from the Homeless Cat Network passed out brochures that promoted the necessity to reduce the population of feral cats. HCN's efforts to spay, neuter, feed, and adopt abandoned felines not only protect the cats but also the other wildlife of the Bay.

In earlier years we had distributed flyers at the supermarkets and run ads in the community papers, achieving little success. This year we posted announcements on Craigslist and the Foster City electronic marquee. In the future we intend to try facewall-writing, tweeting, and other cutting-edge modes of communication. If there's only something we can do about stopping the rash from the cat hair....

A reporter from Patch.com showed up.

Her article may be found here.

Grease is Good

Waste grease now sells for $1.90 (!) a gallon, and waste grease thefts are on the rise.

Prices may well continue to increase because the supply of grease is expected to go down due to the imminent bursting of the bacon bubble. Time to switch out of gold and into goo.

It's making connections like this that have enabled me to be the successful investor that I am.

Why We Should (Hand)Write

I'm behind on my reading, which puts me in good company, albeit an ever-dwindling minority. It stands to reason that the explosion of e-reading is a phenomenon that we should welcome. The iPad and Kindle enable us to read more, read more efficiently, and read more conveniently.

However, there's a downside. By making the physical act of reading too easy, with every letter "precisely defined," the new e-readers don't stretch our brains.

The literate brain contains two distinct pathways for making sense of words, each activated in different contexts. One pathway, known as the ventral route, is direct and efficient: We see a group of letters, convert those letters into a word and then directly grasp the word's meaning. When you're reading a straightforward sentence in a clear format, you're almost certainly relying on this neural highway. As a result, the act of reading seems effortless. We don't have to think about the words on the page.

But the ventral route is not the only way to read. The brain's second reading pathway, the dorsal stream, is turned on when we have to pay conscious attention to a sentence. Perhaps we've encountered an obscure word or a patch of smudged ink. [snip]

Familiar sentences rendered on lucid e-ink screens are read quickly and effortlessly. Unusual sentences with complex clauses and odd punctuation tend to require more conscious effort, which leads to more activation in the dorsal pathway. All the extra cognitive work wakes us up; we read more slowly, but we notice more. [bold added] Psychologists call this the "levels-of-processing" effect, since sentences that require extra levels of analysis are more likely to get remembered.

Among my most treasured possessions are handwritten letters from loved ones, many of whom are long gone. Their words may be plain, but the letters are not a quick read. When I was young and in a hurry I was mildly irritated, but now I savor every curly-cue, smudge, and cross-out. Sometimes the words were indecipherable, and I had to figure out the meaning in context with the rest of the sentence. My dorsal stream was being freed up.

Below is a handwritten letter from one of the Cambodian schoolchildren whom my church supports. Slower to absorb, but much nicer than a text message, nicht wahr?