Saturday, March 31, 2012

Rescued from Oblivion

Like its owner, the car's undercarriage is not very attractive.
The 1997 Dodge Grand Caravan, like its owner, is on a slow glidepath to oblivion. Something, usually minor and not worth fixing, goes wrong each year. Until recently we've adapted to the inconveniences, such as having to open the doors with a key because we've lost both remote controls.

In the latest series of problems the airbag light has remained on since October; the mechanic said he couldn't solve it without removing the airbag, a fix that would cost more than the aged van is worth. Next the cruise control stopped working, then the horn. The last straw was the emergency brake light, which remained on after the brake had been released.

Last Monday we began to test-drive new minivans and SUVs, the cheapest of which would cost $40,000. We decided on a SUV, and after performing several calculations, decided that a three-year lease would provide for the most flexibility in case our driving needs changed. But first we needed to make sure that the minivan trade-in had no safety issues.

Our mechanic performed his diagnosis and replaced the van's brake pads, calipers, and water pump at a cost of $800. He also gave us some very good news: the airbag, cruise control, and horn problems were all probably solvable by replacing a faulty clockspring, which Chrysler had recalled and would repair free of charge.

Yesterday the Dodge dealer replaced the clockspring, and the van is working better than it has for the past five years. I felt so pleased that I paid $200 for two re-programmed remote controls. That's how one behaves when one rescues an old car from oblivion and doesn't have to spend $40,000 on a new SUV.

Friday, March 30, 2012

The Price of Dreams

There was no waiting to buy a ticket this morning at the local Lucky supermarket. The estimated $640 million Mega Millions jackpot has drawn hordes of punters, including those who seldom indulge in games of chance.

For just one dollar we can dream for a day or two. (We fantasize about profitting on our real-world investments, too, but because they entail risk they're also a source of worry.)

BTW, there's a part of me that doesn't want to win, and the feeling has nothing to do with fear of worldly success. If I hit the winner against 1 to 176,000,000 odds, that will be a strong indication that my life is being manipulated like a lab experiment, and that this vale of tears is nothing but a computer simulation.

It's fun to dream but often not as fun when dreams come true. © 2012 Stephen Yuen

Thursday, March 29, 2012

Addition by Subtraction

Economist Tyler Cowen makes an excellent observation (concerning the e-Book market), which I would make more excellent and more generalized by striking one word.
My view is simple, namely that in the face of massive disruptive innovation, antitrust law rarely does a good job.  The law should stay out of this.

Frankly, I'd Rather Have the McNuggets

The most open-minded Westerner might draw the line at eating this Chinese dish.

No, just because its preparation involves recycling doesn't help.

Related item: in China eating chicken cooked more than 30 minutes ago is not okay.

Wednesday, March 28, 2012

Only So Long

Now that no one has won the $363 million jackpot, the Mega Millions payoff is expected to escalate to $500 million on Friday. We will probably buy a few tickets this time ($363 million wasn't enough, but $500 mil? Now you're talking!)

The left-brain folks are fond of reciting odds that prove that lotteries are a fool's game, statistics such as it's more likely that one will die in a lightning strike or driving to buy the ticket than one will win the lottery. What the ratiocinators don't take into account is that the lotto vendors are also selling hope. People will pay a lot for even a smidgeon; just ask any cancer patient.

But back to the Mega Millions jackpot. Around the dinner table the dreamers talked about what they would do if they won. We gently diverted them to the issues a winner should consider. The first decision was: lump sum or annuity? We talked about the concept of present value, how $500 million payable over 26 years might translate to a single payment of $300 million today, depending on the interest rate.

We talked about how current and future tax rates, both Federal and State, might enter into the calculation. We talked about the difference between equity investments, bank accounts and CD's, and Treasury obligations. We discussed estate taxes and the various tax and legal reasons that rich people set up trusts.

We all agreed that it's much better to have a lot of money, but rich people don't have a worry-free life. They can hire expensive advisors to manage their finances, but how can they be sure they are trustworthy? Every month there's a story that about how a bookkeeper, lawyer, investment advisor, and/or trusted friend or family member stole $millions. And even if the advisors are honest and competent, they can still go very wrong. Just ask any holder of triple-A collateralized debt obligations.

Then the dreamers thought about the new houses, cars, and other neat stuff they could buy, and how they wouldn't have to work at jobs that they didn't like. The human mind can dwell on the negative only so long. © 2012 Stephen Yuen

[Update: this analysis concludes that the expected value of a $1 ticket purchase peaks at 69 cents when the jackpot is $420 million. At higher amounts the probability of sharing the pot increases faster than the growth in the pot itself.]

Tuesday, March 27, 2012

Brightening Their Day

Boxes of fresh vegetables await distribution
For our congregation it has become an anticipated Easter ritual. There were 12 names on the sign-up sheet ("many hands make light work") for the 16 food items--no more, no less--that went into each box. After double-checking the list we took the boxes to CALL Primrose, which has been aiding people in need on the Peninsula since 1983.

Each box had contents that were modest--canned items, bake mixes, grocery gift cards--and won't make much of a difference in the recipients' lives. But it should brighten their day. © 2012 Stephen Yuen

Monday, March 26, 2012

Apple: Good for Your Health, in Moderation

Apple has nearly tripled in two years.

The Merc recites happy tales of small investors who have profited by many thousands of dollars on Apple stock. The happiest? Perhaps it's Anton Marinovich:
When Anton Marinovich turned 18, his grandmother gave him $1,000 with strict instructions to invest in the stock market. He chose Apple. Seventeen years later, his investment is worth more than $240,000 and will bring him over $1,000 a quarter through the company's new dividend plan.
Many of these shareholders, as did your humble observer, acquired their stock not because of their financial acumen but as a show of support for the company's products. For those who suffered through the pre-iPod period when Apple was in a death spiral toward dissolution, its current status as the largest public company is nothing short of a miracle.

The escalating value of the shares has resulted in a good problem to have [bold added]:
But the problem, pros say, is that clients' growing positions in Apple means less-diversified portfolios. One of the enduring lessons from the bursting of both the tech and housing bubbles last decade is the danger of not spreading your bets. For that reason, Kenny Landgraf, head of Kenjol Capital Management, recommends clients trim positions in Apple to no more than 10% of their portfolios. When everyone is "drinking the Kool-Aid" and watching their portfolios rise, Mr. Landgraf says, "it's hard for clients to decide how much is too much."
Reducing one's holding is sound advice. During the Internet bubble I fell in love with some of my winners and held on to them until they became losers.

We will try to avoid repeating that mistake: we will harvest some Apple gains and partially assuage our guilt by buying the new iPhone and iTV when they are announced later this year. Here's to you, Steve.

Sunday, March 25, 2012

The Most Powerful Man in the World

If knowledge is power, he is the most powerful man in the world. 34-year-old multimillionaire mathematician Gilad Elbaz is
trying to identify every fact in the world, and to hold them all in a company he calls Factual. [snip]

Factual’s plan, outlined in a big orange room with a few tables and walled with whiteboards, is to build the world’s chief reference point for thousands of interconnected supercomputing clouds. The digital world is expected to hold a collective 2.7 zettabytes of data by year-end, an amount roughly equivalent to 700 billion DVDs. Factual, which now has 50 employees, could prove immensely valuable as this world grows and these databases begin to interact.
(Note: one zettabyte is equal to one billion terabytes.)

In the old days (i.e., when I was a kid) one sign of intelligence was the ability to do math problems in one's head. Calculators eliminated that advantage. Another sign of intelligence was the ability to remember facts, a talent that, in the age of the Google, is about as useful as a buggy whip or butter churn.

Higher-order intelligence includes the ability to recognize situations, retrieve applicable facts, and act to produce a desired result. We laud geniuses for their inspiration in employing facts and ideas that were apparently unrelated to solving the problem at hand (or even problems that we didn't know we had).

If Mr. Elbaz even partially succeeds, his mountain of facts and ability to make connections among them could make him the most powerful man in the world. I hope that he, even more than the company that he once worked for, takes to heart that organization's motto: "Don't be evil."

Saturday, March 24, 2012

The Crowdfunding Phenomenon

The Internet revolution has given rise to yet another new financial term: crowdfunding, "the practice of securing small amounts of money from multiple contributors online."

It's one thing if the risk were limited to blowing $50 on a possible scam, but a bill before Congress was about to allow crowdfunding investments under $10,000 to have little oversight.

IMHO, I was okay with that seemingly high cutoff level. We should allow rapidly changing marketplaces to sort themselves out without "protection" from the government. By the time Americans turn 18, they have had the experience of being approached for money by questionable characters. To turn over $10,000 to an unfamiliar website is like sending it to a Nigerian with a frozen bank account. That's why most of us use the Internet and other information sources to check out charities, stocks, and products before making a significant outlay.

I suppose there's not much downside, though, to amending the bill to protect some Americans from foolishness that could hurt (but not destroy) their finances. I just hope that the cost of the eventual government regulations and bureaucracy doesn't turn out to vastly exceed the benefit.

FYI, here's an excellent description of the various categories of crowdfunding: (1) the donation model, (2) the reward model, (3) the pre-purchase model, and (4) the equity model.

Friday, March 23, 2012

The Pay is Good

Children of clients and volunteers play together.
The San Mateo church has sleeping facilities but not enough volunteers. The Foster City, Belmont, and Burlingame churches have volunteers but no beds or showers. The four churches -- Lutheran, Catholic, Congregational, and Episcopal -- came together this week to help four displaced families get back on their feet.

Families under duress have been coming to Home and Hope churches and synagogues for over a decade. They receive warm meals, a place to sleep, and a day-care/office facility at which to spend the day if they're not attending school or going to work.

Tessa, Helena, and Kay
The waiting list is long, and the resources are stretched; people do what they can.

For the past five years I had been bringing ice cream, which didn't entail any effort (or risk to the diners). Last night we were short of cooks, so I threw a couple of trays of chicken into the oven. There were no ill effects, and they asked for the leftovers to fill a gap over the weekend.

I suspect my future responsibilities will be increased, but that's all right because the pay is good.

Thursday, March 22, 2012

Not So Dumb After All

Bay Area residents whose politics are right-of-center (the center being quite to the left of the rest of the country) have learned to stay in the closet. They smile when jokes are made about conservative politicians, Mormons, and Southern Baptists. Their car bumpers are a politics-free zone for the sake of vehicular preservation. They refrain from questioning the dogma of anthropogenic global warming climate change, and quietly endure the chortling over scientific studies that "prove" that liberals are more intelligent that conservatives.

It was therefore startling to read yesterday's column by Nicholas Kristof of the NY Times:
Conservatives may not like liberals, but they seem to understand them. In contrast, many liberals find conservative voters not just wrong but also bewildering. [snip]

Moderates and conservatives were adept at guessing how liberals would answer questions. Liberals, especially those who described themselves as “very liberal,” were least able to put themselves in the minds of their adversaries and guess how conservatives would answer.

Now a fascinating new book comes along that, to a liberal like myself, helps demystify the right — and illuminates the kind of messaging that might connect with voters of all stripes. “The Righteous Mind,” by Jonathan Haidt, a University of Virginia psychology professor, argues that, for liberals, morality is largely a matter of three values: caring for the weak, fairness and liberty. Conservatives share those concerns (although they think of fairness and liberty differently) and add three others: loyalty, respect for authority and sanctity.
Nicholas Kristof analogizes the ability to grasp other world views to an ability to speak other languages [bold added]:
Another way of putting it is this: Americans speak about values in six languages, from care to sanctity. Conservatives speak all six, but liberals are fluent in only three. And some (me included) mostly use just one, care for victims.
One sign of empathy is the ability to put oneself in another's shoes. It would be asking too much for Mr. Kristof to take the final step and admit that conservatives as a group evidence an admirable personal quality in a greater quantity than liberals (like charitable giving) but at least he makes a start.

[Update - related: there's now evidence that real bilingualism increases intelligence.
The bilingual experience improves the brain’s so-called executive function — a command system that directs the attention processes that we use for planning, solving problems and performing various other mentally demanding tasks.]

Wednesday, March 21, 2012

I'll Have What He's Smoking

It's a paradox of investing that the enthusiasm to buy stocks, real estate, artwork, gold, etc. increases as the asset price rises. The passions are most intense right before a crash.

Lately I've become worried about the action in Apple shares (yesterday's price was $605.96) when Morgan Stanley predicted a $720 price by March, 2013 and $960(!) by December, 2013.
Morgan Stanley analyst Katy Huberty placed an end-2013 target of $960 on Apple, which would leave the stock up a whopping 69% since Tuesday’s close and more than triple its 52-week low of $310.50 set last June.
Not to be outdone, Forbes columnist Eric Jackson projects a $1,650 (!!!) price in less than four years. He builds his case around growth in four current products--iPad, iPhone, Mac, and iTunes--plus two new businesses--iTV and iPay (mobile payments).

I have trouble getting my mind around his number. Apple's market capitalization would be over $1.5 trillion, nearly three times today's value. The share price would increase by 29% per year for the next four years...and that return doesn't even take into account the $2.65/quarter/share dividend that Tim Cook just announced (finance humor, people).

The smoke is getting heavy in here. I'm going to have to leave the room.
© 2012 Stephen Yuen

Publication of this 2000 book signalled a market top. The Dow is currently 13,150.

Tuesday, March 20, 2012

No Class

Joe Lacob and Chris Mullin (Mercury News photo)
If a class-less society is what we should be striving toward, then nirvana was achieved last night at the Oracle Arena.

The Golden State Warriors honored Chris Mullin by retiring his #17 jersey, but the ceremony was marred by the frequent booing of Warriors owner Joe Lacob. The ostensible reason for the fans' displeasure was a trade in which the Warriors sent away their best player, popular seven-year guard Monta Ellis. Despite pleas by Chris Mullin and Hall-of-Fame great Rick Barry, the boos for Joe Lacob escalated throughout the ceremony.

Those fans who insisted on spoiling the Mullin family's day--yes, that wasn't the fans' main intent and yes, they have laid out a lot of ticket money for decades--were thinking only of themselves and their right to speak.

Class in the "classiness" sense arises not from wealth or social status but from a spirit that chooses not to exercise the rights, privileges, and wealth at one's command, when to do so would injure others or merely glorify oneself. On Monday night in Oakland there was a notable lack of class.

Monday, March 19, 2012

Stars in Their Eyes

It's a staple of romantic tragedy. Boy and girl plan a life filled with happiness. Boy is entranced by a famous beauty. Boy leaves girl for a fantasy future and is (inevitably) rejected. Sadder and wiser, he returns to girl, but she is gone. He had a good life in his grasp, he reached for a more exciting one, and now he has neither.

A fumble away from last season's Super Bowl, the San Francisco 49ers upgraded their squad and were a serious championship contender. All they had to do was re-sign Alex Smith, a steady if unspectacular quarterback. After professing their undying love for Alex, they abandoned him to pursue Hall-of-Fame-quarterback-lock Peyton Manning, who apparently has now chosen to sign with Denver.

ESPN photoshop of Peyton Manning in a Bronco jersey.
Protecting his own interests, Alex Smith flew to Miami and is "discussing contract terms with the Miami Dolphins." After laying the groundwork for a championship run, the 49ers won't have a great quarterback and maybe not even a good one behind center on opening day. They may have as signal caller a second-year man who has played only a few minutes in his entire NFL career.

As you're walking around with stars in your eyes, just make sure you don't fall into a ditch.
© 2012 Stephen Yuen
[Update: Miami signed quarterback David Garrard tonight. Looks like San Francisco and Alex Smith have no choice but to spend next year together. They can take comfort in the knowledge that successful marriages don't need true love, just a strong common interest.]

Sunday, March 18, 2012

No Accounting for Taste

My business associates sniff at my plebeian tastes. They decant their wine while I push a button on a box. Their German cars sneer at my Buick 4-door and Dodge minivan. But I have endured enough of their taunts. Leave my Olive Garden alone.

A balanced, nutritious meal for $12.95? In your dreams, French Laundry!

For providing good food at reasonable prices--in the best tradition of capitalism I might add--the Olive Garden is mocked by both the bi-coastal elites and purveyors of taste in popular culture.

The Big Bang Theory: "What am I running here, a fancy restaurant? Does this look like Olive Garden?!"

Jay Leno: "The stock market plunged over 389 points because of financial news in Italy. They’re calling this the worst Italian disaster since Olive Garden introduced that fettuccini alfredo."

The insults can come from unexpected places. In a sports column lamenting the caliber of basketball displayed in the NCAA tournament:
If you love professional basketball the way that I do, suffering through March Madness is like being a restaurant critic who gets asked to review…the Olive Garden.
When they can't out-cheese your alfredo, they resort to insults.

Saturday, March 17, 2012

Answer to an Economics Puzzle

Economist columnist Greg Ip poses three questions about the recent behavior of the U.S. economy:

1) Why is GDP growing so slowly?
Since the recession ended, growth has averaged 2.5%, roughly around its pre-recession trend-rate, which means no progress closing the massive gap between actual and potential output that opened over the course of the recession.
2) Why is unemployment falling more quickly than the modest GDP growth would imply? [yes, falling unemployment is a good thing, but the article is analytical, not prescriptive]
In a six month period when GDP has probably grown roughly 2.5%, annualised, unemployment has fallen at a rate fast enough to justify 5.1% growth.
3) Why hasn't inflation fallen further?
Models that prevail in most forecasting shops would have projected much lower inflation given the size and persistence of the output gap than has actually occurred.
Greg Ip concludes that there is one explanation that fits all the facts [emphasis added]:
both the level and growth rate of American potential output is much lower than we think.
A discussion about potential output may seem arcane, but the subject is dear to the heart of economists. During a recession actual output, or GDP, falls well short of its theoretical potential, i.e., when the economy's resources are fully utilized.

The silver lining about recessions is that recoveries should be quick and nearly inflation-free. Idle plant and labor can readily be put to use without price increases, hence the conundra of (1)--the economy should be growing faster than 2.5% during its current phase, and (3) -- inflation should be 1 to 1.5%, not its current 1.9%.

The unemployment puzzle concerns the relationship between GDP growth and unemployment, which has held fairly steady over the past quarter century. People are going back to work at higher rates than 2.5% growth would have predicted in the past.

Greg Ip's explanation--that potential output is growing slowly, if at all--makes sense to this non-economist. "Potential" GDP doesn't grow on its own or even sit there waiting for demand to catch up. Capital and labor erode: airplanes parked in the desert can't really fly again, nor can laborers--think injured NFL quarterbacks--resume work at 100% without a lot of expense or re-education.

Just keeping the economy's potential where it's at is more costly than ever.

(Related subject: Tyler Cowen's Great Stagnation discussed how 20th century America picked the low-hanging fruit of free land, technological breakthroughs, and education of an intelligent, but unskilled populace to trigger an unparalleled era of prosperity. Expanding potential output has become much more expensive as well.)

Friday, March 16, 2012

Why I Don't Like Mutual Funds

The WSJ says hundreds of mutual funds with criteria [bold added below] that supposedly exclude Apple (AAPL) have nevertheless bought the stock:
At least 50 small-cap and midcap mutual funds—which focus on small and midsize companies—own Apple, the world's largest company by market value, according to analyses for The Wall Street Journal by market-data firms Morningstar Inc. MORN +0.20% and Ipreo Holdings LLC. Non-U.S.-focused funds also own it. Apple doesn't pay a dividend, but about 40 dividend-focused funds hold its stock. And Apple shares can be found even in one high-yield bond fund.
The reason that funds are permitted to depart from their objectives:
Under a 2001 securities rule, managers like Mr. Bacarella [who's supposed to invest in companies valued under than $10 billion] can apportion up to 20% of their portfolios to investments that aren't part of their mandate.

AAPL is up 42% YTD, boosting the performance of funds that hold it.
This (mis)behavior illustrates why I own few mutual funds; often they deviate from their stated goals. I buy funds because I want exposure to a specific sector of the market; an individual stock like Apple I could purchase for myself. If an energy fund drops in value because of a decline in the price of oil, that's a risk I took knowingly. If the fund goes down because it holds a losing tech stock, that's not what I signed up for. Managers stray because they are tempted by out-of-their-bailiwick "opportunities" that turn out to be risky bets.

For the individual looking to do his own punting, conditions are more favorable to self-guided investment than ever before.

  • Commissions are much lower on stock transactions than are the expenses on a mutual fund. For example, at this moment one can buy 100 shares of Google for $62,504 and pay less than $10 in commissions to a discount broker.

    Some mutual funds charge an upfront fee that can cost 1% ($625 in the above example using Google) or more for the "privilege" of using their expertise; all funds, including those without an upfront load, charge an ongoing management fee that would be at least $100 per year (.2% of asset value) on a $60,000 investment.

  • Widespread availability of financial information and tools make it easier and cheaper for individuals to perform their own analysis and make intelligent decisions.

  • Adequate diversification can be obtained by investing in 12 to 18 stocks. And because of low commissions on all transactions, including odd lots (less than 100 shares), one can obtain reasonable diversification on a self-managed portfolio of $50,000.

    Caveat: some experts believe that diversification--which reduces the risk of a disastrous loss in too-few names--requires holding many more than 20 different stocks. (If an investor is very risk-averse, then he should stick with mutual funds or, frankly, not invest in stocks at all.)

  • One last consideration: the investor can exercise better control over his tax position. From personal experience the capital gain and ordinary income that flow through on a mutual fund's Form 1099, after the tax year has ended, could be significantly larger than expected, increasing one's tax bill (and high taxable income doesn't necessarily mean the fund has gone up in value). Those who hold individual stocks can monitor ordinary and capital gain income more easily and pay estimated taxes, if need be, to avoid underpayment penalties. © 2012 Stephen Yuen

    Thursday, March 15, 2012

    Dramatically Better and Dramatically Faster

    The WSJ's widely followed technology columnist, Walt Mossberg, gives an enthusiastic review of Apple's new iPad:
    So, how has the company chosen to improve its wildly popular tablet? By making that display dramatically better and making the delivery of content dramatically faster. [snip]

    Using the new display is like getting a new eyeglasses prescription—you suddenly realize what you thought looked sharp before wasn't nearly as sharp as it could be.

    Boosting those particular features—the screen and the cellular speed—usually has a negative impact on battery life in a digital device. But Apple has managed to crank them up them while maintaining the long battery life between charges that has helped give the iPad such an edge over other tablets.
    As an owner of an iPad 2, whose only advantage over its successor is that it is thinner and lighter, I'm going to resist the temptation to upgrade. It is, after all, the season of Lent when we're supposed to overcome the weaknesses of the flesh.

    But Lent does end in 23 days, 14 hours, and 31 minutes, and by then Apple should have made progress on its back-orders.....

    Below is Walt Mossberg's six-minute video review (the video uses Flash and--yes, it's ironic--won't appear on iPads and iPhones).

    Wednesday, March 14, 2012

    Cheesecake Factory

    Two ahi light main dishes, fettucini with sun-dried tomatoes
    The word "factory" conjures images of assembly lines, products that look alike, and boring working conditions. Yesterday we went to the Cheesecake Factory, which had replaced the defunct Mervyns clothing store at Hillsdale Mall. The dark, richly appointed interior conveyed the mood of expensive steakhouses and seafood joints. There was no sign of an assembly line.

    We were seated promptly, and service was attentive. Because we intended to order dessert (why else would one go to a restaurant named "Cheesecake"? and yes, we are cognizant of the secondary definition), we ordered lighter fare. The ahi tuna and pasta dishes were attractively arranged, light and flavorful. We couldn't finish the cheesecake slices, so we took them home for late night snacking.

    Including appetizer, entree, and dessert the bill came to $100 for three people. Neither our waistline nor our pocketbook can afford to come here too often, but the crowds at the entrance assured that they won't need us to stay in business. We'll be back in a few months.

    Tuesday, March 13, 2012

    Unfolding Understanding

    Paypal executive Eric Salvatierra was killed last Friday when he was struck by a Caltrain commuter train in Menlo Park.

    Caltrain is a speedy alternative to driving in the San Jose-San Francisco corridor, but long stretches of track use old-fashioned railroad crossings on the densely populated Peninsula. (Building over- and under-crossings would cost many millions of dollars, and cash-strapped Caltrain has many demands on its budget, like replacing its aging fleet.) We are sadly accustomed to reading about Caltrain-caused deaths related to stalled cars, kids playing on tracks, and inebriated pedestrians.

    Mr. Salvatierra did not appear to fit any of the profiles, until this morning's announcement:
    The PayPal executive killed on the Caltrain tracks suffered from depression and bipolar II disorder, his family said Monday...."In the past eight months, Eric and Meredith worked tirelessly with mental health professionals to get him through his illness," the family's statement said. "In the end, he lost his fight with this debilitating disease."
    In recent years there has been a rash of teen suicides associated with Caltrain. Mental illness, like physically debilitating diseases, affects not only the sufferer but those who love them. Too often the ending is tragic. The family has asked that donations be made in Eric's name to the National Alliance on Mental Illness. (NAMI has two out of four stars on Charity Navigator.)

    Monday, March 12, 2012

    Surprised We're Not Dead Already

    This is troubling:
    Eating red meat — any amount and any type — appears to significantly increase the risk of premature death, according to a long-range study that examined the eating habits and health of more than 110,000 adults for more than 20 years.
    The study purports to have a great deal of precision about the risks of eating red meat and the rewards for substituting other foods:
    adding just one 3-ounce serving of unprocessed red meat — picture a piece of steak no bigger than a deck of cards — to one's daily diet was associated with a 13% greater chance of dying during the course of the study.

    Even worse, adding an extra daily serving of processed red meat, such as a hot dog or two slices of bacon, was linked to a 20% higher risk of death during the study. [snip]

    Eating a serving of nuts instead of beef or pork was associated with a 19% lower risk of dying during the study. The team said choosing poultry or whole grains as a substitute was linked with a 14% reduction in mortality risk; low-fat dairy or legumes, 10%; and fish, 7%.

    McDonald's Mushroom Angus Burger
    The methodology that the researchers used will likely be scrutinized in the months ahead. Studies like this one, that are based on self-reporting and not direct observation, are often riddled with errors. Also, there could be alternative explanations such as maybe the people who ate red meat just ate more food, period, or maybe they died because they weren't as rich as the people who could afford to buy fish and exotic nuts.

    I can already see what our nanny state masters will do with this study. First they took away our cigarettes. Next, they're going to take sugar out of our food. Well, they're going to have to pry that mushroom-covered cheeseburger from my soon-to-be cold, dead hands.

    Sunday, March 11, 2012

    A Cloud Like a Man's Hand

    Behold, there ariseth a little cloud out of the sea, like a man's hand. (1 Kings 18:44)

    As an Apple shareholder, I'm not concerned about the big Cloud that's going to store all our data and integrate our lives. It's the little clouds that worry me.

    iPad shipping delays: Apple's U.S. website said new pre-orders for iPads would not ship until March 19, three days after the official launch day.

    Accusations of price-fixing: "The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter." [Update: Forbes columnist Tim Worstall thinks that any monopolistic/oligopolistic price fixing in e-books will evaporate quickly in the age of contestable markets.]

    New iPad profit margins are lower than for the iPad 2.

    The problems that Apple has had perfecting its iPad trademark in China. For those who don't care to watch, the linked video talks about: 1) How Apple asked Amazon to remove the iPad from Amazon's Chinese website because Amazon is not an authorized reseller; 2) Apple's dispute with the bankrupt Proview, from whom Apple says it bought the rights to the iPad trademark. Proview claims it never sold Apple the trademark and has ratcheted up the actions it wants the Chinese authorities to take, from pulling iPads from store shelves to banning all exports of iPads manufactured in China. The WSJ reporter said that the latter action would be a "big deal" but also said that iPads were still being sold in Beijing.

    Apple's superb track record makes it very likely that these problems will be worked through. But the clouds are getting bigger, and we'll have to watch them more closely.

    Saturday, March 10, 2012

    Stephen Curry

    Stephen Curry is one of the best players on the Golden State Warriors basketball team. In an otherwise lackluster year in which the team will miss the playoffs yet again, the backcourt play of Stephen Curry and Monta Ellis makes the Warriors worth watching. (They are also the reason that Jeremy Lin was cut; with those two in front of him Jeremy wouldn't have gotten much playing time.)

    Last night we went to Lefty's Sports to get his rookie card autographed. Yes, we did have to pay a signing fee, but unlike some other athletes Stephen Curry was friendly to his youthful fans and quite generous in allowing snapshots to be taken. He's only 24 years old (another Dragon!) and has donated freely of his time to community service activities.

    There have been rumors that the Warriors are trying to trade him to get a "big man" who will elevate them to the playoffs. This season's lost, so I hope that the rumors aren't true. The front office has taken plenty of criticism for losing Jeremy Lin. The criticism will become a lot more intense if they trade away Stephen Curry.

    Friday, March 09, 2012

    Retiring in Hawaii

    When we moved to the San Francisco Bay Area in 1975, our plan was to live on the Mainland for "about five years" then return to the Aloha State, where we would raise children, buy a house, and live the rest of our lives surrounded by family and friends. As John Lennon sang,
    Life is what happens to you
    While you're busy making other plans.
    37 years later, now that we are approaching the age when we're eligible for Social Security and Medicare, it's time to get serious about that long-ago objective.

    Smart Money advises transplanted Mainlanders to abandon dreams of living in the popular Hawaiian tourist destinations unless they are quite wealthy.
    ...forget about the ultimate in a Hawaiian retirement paradise, the lovely beaches of Kaanapali on Maui. With a cost of living that's 163% higher than the national average and median home prices that are over $1 million, Kaanapali makes even ultra-pricey mainland favorites like Nantucket and Kennebunkport look affordable.
    Smart Money's more affordable Hawaiian locales:
  • Hilo, Big Island - Hawaii's second largest city, Hilo has the accoutrements of urban living at lower prices than Honolulu. Hilo is on the water, but living by Hilo Bay isn't necessarily a plus. Kamaainas still talk about the 1946 and 1960 tsunamis that killed 160 and 61 people, respectively. Currenty we are not considering retiring to the Big Island because it's an hour's flight from Honolulu.
  • Kailua-Kona, Big Island - is probably where we would settle if we did live on the Island of Hawaii. My maternal grandfather hailed from Kohala, an hour's drive north of Kailua-Kona. He moved to Honolulu after the Great War. The area is the site of our family reunions.
  • Paia, Maui - is an old agricultural town whose economy is now dependent on the tourist trade, like the rest of Hawaii. Paia is close to the beaches of central Maui and the Kahului airport. Nearly an hour's drive (33 miles) from Kaanapali, Paia is not completely "haolified", i.e., it still retains the rhythms and culture of pre-jet age Hawaii. There's also a family connection: my father-in-law and his siblings grew up in Paia.
  • Kaneohe, Oahu - To an island kid Kaneohe seemed quite distant from Honolulu because one had to drive there through the Wilson or Pali Tunnels that had been drilled through the Koolau mountains. To a Californian the half-hour distance from downtown is like walking across the street. With a median home price of $563,200 Kaneohe isn't cheap, but on a relative basis it's still less than central Honolulu.

    With Hawaii's high housing prices we'll be lucky to break even on transferring from Northern California. Well, there's one financial inducement to make the move sweeter: Hawaii doesn't tax pension distributions, and, knock on wood, we'll have some of those.
  • Thursday, March 08, 2012


    As a longtime consumer of Apple products and as an Apple shareholder, I want to love the new iPad. It's got a higher resolution "retinal" display, faster internal processing, faster Internet connections, and sharper cameras than its predecessor. The new iPad's price range is $499 to $829, the same as for the iPad 2 last year. Meanwhile, the price for the iPad 2 has been lowered by $100.

    Over the past decade I've been spoiled by Apple's product introductions, which have upended entire industries. For any other company it would have justifiably been called a revolutionary upgrade (Apple uses the mildly cute "resolutionary"), but to these eyes the new iPad is "just" more, better, and faster than the iPad 2. The tech reporters are admiring, but phrases like workmanlike upgrade give away their true feelings.

    My one-year-old iPad 2 is still pretty good, so I'll pass on the new iPad. Besides, I have to save my shekels for the rumored iPhone 5 and iTV. [On the other hand, if the Board of Directors deigns to introduce a dividend, I just might have enough to buy a new iPad after all :) ]

    Wednesday, March 07, 2012

    Peyton Manning: Niners Should Pass

    Now that Peyton Manning has been released by the Colts, there's rampant speculation about which team he'll end up with. There are teams which even a somewhat diminished Manning could improve greatly. Sports Illustrated's candidates, in order of likelihood, are Arizona, Miami, Houston, Seattle, Kansas City, New York (Jets), Washington, and San Francisco.

    Everyone's entranced with Peyton Manning because of memories of what he was before four neck surgeries: one of the greatest quarterbacks ever to play the game. The Niners are tempted to make a run at him because they almost---in fact, should have---made it to the Super Bowl this year. The 49ers lost, not because of deficiencies at quarterback, but because of rookie mistakes and a wide receiver corps that didn't show up at the NFC Championship game.

    If bringing in Peyton Manning means losing current quarterback Alex Smith to another team, then the cost is too high, especially since Peyton's durability is suspect.

    The Niners are almost at the mountaintop. They performed well above expectations last year. The emotions and temptations of this moment will pass. Sticking to the plan, however unspectacular that may be, is the best course of action.

    Tuesday, March 06, 2012

    Rush to Judgment

    I enjoy listening to Rush Limbaugh. I also enjoy listening to Bill Maher. Though they're at opposite ends of the political spectrum (disclosure: my politics are closer to Limbaugh than Maher), both often come up with insights that never occurred to me.

    Rush Limbaugh and Bill Maher are interesting, witty, and very rude, even offensive. They are comic entertainers.

    Our culture has long treated comedy as a circumscribed area--much like smoking lounges or red light districts--where people can make the most politically incorrect--racist, sexist, ageist, and any other "ist" one can think of--statements and not be sanctioned. We need safety valves for the juvenile feelings that all of us keep hidden. These outlets have historically been open to everyone, despite efforts to shut them down by one side or the other.

    That said, Rush Limbaugh should not have made personally pejorative remarks about Georgetown law student Sandra Fluke. Ms. Fluke had argued before a Democratic Congressional gathering that contraceptive services be provided free to women students, including those who attend Catholic institutions. There are strong First Amendment arguments, as well as arguments about the proper role of government, against her position.

    Instead Rush Limbaugh took her statement that "contraception can cost a woman over $3,000 during law school" and riffed on Ms. Fluke's sex life. After the understandable outcry, he apologized.

    But an apology is not good enough for his detractors. They're going after his advertisers. They're petitioning the FCC to remove him from the air. Now there's a counter-petition to remove Bill Maher from HBO. (Over the years there have been many efforts to silence Bill Maher; "Bill Maher petition" has over three million Google hits.)

    IMHO, we should keep them both on the air. They stimulate the national dialogue, and if they cross the line, their own causes will be hurt much worse than their victims. © 2012 Stephen Yuen

    Monday, March 05, 2012

    GCB (Giant Continuous Bellylaughs)

    Billionaire Ponzi schemer absconds with loot. Mistress' ministrations distract him from his driving. Sportscar goes off cliff. Widow and two kids, now broke, must go to live with grandmother in Dallas.

    The set-up for Sunday night's pilot took but a minute. Then the laughs come one after another.

    Sample dialogue and visual gags before the first commercial:

    The TV reporter, Bridget Sanchez-Fong, is black.

    "Grandma, do you have Internet?" "Why would I, I don't watch porn."

    "If you need to go to one of those [AA] meetings, don't go to the one at the Baptist church--folding chairs. Chessy Bolton says the Episcopal at Turtle Creek, much better, upholstered, with canap├ęs."

    "That's Carlene?" "Carlene's had a little work done." "Little work? That's a teardown."

    "Amanda, Amanda, Amanda, welcome home! How long you staying?" "Don't know yet, I'm still figuring it all out." "Well, darling, we all hope you're here for good.....and not for evil!"

    "Speaking of lust, look at the men. They're all over her like flies on shh---sugar!"

    [Church sign: You Reap What You Sow.] "Hey, Mom, what's that mean?" "That's Texan for 'karma.'"

    The show is filled with double-entendres, interspersed with bible quotes. One of the familiar comic devices is the utterance of a platitude, followed by a quick cut to the GCB ("good Christian belle") behaving the opposite.

    The first episode was very funny, but I wonder if the writers can keep it up. They need to guard against beating the hypocrisy theme to death, as well as having Amanda's enemies all be one-dimensional mean girls.

    The DVR has been set to "record series." © 2012 Stephen Yuen

    Sunday, March 04, 2012


    Statues by the Pool by stevebyuen
    From our 2008 trip
    The history of the Hearst Corporation is remembered by the San Francisco Chronicle on its 125th anniversary.

    William Randolph Hearst founded a media empire, was the thinly disguised subject of what some consider to be the greatest movie ever made, and built a castle in the San Simeon hills.

    We first toured the Hearst Castle in 1962 and have visited it every decade since. In terms of sheer opulence, classical architecture, and design integration it's one of the wonders of the modern world.

    Saturday, March 03, 2012

    Two Points of View

    ...about when the battle is won.

    Attorney General Eric Holder on affirmative action:
    Holder expressed support for affirmative action, saying that he “can’t actually imagine a time in which the need for more diversity would ever cease.”

    “Affirmative action has been an issue since segregation practices,” Holder said. “The question is not when does it end, but when does it begin ... When do people of color truly get the benefits to which they are entitled?”
    The Rev. Martin Luther King, Jr. on civil rights:
    There are those who are asking the devotees of civil rights, "When will you be satisfied?" We can never be satisfied as long as the Negro is the victim of the unspeakable horrors of police brutality. We can never be satisfied as long as our bodies, heavy with the fatigue of travel, cannot gain lodging in the motels of the highways and the hotels of the cities. We cannot be satisfied as long as the negro's basic mobility is from a smaller ghetto to a larger one. We can never be satisfied as long as our children are stripped of their self-hood and robbed of their dignity by signs stating: "For Whites Only." We cannot be satisfied as long as a Negro in Mississippi cannot vote and a Negro in New York believes he has nothing for which to vote. No, no, we are not satisfied, and we will not be satisfied until "justice rolls down like waters, and righteousness like a mighty stream."

    Friday, March 02, 2012

    Larger Than Life

    AP Photo via the Chronicle
    With his unsurpassed combination of strength, athleticism, and grace 7-foot-tall Wilt Chamberlain was the dominant basketball player of the 1950's and 1960's. Today is the 50th anniversary of the day he scored 100 points, a single-game NBA scoring record that no one has come close to breaking.

    Before Twitter, Facebook, and Google, before the personal computer, e-mail, and cable TV, there were only three TV channels and one phone company. (On the other hand, there were at least two newspapers in every town, and AM radio was pretty much the same as it is now.)

    We got most of our news in print the next day. If we were lucky there were a few photos. For higher quality pictures we had to wait a week to read the issue of Life or Look magazine.

    We still had our imaginations. In an era when being 6-2 meant that you could be a center on our high school basketball team, we barely imagined a giant like Wilt Chamberlain. We could read about him in the paper, and we saw his grainy black-and-white footage on our tiny TV's or on the Movietone newsreels. We used our minds to fill in the blanks.

    Wilt Chamberlain, like Bill Russell, Mickey Mantle, Willie Mays, and John Unitas, will always be larger than life to this child of the '50's. In the battlespace of memory imagination triumphs over the eyes and ears. © 2012 Stephen Yuen

    Thursday, March 01, 2012

    Two SEC's in One

    (Bold added.)

    The link to the first article:
    Regulators are edging closer to switching U.S. companies to global accounting rules, as the Securities and Exchange Commission's top accountant suggested Monday he was moving toward recommending a long-discussed compromise approach.
    The link to the second.
    The top U.S. securities regulator said on Friday that the United States won't be rushed into a possible move toward a global accounting standard and will only adopt such a regime if it is good for U.S. markets.

    "I don't feel any pressure at all to go along with anybody," said Mary Schapiro, the chairman of the U.S. Securities and Exchange Commission, on the sidelines of the Practising Law Institute's annual SEC Speaks conference.