No Fun to be Mark

May was a mediocre month for stocks, but it was terrible for Facebook investors. After two weeks FB had fallen 22% from its IPO price. Other stocks in the social media business, like Google and Linked In, suffered losses in the single digits, while Apple, up 9%, lived in its own world. [Update - 6/1, noon PDT: the markets are down 2-3% today because of worries about Greece and a poor U.S. jobs report. Facebook is under $27.]

FB was down 22% since its IPO, despite a 5% bounce on May 31st.

We've been skeptical of Facebook's valuation ever since the prospectus was issued in February.  However, it seems to this observer that the disappointment in share performance has turned into a piling on. One thoughtful analysis places Facebook's value at $9 - $15 per share. Mark Zuckerberg has metamorphosed from being the next Steve Jobs into a symbol of Dotcom Bubble 2.0, a twenty-something billionaire more likely to captain his vessel to a shipwreck than the stars.  (Doesn't he know that he shouldn't be honeymooning while the stock price is crashing?)

Let's take a deep breath.  Steve Jobs didn't become "genius-CEO Steve Jobs" until he returned to Apple at the age of 42. Even then, it took Apple a few years to right the ship before it introduced the products that make Apple one of the most astounding business turnarounds in the last century.

The analysts who are dissecting Facebook today are extrapolating from the businesses that they know about. Those who analyzed Apple 12 years ago saw a company that made niche personal computers; their financial models didn't know about the iPod, iTunes, iPhone, or iPad.

If Mark Zuckerberg has just a fraction of Jobs-like genius--which I think he does possess--then Facebook is cooking up a few (pleasant) surprises that no one outside the company is expecting. If the price falls to $25 I'll be interested, and at $20 I'm definitely a buyer.

Hoofing It in San Bruno

Huntington Ave.: behind the BART tracks are 101 and SFO.

The minivan was due for an oil change and a transmission check, but there were twelve cars in front of it. I would have to leave the van overnight in San Bruno.

My more intense, younger self would have called for a ride or taken a taxi, but now I welcome opportunities for contemplation. I began hoofing south toward Burlingame.

San Bruno is a working-class community. Crowded with older homes on small lots, it boomed during the post-war decades. Much of the city was constructed long before city planning became a discipline.

Light industry and commercial buildings intrude among the residential areas, which have narrow winding streets resembling San Francisco more than Orange County.

The Tanforan race track operated for 64 years (during World War II it was a Japanese-American internment camp) until the property was converted to a shopping mall in 1971.

San Francisco International Airport on the other side of the 101 freeway is a source of business and employment, as well as pollution and traffic.

San Bruno's best-known landmark is the Golden Gate National Cemetery, whose 161 acres comprise one of the few green expanses on the developed Peninsula.

We are always driving around or through San Bruno but rarely stop. Hoofing through the city allowed me to wander (like in this post) around the neighborhoods. There were a few run-down houses, but most were well-kept. Children played in front yards. A kid waited for a ride to his violin lesson. Trucks were parked on each block.

Burlingame fire station on Rollins Road.

The atmosphere is far from bucolic. Streets are being torn up. Construction occurs along miles of train tracks. Planes fly overhead. But it wasn't unpleasant; in San Bruno everyone is trying to create his own slice of heaven.

In tonier Burlingame, where I met the family for dinner, people seem to be trying just to keep what they have.

As Little As He Wants To

Photo from the Verge

Apple CEO Tim Cook was close-mouthed tonight during his interview at the All Things Digital Conference.

He dribbled out a few nuggets about Apple's manufacturing and intellectual-property philosophy but didn't give the audience what it most wanted to hear: information about an iPhone 5 or an Apple television. He even declined to give specific answers about lesser (for Apple) endeavors, such as improvements to Siri or the Facebook interface.

Since Steve Jobs' death on October 5th, Apple has: introduced a new iPad to great acclaim, announced its first dividend in 17 years, and beat the analysts' estimates by more than 20% for each of the last two quarters, the last being all the more remarkable during a period in which other tech giants have faltered.

Apple's stock has risen by over 50% since October 5th. In less than eight months the company has increased its value by $180 billion (to $535 billion)---the increase alone is worth about three entire Facebooks at today's close. With that kind of performance Tim Cook can say as much or as little as he wants to.

 AAPL has outstripped the indices since since Steve Jobs' passing. 

Memorial Day, 2012

On Memorial Day we went shopping, watched a baseball game, quaffed beer, and stuffed ourselves with grilled kebabs.

We paused to remember those who fought for our freedom. The men I knew would have taken pleasure in their descendants' participation in these seemingly frivolous activities. Don't dwell on us, they would have said, your enjoyments are thanks enough.

Too bad, we will always remember.

The Truth is Out There

From yesterday's post: our taste for sweets is unhealthy. But that doesn't mean all food cravings should be resisted. They can also be triggered by the human body's lacking a certain vitamin or mineral. Physical cravings for an orange, for example, may signal a need for Vitamin C.  A desire for chocolate may be attributable to the body's need for antioxidants (at least that's my excuse).

Listening to one's own body is an ancient source of truth. Socrates said that the purpose of life was to "know thyself". We who live in first world countries enjoy material comfort beyond Socrates' imaginings and---I am sure he would say---should devote ourselves to philosophy and other lofty pursuits. But the same society that defeated hunger and childhood disease is filled with distractions, a cornucopia of entertainment and experiences that divert us from the still, small voice.

This Sunday we celebrated Pentecost, one of the three great feasts of the Christian faith. Truth did not reveal itself silently to the apostles gathered in the room. The Holy Spirit came to them on tongues of fire, just as it bowled over Paul as he traveled on the Road to Damascus.  Truth came quietly from within to Socrates and loudly, from without, to the followers of Jesus.

Appropriately, the color of Pentecost is red.

Carbs Are For Kids

A food taster says that bitter is better. Our fondness for sweets leads us to avoid the complex and sometimes bitter flavors of a healthier diet:

the compounds that make foods taste bitter (carotenoids in sweet potatoes and spinach, flavonoids in cranberries and kale, polyphenols in wine) also make them good for us. 

Bitter melon with black beans and pork

Like many kids growing up in Hawaii my mother mixed in milk and sugar with poi to encourage me to sample the sour purplish-gray paste. She gradually reduced the M&S until I could eat poi just like the adults (a desire to appear grown-up can also be the impetus for trying foods like kim chee or sashimi, both of which, by the way, are not as well suited to the ministrations of M&S).

But it wasn't until my late teens that I learned to tolerate, then appreciate bitter melon.  The younger members of the household won't eat it (there's little hope for that generation, as the polls seem to show), but sometimes I crave its sharp bitter taste.  The good news is that when I order it at a family-style meal at a Chinese restaurant, it's all mine.

Don't Trust, Always Verify

My stockbroker called with an urgent question: "Did you send us an e-mail requesting a wire transfer from your account?" No, I said. The broker replied to the sender that he would like to speak to "me", but the crook wrote back that he was boarding a plane and would be unavailable to talk.

What was worrisome: the fraudster knew my broker's personal e-mail address and was able to make the funds request look like it came from the e-mail account that my broker had on file. (There didn't appear to be any questionable ins and outs in my real e-mail account, nor did the thief know my brokerage account number.)

I'd be willing to help trap the crook(s) by wiring a token amount to his bank account, then prosecuting him for fraud, but my broker will probably just report the matter to internal security and let it drop. Too bad.

Meanwhile, I've discontinued use of that e-mail account, changed its password, and have instituted a "verbal password" whenever I speak with the broker. Thank goodness I didn't trust this newfangled electronic banking enough to allow outgoing wires when I set up the account. Nothing wrong with having to go to the broker's office to show them ID and pick up a check. Sometimes the old ways are best.

Using Your Time Wisely

Ever since I was a whippersnapper, authority figures have entreated us to "get involved" with politics. Involvement is not only good for democracy, they tell us, it's also our civic responsibility.  Political campaigns can be fun to follow: it's interesting to talk about the horserace,  the strategic maneuvers, the details of the candidates' biographies, the crazy relatives they're stuck with, and the candidates' errors of elocution. Follow politics for its entertainment value, but don't delude yourself into thinking that your vote matters.

This is not to say that there will not be a big difference if Mr. Obama or Mr. Romney is President.  Also, if Republicans or Democrats control Congress, there should be a big difference to our futures.

But I have already decided whom I will vote for in November; the expenditure of many millions of dollars, oceans of ink and plethoras of pixels is very unlikely to change my mind, and I suspect that is probably true for you, too, dear reader.  Think of all the time and money that will be spent over the next six months, all that for just ten minutes in the voting booth that for most of us may as well occur today.

The silver lining for us who live in California: the candidates will be here in person to raise funds but we won't have to listen to too many ads. In February Mr. Obama led Mr. Romney in the Field poll, 55 - 35%. The gap may close a little by November,  but Mr. Obama should win here handily.  Plan the use of what you pay attention to accordingly.

Along the Embarcadero

....with an iPhone 4 camera.

The Pier 36 demolition project 

Red's Java House

Cupid's Span

Raygun Gothic Rocketship

Vaillancourt Fountain

Unseen Vista

Movie mogul and Warriors shareholder Peter Guber communicates his vision.

The heavy hitters were out in force today to announce the return of the Golden State Warriors to San Francisco. The rechristened "San Francisco Warriors" (as they were originally called) will move to a new arena built on the Embarcadero, just a half-mile from AT&T Park. The Warriors' new home will cost at least $500 million.

Completing the sports palace by 2017 faces daunting environmental, traffic, financial, and political obstacles. Proponents say that the benefits justify the cost: the spectacular backdrop of the bridge and the Bay will not only be good for the team, they say, but will attract tourist and convention dollars to the City.

Basketball being an indoor sport, it's difficult to make the connection between the venue and the basketball-watching experience. Unlike Giants fans at AT&T Park, Warriors fans will be unable to look at the scenery while they're watching the game.

But we shouldn't underestimate the boldness and imagination of the Warriors ownership. Deep-pocketed, technically savvy tycoons like Peter Guber and Joe Lacob may already be working on a solution.

For instance, Bay views would be possible from an arena built with transparent aluminum, a substance that was invented in San Francisco (okay, it was in a movie). It turns out, however, that transparent aluminum is not fiction but reality . Looking out to the Bay from an arena built with transparent aluminum...wouldn't that be something?

I'd pay to see that.

Hole-in-the-wall landmark Red's Java House will be preserved, say the owners.  

Fertile Ground

Looking east to Mountain View, Sunnyvale, and the Bay.

The area of the strip of land running from Menlo Park in the north to Cupertino in the south is barely 100 square miles. Seen from above it resembles dozens of other mixed-use suburban areas around the country. There are few distinguishing landmarks--the Moffett aircraft hangar and Stanford's Hoover Tower come to mind.

Companies headquartered here have a combined market capitalization of over $1 trillion.

What mysterious alchemy makes this so? There are other places with beautiful scenery, mild weather, and great universities. There are other places--think of oil or gold--with vastly greater endowment of physical assets. There are seats of government which divert and absorb rivers of wealth through taxation or power.

The wealth here is created by the voluntary actions of billions of people who purchase Silicon Valley products and services. It's created by the millions of investors who foresee returns, i.e., an even greater future, from this mysterious alchemy.  Developers from all over the world come here to try to divine the formula.

As for me, I like to enjoy the scenery.

CDSP Graduation, 2012

A graduation ceremony with Holy Communion.

When the ceremony was over, the newly minted graduates let out a half-hearted whoop and smiled, exhaustion mingled with elation.  There would be no tossing of mortar boards, which they did as twenty-somethings years ago.

Many graduates of the Church Divinity School of the Pacific have wrinkles and gray hair. They have less energy than the nearby Cal undergraduates, but they more than compensate with their motivation, purpose, and, yes, experience.

They will soon be ordained as priests in the Episcopal Church, one of the oldest Protestant denominations. It is a denomination that is dying. The Episcopal Church in America now counts less than two million members, less than half the number of the mid-20th century. And there are no signs of a turnaround; one can attend services all across the country without seeing anyone under 30 years of age.

But the gloomy prognosis did not dissuade these students. They were fully aware of the church's problems when they entered seminary.  Not for glory or riches did they begin their journey. They were answering a call.

On this beautiful Friday morning in Berkeley, hope flickered but refused to go out.

Not A Good Demographic

Another negative article about the Facebook universe:

A slew of recent studies found the site causes some people to become depressed. And a new paper contends the site appeals to people with far more serious psychiatric problems......those who most often “like” other people’s activities on Facebook are more likely to show symptoms of “mania” and “compulsivity.”

Why are many "likers" depressed?  "People who 'like' friends’ updates and pictures may do so in the hope that the favor is returned"---but the liking is often not reciprocated.

Facebook Depression (American Academy of Pediatrics article here) can also be triggered in children and teens "when poring over positive status updates and pictures of happy friends."  Whatever the reasons, the after-effect of logging in to Facebook is not a pleasurable experience for a sizable population.

Addictions (e.g., gambling, drugs, etc. and now Facebook?) that leave people feeling bad eventually peak as the flow of exiting customers rises.  Unless the company addresses this effect of its product, the growth in Facebook customers may come to a halt a lot sooner than anyone expects.

The Sanity of Crowds

FB traded between $38 and $42 on the first day, closing at $38.23.

After a delayed opening, a wave of selling threatened to drive Facebook shares below its $38 IPO price. A sub-$38 closing would have proved embarrassing to the Wall Street hype-meisters.

The stock had been widely predicted to soar on its first day. Instead, up until the closing moments of the trading session, Facebook's underwriters battled to keep the stock from slipping below its offering price of $38 a share. Such a stumble would have been a significant embarrassment, particularly for a prominent new issue like Facebook, the most heavily traded IPO of all time. 

In the end, the bankers succeeded. When trading on Nasdaq ended at 4 p.m., the social network's stock was up just a hair.

The fact that Facebook didn't "pop" to $50 or higher showed that investors aren't as irrational as some underwriters had hoped.  The consensus projection is that FB will earn about 50 cents per share in 2012. Growth projections being all over the map, one can easily talk oneself into chasing the stock.

Even at 50 times earnings that still puts a "fair" valuation at 50 x $.50 = $25.  I'll probably pick up a few shares if Facebook drops to that level.

FB is not feared or worshipped (yet) and is the butt of jokes (e.g., Mad),

"Mark Zuckerberg is the One"

The biggest reservation I have about investing in Facebook is not discussed in the post below: Mark Zuckerberg controls the company through its tiered-stock structure. When you buy Facebook, you're investing in him, not only his technical genius but also his management prowess as a CEO. If he mismanages Facebook, he can't be removed.

Some are on board with this set-up:

“I think Mark Zuckerberg is ‘The One,’ ” says Roger McNamee, a longtime Valley venture capitalist whose firm, Elevation Partners, is an investor in Facebook. “Like Bill Gates and Steve Jobs, he has set a tone that everyone else has lined up behind.”

This Bloomberg News article describes how Mark Zuckerberg avoided strategic missteps along the way to tomorrow's largest IPO in stock market history. It should be comforting to investors how he

1) Foresaw Google as the main competitor back in 2007 and allied with Microsoft;

2) Brought in foreign investors who allowed him much more freedom than American venture capitalists;

3) Hired a complementary Chief Operating Officer, Sheryl Sandberg, instead of a seasoned "wise head" [think how Steve Jobs and Tim Cook complemented each other in different areas];

4) Stuck to his vision by adding features (e.g., news feed, status update, "Like" button, login to other sites using  the Facebook ID) that eventually brought more users to Facebook;

The fifth factor is idiosyncratic for a billionaire CEO who has important things to do: he's again writing code. It's grunt work, but it brings him closer to Facebook's engineering talent and may inspire future products. I like how he thinks.

The 1990's and 2000's were the decades of Bill Gates and Steve Jobs, respectively.  The 2010's could turn out to be the decade of Mark Zuckerberg. He just may be the One.

Falling on Its Face(book)?

Despite the widespread belief that Facebook's Friday initial public offering will be a resounding success, most of the articles in the business press urge caution.

I've seen nothing that will change my judgment from February 2nd ("I've already concluded that I won't be buying the stock when it becomes available"). If anything, the following developments have reinforced that conclusion.

Opinions that IPO price is too high:  Forbes - "Facebook is set to price its historic IPO later this week at a reported valuation of over $100 billion....we believe the rumored IPO range is ahead of fundamentals which we value at $82 billion." Barron's - "investors would do well to skip the deal. Facebook's shares will be richly priced, both in absolute terms and relative to the stocks of established growth companies Google (GOOG) and Apple (AAPL)."

Quarterly net income growth may be slowing (Forbes)

GM says Facebook ads don't pay off:  Wall Street Journal - "General Motors Co.  plans to stop advertising with Facebook Inc. after deciding that paid ads on the site have little impact on consumers' car purchases, according to a GM official."

Insiders are cashing out: Wall Street Journal - "some major stockholders sharply increased the number of shares they intend to sell as part of the IPO." Also, this: " The smart money is flying out of Facebook as the dumb money piles in."

Frankly, despite my valuation concerns, I hope that the IPO is spectacularly successful.  A hot Facebook offering could trigger a rally that will lift all stocks, especially the techs in which I am heavily invested. Also, newly minted millionaires and billionaires will be tempted to spread their wealth around (to use the President's phrase, although it's not the method he envisioned).  The "wealth effect" should redound to the benefit of everyone who lives in the Bay Area.

Advice from an Accountant

Economist David Henderson has a tax accountant who never finished college.  The accountant "has a net worth in the 8 figures" (presumably the fruits of ethical hard work, intelligence, and luck) and cites three common characteristics of financially successful people.

The three he named are:
(1) Don't have a lot of overhead. Don't commit to a large rent. Don't have a large mortgage or, if you do, pay it down quickly.
(2) Be "footloose." That is, be able to adjust quickly when things go bad. So, for example, he told the story of a friend who was doing well but then had his rent on a municipal property jacked up by a local government that saw that he was doing well. His friend didn't renew the lease but went elsewhere quickly.
(3) Take advantage of--and maximize if at all possible--all of the tax-advantaged ways of saving that you have access to: max your 401(k), max your Roth, etc. He told of a man who worked for a large company and who, over his working life, maxed his 401(k) and now has $1.4 million in that account alone.

My own additions to this list for those starting out:

1) Don't be afraid to foresake security for (large) potential upside, at least until children enter the picture.

2) If you fail, keep trying. Being broke isn't that bad when you're young.

3) If you're lucky and brilliant enough to be successful at an early age, pay for help in areas where you lack expertise, for example, intellectual property law, multistate tax reporting, ERISA, Sarbanes-Oxley, to name but a few. Your time is too valuable to waste delving too deeply in these complicated subjects unless they are your specialty.

No Evolution Here

Unlike the President, my take on same-sex marriage hasn't "evolved." From 2004:

Where I stand on the issue of gay marriage:

If a referendum were held on this matter, I would probably vote for the issuance of marriage licenses to same-sex couples (depending on how it was worded).

I hold to my religion’s teaching that homosexual acts are sinful, but most sins are not illegal in our society, else all of us would be in jail.

Because people have deeply-held beliefs, pro and con (maybe even within the same person!), and people on one side or the other tend to cluster by geography, gay marriage should be left to the states to decide. We should try to prevent repeating the never-ending battle over abortion that resulted when the Supreme Court imposed a uniform standard across the country.

I don’t like touching the Constitution, which should only be amended when there are strong majorities in favor of a measure, but someone please tell me how one prevents an activist judge from forcing, say, Alabama, to recognize a same-sex marriage performed in California if the people of Alabama do not want to do so.

Additional comments from 2012:

1) if, like President Obama, you say that same-sex marriage should be left to the states, then you're also saying that SSM is not a fundamental human right covered by the equal-protection clause of the 14th amendment. Some legal scholars have noted the Administration's "incoherence" in opposing on equal protection grounds the Defense of Marriage Act, which says each state decides on SSM for itself.

2) what is moral is different and should be different from what is legal. According to my religious beliefs homosexual acts are sinful....but so is divorce. More to the point, gluttony, sloth, lust, greed, pride, anger, and envy are also sins, I'm guilty of all of them, and I'm grateful that for the most part they're not illegal.

3) I still have not heard proponents provide a satisfactory explanation of how the justification for same-sex marriage cannot also apply to polygamy, incest, and underage marriages. If the criterion for legal marriage is no longer single-man-single woman, then advocates for those currently illegal unions, to these unlawyerly eyes, also have a we're-in-love-too equal protection argument.

Happy Mother's Day (Reprise)

Thank you for drying our tears when we got hurt.

Thank you for leaving work to take care of us when we got sick.

Thank you for cooking our favorite dinners when we were feeling empty inside.

Thank you for cleaning our room, feeding the pets, and doing other stuff that we promised we would do but somehow forgot about.

Thank you for giving us a warm safe place to come to when the world seemed cold.

Thank you for loving us no matter what.

Happy Mother's Day to Mom and to mothers everywhere.

$$ ZZzzzz

2007: not your grandpa's boxspring

Barron's says that sales of memory-foam mattresses are skyrocketing. The disadvantage of memory foam is that performing "the act" is very challenging:

"It's like trying to do it in quicksand," one owner writes on an Internet message board. New York sex therapist Sari Eckler Cooper couldn't be clearer: "There's a lack of resistance for the knees and feet. And whoever is on the bottom is sinking into the bed."

Sales figures don't lie:

mattress shoppers are weighing the risk -- bad sex -- against the promise -- good sleep -- and are voting with their eyelids: They choose to snooze.

Five years ago, we splurged on a pricey alternative to foam, the Select Comfort adjustable bed. The air mattress technology does not envelop the user as much as foam does but still makes for a good sleep. As for the other dimension, well, I can't speak to that because I'm out when the head hits the pillow.

The New Predeterminism

There's now scientific proof of why we enjoy posting about ourselves on Facebook, Twitter, or (ahem) blogs. In scans of brain activity

acts of self disclosure were accompanied by spurts of heightened activity in brain regions belonging to the meso-limbic dopamine system, which is associated with the sense of reward and satisfaction from food, money or sex.

It's doubtful, though, that the pleasure centers light up if we're talking about something negative or embarrassing (unless we can jiu-jitsu the negative into a positive, e.g, how I gave up drinking and became rich, successful, and universally admired).

It will be interesting to see what sections of the brain are activated when the speaker is not enjoying the conversation, such as in news interviews or courtroom settings. Or maybe someday scientists will be able to link the memory and bragging areas to gauge the degree to which our stories are embellished.  From speed-dating to autobiographies to job applications, the possibilities are mind-boggling.

WSJ photo Pleasure centers for bragging, food, money, and sex are the same..

Maintaining Infrastructure

We've been known to criticize the cost and inanities of government--yes, really! see below post for an example--but on the flipside the benefits that government provides are often little noticed.

Two guys with heavy equipment came around the neighborhood to clean out the storm drains. They lowered the crane several times to scoop out the leaves and other detritus. How much it would cost me to pay for this service ala carte I don't know, but it's a lot easier and probably cheaper that the cost is run through the property tax invoice.

In principle, privatization is more efficient. In practice, well, let's not get crazy about it.

Our Protection

Media outlets as ideologically diverse as Fox News and NPR have run stories about how kids who run lemonade stands are being fined or shut down by zealous regulators.

It's easy to see the motivation behind lemonade laws. Health departments are charged with ensuring food safety. Bad publicity, not to mention lawsuits, would result if someone got sick from drinking unlicensed lemonade.

Unfortunately there is no one to advocate for difficult-to-quantify benefits like teaching kids about entrepreneurship or fostering neighborhood spirit.  IMHO the community is worse off because there is no push-back against the cost of over-regulation.

In a few weeks we'll be selling pre-packaged ice cream at the local Arts and Wine Festival. (profits will go to hunger charities). We will take the wrapped bars and ice cream sandwiches from the freezer and hand them to the customer. Although we will not be in contact with the food, we, like all other food vendors, must set up a hand-washing station (picture) with warm water, wastewater bucket, soap, and paper towels. Bottles of hand sanitizers or sanitizing cloths will not be sufficient to satisfy the requirement.

It's useless to ask for a waiver, because if the rules are bent for us, others vendors might ask for similar treatment.  So we will comply (cheerfully!) with the five pages of instructions for "Temporary Food Sales," every jot and tittle of which has been thoughtfully composed for the public's protection.

Blind Spot

Like millions ( a billion?) of other time-wasting smartphone users, I click over to Angry Birds when bored or in need of a distraction. I finished the game but found it difficult to score the maximum three stars on one of the easier levels.

The player must knock over the stone tower, which is intermittently successful if one shoots at the tower roof. But the score was frustratingly low despite hundreds of attempts over a period of months.

I started firing birds in all directions and found that a couple of shots by the yellow triangular bird would demolish a small stone near the base. The whole edifice came tumbling down, and the elusive three stars were the reward.

The small satisfaction received from beating the level was dispelled by the knowledge that I had a blind spot to a solution that was obvious in retrospect.  How many blind spots do I have in matters more important than a videogame?

Brandon Belt

Obtaining an autograph from a young athlete is a lot like investing in an IPO. Unless the athlete (company) is a surefire winner like LeBron James (Facebook), there's a significant probability that appreciation will be minimal. Rookies and startups find it tough to play in the big leagues.

If one is going to engage in autograph collecting, one may as well like the athlete personally (just as one should enjoy living in one's house, because owning it as an investment may not work out). One such likeable sports star is Giants second-year first baseman Brandon Belt.

Brandon Belt greeted every fan with a smile on Saturday evening. (He and everyone there were happy because the Giants had just defeated the Braves earlier that day.) He posed for pictures and signed pictures, bats, balls, and cards. His statistics so far don't promise that he'll be playing in the All Star Game any time soon, but the happy kids crowding around him didn't seem to care.

Privileged to Know

Receiving a blessing on their 50th Anniversary

In this peripatetic world people move in and out of our lives with much greater frequency than in the past. We have said goodbye too many times, as retirement, families, health, and economics call friends away.

Despite its woes, people still do move to California. One couple that we've been pleased to make the acquaintance of is Warren and Nellie Wong, who emigrated from New Zealand and landed in Indiana by way of Harvard. After Warren retired from his mathematics professorship at Notre Dame, they relocated to the Bay Area to be closer to their children and grandchildren. In a short while both have became invaluable members of the community, volunteering and leading many activities.

At the end of each service the minister includes in the benediction this quote by Fredric Amiel: " Life is short and we do not have much time to gladden the hearts of those who walk the way with us. So be swift to love and make haste to be kind."  Wise advice, followed by Warren, Nellie, and others whom we are privileged to know.

I'm Staying Away

In 2009 securities analyst Dan David began researching Chinese stocks that were listed on U.S. exchanges. In a Barron's interview he talks about the fraud that he uncovered. Some examples:

China MediaExpress Holdings (ticker: CCME)

Fraud was pervasive and out in the open. We would ask our investigators to go visit a facility and they found it wasn't operating. I was shocked. We then approached our China attorney and asked for these filings that companies make to the SAIC, the State Administration for Industry and Commerce.[snip] Some six months later, China MediaExpress' auditor and some directors resigned. It stopped reporting to the SEC.

Lotus Pharmaceuticals (LTUSE)

they had indicated that they spent $32.7 million on land in Inner Mongolia. We had an independent appraisal done on the land and it appraised for less than $7 million. [snip] Lotus later returned its Mongolian assets to the previous owner for no cash, and recently said that it can't afford to employ an auditor. It has stopped reporting to the SEC.

China Redstone Group (CGPI) 

they said they owned a cemetery. They didn't own it. They didn't have a license to operate it. We had government documents that showed that it was owned by another entity. [snip] China Redstone's chief financial officer resigned, and it, too, has stopped reporting to the SEC.

 Subaye (SBAY)

[It was] a cloud-computing company that claimed to have 1,539 employees at a certain location. We sent our investigator there. [snip] He stood outside for two days and watched the employees come in and out. Then he called and said, "There's a problem. They have many fewer employees there than they claim." And I said, "Okay, they say they have about 1,500. What are we looking at, half that?" And he said, "No, 40 to 50." The investigator also talked to the community at large. The local people would tell you, "You are not here on the wrong days. This is really how many people come in and out of there." So we published that report and Subaye got delisted. The CFO resigned.

In every instance it was Dan David's investigations that resulted in the de-listing. The Chinese regulatory regime circled the wagons:

they are requiring you to get a "statistics license" to do investigations in China—at the risk of criminal charges. [snip] SAIC employees now ask who you are and why you want these filings. Then they alert the company.

The Chinese market is too large for major companies (think Apple and Ford) to ignore. However, these companies can afford the due-diligence expense.

Retail investing in Chinese stocks is a different story. Fraud is too pervasive for this small investor. I'm staying away.

The Holder is Extra

While shopping for the latest in high-tech commodes, I chanced upon the no-tech retro model shown at right.

This $2,582 stainless beauty is obviously priced for Facebook founders or venture capitalists looking to, er, hop aboard the latest craze for liquidmetal.

Because there's nothing like the feel of cold steel on a winter morning.

This reminds me of a joke by humorist H. Allen Smith, reprinted below unedited (caution, language) from his 1970 book, Rude Jokes.

Has Its Limits

Too comfortable? They feel safe ignoring the cameraman.

The ducks have free rein over the neighborhood. They wander the streets and yards, quacking, foraging, and performing other natural duckly functions.

Owners of pricier waterfront homes have to pressure-wash their decks regularly.  Ducks, geese, and other waterfowl are protected in Foster City and other Bay Area cities, and the birds seem to revel in their protected status.

(Hunting is permitted in areas of the South Bay at certain times of the year.)

For those who are tempted to harvest Bay mallard, a word of caution: "mercury concentrations are high enough to be a cause for concern, especially in the most southern and northern portions of the bay."

Locavoring has its limits.

Magic Spray

Roller removal risky, rejected.

An elderly friend asked me to help fix his mirrored closet door. He said it needed new rollers, which I bought for $5 at the hardware store.

I lifted the door off the track and quickly saw that replacing the rollers would be risky: it looked like I would have to disassemble the frame and possibly ruin the rubber lining, not to mention damage the mirror.

Using a small screwdriver, I adjusted the old rollers higher. The doors slid more easily, but they were still difficult for him to push.

The situation called for the magic spray. Back to the hardware store to return the rollers and pick up a $4 can of WD-40.

The company has added a lever to the spray can top. No longer does one have to mess with the red straw, which is now affixed to the can. A clever modification, it became a tactile pleasure---perhaps that's a guy thing---to spray the rollers and the metal track. The doors slid easily. I placed the WD-40 on his shelf.

The magic spray, invented 59 years ago, is as miraculous as any smartphone or designer medicine. It will probably outlive them all.

May Day: Hawaii No Ka 'Oi

On this International Workers Day, while Bay Area residents endure strikes and shutdowns by workers whose jobs many of us would love to have, it's timely to reprise a post about a genteel way to celebrate the first day of May:

Flower leis flown in from Hawaii

May Day is lei day in Hawaii
Flowers and garlands everywhere…

May 1st is the day of celebration for workers’ movements everywhere, but many people disassociate themselves from the festivities because of the date’s connection with communism. In Hawaii May Day is Lei Day, which everyone joins in without hesitation.

Leis can be simple or elaborate, multi- or mono-colored, expensive or free as the flowers from one’s own back yard. They are given at birthdays, airports, weddings, graduations, banquets, holidays, or sometimes just because. They are given freely without expectation of reciprocation, often to people that one has never met before. There’s supposed to be no lasting commitment—the flowers fade quickly even in a fridge; the receipt of a lei therefore usually “means” little. But sometimes we remember the occasions forever.

A lei is granted with a kiss. Many young boys, grimacing, receive their first kiss from a non-family member when receiving a lei. Later, for the cost of a few flowers it’s a good pretext for a young adolescent male to peck the cheek of a girl he’s long admired (if your mother made the lei, don’t tell the girls, they feel funny when you say that).

When I was growing up, every woman in Hawaii knew how to string a lei. It’s far from a lost art, but fewer people take the trouble now, much like baking bread or writing a letter by hand. But I’m not lamenting days that are gone, rather I’m happy that the tradition of Lei Day is continuing and appears to be getting stronger. Frankly, if I may say so, I prefer Hawaii’s version of May Day to the other one. © 2012 Stephen Yuen