Monday, May 16, 2022

Unconstitutional and Unnecessary

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

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

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

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

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

Sunday, May 15, 2022

The Grace of God

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

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

Every year wildfires have destroyed hundreds of California homes.

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

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

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

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

Saturday, May 14, 2022

Cutting Back

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

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

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

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

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

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

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

Friday, May 13, 2022

Just Desserts

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

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

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

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

(Image from Schlok's website)

Thursday, May 12, 2022

Coastal Fire

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

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

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

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

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

Stay safe, bro.

Wednesday, May 11, 2022

Hump Day is Humming

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

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

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

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

Now That's Being Truly Rich

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

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

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

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

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

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

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

Tuesday, May 10, 2022

Business Etiquette: Some of it Sounds Familiar

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

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

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

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

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

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

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

Monday, May 09, 2022

Guess Where They Ended Up

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

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

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

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

Sunday, May 08, 2022

Mother's Day, 2022

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

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

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

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

Saturday, May 07, 2022

Twitter: It's the Entertainment

So much for investing discipline.

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

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

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

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

Friday, May 06, 2022

A Real Burrito

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

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

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

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

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

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

Thursday, May 05, 2022

Sinking on Cinco de Mayo

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

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

Wednesday, May 04, 2022

Stock Market: Hold, but Buy Antacids

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

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

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

That is no longer the case.

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

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

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

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

Tuesday, May 03, 2022

The Coming Campaign Won't Be as Difficult as Feared

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

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

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

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

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

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

Monday, May 02, 2022

More Heat Coming

Barricades erected around the Supreme Court
building on Monday night (Daily Beast)
Roe v. Wade was decided in 1973, which means that abortion has been a constitutional right for nearly a half-century.

Your humble blogger has strongly resisted being drawn into the argument: each side has bedrock principles, stating an opinion would cause me to be hated by someone, and it's not a subject--to be callous about it--that affects me or anyone I know personally.

Within hours of the leaking of the draft opinion that would overturn Roe I've been forwarded angry texts, tweets, and emails by the pro-choice side. All this merely confirms my decision to stay out of the discussion.

By the way, what does it mean for Californians if Roe is overturned?
Yet even if the Supreme Court outlaws Roe, abortion would remain legal in California, where lawmakers have written its protections into state law.

Even in 1981, after the Legislature virtually eliminated Medi-Cal funding of abortions for poor women, the state Supreme Court ruled that California’s constitutional right to privacy required Medi-Cal to cover abortions just as it covered childbirth.

The state’s high court relied on the same privacy right in 1997 when it struck down a law requiring parental consent for minors’ abortions, similar to laws in other states that the U.S. Supreme Court had upheld under federal standards. Roe vs. Wade also relies on a constitutional right to privacy, which the Supreme Court declared in 1965.

So California will become a refuge for women seeking abortions if the Supreme Court overrules Roe.

The state began preparing last year for the likelihood of losing Roe vs. Wade and establishing California as a national leader in maintaining the right to terminate a pregnancy.
The anger of pro-choice Californians is not over their own rights being taken away. Like the transgender-bathroom and "don't say gay" children's education bills, we can't resist telling other states what to do.

Sunday, May 01, 2022

Day of Rest

Only eight were in attendance at 8:30.
If there are no after-church meetings, I prefer to go to the early service at 8:30.

Being done by 9:15 leaves the remainder of Sunday for chores, recreation, and family activities.

With all that freed time I stopped at Starbucks for a blackeye (coffee plus 2 shots of Espresso). The caffeine forestalled fatigue.

Sunday is the day of rest, but I didn't want to waste it on a nap. Naps are for weekdays.

May Day, 2022

Waikiki Elementary May Day, 1980 (Star Advertiser)
The Lei Day celebration returns to Kapiolani Park:
This year, the 94th Lei Day Celebration returns after a cancellation in 2020 and virtual celebration in 2021. The free festival will take place from 9 a.m. to 5:30 p.m. this Sunday at the Queen Kapiʻolani Park in Waikīkī.

...Lei Day has a fascinating history. The day originated from an idea by poet Don Blanding in the 1920s.

Blanding thought there should be a designated day celebrating the beauty and significance of lei in Hawaiʻi. Blanding discussed his idea with “Honolulu Star-Bulletin” columnist Grace Tower Warren. She suggested that Lei Day should fall on May Day, creating the popular and catchy phrase, “May Day is Lei Day.” The first Lei Day celebration was held in Honolulu on May 1, 1928. Since then, numerous festivals have been established throughout the state to celebrate the uniquely Hawaiian holiday.
As I've said before, I much prefer the Hawaiian May Day to the Marxist version that commemorates worker uprisings. Flowers universally bring smiles, while upraised fists bring...I'll be polite and just say pluses and minuses.

Saturday, April 30, 2022

Applause Not Needed

(photo from NY Post)
Warren Buffett is the most successful investor in history. His knowledge of the stock market and financial analysis is unrivalled, but IMHO his wisdom concerning human nature and human behavior are equally important components of that success.

And it all stems from his empathy, i.e., the ability to put himself in another's shoes. The latter was on display when he said why he doesn't talk about politics in public, at least not any more. [bold added]
the CEO explained why he’s not speaking on politically charged topics — because doing so could affect Berkshire and the companies it invests in.

“I don't want to say anything that will get attributed basically to Berkshire, and have somebody else bear the consequences of what I talk about,” Buffett said.

“Why in the world do I want to hurt the people in that other room that do all kinds of things for Berkshire? Why do I want to hurt you? Because I say something that 20% of the country is going to instantly disagree with. And sometimes they will be so upset about us that they will try and…have campaigns against our companies.”
Michael Jordan expressed a similar thought 32 years ago. When he was urged to support the Democratic candidate in a Senate race, he said, "Republicans buy sneakers, too."
My mother asked to do a PSA for Harvey Gantt, and I said, 'Look, Mom, I'm not speaking out of pocket about someone that I don't know. But I will send a contribution to support him.' Which is what I did.

"I do commend Muhammad Ali for standing up for what he believed in. But I never thought of myself as an activist. I thought of myself as a basketball player.

"I wasn't a politician when I was playing my sport. I was focused on my craft. Was that selfish? Probably. But that was my energy. That's where my energy was."
They refrained from politics for different reasons: Michael Jordan didn't want to hurt his own brand, and Warren Buffett didn't want to hurt the people in Berkshire's businesses. Two other similarities: both men have shown enormous discipline throughout their lives, and neither craves the adulation of people who clap because they like their politics.

Friday, April 29, 2022

Apple Rolls Along

Through yesterday's close AAPL is up 42%, vs the NASDAQ'S 12%, over the past 12 months.
It's down 2% to $160 this morning.
Despite strong revenue and earnings for the quarter ended March 31, 2022, Apple said that supply-chain shortages and strict China lockdowns will affects its performance for the rest of 2022.
Apple Inc. cautioned Thursday that the resurgence of Covid-19 in China threatens to hinder sales by as much as $8 billion in the current quarter—a setback after seeing supply-chain improvements during the first three months of the year.

The guidance from the iPhone maker came Thursday shortly after the company posted one of the best quarters in its 46-year history...

The challenges come after a blockbuster quarter. Apple’s revenue for the recent period rose 9% to $97.3 billion, far exceeding analyst expectations for $94 billion. Earnings per share rose to $1.52 from $1.40 a year earlier—beating estimates for $1.42 a share and setting a record for Apple’s fiscal second quarter.
Apple has continued to grow despite COVID-19, the ups and downs of U.S.-China relations, supply-chain issues, and the supposed limitations of being a hardware company. As we noted almost two years ago,
Apple's market capitalization when Tim Cook officially took over in October, 2011, was $344 billion. The company is valued six times [on 4/29/22 it's 7.6x] as much today. As we've observed, naming Tim Cook as his successor was Steve Job's wisest decision.
We're a holder of AAPL more for Tim Cook and his management team than for any one product, yes, even the iPhone.

Thursday, April 28, 2022

Unique Menu

Sushi rolls
Five years after our first visit, we were pleased to see that Tugboat Fish & Chips had survived the pandemic.

The franchisees, an Asian couple, were still offering a unique menu: sushi plates, other Asian dishes, and English seafood & chips.

When we entered the dining room, eight middle-aged Japanese-Americans were chatting amiably at a large table in the corner. It's always a plus to see locals eating in an establishment that one is about to patronize.

Lunch special
I ordered the lunch special: deep-fried cod, french fries, onion rings, tempura zucchini, and pot stickers. My companion ordered a couple of sushi rolls. The ingredients were fresh, and the deep-fried dishes were crisp and moist inside.

The bill was $30 before tax and tip, about 25% below comparable Bay Area restaurants. We'll be back, and the interval will be a lot less than five years.

Wednesday, April 27, 2022

San Francisco Housing Program: "Chaos, Crime and Death"

Tenderloin hotels Olympic and Windsor don't
look so bad from the outside (Chron photo)
A little over two years ago, just before the COVID-19 lockdowns began, the Chronicle reported on San Francisco's program to rent single-room occupancy (SRO) rooms at older hotels to house the homeless. It would be run by "motivated charities":
The oversight by motivated charities, not indifferent bureaucrats, has a good chance of identifying problems earlier. Also, the housing is available immediately, instead of waiting for the units to be built years from now.

The project risk is much lower than the cost of building shelters that turn in to white elephants, so give them props for trying.
Though it's only been two years, the results are clear: the SRO program is a disaster: [bold added]
But because San Francisco leaders have for years neglected the hotels and failed to meaningfully regulate the nonprofits that operate them, many of the buildings — which house roughly 6,000 people — have descended into a pattern of chaos, crime and death, the [Chronicle] investigation found. Critically, the homelessness crisis in San Francisco has worsened.
• At least 166 people fatally overdosed in city-funded hotels in 2020 and 2021 — 14% of all confirmed overdose deaths in San Francisco, though the buildings housed less than 1% of the city’s population...
• Since 2016, the year city leaders created the Department of Homelessness and Supportive Housing, the number of homeless people in the city has increased by 56%...
• Residents have threatened to kill staff members, chased them with metal pipes and lit fires inside rooms...
• Broken elevators trap elderly and disabled tenants on their floors, shuttered bathrooms force people in wheelchairs to rely on portable hospital toilets, and water leaks spread mold and mildew through rooms.
Some rational tenants have moved back onto the street:
Blocks away, at the Baldwin Hotel, Richard Brustie said he became so fed up with the conditions that he and his girlfriend left in January. They opted to live in a tent outside instead.

“I moved in there and the kitchen sink had human shit in it, and the hotel has black mold,” said Brustie, also 57. Past public inspection records confirm similar violations in the Baldwin’s common areas. “So we said screw that, and we started sleeping on the streets.”
How can the SRO program be fixed? The solution, from everyone quoted in the Chronicle article, is to spend (a lot) more money.

George Christopher lured
the Giants from New York.
As your humble blogger has written before, the San Francisco voters seem to approve these policies on homelessness and crime because they keep re-electing leaders who spend $billions and not only do not fix the problems but make things worse.

George Christopher (1907-2000), the last Republican mayor of San Francisco, left office in 1964.

As a believer in democracy, I say let's continue to give the voters what they asked for, good and hard.

Tuesday, April 26, 2022

Lincoln, California in the Spring

November 29, 2021
April 26, 2022

The winter rains didn't alleviate the drought, but they were enough to cause the pond grasses to spring to life. A hay-fever sufferer since childhood, I felt the familiar nasal tingling that presaged an attack if I didn't leave the area.

A few hundred feet along the walking path brought me to what was an empty field two years ago. New homes priced in the $500,000 range had sprung up.

The builder, D.R. Horton, has a good reputation; just the fact that the project was nearing completion during an era of material and labor shortages is a sign of competence, IMHO.

The new development was a sign of the migration inland.

For Californians looking to get away from the over-priced, over-crowded coasts--but still be close to the perks of suburban life like shopping malls, restaurants, and recreation--the greater Sacramento area is a good landing spot.

Monday, April 25, 2022

Rocklin Repast

We were done with the tax returns for family and friends, and a 9-month project for the church had coincidentally wrapped up. It was time to reward ourselves with an overnight trip to Central California.

The head ordered the ahi salad, but the
heart wanted the drunken-pig fries.
We stopped for lunch in Rocklin. An upscale burger-and-brew operation, the University of Beer, had opened six locations in the Sacramento Valley.

The prices were roughly the same as in the Bay Area--$20 for an entrée--and the portions were larger. As the designated driver, I wistfully scanned the extensive beer collection and settled on ice water.

My annual physical was fast approaching, so I also passed on the calorie-laden burger that I really desired and ordered an ahi salad.

Everything was well-prepared, and the ingredients were fresh. My companion let me taste his order of burger and fries.

Next time I'll have what he had, and someone else can drive.

Sunday, April 24, 2022

Doing, Not Just Believing, Is Important, Too

Going up for Communion in person.
Northeastern psychology professor David DeSteno ("How God Works: The Science Behind the Benefits of Religion”) says that ethical behavior is not dependent on theology as much as regular attendance: [bold added]
when it comes to morality, the power of religion is more in the doing than in the believing. Studies of religion and health show that identifying with a religion—saying you believe in God or going to worship once a year on Easter or Yom Kippur—means very little. Epidemiological research shows that it is people who live their faith, regularly going to services and engaging in their religion’s rituals, who tend to live longer, healthier and happier lives.

...doing religion helps. During a moment of temptation, belief that God is watching you is difficult to ignore when you’ve been regularly reminded of this fact through prayers and rituals. That’s why people who believe in God often work harder to resist temptation the more they practice their faith.
I am acquainted with people who describe themselves as "religious" but eschew Sunday worship because they purportedly are turned off by organized religion. The science of psychology suggests that group worship does have benefits that can improve individuals' ethical behavior and spirit of charity.

It seems that there is no harm and much to gain by visiting the local churches, synagogues, or temples for a little while to test Dr. DeSteno's hypothesis, but that's just me.

Saturday, April 23, 2022

Our Civic Duty

Boothbay Park
Arriving at 10 a.m. at Boothbay Park, I introduced myself to the other volunteers, three adults and two children.

It was Earth Day clean-up in Foster City, and Boothbay was one of the nine parks where residents gathered to pick up trash.

We were handed 32-inch trash grabbers, plastic bags, and orange Home Depot buckets to hold recyclables. A pleasant Saturday morning, I was prepared to stay till noon.

However, the Foster City workers said that they had to be done in an hour. No dallying if we wanted to cover the entire park.

Not bad for an hour's work.
The park's outward appearance was clean, but closer inspection revealed small pieces of gum and candy wrappers, foil, and popped balloons.

The bushes along the edge of the park yielded up more than half of the trash. The stiff winds that we had been having every other week were the culprit, and even tidy picnickers might be reluctant to wander into the moist foliage to do their civic duty.

The work was low intensity, but after an hour we had picked up more trash than I thought we would. Waste management is not my forte, as anyone in my household can tell you.

Everyone got T-shirts for their trouble. The compensation that gives the most pleasure sometimes isn't money.

Friday, April 22, 2022

Earth Day, 2022: Going Nuclear

Even Democrats are having second thoughts about
closing Diablo Canyon in 2025. (Chron photo)
On Earth Day, 2022 there are signs that the decades-long freeze against nuclear energy is over.

Biden launches $6 billion effort to save nuclear power plants
The Biden administration is launching a $6 billion effort to rescue nuclear power plants at risk of closing, citing the need to continue nuclear energy as a carbon-free source of power that helps to combat climate change...The program was funded through President Joe Biden's $1 trillion infrastructure deal, which he signed into law in November.
Question Asked: Can Coal Plants Turn Into Nuclear Reactors? [bold added]
the main issues are that you have these coal plants that are closing down that have an experienced workforce. So you could tap into the workforce, you could save some jobs, and help out local economies. And that you would reuse the site in a sense that you have these valuable grid connections that are there and that you could do something with that. And then that you would be replacing coal essentially with a cleaner energy, that nuclear is a no carbon way to make electricity. So the idea behind modular nuclear reactors is that they are smaller and faster to build.
Bill Gates’ TerraPower aims to build its first advanced nuclear reactor in a coal town in Wyoming
The Kemmerer plant will be the first to use an advanced nuclear design called Natrium, developed by TerraPower with GE-Hitachi.

Natrium plants use liquid sodium as a cooling agent instead of water. Sodium has a higher boiling point and can absorb more heat than water, which means high pressure does not build up inside the reactor, reducing the risk of an explosion...

Natrium plants can also store heat in tanks of molten salt, conserving the energy for later use like a battery and enabling the plant to bump its capacity up from 345 to 500 megawatts for five hours.

The plants are also smaller than conventional nuclear power plants, which should make them faster and cheaper to build than conventional power plants. TerraPower aims to get the cost of its plants down to $1 billion, a quarter of the budget for the first one in Kemmerer.
Nuclear power plants designed a half-century ago are being matched against today's solar and wind power technology. Comparing all non-fossil-fuel sources of energy for their current safety, cost, and reliability is a much more honest analysis.

Thursday, April 21, 2022

Reminiscing, with Receipts

Thornton Wilder himself played the minister
in a 1950 production of Our Town.
Thornton Wilder's Our Town was one of the first 20th Century plays that we read.

The language was not above our heads, but few seventh graders had a lived grasp of the theme: that life in all its moments, special and jejune, is not appreciated until it's over. But who can fault us; not quite teenagers, our eyes were looking forward, not back.

Speaking of looking back, the Pulitzer Prize-winning playwright kept meticulous tax records:
Like any conscientious taxpayer, Wilder carefully documented his tax-deductible business expenses. His returns from 1968 to 1972 include meticulous, multi-page accounts of his work-related travel and associated expenditures. Originally intended to justify tax write offs, today these records offer a unique perspective into Wilder’s writerly life at the twilight of his career...

Wilder explained [in an attachment to his tax returns] that living in a big city or near New York subjected him to constant harassment from “interviewers, photographers, enthusiasts, student delegations, visitors from Europe and Asia.”

“It is necessary that I remove myself,” he stated...
For Thornton Wilder 1968 was especially noteworthy for his (deductible) European travels to watch and work on plays that he adapted to the American theatre. He spent months in Martha's Vineyard recuperating from surgery, then returned to Paris in the fall.
His travel and hotel expenses for 1968 totaled $4,658.76, according to the tax documents, which is about $34,000 today adjusted for inflation.

1) Thornton Wilder does look like an accountant in his college year book photo, doesn't he?

2) Yes, boys and girls, CPA's used to type the tax returns. (Look at the mis-aligned "X" in the middle photo.) Typing often took more time than filling out the draft in pencil.

3) To pre-empt possible questions, additional documents and/or explanatory notes such as Thornton Wilder's narrative descriptions were regularly attached to tax returns. Later this practice became impossible with some e-filing software.

Wednesday, April 20, 2022

Netflix: That Sinking Feeling

Netflix (NFLX) fell 35% today and is down 62% since January 1st
Competitive stresses had been building for Netflix, which once had the market for streaming video all to itself. The dam broke last night, when Netflix announced that it had lost subscribers, and the stock fell precipitously:
The shares shed more than a third of their value, finishing down $122.42 to $226.19. The stock was the S&P 500’s worst performer of the day. Investors had expected that the company would add new users in the quarter. Instead, Netflix said it ended the first three months of the year with 200,000 fewer subscribers than it had in the fourth quarter and said it expected to lose two million global subscribers in the current quarter...

The fall in Netflix’s shares represented its biggest single-day percentage drop since Oct. 15, 2004, when it fell 41% after saying it would cut subscription fees and postpone planned international expansion. It slashed $54.3 billion from the company’s market capitalization, its largest one-day market cap loss on record...

“Nobody was expecting Netflix to announce they lost subscribers. They were expecting a slowdown in subscriptions, but seeing Netflix losing subscribers is a big deal,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, an online broker.
Your humble investor/blogger turned a modest profit on Netflix eleven years ago. At the time I was spooked by Amazon's entry into streaming video and thought that the much-larger company would eat Netflix' lunch.

Though I sold Netflix ten years too soon, there are only small regrets. I would probably have held on too long and watched a large Netflix holding fall by 35% in one day. Irrational, to be sure, but that's why you shouldn't listen to a blogger who gives free advice.

Tuesday, April 19, 2022

Tax Day, 2022

Federal extension form 4868
Following retirement and the elimination of entities (partnerships, Subchapter S corporations) that required us to wait for K-1 forms that were frequently late, there were no excuses impediments to filing our tax returns by April 15th.

California extension form 3519
Ambition, however, fell easy prey to sloth and pain avoidance, two pillars of procrastination. Over the weekend I filled out draft tax returns with only a cursory look at deductions. (A full search involves four different credit cards and three bank accounts, i.e., the pain I was speaking about earlier.)

Two extension forms, plus checks that were more than enough to cover the liability for 2021, were mailed at the post office on Tax Day, April 18, 2022.

Having the government hold on to the money a few extra months was the cost; the benefit was the first restful sleep I've had in weeks. It was worth it.