IRS: It Can't Even Get the Basics Right

Any notice received from the IRS is upsetting, and this one was no exception. Form CP80, received last week, said that our account had a $2,378 credit and that our 2020 income tax return had not been filed.

We had mailed the return timely on April 14, 2021, along with a check for $2,378 and Form 1040-V, the payment voucher.

Everything was in the same envelope. Obviously they cashed the check and knew it was ours. How could the return have been "lost"?

The above question is sarcastic, dear reader. My mother's 2019 and 2020 tax refunds still have not been received, and getting through to talk to a live person who knows what he or she is doing is impossible.

Tracking info to Cincinnati

And I was certainly not going to accede to the CP80 request to send them another copy with a 2022 signature date. It would go to Philadelphia while the original had gone to Cincinnati. They might think the copy was an Amended Return and accuse me of not filling out a 1040-X.

So I did what we used to do in the old days: compose a politely worded business letter, free of tone, especially sarcasm.

The letter explained that the return was mailed at the Foster City Post Office and, according to the enclosed USPS tracking record, was received in Cincinnati on April 16th. Your move, IRS.

Note: the Washington Post reports that we are in the same boat with an unspecified number of taxpayers. [bold added]

As of Dec. 31, the IRS had 6 million unprocessed individual returns, including returns for the 2020 tax year...

Many taxpayers have been receiving what’s called a “CP80 Notice.” Taxpayers who had already filed a return are told to send a newly signed copy to the address listed in the notice.

Obviously, this direction has alarmed those taxpayers who conclude their original returns are probably in a pile in some IRS office waiting to be processed. Wouldn’t mailing another return just cause more confusion?

Sunday Service

At least the picture is clever

Attending early-morning church service is a tradition in many households during football season.

There were games to watch in the afternoon, but before that pleasurable activity I had to take the brown-bag lunches to Redwood City.

That lunchtime errand unfortunately (😉) conflicted with the church's Annual General Meeting, where the congregation votes on various measures and candidates for office.

As an added bonus one gets to listen to reports of finances and various ministries.

I couldn't attend the meeting and picked up the 43 pages of materials. Reading is much more efficient than listening.

Pre-COVID we needed six servers for the hot lunch.
Now just one person is needed to deliver and set up.

I retrieved the lunches from the refrigerator and hauled them to the Redwood City community center.

There were 30 people in line, and a dozen stragglers showed up in the next half hour.

After a short waiting period, the customers were told they could have two bags, and all 87 were snapped up.

Duties done, it was time to engage in America's secular religion.

Well, the games were exciting and not decided until the very end. The Cincinnati Bengals and the Los Angeles Rams will face off in the Super Bowl in two weeks.

Saturday Assembly Line

The beginning of the third year of the pandemic saw us assembling brown-bag lunches again, instead of the hot meals we used to serve cafeteria-style in Redwood City. This time we only had four volunteers on a Saturday morning because of scheduling conflicts.

No worries, we had become much more efficient since we had begun making sandwiches fourteen months ago.

No more running back to the store to buy something we had forgotten, no more stuffing too-large bread into too-small sandwich bags.

Two hours later, 87 bag lunches were stuffed into an empty refrigerator.

We'll take them to the community center tomorrow. It will be nice to see old friends.

One Marketing Survey That Was Worth a Look

I walked to the local Citibank branch a block away and conducted a straightforward deposit transaction with the teller. Citi promptly sent an email survey (right).

First take: another marketing survey for the benefit of a large corporation. Delete.

Second take: hasn't everyone--and the banks especially--told us never to click on e-mail links or open attachments? The risk of identify theft and crooks trying to steal our money is very high. Press doubly hard on Delete.

Third take: hold on a second. That small neighborhood branch has been there for over 40 years. We opened an account with Glendale Federal, which was acquired by Cal Fed, then Citi. The big banks are always looking for ways to cut costs, and I definitely want to keep that branch open.

After carefully screening where the email came from and examining the marketing feedback site (that didn't ask for personal information), I answered the questions, giving the teller mostly 10's and a few 9's just to imply that I thought about the questions. I also typed in a comment about how friendly, efficient, and accurate she was.

Emails from "financial institutions" are risky because of the probability of fraud; this is the rare one that was worth a look.

Olfactory Modification

(WSJ graphic)

In a double-blind study men and women displayed opposite behaviors when they were exposed to hexadecanal (HEX), a chemical found on babies' scalps: [bold added[

breathing in HEX influences our social behavior, dialing up aggression in women but attenuating it in men. This sex difference stunned the researchers. Based on mouse studies, they expected HEX to have a calming effect across the board...“Women exposed to HEX reacted 19% more aggressively, while men were 18.5% less aggressive.”

...The authors speculate that HEX is an ancient survival mechanism. Mothers exposed to the chemical signal would be more likely to defend their babies against threats, while fathers who inhale it would likely be less aggressive.

Brain scans confirmed that exposure to HEX caused sections of men's brains to react very differently than women's.

Because the dimensions of aggressiveness and agreeableness are not as value-laden as, say, intelligence ("more aggressive" is not necessarily a compliment while "more intelligent" is), the apparent findings of an inherent sex difference in reacting to a chemical has escaped controversy.

Let's hope that researchers will design, conduct, and report on future experiments in this area with neither fear nor favor.

Justice Breyer to Retire

(WSJ photo)

Justice Stephen Breyer will retire, according to NBC News:

Justice Stephen Breyer will step down from the Supreme Court at the end of the current term, according to people familiar with his thinking...

Biden promised on the campaign trail to nominate a Black woman to the court. In the wake of Breyer’s announcement, there was an outpouring of statements calling for him to follow through.

The progressive group Demand Justice hired a truck last year to drive around Washington with the sign: "Breyer Retire. It’s time for a Black woman Supreme Court justice."

Justice Breyer, 83, has yet to make an official announcement.

The current SC term ends in late June or early July.

Although only a simple majority in the Senate is necessary to confirm a future nominee, the Democrats won't have any room for error. Digging through a nominee's personal life back to her high school days is now an acceptable practice, and any behavioral or verbal misstep will be grist for the hearings. Depending on what turns up, Senators may have difficulty justifying their vote to their constituents, especially if they're up for re-election in 2022.

In any case, replacing a Supreme Court nominee increases the likelihood of nothing important getting through Congress in 2022.

Stock Market: A Crazy Monday

Like some games this weekend: fall behind quickly, things get worse, recovery to eke out a win.

The craziness of the football weekend extended to the stock market, which plunged Monday (the Dow Jones Industrial Average fell over 1,100 points) then recovered to close slightly higher for the day.

Yes, I know that these phenomena should not be related, but what do we really know, dear reader? What if the simulation is just playing with us, to see the reactions of the laboratory mice as the rules of reality break down?

In the meantime for conservatism's sake, I have to assume this reality--let's not get distracted by the infinite possibilities of the multiverse either--is the one that counts. And the reality is that the stock market slide since January 1st has hit the portfolio about 10%. When the NASDAQ fell mid-day another 5%, it sure seemed like a "selling climax."

Your humble and oft-humiliated blogger-investor put a small amount of money into a high-flying stock that had fallen over 30% this month and was pleased to see that it bounced 10% higher before the close. The investment was fun, a spark of light in the gloominess. Let's hope the rise continues.

Update - 7 a.m. PST, Tuesday: the indices are down 2-2.5%, which doesn't surprise. There are too many negatives weighing on the market (higher interest rates, threats of war, supply-chain issues, the Great Resignation). It will be a nervous climb higher.

The Best Weekend of Football Ever

Tetraptych of the four winning quarterbacks: Burrow, Bengals;
Mahomes, Chiefs; Garoppolo, 49ers; Stafford, Rams (WSJ photo)

Fans of professional football for over 50 years, we've always made a point of tuning into the Divisional Playoffs, four weekend games which pit the eight teams left in the Super Bowl tournament. We hope for one, maybe two exciting games; usually there are a number of stinkers that are decided by halftime.

Last weekend each game was exciting enough to have been the highlight of the weekend in past years.

the 2022 version of the divisional round may be the best ever.

Two No. 1 seeds were taken out in the divisional round, the first time that's happened since 2010. All four teams that won earned the victory in walk-off fashion.

Evan McPherson hit a game-winning 52-yard field goal to give the No. 4 Cincinnati Bengals a 19-16 win over the top-seeded Tennessee Titans.

Robbie Gould hit a game-winning 45-yard field goal to give the No. 6 San Francisco 49ers a 13-10 win over the top-seeded Green Bay Packers.

Matt Gay hit the winning 30-yard field as the Los Angeles Rams knocked off the defending Super Bowl champion Tampa Bay Buccaneers.

Patrick Mahomes connected with Travis Kelce on an eight-yard touchdown pass to give the Kansas City Chiefs an overtime victory over the Buffalo Bills.

The National Football League couldn't have written the script any better. The first game, Cincinnati's upset win over Tennessee that was decided by a last-second field goal, was exciting, but each succeeding game was even more thrilling as the stars elevated their play. IMHO, the games were "won," not "lost."

a football weekend like this past one, a four-contest, do-or-die playoff buffet in which the first game was totally wild, the second game was utterly wilder, the third game was straight-up bonkersville, and I really don’t have the term to describe the fourth game, because the English language has yet to come up with a sufficient word to precisely describe its final minutes of madness...

It was some 24 hours, starting with Cincinnati winning a football game they really had no business winning, to San Francisco winning a wintry game they had no business winning, to the Los Angeles Rams winning a game they did their best to gift wrap and leave on the doorstep for Tampa Bay, to a relentless jaw-dropper between Kansas City and Buffalo in which the lead flipped back and forth in the closing seconds of regulation.

Another reason this was a great weekend for football: for the first time in 5-7 years the focus has been on the games and not on fundamental threats to its popularity. Rule changes and improvements to safety equipment have halted, at least temporarily, the furor over CTE (chronic traumatic encephalopathy). A combination of acceding to some of the players' demands and a general lowering of the political temperature has pushed the flag-kneeling controversy to the background. Vaccinations and greater knowledge of the disease have made COVID protocols less disruptive.

Go Niners!

Save Us from the Time of Trial

Hostages rescued at Congregation Beth Israel,
Colleyville, TX on January 15, 2022 (NY Post)

Writer Mark Oppenheimer says that times have never been better for American Jews who are not overtly religious: [bold added]

for people who are Jewish but don’t do Jewish things, the U.S. is less oppressive than ever. Fifty years ago, there were still meaningful prejudices and structural obstacles that plagued the most secular, non-affiliated Jews.

There were country clubs that didn’t allow Jews (or only allowed a token few), and there were law firms and Wall Street banks where making partner was that much harder for a non-Christian.

But I have been writing about American religion for 25 years, and in that time, I have not encountered a single business, school or social club where Jews are unwelcome. I am sure there are outliers somewhere, but let’s put it this way: The average Jew is no longer worried about being excluded by gentlemen’s agreements at law firms, restrictions at clubs or real estate covenants. These are artifacts of the past.

The anti-Semitism that does remain is more extreme and violent and targets outward and visible signs of Judaism:

The recent heightened antipathy toward Jews hasn’t been focused on the general Jewish population. Rather, it has targeted the shrinking minority of Jews who regularly do Jewish things in Jewish spaces—go to synagogue, for example, or shop at kosher markets...The Jews at risk of anti-Semitic attack will include the small but growing number whose clothes make them targets, like many Orthodox, including Hasidim. Then there are the teachers at Jewish schools, the kosher butchers, the nurses in Jewish homes for the aged.

The decline in synagogue attendance ("only a fifth of Jews attend worship services at least monthly, and only 12% weekly") parallels the drop in church attendance. I wonder how many Christians would attend Sunday services if there was a chance, however small, that their lives would be endangered by an anti-Christian extremist.

Pray that we will not be put to the test.

Intuitive Eating

(Image from nutritionist resource)

It was easy to strike a New Year's resolution off the list. I didn't achieve it, I just crossed it out.

Losing 10 pounds is no longer important. (Some) dietitians say that losing weight should not be the goal.

One should focus on "intuitive eating":

Many anti-diet proponents instead advocate intuitive eating, or listening to the body’s innate signals around hunger, fullness and food preferences. Central to the process is giving up tracking weight and categorizing foods as morally good or bad.

Rather than lose weight by denying one's craving, one should focus on eating but not overeating, exercising moderately in activities (e.g.,walking, golf, bicycling) one enjoys, and going to bed when one is tired.

A more accurate term might be intuitive living with guardrails. The weight and health will take care of themselves.

Almost a Killer App

Krystal Pollitt

The Yale School of Public Health has developed a wearable "Fresh Air Clip" that can detect low concentrations of the SARS-CoV-2 virus: [bold added]

“The Fresh Air Clip is a wearable device that can be used to assess exposure to SARS-CoV-2 in the air,” said the clip’s creator Krystal Godri Pollitt, an assistant professor of epidemiology (Environmental Health Sciences) at YSPH and an assistant professor of chemical and environmental engineering at Yale.

“With this clip we can detect low levels of virus that are well below the estimated SARS-CoV-2 infectious dose,” Godri Pollitt said. “The Fresh Air clip serves to identify exposure events early, alerting people to get tested or quarantine. The clip is intended to help prevent viral spread, which can occur when people do not have this kind of early detection of exposure.”

COVID-19 is primarily transmitted through the inhalation of virus-laden aerosols and respiratory droplets that infected individuals expel by coughing, sneezing, speaking or breathing. Researchers have used active air sampling devices to detect airborne SARS-CoV-2 in indoor settings; however, these monitors are typically large, expensive, non-portable, and require electricity. To better understand personal exposures to the virus, Godri Pollitt and her colleagues sought to develop a small, lightweight, inexpensive, and wearable device that doesn’t require a power source. The Fresh Air Clip was the result.

The device captures virus-laden aerosols that deposit on a polydimethylsiloxane (PDMS) surface. The team tested the air sampler in a rotating drum in which they generated aerosols containing a surrogate virus, a bacteriophage with similar properties to SARS-CoV-2. They detected virus on the PDMS sampler using the polymerase chain reaction (PCR) protocol, showing that the device could be used to reliably estimate airborne virus concentrations...

Godri Pollitt said she hopes to make the clips available to the public in the future.

The device has been tested in the field and appears to be reliable.

If it has the features that have been reported--small, lightweight, inexpensive--then the device is a significant weapon against viral transmission. The Clip has to be tested for virus aerosols in "a rotating drum" after possible exposure, so it falls just shy of being a world-changing breakthrough. However, now that we know what the objective is, I am sure that speedy, inexpensive Clip-testing mechanisms are on the drawing board.

Meanwhile, companies that are trying to develop wearable health-related technology should take note: blood-pressure and oxygen content are one thing, but detecting coronavirus in the air will be a killer app.

Talking About We Don't Talk About Bruno

Disney's 2021 animated feature, Encanto, has produced the international music hit We Don't Talk About Bruno:

“Bruno” recently became the first song from a Walt Disney Animation Studios film to hit the number one spot on Billboard’s Streaming Songs chart. This week, it hit number four on Billboard’s Hot 100 to become the highest-charting song from a Disney animated film in over 26 years (since “Colors of the Wind” from “Pocahontas” in 1995) according to Billboard—and surpassing “Let It Go” from “Frozen,” which made it to number five in 2014.

I pulled up the YouTube video to see what the excitement was all about. Characters sing about a missing relative whose ability to prophesy negative events has made him unpopular. The lyrics are clever, Porter-esque even, and the Latin rhythms drive the song forward energetically.

IMHO, however, the melody is not very hummable. I like the piece but don't love it. The animation is attractive, so I would watch the video again but don't intend to listen to the audio stand-alone.

Thus it was, is, and shall be ever more. Generations are divided by their music.

Below is the video, which has garnered 109 million hits as of this writing.

Admire the Mire

The Bay waterfowl splashed about happily (yes, I'm anthropomorphizing) when the rains came in December.

January has been dry, and parts of the lagoon are now a swamp. The muddy environ has attracted even more birds to forage for the creepy, crawly things that lie beneath the surface.

Mud is mankind in the moulding,
Heaven's mystery unfolding;
Miracles of mighty men,
Raphael's brush and Shakespear's pen;
Sculpture, music, all we owe
Mozart, Michael Angelo;
Wonder, worship, dreaming spire,
Issue out of primal mire.
--------Robert William Service (1874-1958)

The ducks have gone south, and the mud hens (aka American coots) are plentiful.

The Financial World is Passing Me By

Everyone used to know how to write a "check"

Trying to sign up for a business-related insurance policy, I sent the following e-mail to the broker:

Kelly, may I just mail a check for $700 to you? I will make it payable to _____ Insurance Agency unless you instruct otherwise. Thanks.

Her answer:

Actually, I need to post an electronic payment to the policy to issue it. So a check would not work, and I cannot cash that to my agency because it needs to be applied directly to [Insurance Co. Name].

If you'd like to run it through your bank acct we can take the electronic check over the phone (routing/acct) and process that today to activate the policy.

Thank you!

I should have seen this coming when a young fellow wanted to pay via PayPal 20 years ago. My quizzical look undoubtedly amused him.

Dinosaurs didn't have the self-awareness to know that they were going extinct.

MLK Day, 2022

No changes are necessary to last year's post on one of the great men of the 20th century:

After re-reading my previous posts on Martin Luther King Day, the great man seems more relevant than ever to this boomer blogger. Unfortunately, his doctrine of non-violent civil disobedience seems increasingly quaint. Today speakers will honor him, all the while willfully ignoring what he called them to do. We must not allow our creative protest to degenerate into physical violence.

From 2010:

Martin Luther King, Jr. was an American original whose stature has only grown since his assassination in 1968. His I Have a Dream speech and Letter from Birmingham Jail are masterpieces of the rhetorical art, replete with religious themes, historical references, and poetic flourishes. Dr. King pushed, pulled, and forced a preoccupied postwar superpower to confront the difference between its glossy self-image and ugly racist reality.

He did this by conveying a vision of an America that was full of hope and was consistent with its founding ideals. He delivered that vision in soaring preacherly cadences that called, if not compelled, his audiences to act. On the holiday of his remembrance Dr. King's wisdom has not dulled with time's passage:

On non-violence:

In the process of gaining our rightful place we must not be guilty of wrongful deeds. Let us not seek to satisfy our thirst for freedom by drinking from the cup of bitterness and hatred. We must forever conduct our struggle on the high plane of dignity and discipline. We must not allow our creative protest to degenerate into physical violence.

On the difference between just and unjust laws:

An unjust law is a code that a numerical or power majority group compels a minority group to obey but does not make binding on itself. This is difference made legal. By the same token, a just law is a code that a majority compels a minority to follow and that it is willing to follow itself. This is sameness made legal.

On civil disobedience:

In no sense do I advocate evading or defying the law, as would the rabid segregationist. That would lead to anarchy. One who breaks an unjust law must do so openly, lovingly, and with a willingness to accept the penalty. I submit that an individual who breaks a law that conscience tells him is unjust and who willingly accepts the penalty of imprisonment in order to arouse the conscience of the community over its injustice, is in reality expressing the highest respect for law.

How to effect peaceful change:

In any nonviolent campaign there are four basic steps: collection of the facts to determine whether injustices exist; negotiation; self-purification; and direct action.

Dr. King asked his followers to “purify” themselves, that is, lead blameless lives in accordance with the very principles that they would demand others follow. Walking the talk remains as difficult as it is noble, and it is as relevant to leadership today as it was 59--and 2,000--years ago. © 2022 Stephen Yuen

Amazing Aretha

This month marks the 50th anniversary of Aretha Franklin's Amazing Grace album:

At the pinnacle of her musical powers and popular success, she decided to go back to her first love, gospel music. On the nights of Jan. 13 and 14, 1972, all the pieces came together for a breathtaking recording and, eventually, concert film. The elements? The soaring, emotive singing of Franklin—even at age 29 one of the great voices of modern times. The tight Southern California Community Choir, led by the “King of Gospel,” the Rev. James Cleveland, and conducted by the gifted Alexander Hamilton. Aretha’s blue-chip band with guitarist Cornell Dupree, bassist Chuck Rainey and drummer Bernard Purdie. Crack arrangements. Soulful piano parts mostly by Cleveland, a few by Aretha. And the empathy, almost telepathy, among the singers and musicians.

As Aretha hums, slides, swoops, whoops and moans, she goes from one chill-inducing moment to another. She says hardly a word, but her faith is unmistakable. Sixteen minutes long in the “complete” recording, “Amazing Grace,” common property of white and Black churches, is the emotional and musical highlight. Stretched to the limits of slowness and out of tempo, this 18th-century hymn becomes a showcase of improvisation and spiritual euphoria.

If you, like my (much) younger self, know nothing about gospel or blues, one enjoyable introduction is the 1980 film, The Blues Brothers. It even has Aretha singing one of her biggest hits, Think. In Amazing Grace "she decided to go back to her first love, gospel music."

Tastes But Doesn't Cost Like Chicken

Costco does demographic analysis on each of its locations.

That's how it suspected that the burgeoning middle-class-to-wealthy Asian population on the mid-Peninsula might be receptive to an expensive drink made of bird saliva. (I haven't seen the beverage for at least a year, but I give them points for trying.)

Nevertheless I was taken aback by this week's offering in the freezer section, a $179.99 box of "chicken essence."

A box of chicken anything that was about the size of a box of Oreos had to confer some kind of benefit beyond taste.

$179.99 buys a lot of Costco rotisserie chicken at $4.99 apiece (36 if you're too lazy even to do division, and now that I'm retired I feel your sloth).

Indeed, Lao Xie Zhen Chicken Essence does have health benefits:

Complete Extraction of Premium Ingredients: free-range second-generation hens whose "essence is 5 times more concentrated."

Tasty and Nutritious: what did you expect them to say? It's also got "premium pork ribs for an enhanced flavour and a boost of collagen."

Recovery From Stress and Mental Fatigue: especially useful for harried young parents. I quaffed Johnnie Walker in my day; don't judge, I'm still here, aren't I?

Replenishes Energy and Strength: we already take supplements for that. If you want to appeal to ABC's (American Born Chinese), tell them they'll lose weight.

Improve Quality of Breast Milk: "chicken essence is more effective than traditional herbal soup to promote quality and quantity in breast milk production." Maybe it doesn't say a lot about traditional herbal soup.

But who am I to mock the expensive but harmless food supplements that others believe in? Every time the household CEO reads a health newsletter, she puts a new item on the list. And so it is that the vitamin drawer now includes glucosamine, chondroitin, turmeric, coenzyme Q10, probiotics, lutein, zeaxanthin, C, D3, and B12. This week I picked up a bottle of collagen to reduce hair loss, wrinkles, and joint pain.

Cumulatively, we spend a lot more than $179.99 a year. P***ing away money has taken on a whole new, literal meaning.

Gather Ye Rosebuds While Ye May

Foster City Lagoon on Tuesday, January 11th

It's a goal, not a resolution

A modest exercise goal since the beginning of the year has been to take at least 10,000 steps each day. That's a little over four miles, which means a minimum outdoors walk of three miles plus a pedestrian (!) activity like shopping.

Hitting the target this week has been a strain because breathing has been difficult. In decades past I enjoyed the sweet smell of operating fireplaces, but late-onset asthma has quelled that pleasure. Before setting out I pack the emergency inhaler and check the air quality: [bold added]

Air quality across the Bay Area was “moderate” to “unhealthy” Thursday morning due to a high-pressure system trapping pollutants in the air over the region, meteorologists said.

The high-pressure system that brought sunny skies and seasonable weather to the Bay Area this week has also made the air stagnant, meteorologists said. A temperature inversion is to blame.

That’s when the air closest to the ground is cooler than higher elevations, allowing fine particles from car exhaust and fireplaces to stay trapped at the ground level.

Aaron Richardson, a spokesperson with the Bay Area Air Quality Management District, said poorer air quality levels at this time of year weren’t unusual.

He said people using their fireplaces is the biggest source of fine particle pollution.

The Bay Area received a lot of rain in the past two months that helped clear the air, he said.

“But now with this high-pressure system, pollution is building up a little bit,” Richardson said.

San Mateo County banned the addition of wood-burning fireplaces in 2015. The silver lining is that our two grandfathered fireplaces, which we haven't used this century due to allergies, could be a desirable feature to a prospective buyer.

Well, enough musing about future real estate values. Time to put on the walking shoes to try to extend that future a little longer.

Direct Investing: A Tool for the Little Guy, Too

The Dow Jones Industrial Average was up 18.4% in 2021. Direct investors in the Dow, depending on
their stock basis, could enhance after-tax returns by selling Disney (down 14.5%) at the end of the year.

Experienced investors know that it's difficult to be a stock-picker, i.e., be smart or lucky enough to buy individual stocks that will consistently outperform the market. Consequently almost everyone's porfolio includes index funds, which earn market returns.

Now there's a tool called direct investing that provides the diversification of index funds while adding tax enhancement: [bold added]

The tactic involves buying the underlying securities of an index, such as the S&P 500, then selling the stocks that decline. In a good year, investors capture the gains of the chosen index while creating losses that at tax time help offset capital gains, thus helping them keep more of their profits...

Terry Burnham, a finance professor at Chapman University, co-wrote a paper that studied the effectiveness of tax-loss harvesting on a portfolio of the 500 largest U.S. common stocks by market capitalization from 1926 to 2018. It calculated that a person who continued to invest in the portfolio each month using a tactic akin to direct indexing would have improved after-tax returns by 1.08 percentage points annually compared with just owning the portfolio and not tax-loss harvesting. The calculation assumed a long-term capital-gains tax rate of 15% and a short-term rate of 35%.

The direct investing technique had been uneconomic for non-wealthy investors. The commissions on buying, say, all the individual stocks in the S&P 500 and selling those that had tax losses would have resulted in high transaction costs; just holding an S&P 500 index fund would have been better. But that was then.

Software-management costs and brokerage commissions have now fallen to zero or near-zero to make direct indexing feasible. Also, the ability to own fractional shares ("stock slices") makes the strategy workable even for small investors.

The technological revolution in finance helps the little guy, too.

The Environmentalists Keep Pushing

We visited the Tomales Bay Oyster Farm in
2013 before it lost its lease.

The Point Reyes National Seashore was established in 1962 to preserve wilderness area threatened by development. 40 miles north of San Francisco, its 71,000 acres along the Pacific coast comprise one of the most beautiful areas in Northern California.

Under the Obama Administration environmentalists killed the 100-year-old oyster farming operation in Point Reyes National Park.

Now environmentalists want to eliminate the ranch and dairy operations that were explicitly permitted under the 1962 act. [bold added]

Tule elk at Point Reyes (Chron photo)

The suit takes issue with a policy that permits native elk to be killed, in order to keep elk populations in check and make room for cattle, as well as with dirty runoff from ranches that threatens the health of local waterways...

Having completed years of analysis and public hearings, park officials say they’ve completed the proper review and paperwork.

The newly updated plan allows commercial dairies and beef ranches to continue operating, maintaining past livestock numbers of about 5,500 total cows and bulls.

The ranches, officials say, are part of the park’s history and culture. Much of the national seashore, established in 1962, was acquired from ranching families, and the park’s enabling legislation gives administrators the ability to continue the practice.

There's no question that cattle operations, oyster farming, and other commercial enterprises such as mining and logging conflict with wilderness esthetics.

However, in the creation of national parks agreements have to be struck with private interests in order to get them not only to go along but to agree to sell their properties to the government. In return there are formal and informal understandings that the businesses can continue on or adjacent to park properties.

In fact one of the original goals of the environmental movement was to demonstrate how businesses could still prosper while preserving nature. That balanced viewpoint is long gone, and the movement has been co-opted by extremists, who, for example, want to blow up the Hetch Hetchy reservoir that provides water for millions of Californians in order to re-create a beautiful valley that few will see.

First with the oyster farming and now with ranching and dairy, the new environmentalists' ultimate goal is clear: they want to get rid of businesses that long predated the park. Through a mix of regulatory pressure (tougher pollution regulations) and explicit legal authority (not renewing a lease) they will get their way.

Ironic footnote: tule elk, which had numbered in the hundreds of thousands, were believed to be hunted to extinction in the 19th century when cattle rancher Henry Miller found and protected a tiny herd in 1874. 22 herds, totaling 5,700 elk, now exist in California, with nearly 600 living in Point Reyes National Seashore.

The Dollar-and-a-Quarter Store

After paying for the take-out lunch, I wandered into the Dollar Tree next door to while away the next 15 minutes. I hadn't been there for several years and was surprised to see that they finally breached the one-dollar price point. Dollar Tree had raised the price of everything to $1.25:

Dollar Tree Inc. is raising prices for good, the company announced on Tuesday, moving its price point higher by a quarter from the eponymous dollar...

The company said the higher price point is a permanent move, and not the result of “short-term or transitory market conditions.” Moreover, the $1.25 price point allows the company to offer a wider range of merchandise, including items that had been discontinued at the $1 level.

I picked up two packages of five 9x12 mailing envelopes. The total was $2.50 for 10, a bargain.

The shelves aren't chained or locked.

The checkout lines, with everyone masked and distanced, were busy. The customers chatted with the cashiers; they seemed like regulars.

I didn't notice any of the chained and locked shelves that are ubiquitous in San Francisco stores. The paucity of security measures probably was due to the Redwood City crime rate being lower and the low per-item value of goods for sale. It wouldn't be worth the time to steal a shelf of anything, then list it on eBay.

Though you are probably not in its demographic, dear reader, Dollar Tree's business model meets the needs of millions, and Dollar Tree is not saddled with the high marketing and security costs that plague upscale establishments. May it thrive another 35 years.

The Blue-Green Divide

I forwarded this WSJ article to
a thread with only iPhone users.

The political extremes live in red and blue echo-chambers, but to the under-30 crowd the more meaningful divide is blue vs green and has nothing to do with politics.

Apple got creative in its protection of iMessage’s exclusivity. It didn’t ban the exchange of traditional text messages with Android users but instead branded those messages with a different color; when an Android user is part of a group chat, the iPhone users see green bubbles rather than blue. It also withheld certain features.

There is no dot-dot-dot icon to demonstrate that a non-iPhone user is typing, for example, and an iMessage heart or thumbs-up annotation has long conveyed to Android users as text instead of images.

This pic of a Thanksgiving turkey went
to a mixed Android/iPhone group.

Apple later took other steps that enhanced the popularity of its messaging service with teens. It added popular features such as animated cartoon-like faces that create mirrors of a user’s face, to compete with messaging services from social media companies... customers were particularly fond of replacing words with emojis and screen effects such as animated balloons and confetti.

Avid teen users said in interviews with The Wall Street Journal that they also liked how they could create group chats with other Apple users that add and subtract participants without having to start a new chain.

Since your humble blogger very rarely uses emojis and never plays iMessage games, the blue-green divide seems like a contretemps in a teapot. The great MLK said something like you should never judge a man by the color of his bubble but by its content, and if not, he should have said it.

Everything is Easier Today....Unless You Want to be a Saint

Baltimore Archbishop Lewandowski with pictures
of Black candidates for sainthood. (WSJ photo)

There has never been a Black Catholic saint from the United States: [bold added]

[In November] at a church in Baltimore, a group of Catholics launched a campaign calling on Pope Francis to name six men and women the first Black Catholic saints from the U.S...The Vatican spokesman, Matteo Bruni, responded that investigations are under way of all six proposed saints and in some cases their “heroic virtues” have been officially acknowledged. But the Vatican’s rules for canonization—the formal declaration by the pope that someone is a saint—ordinarily require at least one verified miracle attributed to the proposed saint’s intercession, something that has not yet occurred for any of the six Black Americans.

The intercession occurs after the candidate's death, i.e., supplicants pray to the proposed candidate for a miraculous healing:

theologians must decide whether the healing was due to the intercession of the candidate for canonization, which means that those who prayed for his or her help did so at the time of the healing and that they prayed only to the proposed saint and no one else. Additional prayers to the Virgin Mary, whom Catholics consider the pre-eminent intercessor, or Jesus himself aren’t considered disqualifying.

Comments:
1) Racism is not the reason that there are no Black Catholic American saints:

There are a number of canonized Black saints, most of them from Africa, but including the Peruvian St. Martin de Porres (1579-1639), who cared for orphans, the poor and the sick.

2) It will become tougher to qualify for sainthood as advancing technology will be identified as the cause of what used to be called medical miracles.

3) Technology will also produce much more documentation--text, video, audio, data from instruments--that will scrutinize "miracles" more closely and likely raise the bar higher.

4) Worshippers have to pray to the candidate after he or she dies, whereupon a subsequent miracle occurs that proves that the candidate, now in heaven, interceded with God. That's a tall order--it took Mother Teresa 19 years after death to be canonised in 2016.

5) This non-Catholic hopes that at least one American Black Catholic saint will be canonized. What counts for this humble blogger is not that miracles be documented but that he, she, or they help to model selflessness, faith, and service for Black Catholics--or all Christians for that matter.

Education is Everywhere, If You Just Look For It

Many of the conveniences of middle-class life are taken for granted, like in-house washers and dryers.

After the old Kenmore dryer failed 10 days ago, I expected to pay $500 for a basic model at Home Depot, Costco, or Best Buy; $700+ would be the all-in replacement cost after delivery, installation, sales tax, and removal of the old dryer.

YouTube showed that repairs were easy--even allowing that it would take me ten times as long as the professionals in the videos--so it couldn't hurt to try to diagnose the problem and attempt a fix (the parts would probably cost less than $50).

I had to promise the household CEO that I wouldn't dither; going to the laundromat was not only inconvenient but in the coronavirus era could be hazardous to one's health because of proximity to others in a warm, humid environment. If the task could not be done in a week, we would buy a new dryer.

Lint obstructed air flow from the clothes drum

After opening the bottom panel and unscrewing the lint cover for the first and only time in 13 years, the likely source of the problem became apparent: lint was jamming the air flow throughout.

Wearing a dustmask, I scooped out handfuls of lint, then used a brush and vacuum cleaner. The dryer had been working harder for at least a year, and the longer drying time finally burnt out one of the circuits.

Pulling out the metal housing for the heating element, I checked for a break on the three devices ("test for continuity" is the technical term) that were most likely to fail: the fuse, thermostat, and heating element.

Testing for continuity

It was the heating element. Ordering a kit for all three parts for $34 from Amazon, I replaced the heating element and kept the thermostat and fuse if either of them blows.

I'll spare you the details of putting everything back together and cleaning out more lint, dear reader. Suffice it to say that the dryer is working again, more efficiently than it has in a long time, and should be good for 2-3 years.

Comments: I did derive satisfaction from:

1) not having to spend $500-$700 on a new dryer;
2) not having to send the old one to the landfill or recycling plant;
3) being able to fix it myself.

But the most satisfaction arose from learning how the dryer worked. It's both simple and ingenious. Discreet writers call it a negative pressure system, but your humble blogger prefers simpler language.

Heating element + small parts

The motor both tumbles the drum and sucks the hot moist air out of the drum and expels it through the exhaust. The drum in turn sucks in outside air that has passed over the heating element. The features (tumbling, drum, timer, moisture sensing, varying the heat, etc.) that we see in current dryers were all invented before 1960.

Frankly, I am in awe of the engineers and inventors that created wonders, both big and small, in 20th century America.

Around the Neighborhood

Walking around the neighborhood is not only good for my health, it also serves as a source of inspiration for landscaping, color schemes, and home improvements.

As we do with people we admire, we look for characteristics that we can adopt to improve ourselves and perhaps our social standing.

Sometimes we come across sights that make us grateful for what we have already...

The Other Dismal Science

(Image from the balance)

I never gave a thought to actuarial science until I went to business school. One of the smartest guys in the class had been an actuary, which I came to understand was too tough a career choice if I had to be as smart as he was and pass difficult, technical exams. (BTW, he's now CFO of a well-known company.)

Digression: so I became a CPA, which meant sitting for two days of exams and working for two years in the audit department of a CPA firm. The latter path was easier, and besides, I've never had to pay anybody to do my taxes.

Apparently, becoming an actuary is even tougher these days: [bold added]

Among people taking at least one exam from the Society of Actuaries—the field’s biggest U.S. credentialing body—15% eventually pass the multiple tests required to become an Associate, one of two designations allowing them to practice. Just 10% pass those and additional tests to become a Fellow, the group’s higher designation, which affords bigger responsibilities and salaries.

It’s such an arduous process that the number of test-takers has been declining in recent years, and the society is making changes to keep candidates from dropping out of the gantlet. It is also adding new “predictive analytics” tests to adjust to the massive amounts of data insurers now have...

There is no limit to how many times a candidate can take the tests. It took one man 50 years to become a Fellow, says Stuart Klugman, an official at the society. The society says a candidate typically takes seven to 10 years to become a Fellow. They must pass 10 exams plus other coursework and requirements.

Every profession is being inundated with oceans of data, and being familiar with data science has become essential to being an actuary. Knowing how to filter, analyze, and model the data is crucial to success. (We noted the importance of predictive analytics three years ago.)

If one is not thorough, knowledgeable about statistics, and honest, one can easily promulgate misinformation by biasing the data sets, selecting or not selecting variables to be analyzed, finding causation in correlation, and not "showing the work" so that results can be replicated.

Why must an actuary be honest? Because as the analyses become more complex, and as the demand for risk assessment (not only for insurance purposes) explodes, there are fewer people who are available to check the work; actuaries must be trusted not to force through results that please the powers that be.

I was glad that I didn't try to become an actuary.

Just for fun: the article presents a sample question involving rudimentary statistics and algebra. Without using a calculator, I could still solve it. (My high school self could have figured it out much more speedily but would also have snickered throughout at the phrase "blue balls.")

“An urn contains 10 balls: 4 red and 6 blue. A second urn contains 16 red balls and an unknown number of blue balls. A single ball is drawn from each urn. The probability that both balls are the same color is 0.44. Calculate the number of blue balls in the second urn.”

Just Because You Can Do It Doesn't Mean You Have To

The WSJ takes a look at future tech on display at the Consumer Electronics Show.

Some I could see myself using, others appear derivative, and a few are cringe-inducing, a subjective feeling to be sure.

Case in point: the Amagami Ham Ham Finger-Nibbling Robot Toy:

“Most people like the nibbling sensation but know they need to teach their children or pets to stop it,” reads the press release. This robot “frees humankind from the conundrum of whether ‘to pursue or not to pursue’ the forbidden pleasure.” The robot uses an algorithm—a “HAMgorithm”—to cycle through two dozen “nibbling patterns” so you won’t get bored using it.

As a toddler I learned not to stick my finger in strange places, and I'm not about to start now.

Don't Ignore That Sinking Feeling

Ishmael had misgivings about Ahab before they met.

One reason it's difficult to "see something, say something."

when a man suspects any wrong, it sometimes happens that if he be already involved in the matter, he insensibly strives to cover up his suspicions even from himself. And much this way it was with me. I said nothing, and tried to think nothing.

             -------Moby Dick, Ch 20

The modern world distracts us from thinking about or doing what is right, which is usually quite difficult or it would have been done long ago.

Breaking the Law of Large Numbers

Six months after Steve Jobs' death in 2011 Apple stock had risen by 50%. The company was valued at $535 billion.

It was around that time that the law of large numbers became a popular term in the financial news. The "law" makes intuitive sense:

any company growing at 20% per year, or 4x-5x the overall U.S. economy, will someday see its growth slow—otherwise it would grow larger than world GDP...

This real world limit on the economy and revenue potential is called in mathematics the “law of large numbers”, and is best applied when projections of future compounding cannot be sustained because they are too high, too far out in the future, or some combination of both.

In 2012 Apple had reached a hard-to-justify valuation of $535 billion, and it was likely that slower future growth in earnings would result in slow appreciation of the stock price. Besides, look what happened to Microsoft. At the peak of the dot-com bubble ten years earlier it too reached $500 billion only to see its valuation cut in half shortly thereafter.

Today's WSJ headline: Apple Becomes First U.S. Company to Reach $3 Trillion Market Value

Apple shares crossed the milestone when they topped $182.856 Monday. The share price has more than tripled since the pandemic lows of March 2020, adding around $2 trillion in market capitalization.

The analysts can cite the reasons for Apple's growth since 2012: the iPhone remains popular; the growth in services is strong; there's the promise of augmented reality and an Apple car. Exactly how it all works out to a $3 trillion market capitalization is $2.999999 trillion above my paygrade.

The law of large numbers will eventually apply to AAPL, but it doesn't say when.

Desmond Tutu (1931-2021)

Desmond Tutu and Nelson Mandela (Forbes)

Whether or not "systemic racism" exists in America today, it unquestionably existed in the deep South for the majority of the 20th century. But the racism in America paled before South Africa's apartheid, a society built entirely around racial distinctions:

The implementation of apartheid, often called “separate development” since the 1960s, was made possible through the Population Registration Act of 1950, which classified all South Africans as either Bantu (all Black Africans), Coloured (those of mixed race), or white. A fourth category—Asian (Indian and Pakistani)—was later added....In practice, this act and two others in 1954 and 1955, which became known collectively as the Land Acts, completed a process that had begun with similar Land Acts adopted in 1913 and 1936: the end result was to set aside more than 80 percent of South Africa’s land for the white minority. To help enforce the segregation of the races and prevent Blacks from encroaching on white areas, the government strengthened the existing “pass” laws, which required nonwhites to carry documents authorizing their presence in restricted areas.

The South African government ruthlessly suppressed any challenge to its authority by the blacks who comprised two-thirds of the population. Into this parlous atmosphere stepped Anglican Archbishop Desmond Tutu, who died on December 26th at the age of 90:

With his friend and fellow Nobel Peace Prize winner, Nelson Mandela, he is credited with leading the charge against a white-minority government that was guided by a policy of racial segregation, known as apartheid. Still, after the African National Congress came to power in the 1994 democratic elections, he criticized the party for graft and greed...

As a bishop in the apartheid era, with police brutality roiling the country, Mr. Tutu went from township funeral to township funeral preaching for peace. He served as general secretary of the South African Council of Churches from 1978 to 1985, and his status in the religious community offered him protection from the apartheid government.

Sometimes Mr. Tutu’s sermons left people laughing; other times in silence. Once, he dove into a frenzied mob to save a suspected police informer from being burned to death. The crowd had thrown a gasoline-soaked tire around the man’s neck and was about to throw him into a burning car before Mr. Tutu pushed through to stop the killing.

Preaching at Grace Cathedral in 2011 (SFGate)

Latter-day critics of Archbishop Tutu fault him for the corruption and disastrously managed economy that arose in South Africa after the black population took control in the 1990's. IMHO, he was too astute a student of history not to have recognized the danger of overthrowing an evil government (cf Saddam's Iraq), but the potential benefits outweighed the risk.

He did speak out against abuses by the African government post-apartheid, and did not seek money or power for himself once the revolutionaries won. He was a man who put his life on the line for his principles and never stopped doing so. R.I.P.

Happy New Year of Self-Discovery and Self-Help

Well, we made it.

For the past two years we were on our own--no, not in the pure survivalist sense because we did need doctors, supermarkets, online retailers, vaccine makers, technology, and so on--because we were forced to make our own decisions to save our lives and livelihoods.

The experts and government leaders changed their mind every month or so. The catch-phrase "often wrong but never in doubt" had never been more true.

We found that we didn't need to work in offices, go out to eat, attend classes, travel, work out in gyms, or use mass transit as much as we thought we did, if at all. We didn't need to live in cities and left crowded conditions for the sake of the health of our families.

More of us discovered that we could live without the approval or disapproval of social media. We found that the only thing holding us back from making right-for-us but unpopular decisions was the fear of what other people might say.

Our physical selves are constrained, but our minds are freer than they were two years ago.

Happy New Year!