Leap Day Can Be Good For You

Once, maybe twice, in every pre-teen boy's life comes the dreaded Leap Day when girls are apt to do any number of silly things to 1) show their "affection", 2) bring the victim unwanted attention in front of a group, and 3) demonstrate how bewildering and strange social relations can be. Rest assured, the experience will get better as one gets older.

For adults, generally speaking, Leap Day helps the finances:

Feb. 29 means a free day of cable, rent, car insurance or Netflix -- services with monthly rates that do not increase as a result of the bonus day. On the downside, salaried workers earn a tiny fraction less per day.

Leap Day is an extra day to make progress on New Year's resolutions and to prepare tax returns. For us it was an opportunity to clear some of our closets and organize the used-clothing bins at the church.

Tomorrow the truck from PARCA will come to pick up the donation, which goes to assist developmentally disabled children and adults on the Peninsula. A win-win for this Leap Day.

[Update: today's Google Doodle honors the composer Gioachino Rossini, who was born on February 29, 1892. Rossini was famous for the William Tell overture, without which Disney and Warner Brothers cartoons would have been much poorer.]

Red Ponchos at Morning

The trail was slick from the rain, so we limited our walk to the 4.5-mile Wildcat Loop. We huffed to the top of the 900-foot trail, then returned to the car.

We paused at Deer Hollow Farm, about a mile from the parking lot, to stare at the goats and hogs that reciprocated with total unconcern.

Busloads of children from the Alum Rock school district assembled in red ponchos. The red makes a wayward student easier to spot, but as anyone who has played with red or yellow golf balls will tell you, a bright primary color is not an infallible method for distinguishing an object.

Parents could rest easy because there was one adult chaperone for every two kids. No red riding hoods would be lost in the woods today.

Wild Parrots of Brisbane

(Chronicle photo)

The Wild Parrots of Telegraph Hill have expanded their reach to Brisbane (the small town just south of San Francisco, not the city in Australia). The parrots have avoided the hazards of red-tailed hawks and cold weather mentioned in the 2003 documentary.

San Francisco's famed flock of cherry-headed conures, immortalized in an award-winning movie and book, has become so populous that about 100 or so birds have fled San Francisco for the verdant slopes of San Bruno Mountain, where they're feasting on juniper and hawthorn berries and delighting the locals with their acrobatics.

It took the second flock eight years to find a home ten miles south of Telegraph Hill. If they continue to migrate at that rate, we may see them in the San Mateo hills in twelve years. (They're unlikely to cross the freeway and nest in Foster City.)

Because the parrots are attractive and intelligent, they're not now regarded as a nuisance. If their numbers continue to grow, however, one never knows. © 2012 Stephen Yuen

A Trend I Can Live Without

At gatherings of family and friends most people refrain from talking about religion and politics. People have deeply held and often opposing opinions, and introducing difficult topics is like bringing a skunk to the garden party.

I like social-media sites because they are a way of staying connected to family, friends, and business colleagues. But now these connections are being exploited by politicians:

Dave Boyce is CEO of Fundly, a ready-made platform for nonprofits, including political campaigns, to launch social media fundraising campaigns. He says that at the end of the 2010 election cycle, 120 political customers were using Fundly to raise money. Now the number is 10 times that. The campaigns range from local races to the presidential efforts of Republicans Rick Santorum, Mitt Romney and a Newt Gingrich PAC.

"The big idea is that giving is social. It always has been," says Boyce, sitting in a glass conference room looking out at a team of programmers in an office decorated in startup chic. "Friends ask friends to join them in supporting a cause."

This is a trend I can live without. If I want to read about politics, my e-mail and regular mail inboxes are filled with junk mail from across the political spectrum. There's also an invention known as the Internet that makes it really easy to look up a topic without assistance from a political partisan.

I don't want to see my Facebook wall or news feed plastered with politics. Maybe, once in a blue moon, I'll post an entreaty for a (non-political) charity that I care about.

But no politics or religion, please. If you want to say something about those subjects, get a blog.

Productivity vs. Reproductivity

Time is running out if a couple wants to have a dragon baby:

Couples have until about mid-May to conceive in time for a birth before the Dragon year ends, and many are sure to ask doctors to induce labor as Feb. 10 nears.

Asians comprise 23% of the Bay Area population, and it's a fair bet that the Asian percentage is at least that high in the electronics industry.

Silicon Valley companies may see declining productivity during the next three months because workers are preoccupied with other matters. At least we'll know why.

They're Different from You and Me

The $200 Million Man (WSJ photo)

Graffiti artist David Choe took stock instead of cash for painting the offices of a Palo Alto startup in 2005. When Facebook goes public later this year, Mr. Choe's equity interest could be worth $200 million. (Some of his artwork may be seen here.)

The Wall Street Journal writes about the difficulties faced by David Choe, Jeremy Lin, and other beneficiaries of sudden riches. Most of us think that we would love to have the problems of the nouveau riche. But there are any number of ways that wealth could slip through their fingers, including 1) not acquiring competent financial, tax, and legal help, 2) consorting with "friends" and relatives who do not have their best interests at heart, and 3) impulsive spending.

Too often we hear about a case of a formerly rich entertainer or athlete who is now broke. Most recently the case of NBA star Allen Iverson, who reportedly has nothing to show for the $200 million earned during his career, is a cautionary tale.

I am unfamiliar with the art of David Choe, but from a quick perusal of his website and art, I detect a sensibility that indicates he'll probably take better care of his $200 million than Allen Iverson did his. I'm rooting for him.

Apple Shareholders Meeting

The line for the second overflow room

Although I arrived at 9:30 for the 10 a.m. meeting, I couldn't get into the main hall for the Apple shareholders meeting. We were bused to the second overflow room, where Tim Cook et al. appeared on the big screen. The audio and video were actually better than watching them live at a distance, which I did in 2010.

With the mail-in and online proxies already having decided the business issues by overwhelming majorities, we sped through the agenda until we got to the #1 issue in the mind of most investors: was Apple going to pay a dividend? (Interestingly, the issue was raised by the first questioner, who pleaded with Mr. Cook not to pay a dividend and focus on rationalizing the video streaming business.) There was no new news: Tim reiterated that the Board is considering the matter "deeply" and that Apple will make this and other decisions "in the best interests of the shareholders."

After reminding us that Apple has spent billions on its supply chain, Apple stores, and corporate acquisitions, he gave a very strong signal that some form of equity distribution (or buyback) will occur this year: Apple has more cash than it needs "to run the company."

There were moments of levity:

Concerning the change to majority-vote election of the directors, TC remarked that even that system is not perfect, as Director Al Gore knows.

One shareholder said that he bought a large flat-panel TV for the Super Bowl and had another month to return it. Should he do so? Everyone laughed about the allusion to the rumored iTV, but TC remained tight-lipped, saying that the shareholder should buy the $99 Apple TV add-on to enhance the viewing experience on his flat-panel.

The same wit said that he was tired of Greece being in the news and that Apple should use its cash hoard to "buy Greece." TC congratulated him on coming up with a use that Apple had not thought of.

No one spoiled the party by bringing up working conditions in China.

In response to a question about funding scholarships, TC talked about the many ways that Apple is supporting education: through matching donations (up to $10,000 per employee, who channel a large amount to educational institutions), discounts and giveaways to schools and students, summer internships, and free software. He encouraged everyone to try the new iBooks app, particularly the new iBooks Author which makes it easy to put together an electronic publication.

The meeting was over in an hour. Next year I probably won't bother to go, especially since Apple doesn't give out free stuff like Google. But that's okay, I'd rather have a $500 billion market cap plus a good chance at a dividend.

Ash Wednesday

Lent is a time for reflection, but during our efforts to honor the season we can be distracted.

At the Ash Wednesday service the priest explained that traditional Lenten activities--giving of alms, prayer, and fasting--can be co-opted for other purposes.

For example, alms-giving is often joined with a fund-raising campaign for particular charities. The charities and their goals may be very worthy, but fund-raising is not the principal purpose of Lent. We are to set aside the concerns of the self and the world and concentrate on our relationship with God.

Similarly, the purpose of a fasting regimen is not to make progress on a New Year's resolution to lose weight. That would be mixing our objectives and our focus. Our eyes may gaze up to the heavens or be lowered in prayer, but they shouldn't be looking in the mirror.

The busy-ness of the world distracts us from the fundamental truth that we won't be around forever. That's why the priest imposes the ashes in the middle of the service and repeats:

Remember that you are dust, and to dust you shall return.

Don't Resist the Wave

Netflix has been the best performing stock in our January 6, 2012 portfolio, when we "purchased" it for $86.29 per share. After reaching an intra-day high of $130.60 on February 6th and subsequently trading in the high-$120's, NFLX was hit by a selling wave yesterday when Comcast announced it was offering a streaming-video service.

I still think Netflix has the best product and will maintain its lead in streaming video. But Amazon is already a competitor, and there are rumors that satellite provider DirecTV will enter the market. It's best not to resist the wave. We'll sell Netflix from our portfolio at today's closing price and look to buy back in when the competitive landscape is clearer.

As of this writing NFLX is still 27% higher than when we bought it in January.

Pancake Supper

The International House of Pancakes didn't have free flapjacks this year, but we went anyway. Without the special promotion, the dining room was much less crowded than last time.

Though it was dinner time, we ordered sausage, eggs, and pancakes. On Fat Tuesday tradition says that we should empty the larder.

Fortunately IHOP was only a mile away and saved us the trouble of mixing a proper dinner of fats, sugar, and salt. We'll (try to) make up for tonight's excess by abstaining during Lent, which starts tomorrow.

The Allure of Appoggiatura

Psychologists and musicologists have analyzed how music produces physical reactions like goosebumps and tears. One reason is appoggiatura:

An appoggiatura is a type of ornamental note that clashes with the melody just enough to create a dissonant sound. "This generates tension in the listener," said Martin Guhn, a psychologist at the University of British Columbia who co-wrote a 2007 study on the subject. "When the notes return to the anticipated melody, the tension resolves, and it feels good." [snip]

Chill-provoking passages, [researchers] found, shared at least four features [bullets added].

They began softly and then suddenly became loud.

They included an abrupt entrance of a new "voice," either a new instrument or harmony.

And they often involved an expansion of the frequencies played. In one passage from Mozart's Piano Concerto No. 23 (K. 488), for instance, the violins jump up one octave to echo the melody.

Finally, all the passages contained unexpected deviations in the melody or the harmony. Music is most likely to tingle the spine, in short, when it includes surprises in volume, timbre and harmonic pattern.

In the 20tn century we were alarmed by how easily the emotions of the masses could be manipulated by propagandists and hidden persuaders. In the 21st century brain scans and other "advances" have pushed the science far beyond what Riefenstahl could have imagined.

Your humble servant was able to resist the emotional pull of Adele's Grammy winning "Someone Like You", which was analyzed in the article. However, when one adds a dash of patriotism, visual spectacle, a well-known standard, and a great singer at the height of her powers, then yes, I get the chills.

Safe Haven

Prohibition taught us that the costs and side effects of enforcement can outweigh the cost of the misbehavior itself. Legalization of so-called "victimless" crimes is one solution. Another is the creation of red light districts, safe havens for otherwise proscribed behavior.

Comedy is a safe haven for racism, sexism, gay-bashing (non-physical), and general cultural insensitivity. Our human weakness demands that we have this outlet.

Last night's Saturday Night Live opening has it all (the topic is Jeremy Lin, naturally): Asian stereotypes and black stereotypes, all leavened with hypocritical sanctimony.

And yes, I laughed too.

Boomerang

ESPN screenshot captured by Larry Brown Sports

There's still too much racism in America, and that's not big news. The insults sting less over time, though, because of the knowledge that the epithets boomerang far worse upon the speaker than upon the target. People are free to speak, insult, and mock, but they are not free from the consequences of speech. Whoever wrote the ESPN headline is likely to get fired or at least reprimanded.

Most Americans have curtailed the use of words (e.g., coon, chink, fairy, retarded) whose secondary meanings are considered offensive to certain groups. (Even "niggardly" is now off limits because it just sounds too much like another word.)

It must also be said that there's too much political correctness and hyper-sensitivity. Allowances need to be made for the age of the speaker. Older people who grew up using now-objectionable words and phrases should be cut some slack. It's not easy to change habits built up over a lifetime. To the offended: please relax, the language will soon pass from the scene.

Back to ESPN, however. It's a media company whose products are images, words, music, and moving pictures. It won't do to say, disingenuously, that "chink in the armor" is a venerable and appropriate phrase. In the context of the first Knicks loss with Jeremy Lin as a starter, the headline writer conveyed the double meaning he intended. He must have really fallen in love with his own wittiness, because the boomerang will be painful.

[Update - 2/19 ESPN statement: “We are conducting a complete review of our cross-platform editorial procedures and are determining appropriate disciplinary action to ensure this does not happen again,” the network said in a statement. “We regret and apologize for this mistake."]

[Update - 2/20: After ESPN fired him, the headline writer apologized and said that he meant no insult, having used the phrase "at least 100 times."]

It Stinks

This post is about one of my worst stock investments.

New York sports fans are miffed about the contract dispute between Time Warner and MSG Network. In order to get their fix of "Lin-sanity" about two million viewers have had to go to sports bars or friends' homes with DirecTV or Cablevision subcriptions.

Dialogue from today's CNBC Squawk Box:

CNBC anchor David Faber: "If you have Time Warner, by the way, you're going to have to find [Knicks games] on the radio. I had to actually go out and buy an AM radio. It's been 48 days, 17 games, that have so far been missed by fans of the Knicks."

CNBC anchor Melissa Lee: "David, where do you even buy a radio these days...Radio Shack?"

David Faber: "Yeah, yeah, you can go to Radio Shack, you gotta go back into the back room." [Far away gesture with hands]

Melissa Lee: "Dust them off? Cobwebs?" [Brushing away motion]

David Faber: "It's 1980's, 1990's inventory." [Hilarity ensues.]

I feel bad enough about my Radio Shack investment. Now it's the subject of gratuitous mockery on CNBC. (I bought some RSH last May because I thought that they were one of the few electronics retailers who knew what they were doing. Boy, was I wrong.)

RSH has dropped nearly 60% since I bought it.

The comment about radios in the back room reminds me of an old joke about accounting inventory methods:

FIFO - First-in, first-out
LIFO - Last-in, first-out
FISH - First-in, still here

Not laughing so hard when it happens to you.

Jeremy Lin Quantitative Analysis

The WSJ analyzes the various factors that have made the Jeremy Lin story an international phenomenon. As a public service we have re-sorted the list using the Journal's scoring:

Chinese/Taiwanese/American background                  25%
The novelty of Lin's Harvard roots                     18%
The fact that he happened to land in New York          13%
Injuries to Knicks players and faulty 
    scouting of other teams                            10%
Sleeping on his brother's couch                         9%
A last name that's a headline writer's dream come true  8%
His Tebow-like religious conviction                     5%
Making his debut during the post-Super Bowl malaise     4%
The phenom-amplifying power of social media             3%
The Knicks' schedule has some lousy teams               3%
When asked, Kobe Bryant said he knew nothing about him  1%
Lin's struts, head nods and tongue waggles              1%

                                                      100%

The article is clearly tongue-in-cheek, so one ought not to be too critical. That said, I believe the importance of #4, "faulty scouting", to the story has been under-rated and even misnamed.

Throughout his life, not just in the NBA, Jeremy Lin was overlooked. Stanford, UCLA, and other March madness schools wouldn't recruit him out of Palo Alto High. He was undrafted by the NBA though he was all-Ivy and helped Harvard beat college powerhouse UConn.

The real story, in my humble opinion, is his persistence in the face of adversity. He refused to abandon his chosen path, though his talents were not recognized by most basketball experts. In a time when we wonder if it still exists, Jeremy Lin shows that the American dream is still alive.