Friday, February 29, 2008

Peter Lynch: Know Thy Stocks?

I really enjoyed Peter Lynch's books and readily acknowledge his greatness as the Fidelity Magellan manager from 1987-1990.

However, there's one belief/tip he gives investors that I frankly disagree with. Lynch is a huge advocate of individual investors "knowing" the industries in which they invest.

I say no way. When you're buying a share in a corporation, you're making a prediction about future earnings, dividend yields, and your resultant capital gains.

You could know everything in the world about Google (GOOG), but that wouldn't have stopped you from being down around $300/share if you got in at the stock's peak. And you don't have to know squat about Proctor & Gamble (PG) to know that a reliable consumer staples stock with a reasonable P/E ratio and a steady dividend yield makes for a great long-term investment.

I have my portfolio and I don't plan to sell anything for years. I am going to buy, hold, and steadily accumulate more and more shares based on dividends and new share purchases. I'll research my stocks from time to time, yes. But for me (a committed buy-and-hold investor) to think that this research is somehow going to drive stock prices up makes about as much sense in my mind as thinking that if I could just learn more about the Patriots' offensive schemes, they would actually win next year's Super Bowl.

That dog isn't going to hunt.

Wednesday, February 27, 2008

George Carlin: A Living Anti-Blurk and Great Patriot

I am getting ready to head to bed and will continue a recent tradition of watching George Carlin routines on YouTube.

I'm a huge fan of all comedy, but I'm an especially huge fan of George Carlin.

Here's why: George Carlin has made an entire career pointing out, and making fun of, blurks. A lot of his greatest stuff is picking apart American English vernacular and having fun with popular sayings that get repeated endlessly without any thought coming from the back of the train. He never relies on slapstick or insta-humor but he still manages to *own* his audiences even into what seems to be old age.

And here's the second reason: George Carlin is a true American patriot. And when I say that, I don't mean it in a cheesy, flag-waving and Bible-thumping Ann Coulter sort of way. Instead, I mean it by the definition I understand -- a lover of one's country. All of Carlin's insight -- all his critiques of the silly things that Americans say and do, even his critiques of our foreign policy -- come from a place of deep caring and love. It comes through in all of his routines and in interviews, books, etc.

Oh, and one request to readers -- could you please go to and give "blurk" the ol' thumbs-up? It'll take but a second and may help the word get published in the hard copy edition.

The 'New Bedford or New Canaan' fallacy

For the record, I find any kind of extremist political views annoying at best, and nauseating at worst. The extreme left and the extreme right both irk me in their own special ways, but I know at the end of the day an individual's political views are his or her own prerogative. For this entry, I would like to have some fun with an extreme-leftist sect known as trustafarians. Trustafarians are people who live off money they haven't earned (i.e. inherited wealth, trust funds, economic outpatient care) and hold extreme leftist political views. As I've already tacitly admitted, someone's political views (as well as their economic status) are really none of my business. However, trustafarians make it my business if and when they try to tell me 'how it is' for the working man. (And if anyone cares to see my W-2 or my 1099s, I would be more than happy to share. Seriously, I'm not kidding about that).

One easy way that trustafarians identify themseleves is by their adherence to what I'll call the "New Bedford or New Canaan" fallacy. At its core, it's the idea that everyone is either extremely well-off (New Canaan) or extremely poor (New Bedford). What trustafarians don't realize is that America has an enormous middle class. They may not be able to comprehend it, but there's a lot of room between New Bedford and New Canaan.

I think this is something that everyone who *works* understands. (And I'll define *work* there not merely as holding a job, but as both having a job AND using that income source to pay for all fixed living costs, other bills, discretionary spending, etc.) It's something I recommend that anyone who wants to make grand declarations about "the working man" ought to try sometime..

Tuesday, February 26, 2008

Michelle Obama, Opportunity, and America

I'm proud of America. But you already knew that. Cindy McCain is proud of America, and I'm glad to hear it. I believe that Michelle Obama is proud of America as well -- for as much press as her gaffe last week has gotten in the media, I understand the campaign's explanation -- she meant to make a larger point about political involvement and participation these days. And when you're on record speaking in public all day, you're bound to make a few mistakes. Good copy all around. Check-roger.

But here's what I don't get -- why is the 'narrative' from Michelle Obama always about these undefined 'people' (guidance counselors?) who kept telling her not to apply to Princeton and Harvard Law because of low scores? If she had not attended those schools I guess I'd have an easier time seeing her point about opportunity, class, and race in America. But she did! So instead of proving how bad America is, and how conspiratorially elitist it must be, doesn't her personal story show that not to be the case? Doesn't the fact that someone from the South Side of Chicago could get that education, and then go on to make a very healthy six-figure salary in corporate law, show the 'art of the possible?' And shouldn't the message to young people then be, "You can do this --learn how the system works and follow my example" as opposed to a narrative about unfair media portrayals and these undefined 'others' who want nothing more than to see you fail?

I understand there is plenty of time between now and the election. Obama currently beats McCain head-to-head, but voters are fickle and polls can be unreliable. Between now and November, I think one thing that is just not going to resonate with the average American voter is what seems to them like someone coming from the top (and by top I mean a seven-figure net worth and an annual salary several times the median) having (or at least appearing to have) a large chip on the shoulder -- it just doesn't add up. People of all backgrounds who legitimately struggle to meet their families' day-to-day needs just won't buy it, so to speak.

I also understand that we're voting for the candidates and not their spouses. But again, I'm talking about people's perceptions, which will naturally cause the two to meld together. If the Obama campaign doesn't spin this well enough and allow themselves to be the ones to 'frame the perception' it could spell their doom by autumn.

Monday, February 25, 2008

"Windows People" and "A/C people"

I would be very wary of any crass generalization about personality types. I would be even warier of any statement that starts with, "There are two types of people..."

That having been said, there are two types of people -- "Windows People" and "A/C People." Don't over-literalize the origins, as it's a metaphor.

Here's where it comes from -- it's a hot (but not unbearably hot) day. Maybe it's the late spring or early summer. It's about 80 degrees with a mostly blue sky and maybe a slight breeze. You're driving around town or hanging out at your place. You could be thinking: a) what a beautiful day -- I'm going to take advantage of it by rolling down the windows and basking in this nice, natural air; or b) I better hermetically seal this car/house/apartment and crank the A/C on full blast before I (or a loved one) runs the risk of breaking a sweat -- yuck, how gross!

From that come the larger themes -- Windows People don't over-plan run-of-the-mill social engagements. They take pleasure in simple things. They're unafraid of public restrooms, door handles, and getting sand from the beach in their car. They don't count calories, they've never had a prescription for something that didn't end in -illin or -cycline, and they don't really give a rip about Britney Lohan-Hilton's boobjobchildimplantdivorcecourt proceedings. They're glad to have good-tasting food and they're not necessarily sure they'd know how to care about the way it's presented at a restaurant.

A/C People, on the other hand, are germaphobic, claustrophobic, and agoraphobic. They can't handle impromptu plan-making and they just plain don't like it when others "touch their stuff." They'll count the tip out to the last decimal place, and won't buy a round for the group until they're reminded to. They'll carry an argument out over years, let alone the appropriate number of seconds or minutes, even after you've conceded that yes, they were right. They were the kid with fifteen perfectly sharp number two pencils sitting next to you who snickered as you got downgraded to an "I" on the 5th grade science quiz for showing up without the proper writing instrument.

Obviously, you can see my bias towards Windows People in the way I've written this. Like I said, it shouldn't be over-literalized (hey, there are times when A/C sure is great) but it's my attempt at making a larger metaphor about the mentality with which people can go through life.

The Power of Voice Projection

Since college, I've been involved either with the teaching profession or the military, so I've seen public speaking, up-close, on a pretty much everyday basis. I've spoken in public, been spoken to in public, taken courses on speaking in public, prepared briefs in front of a peer audience, helped peers prepare their briefs, etc. Through that time, I've seen the good, the bad, and the ugly. And here's my one piece of advice to any would-be public speaker: project your voice. Whether you're a classroom teacher trying to command discipline and respect, or whether you're a military officer concerned with your bearing and your command presence, the one thing you can do to instantly improve your ability to meet your goal is to raise the volume and enunciate.

Before you work through some kind of workshop-inspired checklist about eye contact with the audience, memorizing your opener, visualization, well-timed pauses, etc. just remember that a person who stands in front of a room and speaks loudly and clearly appears more confident, more knowledgeable, and more charismatic. Even if you have to be *too* loud (that is, louder than you would naturally think is appropriate), that's probably okay, as it means you'll naturally regress downwards a few decibels as you go on. The same thing applies for enunciation -- even if you have to *over-enunciate* while you practice, it'll help you on gameday.

If you still don't believe me, just wait until the next time you have to sit through a day's worth of briefs, presentations, classes or whatever it is that you do in your field. When you see someone mumbling or whispering in front of an audience, do a quick sweep to gauge the rest of the room. Trust me, you're not the only one in pain. Now do the same thing when someone who can project is up at bat. Just by the body language of the people in the room alone, you should be able to quickly see the night-and-day difference.

Sunday, February 24, 2008

Social Obligations: Shed 'Em

Here is one of the major adulthood lessons I've learned so far -- stop feeling obligated by every social invitation that comes your way. I think a lot of times, people waste significant amounts of their time and money by doing things out of an unfounded sense of obligation. The sad part is the waste of precious time and money, and the ironic part is that no one *really* cares about what you do.

I don't know about you, but I have a VERY long workday. This means that from Monday to Thursday (not counting time allotted for sleep) I almost never have more than a couple free hours at a time. This makes the weekends uber-precious. This also means that all the errands and other general taskers that I need to do during the week inevitably get pushed off to Saturday and Sunday. Now, don't get me wrong -- I love catching up with friends for a pint of beer, a meal, a coffee, or whatever. But at the same time, as I've already stated, my free time is rare, and I treasure it,so I don't necessarily jump on every chance to go out -- especially on the weekdays, but even on the weekends as well.

And here's what I've learned -- no one *really* cares. People may call to see if you're around, but if you're not, or you're busy, or whatever, they'll get along just fine without you. So my advice to readers is this -- shed your unfounded feeling of obligation to say 'yes' to things. Don't feel like dropping half a month's pay to attend some distant cousin's wedding on the opposite coast? Don't go. And guess what? Chances are, no one's going to notice that you're not there.

Saturday, February 23, 2008

Clinton, Condit, Vitter, and Craig: Why I'm Not Laughing

For all the back-and-forth we've heard on political sex scandals in the past decade, and through all the late-night TV jokes, there's a key point that's been almost altogether left out of the discussion -- the very real danger that these individuals have posed to our national security.

So, you might be wondering, what in the heck does a gay liaison in a Minnesota public bathroom have to do with our national security? Or someone paying for the *privilege* of wearing diapers, or sleeping with an intern? All are fair questions, and here's the answer:

All these men are a) in positions of serious power, and b) hold security clearances. All were (at least initially) in denial about the aforementioned "extracurricular activities." If the Iranians, the Russians, the Chinese or whoever else were aware of these politicians' sexual peccadilloes, it's not that hard to imagine a blackmail scenario. In fact, the "honey trap" was among the most successful Cold War spy tactics used against us (most famously, it led to the compromise of the vault in our embassy in Moscow in the mid-1980s).

Bill Clinton's "lapse in judgement" address in August 1998 will go down in history as one of the worst presidential speeches ever, for the finger-wagging condescension with which he told us, "Even Presidents have private lives." In that sense, he's completely wrong.

Just ask yourself this -- what lengths do you think Bill Clinton or Larry Craig would have gone to in order to protect their secrets from getting out to the public? Given their initial vigorous denials and then the smug sense of righteous indignation they've displayed toward the media and the public, I think the answer should be self-evident.

And now it's not so funny any longer, is it? I, for one, am not laughing.

5 x 5s and Kraft Singles on the Road to Four Hundy

One personal goal I've been working on for some time now is the dream of being able to bench press four hundred pounds. I'm not going to devote too much airspace to it, but I will post periodic updates.

I've been through a few boom-and-bust cycles with this, but -- and yes, I'm going to play the deployment card here -- everytime I've really built it up, I've gone overseas and let it slide. But now I'm refocused as I will be here in the U.S. for the foreseeable future.

The method to my madness is built around something called the "5-by-5."

Here's how it works: You take a weight, let's call it 135 lbs. Can you do 5 sets of 5 reps? If not, just keep at it...once you're able to complete a 5-by-5, you own that weight. Now you need to start working with 140. Just keep adding 5 lbs. every time you establish ownership of a weight.

Slowly, but surely, you will become a lot stronger by doing this.

Lately, I've started to add something called "Kraft Singles" to my routine. Kraft Singles are just what they sound like -- single reps of a weight. They are not max-out weights -- just something higher than your 5-by-5 weight that you're trying to *reach* up to.

Right now, I'm 5-by-5'ing at three hundy and Kraft Singling at three-and a-quarter. I estimate that I'm about a year and a half from reaching my goal.

Urban Dictionary gives "blurk" its blessing

Well, the word "blurk" really does seem to be gaining some traction here in cyberspace.

Thursday, February 21, 2008

Is America Ready?

You want to know how to spot pseudo-intellectual babble? It's actually quite easy -- just wait until someone starts a sentence with "I just don't think America is a ready for a _________" in reference to the presidential election.

When the dust settles from the 2008 general election, and the pundits and academics do their post-mortem analysis, there will be an inevitable flow of "analysis" about why identity politics caused whichever major candidate to lose (with the possible exception of John Edwards).

Here are the problems with it:

(1) You're talking about an absurdly small sample size. I have no strong opinions either way about Mormons, but I voted against Mitt Romney in 2002 because I thought Shannon O'Brian was the better candidate. So I wasn't voting *against* a Mormon or *for* a woman any more than I was in 2000 when I voted for Marge Roukema, or in the 1999 primary when I cast a ballot for Anna Eshoo. I was voting for who I felt was the better candidate. Now that it's 2008 and I am repulsed by the smugness and sense of entitlement on display every day from the Clintons, I'm not supporting the female candidate. But it's not because of her gender, religion, or color. Got that?

(2) "America" is not some monolithic bloc. Remember, this isn't Prague or Warsaw during the Cold War -- we as individuals actually have varying opinions to express. Even within households, there are extremely divergent political views. So any statement about how "America" feels sounds well, like a blurk -- something hollow that gets repeated a lot. Certainly, there are individual Americans who would not vote for an individual because of race, creed, or color. But the other side of that coin has to be -- Yes, but how many individual Americans would vote for an individual because of any of those very factors?

Those last two points were obvious, and you've probably heard them before. But my biggest goal for this entry is to challenge people's use of the term "ready."

I'm not *ready* for a lot of eventualities that might befall me, but I'll adjust to them as they come.

Were Americans "ready" for a Catholic President to be elected in 1960? I have no idea, but they got one. And they adjusted to it.

Were Americans "ready" for a Jewish Vice-Presidential nominee in 2000? I have no idea, but if you look at the popular vote, many more voted for his slate than against it.

Were Californians "ready" for an Austrian immigrant movie star to be elected governor in 2003? I have no idea, but he was re-elected handily a couple years later.

Were Louisianans "ready" for a Catholic son of Punjabi immigrants to be elected governor in 2007? I have no idea, but they have one now, and that's their daily reality.

I'm not any *readier* for a President of a particular identity than I am for a boss, a sister-in-law, or a next-door neighbor of that identity. But I am an open-minded, tolerant American who would welcome that person on his or her merits and accept them in that role. And I'm far from alone on that.

The Dismal Science

I have been undergoing a massive personal project for the past several months -- self-education in the field of Economics. I'm amazed, and a bit embarrassed, that I have gone so long without building a solid baseline of knowledge in the subject. But the bright side here is that since I'm starting from such a meager position, there's been a great marginal return on the effort I've made so far (that was honestly not some kind of play on words, I had no other way to say that). I'm making my way through a lot of the popular literature on Economic Theory, investing, real estate, taxation, economic history, etc. These aren't dense academic texts (and in no way am I claiming, or will I ever claim, to be an expert on the subject) but more the type of stuff you can find in an everyday library or bookstore.

I think part of my impetus for doing this is that now that I'm three years into the *real world* I'm making more and more significant economic decisions. For instance, I had never had the disposable income with which to buy stocks until I returned from my 2006-07 deployment, so I never really felt a strong desire to want to learn everything I could about the stock market. Now that I'm an active participant in the market, it's much more rewarding to read a book like Jeremy Siegel's "The Future for Investors" or Burton Malkiel's "A Random Walk Down Wall Street" (I highly recommend these, by the way) because I can actually put the principles to use. If you don't have time to read them, go long with index funds and look for solid buys with low P/E ratios and healthy dividend yields!

Also, I've never bought any kind of real estate, ever. In fact, the biggest purchase I've ever made was the 2001 A4 that I bought during OCS (and am still feeling a $328/mo hit for). But now that I'm very seriously looking at condos up Lowell, I suddenly have a strong incentive to want to read everything real-estate that I can get my hands on. And on top of that, I have a whole new interest in what the Fed does (even if Ben Bernanke is far from being the most powerful man on the planet, he matters to me in a whole new way).

I imagine that I'll go through a similar process with subjects that I don't *really* care about now (i.e. home improvement) when the right time comes.

I am writing just to share that this has made an enormous impact on the way I read the morning newspaper, the way I interpret things that political candidates say, and -- without getting too dramatic here -- the way I see the world around me. And just a couple months ago, I had no idea what a hedge fund was, and wouldn't have known a large-cap stock from a REIT from a hole in the ground. Of course, there are still miles to go, and I don't plan on stopping anytime soon.

So what's my point? If you don't understand Economics, you don't really understand what's going on around you. You can read all the books about policy, politics, and history that you want. You can read the Big Three weeklies cover-to-cover. You can watch cable news all day. You might even know the names, parties, and major positions of all 50 Governors and 100 Senators. But guess what? You're nothing without a solid foundation in Economics.

Penn and Teller take on "blurks"

I've become a huge fan of Penn and Teller lately. Their show (B.S.) is available on Netflix direct and most are now on YouTube as well now. The reason I love them so much is that they have devoted an entire show to challenging blurks. A blurk, by the way, is defined in the Wiktionary protologism page as:

blurk: Popular, conventional wisdom which may be factually right or wrong, but which loses meaning through frequent, often thoughtless repetition.

"Blurk" also has another meaning to some. The urban dictionary defines it as:

blurk: A lurker on a blog. (n)To lurk and read a blog, but not comment (v)

For the purposes of this blog, only the first definition is acceptable. An example of a blurk would be: "In my opinion, it's really the Fed Chairman who's the most powerful man in the free world." For one, this statement happens to be untrue but that's not what makes it a blurk. It's just something that gets repeated endlessly by people who may not even know who the Fed Chairman is or what he does -- but they heard some pundit say this on CNN, so it sounds like good cocktail party fodder.

Penn and Teller devote each episode of their show to challenging a common societal blurk, i.e. "Wal-Mart is evil," "9-11 is way too sophisticated; it must've been an inside job," "Americans are becoming ruder all the time," etc.

These are all examples of statements that get thrown around endlessly but that don't necessarily stand up to even the first tests of scrutiny (but again, bear in mind that a statement can be 100% true and still qualify as a blurk).

I don't always agree with Penn and Teller's politics, and I don't always agree with their treatment of issues, but I just love the fact that someone is out there systematically trying to challenge and poke logical holes in a lot of beliefs that Americans hold near and dear.

While I'm applauding people, let me add that I have become a South Park fan with the verve of a post-Road to Damascus Saul. I had avoided it for years because I (wrongly) thought the appeal was based on the shock value of children swearing at each other; on the contrary, much of what South Park does these days is brilliantly dismantle common blurks.
Editor's Note: I will return to the subject of blurks in future entries. In the meantime, good places to look for blurks are in: commentary about the real estate market, the subprime lending crisis, steroids in professional sports, and any kind of statement that tries to capture the complexity of the entire 2008 nomination season in one fell swoop.

Wednesday, February 20, 2008

Good Talking

Through the years I've had countless discussions with close friends about various social, cultural, and political topics. A few themes and ideas truly stand out as novel and interesting. One of these is good talking. Here's why it's original -- any bookstore or library in America has an entire shelf somewhere full of "business" or "self-help" books that advise people that in order to become more liked, better at sales, more influential, etc. they need to be better listeners. It's advice given so much that it's almost cliched -- there aren't enough good listeners out there, stand out by being a good listener, be a great leader by being a great listener, etc. However, not a single one of these books -- and I've read plenty more than my share -- ever challenges its readers to be better talkers.

Well, what is a good talker? I would argue that being a good talker has no correlation with how much or how little one talks. I realize this runs contrary to popular perceptions -- many garrulous people fancy themselves to be 'good talkers' (maybe they're enamored of the sound of their own voices), and many quiet people are perceived by others (often wrongly) as the "talks little, says much" types.

Instead, being a good talker means being aware of your audience and adjusting accordingly. It's all about reading a room and reacting to other people's expressions and body language. It's also having a basic awareness of what might interest your listener.

If I walked into my office and gave a ten-minute monologue about how much I used to love Lucky Charms, but now exclusively eat Cinnamon Toast Crunch, that'd be quintessential bad talk. Could I honestly expect anyone to care?

However, if someone was speaking about the Super Bowl to a room full of rapt sports fans, he or she could go on for an hour without even stopping to take a breath, and that would not necessarily be bad talk. In fact, if the room were really held captive that long, I would call that good talk.

This is a theme that I'll return to again and again on this blog. But the bottom line is that there's no static definition of what good versus bad talk is. It's always going to change based on the people in the room and the circumstances at hand.

If you want to be better-liked and thereby more influential in your field, listening never hurts. But if you want to really square the circle with empathetic communication, try focusing on being a better talker as well.

Social Capital and Lowell

Welcome to the first entry for this blog! There isn't going to be any one central theme to this, but there will be some core subjects that I'll return to again and again. One of them is social capital. While there is no single accepted definition for the term, it basically refers to interwoven interpersonal relationships and their power to foster a sense of community, disseminate information, and build trust.

It's an important concept for me because developing social capital is my highest priority for the next several years of my life. Having bounced around for the past five years due to personal circumstances (mainly, preparing to enter and then joining the military) I'm well aware of what it means to go without social capital. I'll get into the details in future entries, but suffice to say it's a frustrating way to live. And much like a multimillionaire with an inspiring story about how he used to live in his car because he couldn't afford to pay the rent, I hope to make my transition from being socially *poor* to finding strength in community and social capital the central theme of my life's story.

Before you ask, let me address a question I get asked a lot -- Why Lowell?

Well, here are three reasons, listed in ascending order of importance:

a) Location. First, Lowell is located smack in the middle of New England, which is my favorite part of the country. I feel very fortunate to be able to say I've lived in several different parts of the United States. New England has a certain edge to it that I haven't found anywhere else. There's a broader cultural diversity there than most Americans probably realize. There's an underrated natural beauty. There's also an intellectual climate embedded in its culture which probably dates back to its founding as a colony and is fed by the presence of so many universities. Yet, at the same time everything is still sort of small and accessible.

Lowell is located about 20 miles north of Boston, which is the unofficial "capital" of New England. I lived in Boston for a year after college and loved it. Many of the friends I had then are still there. And although I can't afford to buy real estate in Boston or Cambridge on my salary, I can very realistically purchase over 1000 square feet of condo or home in Lowell for roughly $200k.

b) Physical layout and size. Lowell is the ideal city size for my goal -- it's small, but densely populated. It's not so small as to give off a small-town feeling (with over 100,000 residents, it's the fourth-biggest city in Massachusetts). But at the same time it's not so large as to be intimidating or feel impersonal, the way an enormous city with a highly-transient population appears to me. The central downtown with its 19th-century layout are a welcome transition from the world of strip malls and subdivisions that I've come to know and loathe in Virginia Beach. For the reasons listed here (and others to come), small cities like Lowell are ideally-suited for social capital building.

c) Forward momentum. I highlighted this one because it's so important. Forward momentum is, frankly, what separates Lowell from a lot of cities that meet conditions (a) and (b). Fall River, New Bedford, Brockton, and Lawrence come to mind, but the list could go on and on -- I'll spare you the familiar New England or Rust Belt story. But the difference between Lowell and these other cities with similar demographics and physical layout becomes immediately apparent to anyone who walks around the downtown -- there's clearly been a tremendous amount of money and effort that has gone into the city's revitalization. There are constant ethnic festivals, concerts at the Tsongas Center, minor league hockey and baseball games, conferences, etc. People there see the changes and take a lot of pride in their city.

Believe me, I'm in no way trashing other New England cities -- they will all come around with time -- but I'm 27 and long overdue for real social capital building. Comparatively, Lowell is just a much better place to do it.