Monday, October 27, 2008

Still Waiting for the Novelty License Plate to End all Novelty Plates: IMA JKASS

Saw this on the road yesterday.

Prius with jackass novelty plate

If you can't quite make out the plate, I tried to zoom in a bit with my limited photo 'editing' skills.

prius owner jackass nv my mpg

It reads NV MY MPG.

Really? For better or worse, the Prius has already become something of a polarizing statement, even when they aren't plastered with juvenile, antagonistic messages.

Now, to be clear, I am not a Prius hater. Far from it. I have rented a Prius and enjoyed it. I know, like and respect a number of people who manage to own Priuses without feeling the need to congratulate themselves on their environmental consciousness and economic savvy via novelty license plates. And I own a Toyota Yaris, so I'm all for great "MPG" (yay!).

But "NV MY MPG"? Come one. That's not funny. That's just being a jackass.

Saturday, October 25, 2008

Obama vs McCain - Judgment

Catching up on my reading this lazy Saturday and just finished this article:
Volcker Makes a Comeback as Part of Obama Brain Trust.

Good read. And another argument for supporting Obama, who has the talent and leadership skills to earn the confidence of people like Buffet and Volcker combined with the judgment to seek out and incorporate into his policies the input of such experts. Or, you could count on McCain's judgment in picking Palin as VP candidate and Palin's "executive experience" as mayor of Wasila, AK and governor of a state smaller than ~20 u.s. cities. The choice is yours.

Thursday, October 23, 2008

Full Video of Obama & Joe the Plumber: Why the Sound Bite Sucks

Last night on MSNBC's Countdown with Keith Olberman I saw for the first time the entire exchange between Obama and Joe the Plumber (video below). It not only confirmed what I previously suspected -- that McCain's co-opting of Joe the Plumber's cause was total bullshit -- but it made me ever more disappointed in the state of our tv "news media" than I was before. How is it that this full exchange is just getting on air now? We had all the sound bite sensationalism (spread the wealth! spread the wealth!) for what, one week? two weeks? - without anyone (at least that I saw) really looking at the full exchange and breaking it down.

* Taxes on the first $250,000 of income stay the same as they are now.
Higher tax rate only applies to the incremental income above $250,000. It isn't in effect from first dollar. So the tax obligation on income from $250,001 - $300,000 is $19,500 instead of $18,000. A difference of $1,500. Roughly $30/week over the course of a year. $300,000 in income calculates out to $5,769 / week. $30/week in incremental taxes is not going to break anyone. And it's not going to hinder job creation.

* Lower taxes on the way up.
Around 1:45 into the discussion Obama explains to Joe how his tax plan would have benefited him during his early/apprentice years and likely accelerated his savings timeline, enabling him to purchase the business sooner. Unless you're handed a fully functioning small business or otherwise don't need to worry about your path to owning one, this should be of interest to you. If you have already achieved success and care more about protecting/hoarding what you have than about creating an easier path for others to follow, this will not interest you. Either way, I haven't heard this aspect of the discussion covered much by America's "tv news".

* Benefits of customers having disposable income
About 4:30 into the video Obama makes the point about Joe's customer base having more disposable income, enabling them to hire Joe at his comfortable plumber's hourly rate. That's kind of an important part of the small business equation, no?

* Capital Gains
About 5:00 in he talks about how his capital gains tax plan would benefit Joe more than the existing capital gains tax if/when Joe sells his business. That's a pretty big factor in benefiting from one's one wealth creation, isn't it?

I realize all this requires people to step out of their comfort zone and actually pay attention and be open minded enough to actually listen and process what is being said rather than resorting to the typical and more comfortable snap reaction cum knee-jerk judgment based upon a sound bite. It also will appeal more to folks who have an appreciation for the bigger picture or longer term view rather than what's in my best interests over the next 5 minutes. So I am not surprised by how it has been covered by the media or how McCain/Palin have seized upon the most dramatic and least relevant sound bite as a way to fire up the non-thinking, rabid dog faction of their support base. But I need to vent about it nonetheless.

Saturday, October 11, 2008

Red States, Blue States, Fat States, Dumb States ... Some U.S. Maps to Consider During this Election

Through this whole election cycle I've often thought 'who the hell would really vote that way?' (for example, when West Virginia voted for Hillary over Obama by something like a 5 -1 margin). But after the primaries were all settled I let my mind focus on other things for a while. Like how Mets manager Jerry Manuel looks like he should be playing clarinet in a smoky jazz club, or how Michelle Obama looks like an odd cross between Sigourney Weaver and Emmanuel Lewis. But now that we're getting close to crunch time and I see Palin's vacuous head filling my TV screen far too often, usually making some close-minded, ill-informed comment in her uniquely smarmy fashion, I have to ask myself -- nay, I ask America -- who the hell would really vote for McCain / Palin?

So I did a little looking around to see what else I could learn about the states that are leaning toward the McCain / Palin ticket. Below is a bit of what I found. I realize that tracking this information at the state level is far from ideal. Chicago holds little in common with Carbondale, for example, other than being in Illinois. But getting this kind of data at the county or congressional district would take forever and I have already spent way too much time on this. That said, take all these observations with a grain of salt.

Note: In all instances, McCain / Obama polling data is from USA Today's Presidential poll tracker. Also, clicking on the images will let you see a larger version of it over on Photobucket.


First, from the US Census, a chart mapping attainment of at least a Bachelor's degree by state.

P25+ with Bachelor's Degree + McCain & Obama polling data

Of the 27 states where less than 25.9% of the population holds a Bachelor's degree:
McCain - 16
Obama - 7
TBD - 4
If I were a betting man I'd say this will end up either 18 - 9 or 19 - 8, McCain

Of the 23 states where more than 26.6% of the population holds a Bachelor's degree:
McCain - 6
Obama - 15
TBD - 2
This will likely go 16 - 7, Obama. If northern Virginia goes heavily Obama, maybe it goes 17 - 6.

Mobile Homes & Trailers

Next, also from the US Census, a look at % of homes that are either mobile homes or trailers.

U.S. States % of Housing as Mobile Homes or Trailers & McCain & Obama polling data

In the 26 states where more than 6.7% of homes are mobile homes or trailers:
McCain - 17
Obama - 6
TBD - 3
And it's looking like this will end up 20 - 6, McCain.

In the 24 states where less than 6.0% of homes are mobile homes or trailers:
McCain - 5
Obama - 16
TBD - 3
Likely to go 17 - 7 for Obama, maybe 18 - 6 Obama.


Next, from Strange Maps with data from the CDC, we look at a map that illustrates relative obesity rates.

U.S. Obesity Rates by State and McCain & Obama polling data

Among the 32 states with obesity rates higher than 24%:
McCain - 17
Obama - 10
TBD - 5
Likely to go either 22 - 10 or 21 - 11 McCain.

Among the 18 states with obesity rates lower than 24%:
McCain - 5
Obama - 12
TBD - 1
Likely to go 13 - 5 Obama

"Values" - Divorce & Teen Birth Rates

Taking a quick look at some "values" issues, I found a couple of charts over at Talk To Action using National Center of Health Statistics data that illustrated divorce rates and teen birth rates.

2004 US divorce rates by state + obama mccain polling data

Surprised to see so many of the green, low divorce rate states skewing toward Obama, the guy who "doesn't see America the way you and I do" (according to I'll-say-anything-because-I'm-nothing-more-than-an-empty-vessel-with-an-extremely-narrow-and-inflexible-world-view Sarah Palin).

2004 Teen Birth rates by state + mccain and obama polling data

Interestingly, Obama also seems to be carrying more of the lower teen birth rate states. Weird, huh? Thought Republicans owned "values".


I also found a couple of maps that illustrated the degree of religiousness and the type of faith that is most common by county. I am far from being an expert on religion, but it did seem to me that a few relatively major religions were absent (say, Judaism, Islam, Hinduism, Buddhism). These defy neat tallying like the earlier charts, but, nonetheless, I had the maps, the Obama logo and the McCain head, so I plotted these, too. Seems like there is some correlation (or just some pretty strong coincidence) of high divorce rates, high mobile home ownership, high teen birth rates, high obesity rates and intense religiousness. And they all like McCain/Palin.

Faith by state & Obama & McCain polling data
Map source: Strange Maps.

Religious adherents by state and McCain Obama polling data
Map source: The Daily Irrelevant.

The Legacy of Slavery

And I also found a map of state/territory slavery policy from pre-Civil War times. Anyone who says race isn't a factor in this election is kidding themselves. Wow.

Pre-Civil War map of slavery policies and mccain obama polling data

Finally, it's worth noting that while I was doing the research for this post I found that someone else, David Pakman, was doing similar analysis. He takes a couple of different looks at a similar concept, so check that out, too, if you're interested.

UPDATE 10/12/08: "We don't need no A-rab president"

Doing a little red state / blue state search this morning and one of the results I found the video below, posted by Andrew Sullivan. All your worst fears live and with pictures and sound - the wonder of YouTube, no?

ADDITIONAL UPDATE 10/12/08: Red State, Blue State, Rich State, Poor State

Looks like there is a lot of useful data and discussion over at Andrew Gelman's blog, which is a companion piece to his book, Red State, Blue State, Rich State, Poor State: Why Americans Vote the Way They Do.

Thursday, October 09, 2008

500,000 Reasons to Pay Attention to the Market & Your 401K Plan

An invaluable lesson learned the hard way
In 2000 & 2001 I saw my modest 401k cut by two thirds, as the NASDAQ went from 5,000 to 1,800. I thought I was doing everything right. I had been contributing with every paycheck. Had aggressive allocations since I was still a relative youngster. Thought everything was fine (there was still a touch of that go-go 90s vibe in the air, after all). But after I had settled into my new job and went through the process of setting up a new 401K and rolling over the old one into a Roth IRA, I had a WTF kind of moment. Two thirds - gone. That's nuts. I didn't know what to do, but I knew there had to be a better way.

I wish I could remember exactly how I found Dick Fabian's Mutual Fund Wealth Builder, because if anyone tipped me off I want to give them proper credit. But I may have just found it in Borders. And it changed my life. I know that might sound pretty weird and cultish, but it's true. His message isn't complicated. It gets pretty repetitive in places it definitely has stretches of high corniness. But the bottom line is he outlines a straightforward approach that is easy to follow and it can save your @ss in years like 2008.

The point is there are macro market trends that can give you a 'red light' or 'green light' kind of signal. Either get to safety and wait out the down draft, or get back on the elevator up.

I'm oversimplifying here, but if you see a couple of major, broad market indicators close below their 200-day moving average, that's a bad sign. On December 27, 2007, the S&P 500 dropped below its 200 day moving average.

S&P 500 October 2007 - 2008; source Yahoo! Finance
Image Source: Yahoo! Finance
S&P 500 closes below its 200 day moving average on 12/27/07

That was a real crap time for it to break down because I personally wasn't paying as close attention as I usually do. And by the following Friday the S&P was down ~7% from November (seems like a quaint concern these days, though). If I was truly adhering to the system I would have reallocated my 401k out of traditional 'long' equity funds and gotten to safer ground with the S&P still around 1,478. Because I had seen this kind of show before and it wasn't pretty.

S&P500 April 1996 - October 2008
Image Source: Yahoo! Finance
S&P 500 breaks down in September 2000, beginning a downtrend that didn't turn until March 2003, after a drop of ~33%.

But I didn't. I waited a little bit, in case it was a false signal. I looked for it to get back up above its 50-day moving average as a sign. By late February that wasn't looking likely and I got out when the S&P was around 1,380. Took a little hit, but it could be absorbed. Comes with the territory, as they say.

That's the good news (for me, anyway). The problem is then that my 401K plan doesn't have any choices designed to really grow even during a bear market. We have a couple of short term income funds and a bunch of longer term funds that are great as long as the broader markets are great. In case you hadn't noticed, the broader markets haven't been great this year.

Most of my current 401k options have tanked along with the market

Here's how it looked yesterday when I pulled up the performance table. Not good times.

Publicis 401K options
Publicis Groupe 401K choices

Publicis 401k options
Publicis Groupe 401K choices

And you can see in this series of charts comparing the individual funds to the S&P 500 year-to-date that they all have been taking the same ugly ride down.
Note: charts were grabbed last night, before things got even uglier today. Also, the S&P is the red line in each chart, the blue line is the specific fund being compared to the S&P.

T. Rowe Price Growth Stock (PRGFX) - year to date
Image Source: Yahoo! Finance

Artisan Mid Cap Inv (ARTMX) - year to date
Image Source: Yahoo! Finance

American Beacon Small Cp Val Inst (AVFIX) - year to date
Image Source: Yahoo! Finance

Hotchkis and Wiley Mid-Cap Value I (HWMIX)
Image Source: Yahoo! Finance

Fidelity Freedom 2025 (FFTWX) - year to date
Image Source: Yahoo! Finance

Fidelity Freedom 2040 (FFFFX) - year to date
Image Source: Yahoo! Finance

Fidelity Freedom 2010 (FFFCX) - year to date
This is one of my favorites. Designed for those getting ready to retire in 2010. Should be getting into pretty 'safe' territory here. Down 25% year to date. Good grief.
Image Source: Yahoo! Finance

Fidelity Contrafund (FCNTX) - year to date
Image Source: Yahoo! Finance

One of two options I have in my 401K where I wouldn't have gotten crushed by this most recent downturn is PTTRX. Fortunately this is where I moved everything back in February. Those who advocate buy and hold, dollar cost averaging on the way down, smart and safe asset allocation and other similar nonsense would have howled at this move. But, Dick Fabian's red light / green light system tells me to move. I moved.

PIMCO Total Return Instl (PTTRX) - year to date
Image Source: Yahoo! Finance

The options I wish I had in my 401K

Earlier this year I asked someone in corporate HR about getting a bear market fund option in our 401k. I was told that kind of vehicle was speculative and irresponsible (I'm paraphrasing as I can't find the email to get the exact language). I was told, however, I could make a formal request in writing with some rationale. I might direct them to this post. What seems irresponsible to me is that some people are in a two-years-until-retirement fund and getting 25% of their @sses handed to them in 9+ months.

Wouldn't it have been nice if I could have allocated some share of my balance and ongoing contributions to one of these three?

Again, charts are as of last night, S&P is red, highlighted fund is blue

Prudent Bear (BEARX)- year to date up >20%
Image Source: Yahoo! Finance

Rydex Inverse S&P 500 Strategy Inv (RYURX)- year to date up >40%
Image Source: Yahoo! Finance

Grizzly Short (GRZZX) - year to date up >60%
Image Source: Yahoo! Finance

It would have been more than 'nice'. It could have made an enormous difference in people's 401k balances 30 years from now. To illustrate exactly how much of a difference it could have made, I ran a few simple scenarios.

The bottom line break down


- Initial 401K balance of $50,000 when S&P 500 triggers the bear market alarm as it did on 12/27/2007
- A total drop of 33.3% in the S&P before it triggers it's next bull market alarm (at yesterday's close of 984.84, the S&P was 33.3% below its 12/27/07 close of 1476.27
- After the 33.3% drop, no further contributions are made and all portfolios make 8% annual returns for 30 years

- Portfolio A does not get out at time of the bear market trigger and rides down with the S&P
End balance: $335,647

- Portfolio B gets out at the time of the bear market trigger and stays in cash on the sidelines
End balance: $503,133

- Portfolio C gets out at the time of the bear market trigger and reallocates to 50% cash, 50% a bear market fund designed to deliver returns inverse to the S&P
End balance: $586,876

- Portfolio D gets out at the time of the bear market trigger and reallocates 100% to a bear market fund designed to deliver returns inverse to the S&P
End balance: $670,619

- Portfolio E gets out at the time of the bear market trigger and reallocates 100% to a bear market fund designed to deliver returns that are twice the inverse of the S&P
End balance: $838,105

Now, depending upon the size of your initial stake at the trigger date, the absolute numbers will vary. But whether you have $5,000 and are just starting or $1,000,000 and are close to finishing, the percentages are the same.

* Take a 33% hit and it will take you ~6 years to get back to even at 8% per year.

* Get on the sideline and wait for the next up trend and you finish with 50% more money.

* Get out and reallocate into an aggressive bear market fund and you could have an extra $500,000 in 30-years. But, that might be speculative and irresponsible. Best to just put your lil' eggs in something nice, like FFFCX.

UPDATE 11/3/2009:
Paragraphs below speak to the value of avoiding losses. Rest of the article ('Cruel Math of Big Losses') provides some conventional tips for those who might not be comfortable with technical trend analysis as an approach for sidestepping these big losses.

"If an investment declines 10%, it takes about an 11% gain to break even (assuming you don't pump in additional dollars). If the drop is 20%, you need a 25% gain to recover. A fall of one-third requires a rebound of 50%. And if your investment falls by half, "you need a double," or a 100% return, says Mr. Wiener, the New York-based editor of the Independent Adviser for Vanguard Investors. The recovery percentages grow exponentially because you have so few dollars working for you after a big loss.

Last year, the average diversified U.S.-stock fund was down 37.5%—requiring a 60% advance to break even—and plenty of funds were down 50% or more. Investors looking at this year's performance listings should know that some big gainers are volatile funds that were big losers last year; thus, investors' holdings may still be worth far less than they were in late 2007."

Monday, October 06, 2008

A Tale of Two Bags - High Sierra Sport's Customer Service Comes Through

Earlier this year I bought two carry on expandable bags from High Sierra Sport . One has been through maybe 15 - 20 trips and is still solid. The other starting falling apart after trip number 3 or 4.

High Sierra defective bag
Note the left wheel caving in. It sticks like that, which kind of nullifies the whole rolling concept.

High Sierra defective bag

Below you can see how the handle grip started unraveling
High Sierra defective bag

This was pretty disappointing. And because I am sometimes a lazy procrastinator, I didn't take my receipt to the place where I bought it (the Randolph location of City Traveler) within the 60 or 90 day return window. But the bag was still covered by its warranty. And while it took more back and forth via email that it probably should have to get a response from High Sierra's customer service folks, I have to say that once I did connect with them and sent back the pieces they needed to confirm what kind of replacement bag I needed, they got the new bag to me within two or three days.

And my sweet orange bag and I are back in business.

High Sierra replacement bag

High Sierra replacement bag

Sunday, October 05, 2008

Pictures from NLDS Game 1 - Cubs v Dodgers

Well, I was luckier than the Cubs were. By far. What I saw was the first game of a sweep that has broken hearts all over Illinois. But, for it's worth, I had a great view.

2008 NLDS Game 1 Cubs v Dodgers - ticket
Aisle BLPN33 Row B Seat 3

2008 NLDS Game 1 Cubs v Dodgers
You know your seats are good when you're right next to the photographer well

Cubs Dodgers - Manny on 1st base
Manny on first

Cubs Dodgers - crowd isn't happy
Long faces and rally hats - not a good sign

Cubs Dodgers Greg Maddox pitching in mop up duty
Greg Maddux pitching mop up in the 9th. Weird.

Wednesday, October 01, 2008

My Lucky @ss is Heading to the Cubs Game

Not only that, but I have a preposterously good seat, thanks to the very kind folks at Tribune Interactive.

ridiculously good seats at NLDS game 1, Cubs & Dodgers

Cold or not, this will be fantastic. And I have no qualms whatsoever rooting against Lowe, Nomah and Manny (would be different story if it were, say, Wake, Youk and Papi who had defected the Nation).