Intellectually is not the way to make money. In last month's diary I praised investment adviser Peter Schiff, who got right what so many bigger names got wrong. I'd met Peter at a Christmas party. A few days later, quite unprompted, a copy of his recent book arrived, with a friendly inscription.
Nice guy: and anyone who makes a monkey (so to speak) out of Ben Stein is a friend of mine.
Not everybody's a fan of Peter's, though. A different friend who reads way more finance-biz literature than I do points me to this cautionary tale:
Peter Schiff's Clients Got Hosed This Year, Too
Sure his on-air sparring makes for some great TV. And his pointed criticism of the stimulus plan is spot on, especially at a time when people believe the answer to our pile of debt is to spend like crazy. But that doesn't mean Peter Schiff has been an amazing steward of his clients' cash …
This gets a shrug from me. To be right about anything in the investment world is a major achievement. To be right about everything — or even just much — is not vouchsafed to us mortals.
George Goodman explained all that forty years ago. Here's George in the early 1970s, promoting the I Ching — an ancient Chinese manual of divination (pronounced yee jing) — as an investment tool:
Then I went to Wall Street with the I Ching under my arm.
I would sit in the conference room of the firms I called on, and one by one the partners would come in and ask the I Ching a question.
Why did they put up with this? The moment was important, as the I Ching says. They were confused. Five years previous, they would not have taken the time, and their assumptions were that since they were smart, they put information together and evaluated it in such a way that they made a lot of money. But now everybody who was in the market at all was losing money — indeed, all this professional management was doing worse than the random averages …
They would throw the coins [you can do I Ching divination by tossing three coins] and I would simply read the hexagram and its interpretation and ask them what it meant.
Dick threw "Work On What Has Been Spoiled, Keeping Still, Mountain, over The Gentle, Wind." [It's #18 in the drop-down box here.] He had asked about his view of the market. "That's very good," he said. "Very good. It means pay attention, and don't get sucked into the rallies. See, it says, 'Setting right what has been spoiled by the father.' Well, that means that the last guy to run this portfolio missed the market completely. We need a new tack. Intellectually is not the way to make money."
Intellectually actually is the way to make money most of the time. To play the investment game reasonably well, you need a fairly high level of smarts. Once in a while, though, the nation sails into a zone of chaos. Then investment professionals will reach for anything, even the I Ching.
This is one of those times. Get tossing coins … or, if you want to be thoroughly authentic, yarrow stalks.
Sauve qui peut. Times are hard, no doubt about it. My wife works in retail, selling jewelry for one of the big upmarket department stores (anagram of ODDLY ORAL RANT). From what she tells me over the dinner table, the department-store sales force is undergoing the employee equivalent of Omaha Beach.
An acquainance in senior management at a different department-store chain (anagram of ASKS) confirms the impression.
He: "We've let go ten percent of our commissioned sales force. Ten percent! — I've never known anything like it. And all of us managers are under orders to bring down our vendors' prices by twenty percent. All the vendors — not just wholesalers, but things like modeling agencies and advertising. Twenty percent, across the board."
Me: "What if a vendor can't reduce his price twenty percent?"
He: "Then we go find a new vendor."
It doesn't take much thought to see how that's going to ripple right through the economy. And considering where manufactured stuff mostly comes from nowadays, not just our economy.
This is tough, and it's getting worse. Nobody makes much money in retail sales (Mrs Derb sure doesn't), but these are the kind of people taking the hit right now. Next it'll be those vendors, model agencies, advertisers. Then the tsunami will wash back to wipe out the goods and services they all use, from software support to truckers, copy writers, restaurateurs, freelance photographers, warehousemen, …
Hard times, and they'll get harder.
A wealth-eater administration. If professional investment advisors sometimes can't make sense of the economy, how good do you think politicians and bureaucrats are at it?
Right. They don't have the beginning of a clue. Keep that in mind when you hear them talk about "stimulating consumption" and "creating jobs." The congresscritters, paper-shufflers, and gubmint time-servers of Washington D.C. don't have a freaking clue. They're not wealth-creators; they're wealth-eaters.
That includes the new administration. Why would they have a clue? Very few of them have ever done anything an ordinary citizen would recognize as work.
Here's the Obama cabinet.
|• Position •||• Name •||• Work experience •|
|Attorney General||Eric Holder||Government lawyering|
|Secretary of Agriculture||Tom Vilsack||Lawyering, politics|
|Secretary of Commerce||Judd Gregg||Lawyering, politics|
|Secretary of Defense||Robert Gates||CIA, MilInt|
|Secretary of Education||Arne Duncan||Education bureaucrat
|Secretary of Energy||Steven Chu||Research physicist,
|Secretary of Health
and Human Services
|Tom Daschle||MilInt, politics|
|Secretary of Homeland
|Janet Napolitano||Lawyering, politics|
|Secretary of Housing
|Shaun Donovan||Govt. bureaucrat|
|Secretary of the Interior||Ken Salazar||Lawyering, politics|
|Secretary of Labor||Hilda_Solis||Professional Hispanic|
|Secretary of State||Hillary Clinton||Politician's wife, Politician|
|Ray LaHood||High School teaching,
of the Treasury
diplomat, tax evader
Just look at those résumés! Military service is certainly honorable; Steven Chu seems to have added something to human understanding and capability; and I suppose there is some necessary number of lawyers, bureaucrats, and even politicians we have to put up with. (Though in these days of telecommuting, I don't see why they can't all be sequestered on one of the Aleutian Islands so we don't have to look at their sleek, smug, self-important faces.) Nobody in that list, though, not one, has any acquaintance with the production of wealth.
Our civilization rests on our having enough citizens possessed of the ability to turn a nickel into a dime, and a government that keeps out of the way while they do it. Nobody in Obama's cabinet has any idea how to turn nickels into dimes, least of all the Wealth-Eater-in-Chief.
In his autobiography, Obama described his one brief experience in the world of private enterprise as a sort of endurance test — a purgatory he had to suffer before ascending to the heaven of "community organizing." He felt, he tells us, "like a spy behind enemy lines."
Those private-sector money-grubbers, trying to squeeze some wealth out of a reluctant world — that's the enemy in Obama's universe. A friend would presumably be someone who squeezes wealth out of big litigation-whipped corporations, guilty white liberals, foundations taken over by leftist ideologues, and of course the ever-milkable taxpayer.
This is an administration of wealth-eaters and wealth-spenders, not wealth-creators. If you were to sit at Obama's cabinet table with all officers present and ask them where money comes from, they would reply in happy unison: "Why, from a government paycheck, of course! Everybody knows that!"
The grubby, demeaning work of pulling things out of the earth, or harvesting things grown on the earth's surface, or turning things into other things, or persuading people to buy things — all of that is mysterious to them, and they would prefer it to remain so.
We should, therefore, do well to heed the words of Arnold Kling:
Sooner or later the U.S. government is going to have to get serious about stripping the assets of those of us who have tried to live within our means. Sooner or later, the profligate are going to take from the prudent, the grasshopper is going to confiscate the property of the ants.
I feel sure the wealth-eaters — Obama and his pals — are furious with the productive working people of the country for somehow having fallen down on the job — the job, that is, of providing wealth-eaters with, as Sir Robert Walpole used to say, "enough pasture for all the sheep." We exist to feed them. Without the money they take from us, they will have nothing to eat.
Kling is undoubtedly right: When their fury abates, they will set about taking their revenge by robbing us blind, using all the force of law, all the power of the federal government, and all the gassy pseudo-inspirational rhetoric our Wealth-Eater-in-Chief can muster.
The circus is in town. Oh, the Inauguration. I watched it with horror and anguish. What a revolting, disgusting spectacle! What a shame and a disgrace to a free people!
This is the United States of America — a practical, commercial republic, with a modest-sized, parsimoniously-funded federal administration to oversee its necessary affairs. Well, that's what I thought it was when I immigrated to it.
Are people really taken in by the Dianafication of this Obama fellow, with his vapid grin, his meaningless rhetoric, his snarling wife, and his long — life-long — associations with crooks, thugs, terrorists, and crank ideologues? Heaven help us! Am I the only person who finds the Obama people, well … sinister. Not quite:
And in any case, it's not just about Barack Obama. Like [Tony] Blair, I'm sure he's a fantastic bloke. Looks great in a suit, fabbo teeth, wonderfully charming. But what about that ragbag — an inevitability with all left-liberal administrations, especially when they control both houses of Congress — of scuzzballs, communists, class warriors, eco-loons, thugs, malcontents, and single-issue rabble-rousers that will sweep into power on his back? They're the ones America really needs to worry about because they're the ones who'll be wreaking the most havoc while Obama stands in front masking their excesses with that reassuring "I'm not a socialist" smile.
That was James Delingpole in the London Spectator. He's absolutely right. The circus is in town.
Crisis in Japan. A friend who has lived for many years in Japan writes the following:
Japan is again dealing forthrightly with deep-seated social problems.
Last night, on the national NHK news broadcast, a major segment was devoted to this troubling issue: Kids in some schools are not finishing their lunches! In order to deal with this, one Tokyo ward has decided to lengthen the lunch period by 5 MINUTES! Obviously, this is a news story.
Needless to say, reporters and cameramen were on hand to record the epoch-making event, with close-ups of the food, a shot of the supervising teacher announcing to the kids that they had five more minutes, and even one student going back for seconds.
Never let it be said that the Japanese try to sweep gnawing social problems under the rug!
Teen thugs. Over there in the Mother Country, the British teen sociopath is very much alive and well. Look at these beauties (scroll down some), members of a Liverpool gang involved in the murder of an 11-year-old boy.
Low IQ seems to be a common denominator. Dean Kelly: "After dropping out of school with little [sic] prospects …" Nathan Quinn: "With a low IQ, Quinn was expelled from school …" Melvin Coy: "With low intelligence, he struggled at school …"
Here is Boy M, who at 16 is too young to be named:
Asked how he spent his days, he replied: "Just sit in my room — I have got an X-Box and Sky and a Playstation 2 so I've got three things to choose from. I play that all day then I go to bed and I get up the next morning and that's another day of my life gone."
Do you get the impression that a complex modern society really has no use for the bottom IQ quartile? And … they know it?
First Trentonian of 2009. First baby of the year in Trenton, NJ was Nah'sir Rayzohn Moore. Trentonians learned all about the event from their town newspaper, The Trentonian, which put it on the front page, together with a large color picture of little Nah'sir and his parents. Mom is 15 years old, Dad is 16. The Trentonian described them winsomely as "two teen lovebirds." Well, isn't that sweet.
I await reports of the father's arrest on charges of statutory rape. Meanwhile, I must get started on doing my taxes. Someone has to support this child for the next 18 years (at least). Hard to see how two schoolkids can do it, even if the rapist-Dad avoids jail time.
The apostrophe iceberg. And what's that apostrophe doing in the baby's name? Is it supposed to be pronounced — a glottal stop, perhaps? "Nah-[cough]-sir," like that? Or what? Over to the 15-year-old Mom: "I thought it would be interesting to put the apostrophe in the middle."
Interesting to whom? I'm obviously missing some big point here, but I don't find Nah'sir's apostrophe the least bit interesting, just annoying and dumb. And what's with "Rayzohn"? The Trentonian explains:
The middle name "Rayzohn" is a combination of Glenn's middle name and the first name of his late grandpa John. Glenn said it was his mom's idea to "get creative" by replacing the "J" with a "Z" — hence the name Rayzohn.
Why pick on the "J" to "get creative" with? Why not, say, the "o"? You could replace it with a "w" for a sort of Welsh look: "Rayjwhn." Or to make it meaner — hey, it's rough on the streets — you could throw in an umlaut: "Rayjöhn." There's the Jonathan Swift look: "Rayjyhn" (pronounced with a whinny).
A nice diphthong, perhaps: "Rayjeihn"? Or how about a ligature? I always think ligatures are kind of cool. "Rayjœhn" — now that's creative. I bet Glenn's Mom never thought of that!
Nah'sir's apostrophe is the tip of an apostrophe iceberg. My son's football league had their end-of-season breakfast on the 25th. Among the 344 juvenile footballers crammed into the grand ballroom of the local Marriott (along with 86 cheerleaders and a corresponding number of parents, coaches, and town notables), I noticed a couple of lads with apostrophes in their names: Ke'Aire and Taijee'.
That second name really got my attention. I found myself wondering, as the emcee worked his way doggedly down through the teams, handing a trophy to each player, how its genitive is formed. What should the trophy awarded to Taijee' be called? "Taijee''s trophy," with a double apostrophe?
And if 9-year-old Taijee' should, in the fullness of time — say, about seven years from now — be the proud father of a baby by some 15-year-old bobby-soxer, will he feel the urge to multiply the apostrophes in the infant's name? "Nah'qu'el" — something like that? One can only speculate.
Lady Luck. Now I have to tell you about the astounding run of luck I had at that breakfast.
There were, I suppose, about eight or nine hundred people in that hall at the Marriott. The organizers naturally wanted people to stay to the end, so they had some raffles. There was a big raffle with three prizes: first a plasma-screen TV, second a camcorder, third a $100 gift voucher. There were also lesser raffles: twenty-odd baskets of various kinds of goodies set out at the entrance, with a paper bag attached to each one so you could throw raffle tickets in for the baskets you liked.
Came time for the drawings, these lesser items were called first. Two or three baskets in, one of my tickets came up. I went up to collect it. As I did so, another one of my tickets was called. I staggered back to my table with two prize baskets, to much merriment from other parents. ("Hey, Derb, you got any stock tips?" etc., etc.)
Well, it turned out the second basket was a mistake — the caller had read the number of his ticket wrong. They reclaimed it. I didn't care, I still had a prize basket … and then another one of my numbers came up!
So now I really did have two prize baskets; or I would have, but the embarrassment was getting acute, so I went up and told the organizers to re-do that last call, give someone else a shot at a prize.
Lady Luck was determined to shine the light of her countenance on me, however. When time came for the Grand Prize drawings, I got the camcorder. Two prize baskets — darn near three — and a camcorder. Naturally, on the way home I stopped and bought a state lottery ticket for the January 28th drawing. Just as naturally, it was a dud.
Then, when we got home, perhaps feeling a little guilty about the lottery ticket, I went to my study and re-read the chapter on luck in Jason Slone's book Theological Incorrectness.
[W]e strive to gain as much control as possible over event outcomes, even in cases where our actual ability to control events is negligible. The desire to do so is nonetheless strong, and it surfaces in the notion that unlikely events have the hidden "cause" of luck. Once the cause of luck is postulated, we naturally feel we can influence that cause. Luck beliefs involve a transfer (violation) of expectations about psychological causality to mechanical causality. And, like other forms of supernatural belief, such thinking is a natural by-product of human cognition.
I don't read PCM much any more — only if I'm doing a browse at the magazine store in Penn Station while waiting for a train, or at a loose end in the library while waiting for some local event. I have fond memories of the mid-1980s version, though, when they used to give entire Assembler-language listings of handy little PC utilities. Back when PCs were fun …
This month's puzzle concerns the card game known as War. A reader tells me:
One night a friend and I decided to kill some time before dinner with a game of War. I won the game in one pass through the deck.
What is the probability of this? (Note: My reader was playing ace high, though it seems to me this doesn't make any difference.)