Things that Should NOT Be

Things that Should NOT Be

Manufactured scents are gross - laundry detergents, dishwasher detergents, dish soap, shampoo, hand soap, and maybe worst of all air "fresheners". They stink. They provoke allergic reactions in some people. They have no redeeming attributes.

Manufactured trans-fats, also known as (partially) hydrogenated oils, have been shown to be very unhealthy, associated with heart disease and strokes. There have been some trans-fat bans and a lot of companies have reduced or eliminated trans-fats in their products. It's time to make them illegal.

Touch screens in cars are a menace. They divert attention from driving. They are ergonomically horrible because you must look at the screen to operate it and transient vibration from the car can easily cause you to miss the desired button. There is no physical feedback and no good way to anchor your hand in preparation for a button press.

Air blower hand dryers are viciously loud and dry leaving whatever was in the water on your skin. Why do people use these? If there are no paper towels available or if I feel guilty about using them, I just use my shirt (cotton), the water is clean and evaporates quickly.

Tanning beds - no redeeming value and a significant health risk. Why do these exist? Why are they allowed to be used?

Shower control that only controls the hot/cold ratio. It is such a waste to not be able to control the amount of water.

Colgate toothpaste - have you ever tried to buy Colgate toothpaste? How did you choose which type? Ignoring kid's stuff and sensitivity reducing toothpastes we have - Baking Soda and Peroxide Whitening Bubbles, Baking Soda Whitening, Cavity Protection Enamel Health Whitening, Fluoride, MaxClean Smartfoam, MaxFresh Knockout, MaxFresh with Mini Breath Strips, Optic Express White, Optic White, Optic White High Impact White, Optic White Radiant, Optic White Stain Fighter, Optic White Stain-Less White, Sparkling White, Tartar Protection with Whitening, Total Advanced Deep Clean, Total Advanced Whitening, Total Clean in Between, Total Clean Mint, Total Daily Repair Toothpaste, Total Whitening, Triple Action and I'm sure that I missed a few. Do they want you to buy one of each and evaluate for yourself? If I want the whitest teeth possible, one of these should do - Optic White Radiant, Optic White High Impact White, or Sparkling White. But which one?

Thankfully the car makers have quit putting "wings" on family sedans. But they are now in a hotly contested race to see who can make the ugliest grill. Nissan, Honda, and Lexus, are currently tied for second and Toyota has taken the lead with two equally horrible grills for the regular and sport version of the Camry.

I'm sure that I have missed a few other things that should not be. Oh - SNOW IN APRIL.


Life as a Customer

Life as a Customer

A number of businesses have apparently decided that they don't want my business.

It appears that Google would prefer that I use Apple smartphones. Android 8, months into distribution is a mess. Poor feature decisions and apparent bugs keep making me wish for a return to Android 7. And the future direction (stupid features, more bugs, more change for the sake of change) is not to my tastes. Now, can I get my MP3s from Linux to an iPhone? Will Apple offend me more than Google? Or should I just go back to a flip phone?

I drove a Volvo S40 (compact based on the Ford Focus, from when Ford owned Volvo) for many years, happily. But no more small Volvo sedan for the US. I switched to Toyota.

Volkswagen - no more Sirocco in the US. Honda - no more CRX. Acura - no more Integra.

Near the end of a long trip in the Volvo, I stopped in a Shell gas station and tried to fill my gas tank. The pump produced no gasoline, so I went next door to Chevron and filled it. The next day my car started hesitating and was very low on power. Coincidence? I don't think so. I called and wrote letters to Shell and Chevron. They both refused to do any serious investigation or make any compensation. I spent about $800 for a new gas tank. I haven't purchased gasoline from Shell or Chevron since and I don't expect that I ever will.

Asics, New Balance, Nike, Saucony - all of these companies have a very bad habit of making a good shoe then replacing it with a vastly inferior shoe. They have all lost my business.

I wore Lee regular cut jeans for many years, maybe thirty. Then they changed the cut. No more Lee jeans.

I wanted a sofa with an external wood frame (like a futon) with a flat (not tilted) seat, replaceable cushions. And no folding mechanism - this always compromises rigidity. The wood frame is to reduce volume - the sofa sits in the middle of the small room and I don't want it to look huge. What did I find - NOTHING. Everyone sells the same designs. I gave up and made the sofa that I wanted. Along the way I smashed my arthritic toe by dropping the frame on it - missed the joint by about a half inch. And ruined three pairs of pants with varnish/stain.

I bought a BMW 328i, 2000. I was very happy with it for a couple of months. Then someone bashed the wing mirror. While replacing it the moisture barrier in the door was replaced improperly. The interior carpet became damp, without me noticing it. Then it started to smell of mildew. I finally noticed the water and took it in to be serviced. I think they fixed it. But a couple of years later, the window lift mechanism broke - they all eventually broke in this model. Again the moisture barrier replacement failed to keep out water. Repeated attempts at sealing were a failure. I blame BMW. Cars should be designed to be repaired. BMW - never again.


How to Choose a Mutual Fund

How to Choose a Mutual Fund

I have defined, in previous posts, various measures of mutual fund strategy and performance - yield, turnover, etc. This post is to get you to think about how to use these measures to choose a fund.

Turnover - I want low turnover. This indicates investing in a company rather than trading stocks. In addition, high turnover increases hidden trading costs. I try for less than 25%, i.e. on average each asset is held for four years.

Expense ratio - higher expense ratio does not buy you anything. If Vanguard can run a great fund like Wellington for .25%, it looks to me like anything above this is just profit for the mutual fund company. If you limit yourself to .25%, that will be Vanguard funds and index funds. If you want more choice, Dodge and Cox funds are close to .5%. Funds under 1% are common. Certainly do not accept anything above 1%, or maybe 1.5% for international funds.

Yield - this tells you how much dividend income the held stocks and bonds produce. I prefer companies that distribute dividends because that indicates to me that they are a money making enterprise. A lot of companies make no money and their stock price is based on speculation of future earnings - you can make or lose a lot of money on these.

Total assets - if a fund is too big, it is can be difficult to manage. This depends on the strategy. If a fund trades constantly, big is a disadvantage. If the pool of stocks in the fund's strategy is limited, big is a disadvantage. Large cap, balanced, worldwide, size is not generally a problem.

Past performance - I look at past performance, especially performance in down markets. This shows how well the chosen stocks and the fund strategy handles these situations. I do not care much about short term out-performance - this is likely luck. When looking at past performance, some web pages include reinvested distributions and some do not. Morningstar does. Yahoo does not, they only report share price. Beware.

And beyond measures - I prefer funds that are run by stable companies, with a management replacement strategy. Small mutual fund companies may have very good funds. But they may be bought by other companies looking to feed on their reputation or past performance. And their management replacement system may be sub par.

I like allocation (balanced) funds. They make life easier by keeping the stock/bond ratio constant (or as the management sees fit). And they have less volatility than pure stock funds. And I like global funds. There is a big economy outside the US and exposure to other currencies sounds good.

Yahoo does a good summary with expense ratio, turnover, yield, total assets. Morningstar has this buried in a sea of information that I don't care much about. Mutual Fund Observer ( www.mutualfundobserver.com ) has a good forum.

Some bond and balanced funds to look at (I no longer follow pure stock funds) -
  • US bond - dodix, lsbrx, vcorx
  • US balanced - dodbx, mapox, prwcx, vwelx, vwinx
  • global bond - lsglx
  • global balanced - rpgax, vgwix, vgwlx

Some stable, well run mutual fund companies -
  • Vanguard
  • Dodge and Cox
  • T. Rowe Price

On a related topic - don't take security lightly with your investments.

I once saw a financial knowledge test question - is it better to have all of your money in one brokerage or have it split in two at different brokerages? The answer was - makes no difference, but the second brokerage is a waste of effort, your assets are insured. I think that this is WRONG. If someone uses identity fraud to steal your money, having it at two different places with two different access methods can thwart half of the theft. You might recover the stolen money. But it might take months. If I see my money disappear from one brokerage, I will be on the phone to the other saying "LOCK MY ACCOUNT. NOW".


Android 8

Android 8

I upgraded my Google Nexus 5X to Android 8 a while ago. It now includes several updates and is at 8.1. What a mess.

Alarms go off late sometimes (I think mostly when the phone is in sleep mode).

SSHelper, a very useful app that runs a secure server, doesn't work. Apparently Android 8 aggressively shuts down background tasks to save battery power. Why doesn't it let me exempt programs?

And battery usage doesn't appear any different than with Android 7.

Sometimes, when I turn on my phone, it comes up in Google Play. Why?

Insets are a useless gimmick. It was so annoying with Maps that I had to disable it. (I do appreciate the disable option.)

I haven't found a good use for split screen, so that's a waste.

Dolphin browser, often leaves the keyboard on top of web pages, about 50% transparent. You can't get rid of it. I don't know if this is related to Android 8, but that's when it started doing this. I was using Dolphin because was dramatically faster than a previous version of Firefox. Chrome incorrectly renders some tables, making it useless for some web pages. Now it's back to Firefox.

I finally gave up waiting for Android Chrome to be fixed. The problem is multiple lines separated by line breaks in a table cell - these caused the font size to go crazy. I replaced the multiple lines with a single column table. Problem fixed. What a pain. I was set to start using Chrome. It has a new feature - a news feed on the home page. And an annoying tab menu. So I'm using Firefox, but my contra dance links work with Chrome now!

Of course they still haven't fixed the problem that when you use an app to turn off the screen, the fingerprint reader won't turn the phone back on. That started with Android 7.

There is no reasonable way to go back to 7.

I suggest another "law" related to computers (including phones, probably tablets but I have found no use for tablets), along the line of Moore's law about computer processing power. Every year, consumer operating systems add features and bugs/incompatibilities at about the same rate. This makes them less and less useful. Eventually they will all degrade to the point of being unable to handle basic features - screen, phone, internet. Then it's back to dedicated devices - flip phone, calculator, music player, ...


More Fun with Investing

More Fun with Investing

For an introduction, see my post on investing, from last week. This post will just be useful terms and concepts. It will not be an organized lesson in investing. Having just read and edited it, I must say it's pretty boring. But your financial future is at stake, so read on.


I hate to spend time on annuities because they are generally not good. But financial advisers will push them, so you might want to understand them.

An annuity is a contract where you give a big chunk of money to a financial firm and they promise to make regular payments to you until you die. This is like buying a pension.

There are different types of annuities -

  • "Fixed" these pay a fixed rate on the contract value.
  • "Variable" - the contract value is based on a basket of mutual funds chosen by the user.
  • "Indexed" - the contract value rises with, but not as fast as, a rising stock market.
  • "Immediate" - the payments start immediately.
  • "Deferred" - the contract starts as a pure investment and the payments begin when the user "annuitizes".

Sounds good, but you will generally hear these issues - the fees are high and obscure, you give up control over your investment, your money vanishes when you die (not that you will care, but others might).

If I've said anything that is incorrect, it is because I have no experience with annuities. Buy only from a fiduciary and read any contract carefully.


Types of bonds -

  • "Municipal" - issued by state and local governments, the interest is generally tax free, some are subject to the Alternative Minimum Tax (AMT).
  • "Government" -  issued by the federal government, the interest is generally tax free at the state and local level, but taxed by the IRS.
  • "Corporate" - issued by corporations, which may fail. Bond holders have first rights to corporate assets on corporate failure (unless our leaders decide to change the law retroactively, such as the General Motors failure during the housing crisis). The interest is taxed.
  • "Junk" - bonds from companies that have a questionable future, you get high interest rates in return for relatively high possibility of failure. Taxed interest.

If you have a lot of money, such that the income from AMT-free municipal bonds is all that you need, you can live tax free. A lot of people get upset when they hear that these rich people don't pay taxes. But in return, they are getting very low interest rates, and they are supporting government borrowing (which I get upset about).

Interest rates have been dropping since about 1980. This has given a nice boost to bond fund performance. But they can't go much lower and they are starting to creep up. Rising interest rates will hit bonds. See "duration" in my previous post. If you are looking for a safe place for money, THERE ISN'T ONE.

Mutual Funds

Mutual fund fees include a sales fee, called a load, (front end for type A shares, etc.), a management fee, and a 12b-1 fee (advertising fee). The 12b-1 fee and the management fee are included in the total expense ratio (ER). Earnings are reported after expenses have been deducted.

For load funds, the front end loads are absurd, usually 5% of your initial investment - avoid these funds. They are sold at full service brokerages, banks, and directly from some mutual fund companies. You will NOT get better fund management by paying a sales fee.

No load funds are available at discount brokerages (Fidelity, Schwab, etc.) and directly from some mutual fund companies. Discount brokerages charge a transaction fee on some no load funds, but this is about $50 for a purchase or sale. No transaction fee (NTF) funds at discount brokerages usually have higher expense ratios to help pay brokerage management costs.

Total expense ratios (ER) range from about .25% to 1.5%. That's how much of your fund is taken from you every year. There are two way to look at this fee - as a fraction of the total value of your investment it seem inocuous, but as a fraction of your earnings it can be very high. If a fund has a 1% ER and reports a 4% gain (after expenses are taken) in a given year, management has taken 20% (1/(4+1)) of the earnings. Another fund might have a .5% ER and make 4%. Here management has taken only 11% (.5/(4+.5)) of the earnings. But net to you it's the same 4% - earnings are reported after expenses are deducted. But the first fund has to earn 5% to report 4% earnings, the second fund just 4.5%. A lower expense ratio gives a better chance of making better earnings. And since you would ask if this were question and answer - higher expense ratios to not buy better management.

Vanguard has become the biggest mutual fund company in the US by offering very low ER index funds and actively managed funds. It is owned by its own mutual funds, so any profit goes back to the fund holders. If Vanguard has a fund that meets your needs, it is likely the lowest cost choice (for some index funds, maybe not, but very close).

Allocation to different market segments can be useful to diversify investments - large cap, medium cap, small cap - growth stocks, value stocks, - US, foreign - short term bonds, intermediate term bonds, long term bonds, junk bonds - stocks, bonds, real estate, precious metals. "Allocation" or "balanced" funds can help with this.

If you have decided on a balance of investments, stock to bonds or value to growth for example, you should maintain that balance by "rebalancing" regularly. This requires moving money from more successful investments to less successful investments. Not easy, but remember that may be moving money from volatile investments (stocks) to steady investments (bonds), or maybe from segments that have grown to segments that are poised for growth. Balanced or allocation funds handle this without intervention.

Mutual fund names - sometimes the names describe the fund, sometimes they don't. Be careful.

For actively managed mutual funds - past performance is not a good predictor of future performance. If the performance was due to strategy, structure, low fees, maybe. If it was due to a genius manager, maybe - the difference between genius and luck is hard to determine. If it was due to a genius manager who has been replaced - no. If it was due to cherry picked time frames - no. If it was due to fund merging with selective reporting - no.

Past analysis will tell you that you cannot successfully time investments in the stock market. You can put new money in the market immediately or "dollar cost average" it in, that is, put money in a little at a time, to prevent immediate loss due to a crash. Statistics show that the former method works better, but may be more psychologically stressful.

My suggestion - balanced/allocation mutual funds, US (DODBX, MAPOX, PRWCX, VWELX, VWINX for example) and global (RPGAX, VGWIX, VGWLX). Buy and hold - let the fund manager worry about navigating the financial markets. This is a conservative approach. If you are young, or need to build savings fast, or like to take risk, there are other approaches.

Stupid Stuff

Stock market changes are generally quoted in dollars. This is STUPID. What counts is percent change. The news keeps exclaiming how fast the $1000 marks keep coming for the Dow Jones Industrial 30 index. About ten years ago it was at $10000, a $1000 increase was 10%. Now it's at $25000, a $1000 increase is 4%.




The world of retirement has changed dramatically since I started my first job, at IBM. The plan in 1980 was spend a career at IBM and you will have a pension that will support you until you die. It turns out that that was not reality.

Defined benefit plans, also known as pensions, have given way to tax advantaged personal savings plans with employer assisted contributions (401K, 403B). A lot of people are unhappy with the loss of pensions but there are problems with pensions.

If you are in a pension plan - DO NOT count on it. The money is not in your hands - it is debt to you. And only part of this debt has been funded - the rest is just a promise. If your employer has money problems, your pension may not be there. Companies die, and that includes big companies that people thought would last forever. Companies and state and city governments over-promise, under-fund, and can't necessarily fulfill their obligations. If you are counting on the Pension Benefit Guarantee Corporation, it's nowhere near a 100% guarantee, and an economic crisis could wipe it out quickly.

If you are in a personal savings plan, you have advantages and disadvantages compared to a pension. The big advantage is that the money is in your hands, you own it, you have control (well, some control). The big disadvantage is you must take PERSONAL RESPONSIBILITY for it.

So what should you do? Save and invest. Mutual funds, pooled money investments in stocks, bonds, "precious" metals, are widely used and a moderately easy way to manage a diversified portfolio. But they are easily abused by financial advisers. You must understand them and take personal responsibility in their use.

At a MINIMUM, you need to understand the terms and concepts below. This will get you started, just barely. Look them up on Wikipedia or a book about investing. If learning about this stuff is abhorrent to you, just look up one term every week.
  • fiduciary - an adviser who puts your interests first - if you need an adviser, this is CRITICAL
  • stock - a share in ownership of a corporation
    • dividends - money paid to a company's shareholders, generally yearly
    • growth stock - growth stocks typically appreciate mostly by appreciation of the market share price
    • value stock - value stocks typically pay dividends that support their market share price and can be reinvested
  • bond - a debt note from a company that is generally paid at the date of maturity (can be traded like stocks at any time up to maturity)
    • duration - the time to maturity of a bond  (roughly the percent loss in value of a bond for a 1% rise in interest rates)
    • bond price versus yield - if interest rates go up the value of held bonds go down, so that similar bonds have essentially the same interest rate
  • mutual fund - pooled money invested in stocks, bonds, etc. - regulated by the US Securities and Exchange Commission
    • index fund - a mutual fund that tracks an index (as opposed to active management)
    • exchange traded fund - a mutual fund that trades on a stock market exchange
    • load - a sales fee on a mutual fund, in general AVOID these
    • no load mutual fund - a mutual fund that has no sales fee
    • expense ratio - the percentage of your mutual fund value that is charged as managing fee
    • turnover - the percentage of mutual fund assets that is sold and replaced each year (relates to how a fund is managed, tax efficiency)
    • assets - the total value of a mutual fund (relates to effective management)
    • capital gains - the appreciation in value of a mutual fund
    • distributions - monthly, quarterly, or yearly money paid from a mutual fund due to appreciation in value or dividends
    • reinvested distributions - distributions that are used to purchase more shares in the fund
    • average duration - the effective average time to maturity of the bonds in a fund  (roughly the percent loss in value of a bond fund for a 1% rise in interest rates)
Tax Advantaged Accounts
  • IRA - a retirement savings account funded generally with untaxed money, invested and appreciated money is not taxed until it is withdrawn
  • 401K - similar to an IRA but managed by an employer, often with some matching funds
  • 403B - similar to a 401K but managed by an public sector employer, but there are significant differences that need your attention
  • Roth versions of IRA, 401K, 403B - a retirement savings account funded with after-tax money, appreciated money is tax free
Investment Sectors
  • Dow Jones index - 30 huge US companies
  • S&P 500 index - 500 big US companies
  • Nasdaq index - tech companies
  • Russel 2000 index - small companies
  • AGG - aggregate bond exchange traded fund
  • EFA - Europe, Far East, Australia exchange traded fund
  • ICF - real estate exchange traded fund
  • GLD - gold exchange traded fund
There is free money to be claimed via employer matching contributions. There are efficient and inefficient tax strategies for your savings. There are severe penalties for not taking required minimum distributions from an IRA. There are multiple ways to give away money to advisers, money managers, stock brokers, and scam artists (this is not a desirable thing to do with your money).

I'm not saying that learning all of this is fun. I'm saying that if you don't handle your savings well, you will end up with much less savings. And I hate to see people throw away money that would make life easier.




Random thoughts about creativity, art, and invention.

Thinking outside the box - that's a nice phrase. If the box is well defined, it's probably there for a good reason, and thinking outside of it is not particularly useful.

Often, it's from the box that you don't recognize that you need to escape. You are limited by paradigms that are so internalized that you don't know that they are limiting you. Paradigms are very useful to help you manage in the world. But when you are trying to find new ways of doing things, they get in the way.

There are twelve tones in the even tempered Euclidean musical scales - A, A#, B, C, C#, D, D#, E, F, F#, G, G#. These correspond to frequencies ratios 2^(n/12). So the interval from one note to the same note, one octave up, is a double the frequency. A lot of the other tones work out to be close to a simple ratio of frequency, for example A-E, an interval know as a fifth has the ratio 2^(7/12) ~= 3/2. Tempering - adjusting the frequencies slightly - can improve the musicality. Using these twelve tones, you can construct many seven note scales that sound good, for example C,D,E,F,G,A,B is the "C major" scale. This is a paradigm that western music is built on. When more limited scales are used - five note scales (pentatonic), chosen from the seven - there is some nice music. When all twelve tones are used together, the "atonal" composers escape from the box, the music sounds TERRIBLE. There are other scale paradigms, I'm not familiar with them, I assume they can sound good or bad. The point is that paradigms/rules are there to limit bad things, but they sometimes limit good things too.

I have no love for visual art. I think that is because I haven't seen anything of human creation that is as good to look at as what is on display in nature. But I can respect visual art that shows creativity AND craftsmanship. Have an idea that you want to express, assemble a bunch of objects that other people have created? No thanks. Show some skill in creating the objects so that there is more to look at than the idea. Yes. Why? Because a multitude of people have already expressed that idea. To get my attention, you need to let me see originality in creating your expression of the idea.

Sometimes, brilliant ideas are a failure. That doesn't make the ideas worthless.

I first read about the Rolomite in Popular Science magazine maybe fifty years ago. Some considered it a new basic mechanical invention. Really neat idea. I'm not aware that it was ever used.

The Wankel, rotary internal combustion engine. No valves, no reciprocating pistons, compact, smooth. It worked well enough in real life for Mazda automobiles, until its odd combustion chamber with poor sealing caused it to lose to well developed piston engines for efficiency and emissions. Maybe future developments will fix these problems, but for now it can't compete. But it was a brilliant idea.

I watched The Apprentice on TV a lot (not the celebrity version, which is totally stupid). One of the contestants had an idea for the competition. No one else in the group offered anything. The group went forward with the idea. It failed. Trump fired the person who had the idea - "bad idea - you're fired" (to paraphrase). HUH? You fired the only one on the team that had an idea?

I hate the concept that being different is more important than beauty. That's the overwhelming trend in automobile styling. The result is overwhelming ugly. Maybe that's the concept behind atonal music too.

I can't remember where this conversation about new contra dances came from, but it went something like this - "95% of new dances are crap" response "95% of everything new is crap". Be thankful for the other five percent and keep trying.