Wednesday, December 31, 2008

Wait 'til Next Year (Cubs 101:1-165)

2009 is upon us, and I have to ask myself, "Is this really a new beginning?" We like to be neat about our life histories, and it always makes us feel good to have a fresh start. Why? Because if you start over fresh, you can stop worrying about the problems and difficulties you've had up to this point. Do it tomorrow; you've made enough mistakes today. The truth is that calendar years are convenient fictions. On New Year's Day, a forty-eight year old person born on January 1st could just as easily say, "Here I am at the 17532nd day of my life. What would be good to do today?"

The truth is that we are who and what we are because of all of our past learning and experiences, and that is what gives today its potential for being something special for us. When we feel pleased that we are starting fresh, we are really trying to sweep the past under the rug, and that is a mistake. Each person's life builds on the experiences and values of those who have gone before him or her. What you should do with 2009 is to live it in a way that adds to your values in order to further grow your personal, family, and religious traditions. If you really started over anew, you would be like a tree that had no roots.

The Cubs are who they are in the Friendly Confines because they have learned to cherish their roots. Maybe this year they'll learn how to make those roots sprout.

Saturday, December 6, 2008

Shameless Commercial

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Monday, December 1, 2008

The Star Power Economy

Barack Obama has not yet been sworn in as President, but he has already had a positive impact on the economy. Right after he won the election, newspapers issued commemorative sections, and those sections plus the banner headline editions as Obama declared victory sold out quickly. The newspapers printed additional commemorative runs of the special papers and sold more copies than they had in years. Newspapers qualify as collectible pieces of history, but Internet printouts don't. Commemorative coins, newspaper headline collages, Obama plates and pottery are all big sellers and future eBay features. All of the money being spent on trips to Washington for the inauguration plus housing, meals, and purchases while there are going to be just as significant for the economy as Christmas shopping. I doubt that people will be as enthusiastic about saving souvenirs of the new cabinet appointees, but if they at least think that these people have the qualifications to make a difference, they also will have fan clubs that will help us to turn the psychology of the markets around. Negative thinking is a self-fulfilling prophecy, but get enough positive "vibes" going, and the economic outlook can be self-fulfilling in a positive direction - at least until the new administration is actually installed and starts to be judged by its accomplishments and not by its star power.

Tuesday, November 18, 2008

Consumer Good News and Bad News

The good news is that gasoline prices are (pardon the pun) tanking. Every day I see the prices at the gas stations going down by a few cents. The reason for this is that when prices rose to well over $4.00 per gallon, we finally changed our driving habits. Going for a long drive became a luxury instead of merely normal. The American public collectively drove many billions of miles less than previously every single month. This, plus a shrinking economy, left too much gasoline waiting to be sold and too few buyers willing to consume it. If we keep up our new habits prices will stay low. Drive less, and don't think that as prices go down it again becomes OK to drive a gas guzzler. Continue to economize and look at better efficiency cars when it becomes time to replace yours.

The bad news is that with the economy and the stock market in a downturn, retailers are finding fewer people going through their checkout lanes. Many stores and restaurants are facing the prospect of going out of business. In this kind of economy, the best thing we can do is to keep buying, but only buy things that are good values. You will find many bargains out there as sellers become desperate. Take advantage of these to get good values for yourself and also to help support the merchants. We want them to stay in business if they are viable. Keeping stores in business preserves jobs and maintains a high level of competition between the sellers for your business. When sellers compete you get good value for your money. When some sellers go out of business, there is less competition for your business, and prices go up because you have fewer places to shop.

Tuesday, November 11, 2008

Post-Election Limerick P

Alaska Governor Palin
Thought that she'd have easy sailin'.
But some bad interviews
And too many bought shoes
Left her after the vote, sadly trailin'.

Post-Election Limerick M

That distinguished hero, McCain
Started out speaking words that were plain.
When he changed them to rancor,
It hurt like a canker,
And caused many voters to refrain.

Post-Election Limerick B

Well-versed Senator Joe Biden
Spoke some words that he should have been hidin'.
Though he traveled the south
With his foot in his mouth,
To the VP's big office he's ridin'.

Post-Election Limerick O

There was a young man named Obama
Who always debated much calmer.
He pulled out the race
With a smile on his face,
and a loving goodbye to Grandmama.

Friday, October 17, 2008

Save That Old TV Set

The government is bombarding us with information about the transition of broadcast TV signals from analog to digital in February, 2009. They and all of the broadcast TV channels are saying that if you receive your TV signal via an antenna, you will need to purchase a digital convertor box to continue to receive broadcast TV signals on older analog receivers. This information is absolutely correct, but it implies that your older TV sets without the convertor box will be useless. This part is incorrect. Analog TV sets without the convertor box will still work fine for wired applications such as playing back your video tapes and DVDs. They can also be retained in case you want to someday connect to cable TV networks. They are useful if you want to play back tapes from your camcorder or digital camera. They can even be connected to your computer for larger screen photo and movie displays if your computer has a video output. Older TV sets will be especially useful for permanent setups of video games. Updating to digital and high-definition TV receivers is fine, but don't face those high costs until you feel you are ready for them. You don't have to panic and spend a lot of money replacing all of your equipment. THEY ALSO DON'T TELL YOU THAT THE MOST CRITICAL COMPONENT IN THE CONVERSION TO BROADCAST DIGITAL TV IS YOUR ANTENNA. A weak analog TV signal will give you a snowy or wavy picture. A weak digital TV signal will give you hesitating freeze-frame pictures or a blank screen. With digital signals the picture is either very good or it isn't there at all, and you won't know whether your antenna is good enough until you actually try it.

Friday, October 10, 2008

Stop It Right Now!

Remember the old saying, "Nero fiddled while Rome burned"? The same thing is happening right now, and I'm getting pretty tired of it. Our beloved presidential candidates are throwing character assassination brickbats at each other while our economy and the economies of the rest of the world are falling apart. If you have answers for our problems, tell us. If you are going to behave like nasty little kids, do it somewhere offstage, because we don't want to hear about it. There are serious problems, and the American people want to know what you have to contribute to their solution...Lead, Follow, or Get out of the way!

Thursday, September 25, 2008

What If?

What if lenders were required to submit loan analysis forms showing a reasonable probability of repayment to a regulating or insuring agency before issuing mortgage loans? (or at least a computerized go/no-go program to minimize feedback delays)?

What if the government had been willing to invest even half of the proposed bailout amount into infrastructure improvements so that more people had jobs and the wherewithall to repay their loans (Does anyone remember Keynesian economics?)?

What if the government encouraged people to Buy American so that more of our capital and jobs stayed here and the dollar was worth more?

What if the government encouraged people to save money in the banking system by not taxing interest on savings accounts?

What if business management salaries were pegged to results in both directions so that they went down when the business did poorly as well as going up on increased profits?

What if U.S. imports carried higher duties that could be partially offset by purchases of our exports?

What if non-emergency government spending was required by law to be balanced by corresponding income?

What if banking and credit companies were legally barred from having fees and penalties that were not openly shown in the LARGE PRINT and proportional only to the amount of money specifically involved in the case of late amounts?

What if companies and banks could not disclose your personal information to others unless you specifically allowed them to (Opt IN, rather than Opt OUT)?

What if automobile companies could not promote "Flex-Fuel" or natural gas vehicles in any area where the alternate fuel was not readily available for purchase?

What if we all had to avoid complaining for at least one day per week (You would live longer.)?

Wednesday, September 17, 2008

Thousand Pound Gorillas

Everybody treads very carefully when there is a thousand pound Gorilla in the room. Then there is the other old saying: When you owe the bank one thousand dollars, you lose sleep over it. When you owe the bank one million dollars, the banker loses sleep over it! Both of these sayings are pertinent to the current financial mess with the government bailing out one huge failing financial firm after another. The Feds are afraid of the large number of investors [Read "voters"] who will have their savings or investments wiped out if the huge financial firms are allowed to fail. Don't forget that we all will have to pay the bill in taxes and/or inflation for these bailouts. When Enron went under because of manipulation and unethical practices, the government didn't step in. I personally lost a bunch on that one because my stock in Portland General Electric had become Enron stock when "Big E" took over that utility. It hurt, but life went on, and investors in Enron learned a hard lesson. If huge financial firms are so greedy that they follow unsound business practices to make a quick profit, they deserve to fail, and the government shouldn't prop them up so that they can do more stupid things in the future. Financial firms like all of the rest of us have to learn that if the potential profits of an undertaking or investment sound too good to be true, they usually are. Too many people were willing to loan money to people and firms that could not realistically be expected to pay it back. Then they acted surprised when those people had to default on their loans. What ever happened to financial analysis?

Tuesday, September 9, 2008

September Should be Two Months Long

Here we are again in September, the busiest and most promising month of the year. This is the month when the hot weather of summer gives way to a period when you can comfortably catch up with all of those chores and home improvements that you would like to get done before winter. Unfortunately, it is also the month when students have to get back into the school groove. Politicians are panicking because there isn't much time before the general election. Baseball teams are in the home stretch while football teams are just beginning to play "real games that count". The month is full of birthdays of babies conceived on New Years Eve or in the depth of winter. This is the month that is the beginning of the academic year, and as such is full of promise like all beginnings. Plan-ahead types are starting to do their Christmas shopping, and many stores are enticing them with displays of Christmas decorations long before we have come to Halloween or Thanksgiving. Churches are having "Rally Days" to attract worshippers and Sunday Schoolers back after summer vacations. Business Management is relieved because they got through the short-handedness of summer vacations. People are looking forward to fall foliage, but not to preparations for the cold winter ahead. Final fall weekend trips are in the planning stages. Car dealers are trying to sell off the old models before the new ones fill their showrooms. And I'm trying to finish off my first mystery novel manuscript before starting the sequel...Viva September!

Wednesday, August 20, 2008

Mystery People

Within a very short time the presidential race will move into its next stage with the naming of the two vice-presidential candidates. Obama is expected to announce his running mate by Saturday of this week in order to have everything in place for next week's Democratic convention. McCain will follow shortly afterward in order to take some of the press coverage away from the Democrats and their convention. Right now, the favorite media sport is speculating on the VP candidates. The press is narrowing in on three possibilities for the Democrats and three or four for the Republicans. Frankly, I would like the answer to be "None of the above" for this one, both because the people touted by the press are far from capable of shifting the campaigns into higher gears (and who needs more of the same?), and because I would like to see the presidential candidates outsmart the press. At this point I'm hoping that we're in for a pair of surprises...but maybe not of the Dan Quayle type.

Wednesday, August 13, 2008

Gas Saving Tip

Here's a simple tip for reducing the amount of gasoline(petrol) you use. When you refuel, fill up your tank or purchase a constant number of gallons(litres) so that you know the amount of fuel you have to begin with. Before you leave the pump, reset your trip odometer to zero. When you do this, you will always know the number of miles(km) you have driven since your last refueling. Then remain conscious of the distance you have driven by watching the miles(km) on the trip odometer accumulate. You will find yourself reducing unnecessary trips to slow down the increase in the displayed number, and you will also soon learn how many miles(km) you can expect on your fill-up or constant amount of fuel purchased. This will tell you at any time what percentage of the way to your next refueling you are. Drive so as to maximize the time to your next refueling, and you will purchase less fuel and save money.

Wednesday, August 6, 2008

The Year of the Veep?

The race for president is tightening up, and both sides need something that will generate a boost in the poll ratings and in voter interest. John McCain has succeeded in turning the media's attention to nitty-gritty details as opposed to Obama's long-term "Change" philosophy. They also both have potential liability aspects as voters weigh the impact of age and race on their decisions. The key to victory in this election may well be the identities of the two VP candidates. Each presidential candidate needs to choose someone who will: enhance their combined impact and stature (1+1=3); bring additional votes to the ticket that would not be likely for the presidential candidate alone; give geographic and/or demographic nationwide appeal to the ticket; and offset one or more perceived weaknesses of the top candidate. The selection of VP candidates who cover all of these criteria will be very difficult, but it very well may be critical to the results of the general election and to the perception of the electorate of the worth of each party's ticket. There have been several elections when I voted one way or the other because of my feelings for the vice-presidential candidate, and one or two where I wished the VP candidate was the one running for president. This year the election is going to be extremely close, and the VP candidates may make the difference. I also think that this year's election competition will go right down to the wire and will feature some high-impact last-minute surprises.

Saturday, July 26, 2008

Gas Prices Going Down - Is That Good or Bad News?

To most of us the change to a recent downward trend in gasoline prices is great news. However, given the fickle nature of overconsumers and automobile companies, it may not be. How many times have the automobile companies learned that the long-term trend in fuel prices is violently upward, only to go for short-term profits with huge SUVs and high-power engines? How many times have high-income status seekers complained about gasoline prices and then bought those short-term-profit gas guzzlers to maintain their status and keep gas prices high for the rest of us?
Gas prices have started to go down for two reasons, and if we concentrate on those reasons, prices will continue to go down. The most basic reason is that $4.00-plus gasoline (Europeans, stop laughing. We know and appreciate that yours is much higher.) finally encouraged most drivers to cut back on the number of miles that they drive. If you continually evaluate whether a trip is necessary, run several errands in tandem, and drive your car that gets the best gas mileage, total demand for gasoline will decrease as will prices. The other reason for prices going down is that investors, seeing a slight upward direction to stock prices are starting to switch from driving up the market price for oil to investing again in stocks as a better long-term alternative. The problem with driving up the price for oil as an investment is that the resulting high-priced energy drives down all of your other investments, and you end up shooting yourself in the foot (Which you will need after high energy prices make us all walk or ride bicycles.). Of course, increased walking and/or riding bicycles will both decrease the number of total miles driven and start to make us physically fit again, so it's a win-win situation.

Wednesday, July 16, 2008

Save the Economy - Bring Back the Shmoo?

Al Capp, the ingenious creator of the "Li'l Abner" comic strip solved our economic problems in the late 1940's with his introduction of the Shmoo. The Shmoo was a cute pear-shaped creature which would do anything to make people happy. (Click on the title of this post for more Shmoo info.) It would lay eggs and milk, turn itself into a sizzling steak, or serve as a toy for young children. In today's world, I'm sure a Shmoo would be more than happy to become a tankful of gasoline. Shmoos multiplied at an alarming rate, so there was never a lack of Schmoos waiting to please you in some way. Sounds great, doesn't it? The problem is that we get lazy when everything is done for us, and we lose our capability to solve problems on our own. When times are good, we are more than willing to coast and accept things the way they are. Only in hard times do we maximize our resources and turn them toward solving the problems we face. Sometimes we have to take the doom and gloom out of bad news in order to look at it as an opportunity to solve some problems. Progress comes out of adversity. Fifty years from now when we are driving around in our magnetically levitated fuel cell powered two-passenger vehicles with modular storage add-ons, we will appreciate the incentive that we gained from high-priced gasoline. In the meantime, drive less, carpool, and be a Shmoo to all of your friends. (And don't misspell the word to be ornery...)

Friday, July 11, 2008

Make Her Happy

I saw a billboard today from a jewelry store which showed a woman with a big smile on her face and had the caption, "Make her happy". My first question was whether you can really buy a woman's happiness with a glittery piece of jewelry that has no function (unless you want to cut a piece of glass). This triggered my second question: Why do advertisers try to sell things to make women happy while they never advertise about happiness as a goal when they are selling things to men? If men and women are supposed to be treated equally, how did happiness get to be more of a feminine goal than a masculine one? Can you buy happiness at all? Perhaps the problem is that advertisers are not talking about true happiness. It is even possible that men and women have different interpretations of what happiness is, and they may not even realize when they have achieved it because of a deficient contentment gene. I guess our forefathers (and foremothers) were right in setting the official goal as the "pursuit of happiness". If at first you don't succeed, try, try again...

Wednesday, July 2, 2008

Restaurant Pricing

Did you ever notice that when you go to a restaurant the bill is roughly constant? My wife and I tend to go to moderate family restaurants, and the bill is almost always about $20.00 for the two of us before tax and tip. Restaurants of all types design their menus around the amount of money they wish to receive from each customer. In a typical family restaurant where we live, you can purchase an egg/pancake dish for $7.95, a sandwich plate for $7.95, or a dinner special for $7.95. To be sure, you can shave the price slightly by ordering only one egg or get a better dinner for a few dollars more. In addition, the pricing is biased by whether you order drinks, side dishes, or desserts, which are higher profit items.

Restaurants today are businesses which happen to serve food as their product, rather than hospitality centers where the main goal is to impress the guest with the quality of the food and service. The primary approach is to attract and process through as many customers as possible at a certain average dollar value per customer. This is usually done by compressing the range of prices on the menu as discussed above and by streamlining the process in order to get as many customers as possible through in a given period of time. The latter approach is the fast food philosophy.

It will be interesting to see whether the restaurant business starts to introduce some cost-reduction innovations now that gasoline prices are getting higher every day. The easiest way to compensate for the higher cost of gasoline is to eat at home, saving both the costs of driving and of the restaurant. Some restaurants are now packaging menu items as frozen entrees that you can purchase at the supermarket and eat at home. Is this the best of both worlds?

Monday, June 30, 2008

Transportation and Communication

Two sectors of the economy that are usually mentioned in a single sentence are transportation and communication. They are the twin facilitators that make the difference between living in a worldwide economy and living in a purely local economy. The latter situation was common and normal in the nineteenth century and earlier, and people lived their lives at a slower pace because of it. With the advent of accelerated oil pricing increases, whether due to shortages, increased demand, speculation, hedging, or sinister plots, we have to try to decrease our oil requirements by emphasizing communication over transportation. Fortunately, computers and the internet have been moving in the correct direction for this increased reliance on communication. It is much easier, quicker, and less expensive to keep in touch with people by e-mail than it is with postal mail. I have been involved with international commerce for many years with only a minimum of international travel. With the developing capability for video links and electronic conferencing who wouldn't prefer efficient communication over waiting in airports due to delayed and cancelled flights. A major tool for offsetting increased transportation costs definitely lies in improved communication, and we should all try to emphasize moving thoughts and words rather than bodies and physical objects whenever possible...Now if we could only do something about spam and telemarketing from the other side of the world, we'd really be doing a better job of communicating.

Friday, May 30, 2008

What Are You Doing? Nothing...

This blog, my book, and a lot of my writing is about making decisions as you go through your day-to-day journey through life. It is a blessing that on some of those days you won't have to make significant decisions. Every once in a while it is great just to coast for a while. People think of such times as coming when you are on vacation, but I find that the planning of a vacation frequently requires more decisions than you have when you are in "home" mode. It's not a matter of goofing off. It's more a sense of staying within the "comfort zone" that we all establish through routine and repetition of activities at which we have achieved a good level of capability.
This is all part of the slower pace of life that our society used to have. Even if your normal day is a complete rat-race, you should periodically do nothing, smell the flowers, or read for the sake of reading rather than achieving - just to prove that you still can. If you can't relax enough to do nothing, you may have a problem.

Wednesday, May 21, 2008

Ways to Reduce Your Gasoline Costs

In these days of extremely high gas prices you have to think about your car and your driving habits to save gasoline:

1. Fill gas tank halfway only. – Reduce the weight the car carries.
2. Combine your short errand trips. – Don’t make a single errand and return.
3. Design your route to maximize right turns. – Left turns take waiting and extra gas.
4. Keep your tire pressures up. – Less tire wear and better mileage.
5. Fill tires with nitrogen instead of air. – Maintains tire pressure longer.
6. Turn off engine if idling longer than 30 seconds – IF car is in good shape to restart engine.
7. Park in lot to pull out forward if possible. - Backing and maneuvering take extra gas.
8. Reduce the load in your trunk. – Extra weight requires extra gas.
9. Keep your car clean. – A smooth surface has less drag.
10. Telephone or e-mail rather than driving. – Reduce trips to reduce gas.
11. Move closer to your work to reduce commuting miles.
12. Carpool whenever possible.
13. Take public transportation whenever possible and practical.
14. Buy the lowest grade of gasoline that matches your car’s specifications.
15. Change your oil regularly and maintain oil levels.
16. Use synthetic oil for better lubrication.
17. If you have two cars, use the higher mpg car for long trips.
18. Schedule meetings near the midway geographical point among participants to reduce average travel mileage.
19. Use conference phone calls rather than having meetings.
20. Shop locally.
21. When you have alternate possible places to shop go to the nearest one.
22. Monitor prices and go to the gas station with lowest prices that is within a reasonable travel distance.
23. Reduce eating out. – This saves mileage and reduces your restaurant budget to increase your gas budget.
24. Ride a bike or walk for local trips.
25. Ask yourself, “Is this trip necessary?” – If not, don’t go.
26. Mow your lawn with an electric lawn mower.
27. Keep your car tuned and serviced properly.
28. Slow down approaching red lights. Time your approach to eliminate or reduce complete stops.
29. Use only moderate acceleration. Maximum acceleration wastes gas.
30. Take turns smoothly. Tight turns and stops/starts on turn waste gas and increase tire wear.
31. Cruise at 55 mph on highways. Higher speeds waste gas.
32. Try to maintain constant or slowly changing speeds whether local or distance driving.
33. Shop online or by catalog rather than by car.
34. Use online banking when practical.
35. Don’t idle your car for a long time to warm it up. – Start up and go.
36. Drive in dry rather than wet weather when possible. – Rain causes extra drag and worse friction control between tires and pavement. (same for ice/snow)
37. Don’t use drive-up lanes at fast food restaurants, banks, etc. – Too much idling.
38. Plan your trip to take bridges and underpasses where possible to avoid possible long waits at train crossings.
39. Use limited-access highways rather than local roads to maintain cruising speed and avoid multiple stops at traffic lights.
40. Avoid construction zones.
41. Get an I-Pass (EZ-Pass, etc.) when traveling toll roads to pay your tolls without stopping and waiting in line.
42. Put outgoing mail in your home mailbox for the mail carrier to pick up rather than taking it to a public mailbox or the post office.
43. Walk rather than drive your child to and from school or the school bus stop.
44. Don’t use your air conditioner unless you really need it. If you do use it, set the controls to recirculate the air inside the car. This will mean that the air conditioner cools air that has already been cooled, which uses less energy than cooling hot outside air.
45. Watch your tachometer to keep your rpm’s fairly constant. Generally, cruise rpm’s should be in the 1500 to 2000 range. If you are trying to save gas, they should never be much higher.
46. Use tires designed for highway driving rather than off-road tire types or snow tires (except when required for the conditions you are facing).
47. Avoid bumpy roads and potholed surfaces. – Your car can’t get good mileage if the tires are not in continuous contact with the road.

Sunday, May 11, 2008

Gas Prices and Improved Cars

As the price of gasoline continues to rise, many people start to think about trading in their existing car for one that goes more miles per gallon of gas. When you do get such thoughts, make sure you look at the actual mathematics of the gas cost vs. car cost situation. Assume you are an average driver who might drive 12,000 miles per year. If you are consciously trying to limit your driving miles by such tricks as making many planned stops on a single trip rather than taking many individual trips, 12,000 miles per year is quite reasonable. Assume that your current car goes 20 miles per gallon of gas. If we assume that gas soars to a price of $5.00 per gallon, you would use 600 gallons per year for a cost of $3,000 per year. If you were able to trade in your car for one that has double the fuel economy, that goes 40 miles per gallon of gas, your annual gas cost would drop from $3,000 to $1,500. That's a good bit of savings. Now if you are going to keep your new car for five years, you have to find a new car that you can buy for the five-year savings, or $7,500 in order to spend the same for gasoline plus car costs as you would by continuing to drive your old car. Go ahead, enjoy your $7,500 new car if you can find it. If you want to pay even less than you are now paying, your new car would have to have an even lower price...And don't forget, this calculation was based on $5.00 per gallon gasoline. Perhaps "rusty but trusty" is the better solution until your current car has to be replaced for functional reasons.

Sunday, April 27, 2008

Merger Report

There's a recent merger in my town which might merit attention. The oldest funeral home has merged with a bank. Right now they are in the process of remodeling the funeral home to be the latest in modern suburban banking. The reason this merger is worthy of note is that it may signal the change that everyone has been seeking for a long time: You can take it with you!

Monday, April 14, 2008

How Many Robins?

I have a bird feeder which I fill with the usual wild bird seed mixture. I do confess that I tend to fill it in good weather rather than in the middle of a snowy winter when the birds really need it. Anyway, it is a rite of spring to get some seed mix into the bird feeder and watch for the birds to come back to my yard after the winter. I'm sure that many of you do the same thing. I don't talk to the birds, but sometimes I bet on them. Right now I am ready to bet on the number of robins that will eat at my bird feeder today. My bet is zero. The reason is that robins don't eat grain; they very capably find and eat worms. They are meat eaters. (Just as there were diet differences among the different types of dinosaurs that were ancestors of the birds.) The point of this discussion is not to show what I know about birds but to remind you that in placing any bet or making any decision you will have better chance of success if you bet on something for which you have prior knowledge. It is always better to own stocks of companies for which you know something about their businesses rather than companies that you know by name only. Likewise, you are better off starting up a company in a field in which you have worked or which you have studied rather than a business which sounds interesting but about which you know nothing. Knowledge is power, and that's why you hear the expression, "The smart money is betting on ______."

Friday, April 11, 2008

Figures Can Lie and Liars Can Figure

Every time you read an article about the forever ongoing presidential election campaign you see citations of statistics from the latest polls. Always remember to take these with a bit of scepticism, even when they show the result you prefer. If I were taking a poll of these matters, I could get totally different results from the same group of people if I simply changed the wording of my questions. For instance, "How troubling will Bill Clinton's presence in a new Clinton White House be for Hillary?" will lead to a totally different result from "Does Hillary Clinton have a great advantage because of Bill being with her in a new Clinton White House?" Similarly, "Does Barack Obama's having lived among people of many ethnic and national backgrounds give him an edge in understanding people from other countries?" will yield a different result from "Do you consider Barack Obama's limited experience in international negotiation meetings a liability?" Going to John McCain, you could ask "Do you think that John McCain's willingness to disagree with George Bush about tactics and spending shows that he would be an independent-minded President?" or you could ask "Do you think that John McCain's continued support of the Iraq war shows that his presidency would be more of the Stay the course mentality?"

Always remember to read the questions (if they even show them) when you examine poll results. In addition, you should look at as many polls as possible, and average the results to get more realistic figures.

Tuesday, April 8, 2008

Playing in the Mud

Once upon a time there were three kids playing in the mud at day camp. While they were having a break for milk and cookies, their counselor, George, asked them what they wanted to do when they grew up. John said, "I want to be just like you, George, and defend little kids from evil gangs." Barack said, "I want to change the world so that everyone will have an equal chance and there will be no acceptance of evil gangs." Hillary said, "I'm just going to keep playing in the mud forever."

Wednesday, March 26, 2008

Original Factory Specifications

I had my eight year old car in to the dealer's service department to repair a couple of things that had worn out. Before doing the repairs, the service manager had the technician thoroughly check out the car, and then the manager came out to me with an estimate of what it would cost to perform the suggested service jobs. The list of things that they proposed to do were aimed at restoring the car to "original factory specifications". It would have cost me thousands of dollars to do all that work, and isn't it just a bit unrealistic to think that you could restore an eight year old car to its original condition? I ended up having the service department do the jobs for which I had originally come to them. Extrapolating from this situation a little bit, how would you react if you went for your annual physical exam, and the doctor told you that they could restore you to original factory specifications if you would undergo a series of operations which the insurance company would not cover? Would you say that it was worth all of your savings to get you back into better shape with less apparent age despite the risks of those operations? Would you as in the automobile analogy just get the required work done and try to age gracefully? Would you just laugh when the doctor offered you the possibility of original condition? What would be the social effects on your life if you had all of that work done? Interesting to think about...

Thursday, March 20, 2008

Economic Security or Temptation Toward Problems?

I heard a financial advisor on television say that the first thing you should do to guard against financial problems is to set up a line of credit against the equity you have in your home. She said that you don't have to borrow against your home equity unless you have to, but that this step would give you instant access to capital when you needed it. Frankly, this advice made me feel very uneasy. If you are in a position where it is at all likely that you will need capital, this approach will keep dangling the temptation in front of you to borrow and maintain a rich lifestyle. If you want to plan ahead against possible financial adversity, you are better off to learn how to trim your lifestyle so that it doesn't take as much capital to sustain it. If you start borrowing even a little against the equity you have in your home, especially in an economy that is tending to reduce the value of that home, then you are going to be tempted to do it again the next time you need a little cash. The commentator said that borrowing against your home equity line of credit is as easy as using a credit card. That is exactly the problem. The banks and mortgage holders make it easy because they want you to borrow. It tends to be a one-way street of borrowing more and more and not paying anything back beyond the interest, of which there will be plenty. Has anyone else noticed that the Fed has been reducing interest rates while the credit card companies have either left them the same or found more reasons to increase interest rates whenever you get into a technically incorrect position? Now is the time to learn how to reduce your spending in step with the reductions in the economy. Now is not the time to set yourself up to be tempted to borrow more and more.

Monday, March 17, 2008

Old Irish Saying

There's an old Irish saying that goes something like this:

You either have good health or bad health.
If you have good health, there's no need to worry.
If you have bad health, you'll either get better or worse.
If you get better, there's no need to worry.
If you get worse, you'll either live or die.
If you live, there's no need to worry.
If you die, you'll either go to heaven or hell.
If you go to heaven, there's no need to worry.
If you go to hell, you will meet all of your old friends and relatives there.
So, why worry?

Worrying never solves anything. It just gets in the way of thinking clearly as you go through the process of making new decisions.

Friday, March 14, 2008

Routines Are Important to Efficient & Enjoyable Living (from DECISION TIME! Better Decisions for a Better Life)

As an example (of the use of routine), when you first learn to drive you devote a great deal of concentration to the mechanical steps of operating an automobile: shifting, steering, peddle pressures, instrument panel control positions, etc. Once you have become an accomplished driver, those mechanical operation decisions are handled subconsciously, allowing you to devote your conscious attention to more important matters like safety and navigating to your destination. Routines allow you to handle the many minimal decisions of each day on a subconscious level. Rules also eliminate individual decisions on small matters. For example, traffic lights eliminate large numbers of repetitious decisions as to which car should proceed first at an intersection.

Tuesday, March 11, 2008

The Future Belongs to Those Still Willing to Get Their Hands Dirty.

Once upon a time there was a country so ingenious and tied into the work ethic that when aggressors were inundating the world with warfare, this country within just a few years manufactured enough advanced equipment to turn the tide and restore peace. This happened right after that same country's economy went through a depression during which all that latent capability had nothing to do, and many people were out of work and struggling to survive. After that big war the people of this country said they wanted to never be poor again, so they surrounded themselves with fancy material things they had learned how to manufacture. Later they said that they could be even richer and could better forget that past depression if they just did clean service work and let other countries do the dirty work for them. So the ingenious country taught lots of other countries how to make things for them and told their industrial people to do clean service jobs. Time passed, and the people of the ingenious country were content with using their service profits to buy many neat things from countries they had taught to supply them. This worked well until they learned that in a world unified by computers and communications, other countries could do the service jobs too. And when the people of the ingenious country tried to go back to making their own products, they learned that they no longer had up-to-date capabilities, and that they had convinced themselves that products made by others were better. So the ingenious country headed once more for a depression because it had very little to sell that others wanted, and it sent most of its money to others for the things it thought it needed. The moral of the story: 1. Capabilities and their continuous further development are far more important than short term rewards. 2. Assets that are squandered are no longer assets. 3. What you know trumps what you have in the long run.

Friday, March 7, 2008

John McCain's Campaign Loves Hillary Clinton

The old adage goes "You can't have your cake and eat it too." Someone should mention this to Hillary Clinton. She's getting meaner and more adversarial toward Barack Obama while at the same time saying it would be great if they were running mates for President and Vice President. The first translation of those comments is that it would be nice to be running mates so long as it would be Hillary for President and Barack for Vice President. The second translation is that she is implying that people should vote for her because they could get Barack too (as Vice President). Barack is being forced to fire back more shots at Hillary rather than just defensively responding to her offensives, and every time he does, her staff says he's being mean. If they keep it up, the public will get more than tired of it, and only John McCain's campaign will benefit from it. - And by the way, Hillary, that 3:00 AM phone call to the White House commercial just makes people think positively about John McCain.

Friday, February 29, 2008

Leap Year

Do you realize that if you were (had been) born on February 29th in a Leap Year, your life expectancy in Leap Year birthdays would be only about 19.5? It's probably the reason why states that have your driver's license expire on your birthday usually have four-year license durations. U.S. Presidents are elected in Leap Years, possibly because it takes a great leap of faith to decide who deserves your vote.

How about a totally new calendar. Let's have a simple calendar with every month 30 days long. This calendar would have an extra part that is .4375 of a day left over (instead of the current .25). If we stayed with the 30-day months, we could accumulate the fractional days, and every 16 years we would have a Leap Week. Think of the huge parties you can have with a Leap Week! If you like this idea, write to your Congressman, Senator, MP, or the UN Secretary General. Let's start a movement for change!

Monday, February 25, 2008

Vice Presidential Candidates

Barack Obama and Hillary Clinton are in a tight race to the finish for the Democratic presidential nomination. Many have suggested that the winner select the loser as vice-presidential candidate. Things are clearer on the Republican side, but do you think John McCain should take Mike Huckabee as his vice-presidential candidate? Is it a good idea to have someone you have criticized to be your running mate? Will a Vice President who thinks he/she should really be the President be loyal and supportive. We have had cases in the past where this was done, and where it worked out well. There have also probably been some cases where it was a disaster. A Vice President who had tried for the top job is certainly more likely to be acceptable to the people as President if succession is necessary than a complete unknown who was selected for loyalty rather than for competence. On the other hand, does a President feel safe and secure with an ambitious rival in the number two job? What do you think?

Monday, February 18, 2008

Can You Walk on Water?

The New Testament of the Bible says that Jesus walked on water to reach his disciples who were in a boat. Can you walk on water? I'm sure that the vast majority of you will say "No!" and think that I am crazy for asking. However, you have to remember to consider all of the possibilities and all of the facts when you are faced with making a decision. In many cases we jump to conclusions or reach a decision without considering all aspects of the problem...I'm pleased to announce that I can walk on water - in January and February. I did it today.

Sunday, February 17, 2008

Chicago Cubs Spring Training

It has happened again for the 100th time. The Chicago Cubs have gone to their spring training camp, and they have visions of a World Series dancing in their heads. One of their pitchers, Ryan Dempster, has even predicted it. The Cubs haven't won a World Series since 1908. This will be their 100th year of trying to get back to those early glory years when they were one of the best teams. No matter how each year turns out, there is always a clean slate at spring training camp, and when there is a clean slate, anything is possible. We should all learn from the Cubs. No matter how yesterday, or last week, or last month, or last year turned out, each day starts with a blank slate if you don't spend all of your "rest time" worrying about tomorrow. Worrying never solved anything. Planning ahead is fine, but worrying ahead is useless. Start off each day as though you have a clean slate, and challenge yourself to do the best you can with it. You may be very pleasantly surprised. As the Bible says, "This is the day the Lord hath made; rejoice, and be glad in it."

Sunday, February 10, 2008

Do You Hedge Your Bets?

Last year as baseball teams were starting to report for spring training, a furniture store in Massachusetts was developing their marketing plan for a tie-in with the widespread enthusiasm for the Red Sox. They came up with a promotion linked to how well the Red Sox would do during the new baseball season. The furniture store offered every customer who bought furniture during a certain spring period a complete refund (Their furniture purchase would be free.) if the Red Sox won the World Series. The odds against such a win were huge, so it was highly unlikely that they would ever have to pay off on this offer. However, they were smart enough to hedge their bet by taking out an insurance policy against this possibility. As we all know, the Red Sox won the World Series (Yea!), and the furniture store had something like 30,000 purchases which would have to be refunded. However, because they had hedged their bets with the insurance policy, the insurance company paid for those refunds. The store not only avoided the repayment by hedging their bet, but due to the popularity of the promotion they sold far more furniture that would have been the case without this marketing plan. It is not always possible to make a risky decision and still protect yourself against its possible consequences, but you should study all risk aspects to see if there is a practical way to offset at least part of your risk exposure before you make a commitment.

Monday, February 4, 2008

The Seventh Principle of Negotiation

The seventh principle of negotiation is that the party with the greatest detailed knowledge of the matters being discussed has a great advantage. If you have all the details immediately available while your adversary has to repeatedly call for assistance from others or request a break in the process to obtain more information, you are negotiating from strength while the other party is negotiating from weakness. It is very important that you do your homework before the meetings even start.

Wednesday, January 30, 2008

The Sixth Principle of Negotiation

The sixth principle of negotiation is that you can't please or accommodate everyone. You will definitely have to say No in many situations, and you will have to be firm about it. The word No has great value in that it can be used to reverse or slow down the momentum of a negotiation. You may be willing to concede additional points to your adversary, but judicious use of the word No will help you to gain return concessions and will help you to minimize those items on which you have to yield. It also helps to create an image of you as a tough negotiator, and in negotiations image is very important.

Sunday, January 27, 2008

Is the Glass Half Full or Half Empty?

The old question of whether the glass is half full or half empty is usually taken as an indicator of whether the person who responds is an optimist or a pessimist. However, the image of that glass is taken at a particular point in time, and you really can't answer the question unless you have information from at least one more point in time. The question is a valid one and not just a trick if you know that at a prior point in time the glass had either more or less liquid in it. If the glass earlier had more liquid in it, then the glass is half empty because the liquid level went from more to less. If the glass earlier had a lower level of liquid than it now has, the glass is half full because the level went from less to more. When you make a decision, use all of the information you have, including facts from other points in time. To paraphrase Newton with a little bit of distortion, trends tend to continue unless something happens to make them change.

Monday, January 21, 2008

The Fifth Principle of Negotiation

The fifth principle of negotiation is that when you are not sure what to decide on a particular point, the best tactic is to add something to the discussion which "puts the ball in the other party's court" and gives your opponent responsibility for the next decision. This approach gives you more time to reach the decision that was facing you, and it may also give you new and valuable information from your opponent's response to the new matter.

Saturday, January 19, 2008

Is Charlie Brown Hopeless?

In the Peanuts comic strip Charlie Brown would always try to kick the football when Lucy held it for him, even though he knew that during every past attempt she had pulled the ball away so that he fell down when he missed the ball. I think this is a case of: Fool me once; shame on you!
Fool me twice; shame on me! Fool me over and over; shame on all the readers who laugh at me!
Charlie Brown is an incurable believer in the trustworthiness of others. He believes them when they say they will do something. When you make decisions that will have significant impact in the future, and you rely on others with whom you interact to implement those decisions, be sure that you really know and can trust them. A decision without reliable implementation is only wishful thinking.

Tuesday, January 15, 2008

The Fourth Principle of Negotiation

The fourth principle of negotiation is that decisions proceed from the bottom to the top. For this reason, it may be useful to have some low priority points on which you are willing to give in to your opponent's viewpoint. They may mean little to you, but after you have relinquished something, it is reasonable for you to expect your adversary to offer you something in return. Not only are smaller points agreed before larger points, but also in formal team negotiations there is a "pecking order" for the personnel who participate on both sides. Junior personnel discuss minor matters and are authorized to agree upon them. More senior personnel are required in order to reach an agreement on the more important matters.

Friday, January 11, 2008

Just Say No?

Whenever you are considering alternate decision possibilities, remember that "Do Nothing" is always one of the viable alternatives. There are many occasions when after you consider the various options you will decide that you are better off doing nothing. However, when this occurs, you have made a conscious decision to maintain the status quo. This is totally different from just procrastinating about making the decision at all. "Do Nothing" as the result of conscious analysis is good. "Do Nothing" because you just don't want to think about it is not.

The Third Principle of Negotiation

The third principle of negotiation is that although you frequently will have to resolve conflicts by giving in to someone else's viewpoint, you should always try to get something back in return for your willingness to see things their way. This is usually an acceptable and expected trade procedure. Even when there may not be an item on the table that your opponent is willing to give up in exchange for your flexibility, you may be able to gain something by proposing that he or she commit to a future benefit for you. This is why so many sports team trade negotiations end up including "a player to be named later" or a future draft choice. It is easier to reach agreement in this way because neither party knows the true value of a future benefit.

Monday, January 7, 2008

New Hampshire Presidential Primary

One of the most interesting decision situations takes place tomorrow in New Hampshire. This is the first presidential primary election with individuals walking into a voting booth and casting a secret ballot. Each person who votes will have been subjected to many persuasive arguments from all the candidates as to the superiority of one and the inferiority of all the rest. Some will vote based on the arguments; some will vote based on the personal impression generated by a candidate; and some will monitor the polls and go with the front-runner in order to be on the winning side. In the back of his or her mind, each voter will know that a New Hampshire primary vote is weightier than individual votes in later states, because it helps to generate momentum for the winning candidate which may make him or her unstoppable later. This year the primary season is amazingly compacted. After she came in third in the Iowa caucuses, Hillary Clinton was quoted as saying, I'm in this all the way to February fifth.
Given the fact that the candidates expect the primary races to be all over in less than a month, the New Hampshire voter will indeed be an important indicator of the ultimate outcome. This is true regardless of comments about demographic distinctions between New Hampshire and other states. People get excited about a winner, and that excitement will carry forward for a period of time before it wanes. Given the short period of time between the New Hampshire primary and February fifth, it will be very difficult for other candidates to overcome the excitement generated by the New Hampshire winners in time to stage a successful comeback.

Thursday, January 3, 2008

The Second Principle of Negotiation

The second principle of negotiation is that you must make it very clear to your opponent which are your top priorities and how determined you are to achieve them. These goals should be reiterated and should seem to be inflexible for as long as possible. There is acting involved in such posturing, but the objective is to find out which party most desires a positive outcome to the negotiations. That party will usually show the first sign of flexibility. If no such flexibility is seen on either side, progress may have to be made as the result of setting a deadline or introducing a third party to mediate the process. A final alternative to inflexibility is to walk away from the negotiation process. If and only if your opponent believes that you are truly willing to stop the process, he may show flexibility and allow movement toward success of the negotiations.