Wednesday, December 23, 2009

401(k)s Suck

After complaining about health insurance being tied to one's job, I'd like to expand that complaint about it being tied to 401(k) plans.

Back in my Intel days, my health insurance and 401(k) accounts were basically selected by Intel. Neither of which really made me happy. Why can't *I* make such selections? Being as healthy as I am, I didn't make much use of my health insurance options. I remember Intel sending me a statement one year saying they spent something like $4,500 for my health insurance, and I laughed thinking, "Wow, they really got ripped off!" I'd have preferred them pay me that money and I'd have bought my own health insurance somewhere else.

When I first started working at Intel, I also opened up a 401(k) account because hey, that's what you do to save for retirement, right? After about a year of saving money in the account, I took a closer look at the advantages and disadvantages of them and decided to stop. Oh, I'd still save for retirement, but I decided I liked a boring old IRA better. The main reason--to disentangle myself from the mutual fund choices that Intel provided. I thought they sucked.

I had to open an account with some firm--I don't even remember what one it was anymore--and I got a sheet with a list of 20 or so mutual funds I could choose to invest in including stocks, bonds, money markets, and pure Intel stock. I think it might have been USB. I remember somehow ending up in a situation where I had a USB account with something like $10 in it. I don't even know how that happened, but I had that account for three or four years wondering why they kept wasting money telling me about ten bucks I had in my account. I finally got annoyed enough at the statements that I finally called them and got them close the account and send a check for me for ten bucks.

I put all my money in what I considered the lesser of 20 (or so) evils--an S&P 500 index fun. But why should I be limited to those options in the first place?

When I started working, I signed up to have my paycheck direct deposited in a bank account of my choosing. It's a great system! It works like this: I open a bank account wherever I want, then I tell Intel the account number so they can send my money into it. Why can't 401(k)s work like that? It's so simple. I can invest the money with any company I choose.

The one really nice thing about being laid off--besides having more time for other hobbies--is that they kick you out of the program. I was required to take my money and split, which I considered a blessing. =) I rolled it over into a traditional IRA with an institution of my choosing, and could then invest it in any choice of thousands of mutual funds and stocks.

But the system is screwed up, if you want my opinion. Intel should not be able to limit my investment options to the 20-or-so options they deemed acceptable--and if there's one investment in my book that's NOT acceptable, it's investing in your own company's stock. Just ask anyone that used to work at Enron or Lehman Brothers--but that was a prominent option. Obviously, Intel's investment choices did not have my best interests at heart. It had their own interests at heart, which is the very reason they should NOT be in control of those accounts in the first place.

Amanda has a 401(k) due to her working the corporate job and recently let me take a gander at the investment options they provide. I cringed. I did not like the options at all. Even the S&P 500 index fund had an expense ratio of 0.5%--which I consider absolutely insulting when I know there are such index funds with an expense ratio of just 0.1%. That index fund was charging five times more than it should! And it was the cheapest fund available in terms of expense ratio. Criminal!

But in her case, I suggested she should keep adding to it. Not because the funds choices are great, but because her airline has matching contributions. That's really the only thing that makes it worth while. If it weren't for the matching contributions, I'd tell her she was better off taking her retirement money elsewhere. Intel did not have matching contributions, so that issue wasn't a consideration for me.

Once Amanda retires (or is laid off--this is the airline business we're talking about here), she'll be free to roll over the 401(k) into an account of her own choosing--one with more and better options available. Until then, she's stuck with cruddy investment options.

But it ticks me off. Direct deposits into a bank account of my choice worked so well. Why is it so darned hard to do the same with 401(k) accounts? The company you work for should not be who gets to choose where to invest your money.

I had a second account I opened while working at Intel--this one in regards to the stock participation plan. Basically, it let me buy Intel stock at a discount. Normally, I'm not inclined to buy stock in the company I work for (and at the time, I felt Intel stock was wildly overpriced anyhow), but they'd let me buy the stock for a minimum of 15% below the current market price, and I could sell it immediately for a profit. It was free money! It would be stupid not to take it.

But it meant I had to open an account with E*Trade, a company I loath. I used to have a brokerage account with them. I used to have a bank account with them. And eventually I realized the errors of my ways and ditched them. Until Intel foisted them back onto me. Bastards! Can't they just deposit the stock in a brokerage account of MY choosing? Direct deposit the stock into a company I'd actually want to do business with?

This is actually fresh in my mind, because that E*Trade account still haunts me today. I haven't worked at Intel since 2001, and somehow 63 shares of Intel stock got stuck in a twilight zone. I wasn't able to sell the stock, because they didn't have "paperwork" to authorize it. I couldn't transfer the stock out of the account, because it didn't match the name on my other brokerage account. And those stupid 63 shares have been collecting dust ever since, mostly because I was too lazy to fill out paperwork to "authorize" the company to sell them. Really my own fault, in that sense, but the stock is down about 50% from that original purchase price, so it's turned into a remarkable loss for a little "free money."

Anyhow, I'm tired of them sending statements to me for the past decade, and finally decided to do whatever it took to close the account. And if, God willing, I can actually get that stock sold (*fingers crossed*), I can actually claim a capital loss on it and save some money in taxes. It'll be the first good thing this stock has ever done for me.

So I called up E*Trade this afternoon, punching in account numbers, codes, and at one point yelling into the automated talking machine, "I want to talk to a real, live talking person!" And the machine sweetly responded that it "could not understand my request." I pounded the phone a few times, then pressed pound over and over and over again to see what happened, and the automated voice suggested that if I wanted to talk to a representative, I could press one. So I pressed one, and finally got to talk to a real-live, honest-to-goodness person. "And what's your account number?" he asked. ARGH! Why the heck does their stupid machine ask me to punch in my account number if apparently their service representatives can't even see that information?!

We chatted a bit, him trying to convince me to open an E*Trade bank account, and my telling him I wanted to cut every last thing tying me to their wreck of a financial institution, and he finally transferred me to a trading specialist who, somehow, remarkably, was able to put in a sell order for those 63 shares of Intel (requiring no paperwork on my part--why the hell couldn't they do that back in 2001?!), and I should be rid of those evil shares once the market opens later this morning. The trade will cost $14 and change, and they were "kind" enough to waive the $40 fee they normally charge for doing something I wanted them to do eight years ago for not selling it online through their website. (I wanted to! *rolling eyes*) Good riddens! The money should settle after a few business days, then they'll send me a check and close the account. Finally, a light at the end of the tunnel!

By comparison, my main brokerage account currently lies in the hands of Scottrade. I can't say enough kind things about these folks. I recently called them about a week ago. I owned a few shares of Terra Industries, and they paid out a special one-time dividend of $7.50 per share, which plopped about $2,000 cash into my account. Normally, I'd just reinvest the dividends in whatever stock looked particularly attractive at the time, but I'm looking to fund my IRA and HSA accounts come January. (I've already maxed out my contributions for this year.) I wasn't entirely happy about having $2,000 in dividend income showing up for the IRS (really, they couldn't wait an extra two weeks for the new tax year so I can delay paying taxes on it for 12 months?), but at least it gives me two grand in cash to put towards these other accounts. The only catch was--I needed to get the money out.

So I called up Scottrade about a week ago. And you know what happened? Someone answered the phone, saying something like, "You've reached Scottrade. How can we help you?" No buttons to press. I told him, "I need to get some money out of my account." I told him my account number, how much money I wanted to take out (two grand), and confirmed the address on the account that the check should be sent to, and we hung up. It was a wonderful experience, and that's exactly the reason I prefer doing business with Scottrade rather than E*Trade. Nothing I've ever tried to do with E*Trade has ever been easy.

And get this--I can buy or sell a stock at Scottrade for $7. E*Trade charges twice as much, and the service there sucks!

I'm getting a little track, but my point is this: I wouldn't have had to even deal with E*Trade if it wasn't for Intel's meddling to begin with. Just deposit the stock into an account of my choosing, just like you do with my paycheck. I could have gotten better service, at better prices, and been a heck of a lot happier with the end results.

To me, jobs are where I get paychecks. My employer really should not be involved in choosing my health care, retirement options, brokerage accounts, and so forth. But everyone always goes on like this is normal, or even good. If you're a corporate drone, it may be the best option available. But it shouldn't have to be that way, and I sure wish someone would fix it.

Why I Hate Politics

There are a few things in the news that have been bothering me, so I'm going to complain.

First up: Gitmo. There's talk about moving the inhabitants of Guantanamo Bay into the United States, such as to a prison in Illinois. I guess some are going to be tried in New York City, mere blocks away from where the Twin Towers once stood, and a lot of people are all up in arms about this.

And I wonder--WHY? Who the heck cares? They're in a prison in Illinois. What do people think will happen--they'll escape and go on a rampage killing everyone they can? I suppose technically it could happen, but that can happen to Gitmo too. At least if they escape from Gitmo, they can escape into Cuba and be beyond our reach. Much better. *rolling eyes*

I suppose the idea of exiling Bad People onto an island is appealing to a lot of people (Alcatraz, anyone?), but they're in prison, which in my book makes them no more dangerous in Illinois than they would be in Cuba. The idea of holding people prisoner indefinitely without a trial I find a little disturbing. If there's good evidence that these people are dangerous, why hide it? If there's not good evidence that these people are dangerous, why are they being held? I never liked the setup to begin with, and if they start putting some of these folks on trial--great!

Most trials are held near where the crime took place. If I rob a bank here in San Luis and get caught, you'll probably see me showing up in court here in San Luis--not Seattle. So holding a trial for someone related to the 9/11 attacks--it makes sense to have it in New York City.

A change of venue makes a lot of sense in this case--granted, it would probably be tough to find anyone in the world who was an unbiased opinion of the matter, but some folks will likely be more prejudice than others regarding the manner, and the citizens of New York City are probably among them. No discredit to the citizens of NYC--that's perfectly understandable. But the victims of a crime are not exactly the best people to choose to decide their fate either. So it starts in NYC--I don't really have a problem with that. If both the defense and prosecutor don't mind holding it in NYC, by all means, let them. If they want a change of venue, though, I'd give them that too. But my point--for all the drama that shows up in the news, I think it's much ado about nothing.

Then there's the health-care debate. Politics of the worst kind. The "public option" is one of those things that seems to get people riled up. Supporters seem to suggest that it could single-handedly save the world, while those against seem to suggest that it'll be the end of the world if it's allowed. I'm in neither camp--my thought is that it's much ado about nothing. I don't think it'll help reduce health-care costs in the long run (the for-profit companies don't have particularly high margins to begin with), but it's not going to be financial ruin either. So I don't really care if there is a public option or not--just so long as it's not subsidized by the taxpayers. Whatever it takes in in premiums must cover all expenses. I don't expect it to be for profit, but it should not be allowed to run at a loss either.

Republicans are whining about all the things wrong with the plan. Perhaps there's some element of truth to their statements, but they're in the minority and therefore it is their duty and cry and throw tantrums every chance they can get. Some of you might think I'm bashing the Republicans, but the Democrats would do the same thing if the rolls were reversed, and did so after Republicans took control of both sides of Congress during the Clinton administration.

Here's the problem with Republicans: They have practically no power. They don't control the Senate, the House, or the Presidency. It is in their best interests to see Democrats fail. It is in their best interests to see the economy tank, health-care costs spiral out of control, inflation to shoot through the roof, and lose the wars in Afghanistan and Iraq. If those things happen, the Republicans will sit back and say, "Ah, see, I told you that would happen. It's all those Democrats fault, but we didn't have enough people on our side."

Heaven forbid, if a solid, really good piece of health-care legislation did come out of Congress and it turns into a stunning success, Democrats will happily take all of the credit (and given the Republicans staunch opposition, deservedly so). So it's in the best interests of Republicans everywhere to see that the Democrats fail. Absolutely and completely fail. With health-care being such a hot-button topic, it makes sense that Republicans want to torpedo any legislation regarding it. They need it to fail. Doesn't matter if the legislation is good or not--it just needs to be stopped.

I personally don't have a strong opinion about the current health-care bill being kicked around in Congress one way or another. My biggest complaint regarding health-care isn't being addressed at all--which is why health-care is tied to the company one works for. That's just f****d up.

Imagine that everyone always got car insurance through your job. If you lost your job or changed jobs, you'd also lose your car insurance or be required to change insurance carriers. It's stupid--why should my employer decide where I can get my car insurance?

That's the thing that ticks me off the most--that insurance is most often tied to one's employer. I think it's stupid. There are historical reasons for why that developed, but it's a terrible setup.

It also hides the real costs of health insurance from the people who have it. If you have to fill a prescription but it costs you only $10 no matter where you get it, what are the chances you will comparison shop? Not very high. Maybe the drug normally costs $30 at Costco but $90 at Walgreens. That's a HUGE difference, but it doesn't matter to you--you pay $10 at either place.

Ultimately, the people paying premiums ARE paying that added cost, but one's employer is often the person footing the bill, so it still doesn't "hurt" like it would money out of your own pocket. Companies that are footing the bill don't like it, though, and are pushing more and more of the costs back to the employees that are ringing up the bills. Fair is fair. *shrug* There's a lot of talk about 'socialized medicine' and how terrible that would be, but that's practically what we have already. We have a socialized health-care system wearing a capitalism costume, creating this strange creature that combines the worst of both approaches. Getting away from that would be a good thing.

Back to the auto insurance comparison--what if you're driving around without auto insurance, then wreck your vehicle. If you tried to get insurance a week later, your wreck isn't going to be covered because it's a "pre-existing condition." So yeah, a health-insurance policy that doesn't allow for pre-existing conditions makes sense. Insurance is supposed to protect you against unknown events in the future. It's not really "insurance" if it's protecting you against known events.

I don't really have a good solution to this pre-existing condition problem. I haven't heard of a good solution to it either. If you wreck a car then want the pre-existing condition covered, I'm sure the insurance company would be happy to accommodate you--but they're going to add the cost of that known expense to their premiums. They have to to stay in business. Same goes for health insurance companies. If they know you're going to cost a lot of money to treat, they're going to charge a lot more to cover the cost. Maybe basic health insurance should be a fundamental right for every American. It'll cost more, but treating poor, uninsured folks in emergency rooms isn't cheap either.

We don't want our employers telling us what company to use for auto insurance, so why the heck do we let them tell us where to get our health insurance from? That's screwed up.

Whatever happens with the current health-care proposals, it won't be the end of the world as we know it (like the Republicans suggest), but I don't see it helping much either (like the Democrats suggest). It's politics as usual--much ado about nothing. *sigh*

Tuesday, December 15, 2009

Maybe I'll Just Watch....

Tomorrow (or rather, later this morning, since midnight has come and gone), weather permitting, Boeing's newest airplane, the 787, is supposed to take to the sky. I've been fascinated by this plane ever since I first heard about it. I remember way back when Boeing was trying to decide between building a bigger plane than ever to compete against Airbus's A380, developing the fastest passenger jet in service (at least since the Concorde was retired), or a fuel-sipping machine that would dramatically cut fuel costs.

I'm not sure why Boeing spent so much time, money, or effort considering building a bigger plane or a faster plane--when it comes to flying, what's the most important consideration most people have when deciding what flight to take? The price, of course. Back in the days before I had Amanda to get me around the country cheap, that was always the very first thing I looked at. "Which flight is the cheapest? I'll take it." Didn't matter the time of day or what airline it was. Oh, I had my preferred times, and preferred airlines. But cost was always more important. And most people I knew felt the same way.

The only people who didn't seem to care about what a flight cost were those who didn't have to pay for it. If your company picks up the dime, who cares, right? =) When I flew from Portland to Phoenix on Intel's dime, I didn't worry much about how much the flight cost. At that point, I worried more about the time of day and choice of airlines. (My favorite time of day was about noon or so, and my favorite airline to fly was Alaska.) But even if I didn't care about how much the flight cost, it certainly mattered to Intel.

So to me, it seemed like a no brainer--the cheaper cost to fly the plane, the more popular it would be. Boeing spent years and who knows how much money before coming to the same conclusion, but that's probably not surprising. "Gut instinct" isn't always a good way to run a business. Strangely, Airbus went with the "bigger is better" theory and spent their time and effort building the biggest plane in the world. Good for them. Me? I believed that a fuel-sipping plane was the way to go--and this was back when fuel was relatively cheap.

Not long after the 9/11 attacks, I first invested in Boeing. It seemed like a no brainer to me. Given the crashing of the dot-com boom and fear of flying after 9/11, airlines were in the tailspin. Boeing was suffering from scandals. Those were dark days at Boeing. The sky was falling, and so was the stock price for Boeing.

So I bought some stock. =) Scandals come and go, and I was sure it was only a matter of time before the top management were swept out with the garbage. The airline industry was suffering, but it's always been a cyclical industry. Eventually it would turn around again. And I felt very strongly that the 787 would be a huge, smashing success. It seemed like the company had hit a point of maximum pessimism and things could only start looking up from there, so I bought.

And I've been following Boeing, and particular the progress of the 787 in the news ever since. It only took a few years for a complete reversal of fortunes. The economy started pulling up again, and the fear of flying was abating. Management was swept out, then swept out again when the replacement was caught having an affair with another employee. Orders for the 787 were rolling in in unprecedented numbers, and Airbus fell flat on its face when their jumbo A380 arrived two years late. To say Boeing was doing well was an understatement. It was doing fantastic!

So I sold half of my stock.

I was tempted to sell all of it, but I had kind of grown attached to the company, so I figured I'd at least take out my initial investment and let the "house money" do whatever. =)

Glad I did--it topped out shortly thereafter and sank into oblivion. The 787 was plagued with multiple delays. Airbus started gaining momentum again now that they sorted through the A380 troubles and started development on a plane to compete directly against the 787. And the economy tanked again, airline traffic tanked, and so did Boeing's stock.

I visited the assembly line where the 787 is being put together. Twice, in fact. The first time I took my mom on the Boeing factory tour. (It is totally worth it if you find yourself in the Seattle area looking for something to do.) We got to watch the first few 787s coming together. The #1 plane was still painted in flashy colors for when they rolled out the plane for the world to see for the first time. The other 787s were a pasty khaki color, not yet painted. Which was even more strange to see if you realized that all of the other planes Boeing built always started off green. They put on a green coat to protect the aluminum skin of the plane during construction and don't peel it all off until the plane is done and ready for painting. Occasionally I'll see one of those shiny green planes flying around and I know--it's being tested. Fresh off the factory floor, not even painted yet. So it's kind of weird to see an unpainted plane that's not actually green.

Then last month, when Silent Doug was in the area, I pushed him into going on the factory tour. The first few 787s were parked outside, painted and sitting. Waiting for their time in the air. If I remember correctly, I think they were working on plane #11, but don't quote me on that. Each plane being constructed was actually labeled with the plane number, but photos weren't allowed so I don't have pictures to verify my memory. =)

We also saw that first 747-8 that had just come out a couple of days before. Those things are big.

But anyhow.... I'm rather excited to read about this first flight of the 787. The plane is revolutionary from nose to tail. And, if all goes well, the first flight is just mere hours away.

Three of the 787s they're building are being built with the intention of destroying. One of the factory tours described a wing test they do where they pull both wings up until they snap. The carbon fiber wings of the 787 are so flexible, the guy told us that the wing tips can nearby touch without breaking. (!!!) The incredible flexibility of the wings is supposed to help reduce the effects of turbulence, but it also means the wings might look like a bird flapping in severe weather. I think it would make me a bit nervous looking out the windows and seeing the wings flapping like a bird, so I hope those engineers really know what they're doing!

The plane will have to undergo months of in flight testing before it will be certified as safe for the flying public. Imagine the thrill those test pilots must get being able to fly one of these things for the first time. I always imagined that would have to be one of the most awesome jobs EVER!

Then, today, I read Tough testing awaits the Boeing 787 Dreamliner once it takes to the air. Holy smokes! The hair on my arms stood straight up reading about some of the tests they're going to do to that plane! And now I'm thinking, "Yeah, I think I'd rather watch someone else test pilot those planes." Even if I knew how to fly, some of those tests look absolutely, utterly insane. Who are these maniacs who've volunteered for such a suicidal mission?!

First, there are the "flutter tests." Here's a quote from the article describing those:

Flutter, which occurs when natural vibration is amplified to violent levels by wind or airflow, is what caused the original Tacoma Narrows Bridge to flail to destruction in 1940.

Flutter, which occurs when natural vibration is amplified to violent levels by wind or airflow, is what caused the original Tacoma Narrows Bridge to flail to destruction in 1940.

Seeking to detect any such flutter that could rattle a plane out of the sky, electronic devices pulse the flight controls at varying frequencies to generate shaking. The pilot also slaps the steering column rhythmically with his palm and rapidly vibrates his foot on the rudder control to shake the movable control surfaces as the jet dives from about 40,000 feet.

And, if you read the small print in the caption of a diagram illustrating this test, it reads:

Only after these tests are successfully completed during the first couple of weeks is the plane deemed safe enough to allow FAA inspectors on board to observe the remaining tests.


But that almost seems boring compared to the "Maximum Energy Refused Takoff" test. This test, I'm convinced, would make Chuck Noris cry and wet his pants:

Before the test, the brake pads are intentionally ground down to the minimum allowed before they'd have to be replaced in regular service. Then, loaded to its maximum weight and full of fuel, the jet races down the runway up to a pre-calculated top speed before the pilot slams on the brakes.

When a pilot "dynamites the brakes" in this way, in the words of Joe MacDonald, former chief 747 test pilot, it generates so much heat that on earlier planes typically the steel brakes melted and the wheels caught fire, popping fuse plugs that deflated the tires. Fire personnel standing by were required to hold off dousing the flames for five full minutes in a successful test, to show that no wider fire would ensue.

This particular test they will do at Edwards Air Force Base on the world's longest runway (15,000 feet) with a dry lake bed beyond. Just in case things go wrong, it won't kill anyone except the test pilots.

Another test that made me sick just reading about it is the "tail-strike takeoff."

As the jet accelerates down the runway, the pilot points the plane's nose so steeply upward that as the nose wheels leave the ground the tail of the airplane scrapes along the runway, sending sparks flying out behind. The nose cannot physically go higher until the tail leaves the ground. When it does, the test has determined the Dreamliner's absolute minimum takeoff speed.

The article describes additional tests that the plane will be put through, but I'll tell you one thing--I'm darned glad I'm not a test pilot. Those people are freakin' CRAZY!

And if you live in the Seattle area and see a plane that appears to be plummeting out of the sky--don't worry. They're just testing planes. *rolling eyes* =)

Thursday, November 05, 2009

Website Shenanigans

I got myself banned from a website this afternoon. Suvivalist Boards, if you're interested. It started when I stumbled into a conversation about soda can stoves on some message boards on a website for "survivalists." The general consensus was that they burned poorly at high altitudes and cold temperatures and were easily crushed if you leaned your back against a wall or post. They were toys, not "real" equipment that a survivalist would want to carry.

I'll be the first to admit that the soda can stove isn't ideal for all situations. If you have to cook for multiple people, a soda can stove would take way too long and burn far too inefficiently. I'd suggest something different. If you spend your time climbing all of the 14,000-foot peaks in Colorado in the winter time, you probably shouldn't be using a soda can stove. If you want to bake cookies and pizza, a soda can stove is less than ideal. It's possible--I've done it!--but it's not easy and far from ideal. Other stoves could do a much better job of it.

But for most people, a soda can stove will work just fine. Most people aren't wandering around at 11,000-foot elevations. East of the Rockies, there aren't even any places that go that high. The argument that soda can stoves don't burn well below 20 degress--that might be true, but I've never tried to use it at temperatures that cold before either. I tend to do most of my backpacking in the summertime--except in places like Florida or Arizona where I'll do my hiking in the wintertime. But temperatures don't get below 20 degrees. I have used it once in the snow and it worked just fine, so cold temperatures do work. Below 20? Maybe, but how many people wander around in the woods in sub-freezing temperatures? Not many.

So for most people, a soda can stove will work just fine, and I posted so, clicking off all of the concerns people had about the stove.

One person replied--I got the hunch he ran the website--saying that while he respected the soda can stove, he didn't feel it was appropriate for a "survival kit." Yadda, yadda, yadda. Then went on belittling it, comparing it to other "quality" stoves made of titanium and that folks on eBay sold soda can stoves that their children made. To which I thought, "Yeah, so? If it works, who cares?"

He also pointed out other "quality" items that would go into a survival kit, such as Cold Steel Knives, which I had never heard of before so I googled it out of curiosity and found an interesting video of one where they hung 600 pounds of weight on it. "Look! It can hold 600 pounds! Now that's quality."

It was an impressive demonstration, but I was left scratching my head and wondering, why the heck would I ever want to hang 600 pounds of weight from a knife? If there's a cheaper version that could only hold 100 pounds, I have little doubt it would suit my cutting needs just fine.

But I thought his arguments against the soda can stove were poor. It wasn't good enough for a "survival kit"? Why the heck would you even need to include a stove in a "survival kit" in the first place? I do not consider a stove to be a survival item. You never hear about the guy to got lost in the woods for a week, finally makes it out, and says, "Good thing I had my stove--it saved my life!" I'm sure if I had to cut off my arm, a Cold Steel Knife would be a nice little gadget to have on me. But a stove? Really? How is a stove going to save my life? Sure, dehydrated ground beef isn't fun to eat cold, but if my life depended on it, I could do it. And if I'm really stuck in the woods that long, I'll run out of fuel eventually anyhow. I can just build a fire and cook my meal on that. A stove is not a survival item.

So I posted a second time, replying with such thoughts, and pointing out that I've used them while backpacking over thousands of miles of terrain. The soda can stove has never failed me. It's solid, it's reliable, and perfect for 3-season camping.

I went back to check the thread later this evening, and got a message saying that my IP address was blocked due to 'spam.' Really? Spam? I wasn't even selling anything. I didn't even start the thread--I was just trying to correct misunderstandings folks might have about the soda can stove. I thought the guy belittling the soda can stove was just ignorant or maybe stupid, but I was wrong. He wasn't belittling the soda can stove because he was ignorant or stupid--he was doing it because he sold stoves and he couldn't make money on people who made their own stoves.

The irony is, had he not spent so much effort belittling soda can stoves, I wouldn't have spent so much effort trying to defend them. He'd have been better off just keeping his mouth shut and I would have never bothered replying at all.

But it got me thinking--most outdoor gear, in my opinion, is a scam. It doesn't matter if you look on a website such as this where they push expensive replacements where a cheap alternative would work just fine. It happens in places like REI too. They slap important sounding terms like "load-balancing systems" and "silicone impregnated nylon" on everything. Nowhere does it say, "We charge $10 extra for every big word we can use."

They'll tell you about all the rain gear you need. I've hiked through a lot of rain and mud, and "rain gear" does not keep anyone dry. You will either be drenched in sweat or in rain, or some combination of the two depending on the permeability of the material. Just make sure the clothes can dry quick when it does stop raining. Any cheap non-cotton clothes will do the trick. And a cheap umbrella is worth its weight in gold.

Everyone has been brainwashed into thinking you have to have "boots" to do a hike. I'm living proof that that's not the case. I have used boots before, and I find them less comfortable, they take longer to dry, and much longer to break in. Oh, and a lot more expensive. That's the real reason they push boots--they make more money selling expensive boots than cheap shoes.

If you believe everything you hear, you'd think giardia plagues just about every natural water source available, and filters will turn all of it into pure, clean drinking water. Fact is, most of those remote springs are perfectly safe to drink out of. I hiked the entire Appalachian Trail without treating my water and never got sick. I'm not saying it doesn't exist, but the perceived danger is much greater than what actually exists. And filters are not as reliable as they want you to think. A brand new filter is nearly 100% effective, but as it ages, it's effectiveness goes down. Typically, when it's reached the end of it's expected lifespan, the filter is less than 80% effective. If you do drink out of a water source that's infected with giardia, more than 20% of those organisims are going to get through the filter. The best way to avoid getting giarda is to drink out of water sources that are least likely to be infected in the first place.

They push expensive backpacks that cost several hundred dollars and weigh several pounds--the absolutely worst kind you can get for a simple backpacking trip. Even the so-called GoLite packs are stuffed full of necessary straps and buckles adding unnecessary weight.

You'll never see an article in Backpacker magazine about how to make your own soda can stove. Know why? Because their advertisers sell stoves. I don't blame them--they need advertisers to survive. It's in their best interest to make you want to buy a lot of crap you don't need. I guess I can't get upset being banned for promoting soda can stoves, but I would have appreciated a heads up that promoting goods that the website doesn't sell is frowned upon. And while they may not want to promote outside views, I think it's only fair they don't go out of their way to belittle them either. If you belittle someone else's views, you have to expect them to want to defend it.

I can't express my views on that website anymore, but that doesn't mean I can't express my views. If you're looking for something online, beware of the advice if it comes from the person who is selling it. They may not have your best interests at heart--they may just want you to open your wallet. Open wide!

Wednesday, October 28, 2009

I Told You the Boeing Strike was Stupid

Way back in September of last year, I posted a blog entry called Fools! They're All Fools! Boeing machinists were on strike, and I wrote:

And the main sticking point for them? Job security! Are these people out of their minds? There's no such thing as job security. When Boeing starts to develop the 797 and they need to decide where to assemble the plane, what do you think is going to happen? "Well, we could assemble it in Everett, but they like to strike all the time which causes problems. Perhaps assembling it in some other location where they're less likely to strike would be prudent?"

Shooting themselves in the foot. Boeing must stay competitive, and if that means outsourcing some of their chores, that's what they need to do. And it's not necessarily a bad thing either. If developing countries such as China have a financial interest to buy from Boeing--such as manufacturing some parts in China--they can sell more planes and have more business in Washington.

And while many people in this country are facing foreclosures, loss of jobs, and so forth, the machinists feel now is the best time to walk off the job?

Good luck with that.

The 797 isn't even a figment of someone's imagination yet (so far as I know), but my prophecy about moving jobs elsewhere has officially happened. Today Boeing announced that they would be opening a second 787 line, but this one would be in South Carolina. Nowhere in this news report about the second line does it say anything about that last strike being one of the reasons for the move, but I'd bet it was the single biggest reason for the decision. South Carolina threw in various tax breaks and such, but I bet in the meetings the upper management held, that strike was the straw that broke the camel's back.

I'm a bit sad with the decision. I've been to the Boeing factory where they're assembling the first 787s. I've seen the first several 787s in various stages of construction. It would be cool to see a 787 flying through the air and think, "Yeah, we made that in Everett." No more--we have to share the glory with South Carolina.

But I don't blame Boeing for the decision. Frankly, if I were in upper management there, I would have made the same decision, and for the exact same reason. It was the machinists who lost the 2nd assembly line. Good work, guys. Next time, just do your job and maybe next time they won't go out of state.

Tuesday, October 27, 2009

An iPod Conspiracy?

If you've watched the Jay Leno Show, you might have heard him ask his 'guests' on the 10 at 10 segment about what is on their playlist or iPod. In this segment, he asks various celebrities 10 questions, and since his show is at 10:00 (in most places, at least), the segment is called "10 at 10."

I think it's kind of lame myself, but the few times I've watched it, it seems like he always wants to know, "What's on your playlist right now?"

And today, I was reading the latest issue of Time magazine when people could ask the governor of Michigan questions, and one of the people asked, "What is currently on your iPod?"

And every time I see this question, I start wondering--is there an iPod conspiracy? Is Apple paying people to have this question thrown out everywhere? Or do the people asking this question think it makes them look cool to talk about iPods?

When you really dig down in the question, what's really being asked is, "What kind of music do you like listening to?" But that question is BORING. Why the heck do I care what kind of music the governor of Michigan likes to listen to? ("Everything from Andrea Bocelli to Aretha Franklin to Bruce Springsteen to the Black Eyed Peas," if you really needed to know.) But, if you rephrase the question by asking, "What is currently on your iPod?"--well, it is still a BORING question. But somehow, phrased in this manner, it's more socially acceptable?

The other reason this particular question bothers me is because it makes the assumption that everyone already has an iPod. I don't have an iPod. Or what if someone prefers to use the Zune? It's like saying, "If you don't have an iPod, you are a freak of nature." I resent that. The assumptions built into the question seem to imply that owning an iPod is more important that anything else one could spend money on. "Food? Clothes? Those are nice, but in the grand pecking order, the iPod has to come first."

It's a stupid question, followed by completely useless answers. Interviewers--you can do better than that!

Monday, October 19, 2009

Are You Stupid?

I saw this article today, called More Investors Overweight Equities: Citigroup. And I can't help but think, are you stupid?! The first paragraph reads:

"Investors are becoming increasingly confident in holding equities as U.S. markets continue to make new yearly highs heading into the final months of 2009, according to a client survey by Citigroup."
Later, the article points out that the S&P500 has risen 62% since it hit a 12-year low in March. And I can't help think--there's really a lot of stupid people out there. When stocks are at 12-year lows--oh, everyone is scared. Nobody wants to invest any money. AFTER the price runs up 62% percent--sixty two percent--in just seven months, those same people are now thinking, "Yeah, I think prices are good now."


Not to long ago, the Dow Jones topped 10,000 for the first time in a year and I read that some folks on Wall Street were popping champagne corks to celebrate. I remember the first time the Dow topped 10,000, record highs, way back in March of 1999, and they were popping champagne corks to celebrate. The fools--would they have celebrated if they realized that ten years later they'd be celebrating the exact same thing?

At the beginning of the year, I was positively giddy about stock prices. I was looking at stock prices stunned at what seemed like impossibly low values. Companies like the mighty Microsoft--still a powerful monopoly, enormous piles of cash with virtually no debt--trading at less than ten times earnings? It hardly seemed possible! I did buy a little of Microsoft, but only a little. It was smaller companies that I'd never heard of before that fascinated me even more.

Terra Industries, which makes fertilizer, was trading for about 2 times earnings. In all fairness, the stock did deserve to go down from its highs--earnings were plunging. But they had an enormous pile of cash and virtually no debt, and they were still profitable despite the earnings going down. The company certainly had the resources to survive the crisis, and at just 2 times earnings, I was possible giddy with greed. So I bought a bunch, then started calling it my "crappiest investment ever." They do make fertilizer, after all! =)

I bought it twice. The first time in December, somewhere around $13/share. No matter how I looked at it, it seemed like people were trying to sell me dollar bills for 20 cents each. I'd be stupid to say no! The timing turned out to be incredibly lucky as the price started marching upward almost immediately.

By January, I saved a little more money and bought more. I was kind of hesitant--the stock had already shot up nearly 20% in the one month I held it. Maybe it would go back down and I could buy more at the same prices I did before? The stock still looked SOOO incredibly cheap, however, and what if prices never came back down again? I pulled the trigger--it seemed like a good deal, and 'haggling' did not seem like a good idea. "Oh, I see, you want to sell me dollar bills for thirty cents each? I'm afraid I can't--I won't pay more than 20 cents for each of them."

Sounds like of stupid, don't you think? That's what I thought, so I went ahead and bought the stock again, and I'm lucky I did because a few days later, another company--CF Industries--announced that they wanted to buy the company and would acquire it in a hostile takeover if necessary.

The stock price shot up overnight and hasn't looked back. As of this minute, it's now trading at $35.80, more than double what I paid for it. But you know what I feel? Bummed. I'm bummed that the price has run up so far. Today, I feel like the stock is selling more-or-less at what it's worth. Maybe a little less--perhaps 90 cents for a dollar. Not much margin of safety considering the inherent risks of investing, and certainly nothing to get excited about.

So I feel bummed. Sad. Earlier this year, I had a list of 20 stocks I wanted to buy that I felt were selling at pennies on the dollar. My biggest problem was trying to decide which stock I wanted to buy. Today, my biggest problem is trying to find just one stock I want to buy.

And then I read an article like this one, where people are feeling more confident about buying equities, and I can't help but think, ARE YOU STUPID? The time for confidence was earlier this year--not after prices have run up 62%. When it did become fashionable to "sell low and buy high"?

And no, not all of the stocks I've bought have done as well as Terra, but none has fascinated me more. I thought I bought a sleepy old fertilizer company. Boring, but cheap. CF Industries then announced Terra as a takeover target, and Terra rejected it. Then fine, CF says, it'll be a hostile takeover. Then Agrium comes along and announces they want to buy CF Industries--under the condition that they drop their bid for Terra. CF tells Agrium they aren't interested. Fine, says Agrium, it'll be a hostile takeover, then. CF raises their bid for Terra to seal the deal, the Terra plays shy. Agrium raises their bid for CF, but CF plays shy. CF raises their bid again. So does Agrium. And to complete the circle, it was announced today that if Agrium succeeds in buying out CF, they'll sell a plant to Terra to settle "regulatory issues."

Did you follow along with all of that? CF is trying to buy Terra in a hostile takeover, Agrium is trying to buy CF in a hostile takeover, and Terra will buy an Agrium plant if they succeed. I've seen soaps on TV with less complicated plots, and I've found the whole thing incredibly fascinating. Who will win? Will CF acquire Terra before Agrium can acquire CF? I don't know! But I can't wait to see what happens in the next episode of Days of our Fertilizer.

But the time to be excited about equities was earlier this year--not after prices have run up 62%. Idiots!

Sunday, September 06, 2009

The New Pepsi Generation

A couple of months ago, I read an interesting article in BusinessWeek about Pepsi's new brand campaign. They're updating their logos to be fresh and modern and to connect with a new generation of young people. Blah, blah, blah--if you've heard it once, you've heard it a hundred times.

I'm rather skeptical of these redesigns to begin with. Assuming you aren't starting off with a crappy logo to begin with, does changing the logo really boost sales? According to sources, this rebranding project will cost Pepsi over one billion (that's with a B, folks!) dollars. Just to break even, Pepsi would have to generate at least one billion dollars more in revenue. This amazes me for two reasons:

1. Why the heck does changing a logo cost so friggin' much? I could have made something that I think looks better for a fraction of that cost. =)

2. Pepsi actually believes they'll make up that cost in increased revenues? Maybe they're right, but I find that hard to swallow.

Looking at some of the historical images of Pepsi logos, I can understand why some of those first designs were redesigned. They're hard to read, look a lot like the Coca-Cola logo, and look pretty boring with just red text on a white background.

One thing you'll notice, however, is that the logos get progressively more complicated. That 2005 logo is positively busting at the seems. The new "in" thing now is to go simple. Compare it to the newest Pepsi logo. My first thought when I saw it was, "Ugh. That's hideous!"

The BusinessWeek article I read explained the rational--the "in" thing nowadays is simple and sleek, like the iPhone. I suppose that makes sense on a superficial level, but really, would you bet more than a billion dollars because someone is trying to compare a carbonated beverage to the iPhone?

I'll be the first to say that iPhones and iPods are slick. They're simple, they're sleek, and they look just plain cool. It works for electronics, however, because electronics--historically--have been large, complicated, and expensive. A "laptop" ten years ago probably weighed 20 pounds. They have holes to plug in a wide variety of things--keyboards, mice, speakers, USB drives, microphones, printers, monitors, power cabels, cameras, yadda, yadda, yadda. Wires that have to be color coded because it's too complicated to figure out otherwise.

When someone can develop a technology that's so incredibly simple and elegant, so incredibly small and cheap, it's slick. It's freakin' cool. It makes people's eyes bug out and pull out their wallets, like a moth to a flame.

This is carbonated beverages we're talking about, though. They can slap a simple logo on the product, but the product has not changed. I don't see the new Pepsi logo and think, "Wow, that Pepsi is so friggen awesome!" It's still just a soda. The lipstick on a pig anology comes to mind.

What works to sell electronic devices, therefore, I don't necessarily think will help sell other types of products. The "wow" factor just isn't there.

Even worse, look at that new logo. Starting in the 1990s, the logos started looking more 3-dimentional. More complicated. They're taking a simple product--one of the simpliest that most people are likely to buy on any given day--and trying to sell it as more than it really is. It's an "experience." They're trying to dress up their product to make it look more sophisticated than it really is. Logically, that makes a lot of sense to me, so long as they don't go too far overboard with that concept. That last logo of 2005 makes me thing they may have pushed that concept a bit too far, but it could have been worse.

This newest logo, however, comes right out of the 1970s. It's 2-dimentional. You know another word for 2-dimentional? Flat. It looks flat. And really, if you're in the business of selling carbonated beverages, is that really the look you want to go for? Flat?

I rest my case. The new Pepsi logo sucks.

Friday, April 17, 2009

Are you feeling rich, yet?

The sixth consecutive week the stock market is up. The Dow Jones is up over 20% from its lows. The S&P500 is up almost 30%! I don't want to brag, but my stocks have done even better than that. ;o) (Okay, maybe I want to brag a little....)

Interestingly, although my stocks are still down overall--by thousands and thousands of dollars, no less--the total value of my stocks is actually higher now than they have been at any time since 2001. Higher today than this time last year, even! And do you know why? Because I keep adding a little bit more to it every chance I get. When stocks really started tanking back last October, I practically cleaned out every cent in cash I had and threw it in the market. In poker terminology, I went "all in."

By last February, I recklessly went in with money I didn't even have--buying about $2,000 using margin. It's not much--I figured my stocks would have to tank probably about 95% before I got a margin call, and heck, if that was the case, who cares about the two grand?

So between the additional money I put into the market, and the fact that all my stocks have done so incredibly well these last six weeks, my net worth is actually higher now than it was at any time since I was laid off from Intel in 2001. I'm pretty happy about that. =)

But I'm a little disappointed too.... I rather liked stocks being as low as they were. I keep wishing another panic would set in--even just for a month or two--so I could buy more stocks at those same February and March lows. The idea of buying stocks AFTER they've gone up 20-30% just kills me. I still think stocks are generally pretty darned cheap, and I definitely want to keep buying, but I'd be happier buying if they were 20-30% cheaper than they are today. I can't really say if I could go back six weeks that I'd do anything differently. I already invested every cent I could--including $2,000 I didn't even have! I just wish I had more time to keep buying more....

But the real reason I felt compelled to write was a statistic I read in Why You Should Love Higher Taxes--that the overall stock market had a 284% turnover in 2007. HOLY COW! Is everyone INSANE?! The average stock was held for just four MONTHS?! I own about 2000 shares in a dozen or so companies. On average, the last several years, I've sold all of about 100 of them each year. That's about 5%. Frankly, they were stupid mistakes that really didn't fit well in my portfolio. The stocks might have done perfectly well, but they just "weren't me" so I sold them. And hey, I could harvest some tax losses in the process. =)

How could anyone possibly make any money by selling all their stocks every four months, though? It boggles my mind. I pay $7 per trade with my brokerage. Perhaps not the cheapest option available, but I consider it fair. To sell all my dozen or so companies would cost me 7 x 12 = $84. To buy another dozen companies would be another $84. And to do this three times each year would cost over $500! That's some serious money! I could buy another $500 in stock with that kind of dough!

And if those stocks actually were profitable, I'd have to pay short-term capital gain taxes on them. (Last year, that wouldn't have been a problem. Year-to-date, that could be quite a bit for me!)

So I figure I'm saving $500 in trading costs per year over the "average" person. And the amount of capital gains I've paid taxes on: Zero. Not one bloody cent. I sold one stock so far this year--in a company that was losing money and I no longer had much faith in--and bought another company I felt who's future looked brighter. It was in my IRA account, so I wouldn't have to worry about paying taxes on it. Considering that I lost money on it, though, that wasn't a concern anyhow. =)

But sheeze, I find that turnover rate astounding. Between the taxes and trading costs, how does anyone think they can come out ahead?

On another note.... I recently finished reading a book called How a Second Grader Beat Wall Street. I'd never heard of the book, but was looking for something completely unrelated at Barnes and Nobel and the title grabbed my attention. Cute. =) I flipped it open to the middle of the book and read a few pages, and found myself getting sucked in. I took a nearby chair and decided to read a couple of chapters.

I lost track of time. An hour passed. Then another. Maybe another. I don't really remember.... but next thing I knew, I turned the last page, then returned the book to the shelf. Thinking, "Wow, that was really, really interesting. There's a lot of people who should read this book."

If you haven't read it, I highly recommend it! I woudln't necessarily read the whole thing right there in the aisles of Barnes and Nobel, but that's an option if you want to make use of it. I'd probably check your local library first. ;o)

Thursday, April 16, 2009

Pigs and Gluttony

With all the bailouts, err, I mean economic stimulus recovery money being spent, pork--a.k.a. earmarks--have been in the news a lot. It's infuriating to read about, isn't it? Why are MY taxes paying for some stupid teapot museum in North Carolina? Or to study the mating habits of mosquitoes in Bora Bora? (Okay, I made that second one up. If my memory serves me right, that first one is actually true.)

BILLIONS of dollars are WASTED every year through earmarks. It's something that gets the blood boiling. It's something Republicans can take the moral high road. (Being in the minority, let's face it--their real complaint is the fact that they can't get THEIR earmarks in. Not like they did much about earmark problems when they actually had power in Congress to make lots for themselves.)

But one newspaper account I read said that in a $700 billion stimulus package, about $6 billion was earmarks. That's less than 1% of the stimulus package. Frankly, I don't really find myself getting worked up about less than 1%. Eliminating earmarks isn't going to balance our budget.

I'm also going to go out on a limb and say that not all earmarks are bad. Take the millions of dollars that will be paid out to Filipino WWII vets. That's an earmark. Ideally, it wouldn't be part of the economic stimulus package--it doesn't create jobs. It's not really relevant to the question at hand. But screw it, it's a good earmark anyhow. I'm ashamed that the US waited so long to get this sort of thing through. And while it won't directly create any jobs, to say it would create NO jobs isn't exactly the whole truth either.

We give out money to these well-deserving vets and what happens to it? They SPEND it! They spend it on health care. They spend it on homes. They spend it on food. Or maybe to fix their car. Guess what? Those types of activities create jobs. The money goes to companies that research and make drugs, home construction, your checker at the local supermarket, and the mechanic to fix the car, and the guy in the factor who made the parts that needed to be replaced. And then guess what happens? Those people who have jobs will spend the money THEY make. And so on. Directly, no, those payments don't create a single job. Indirectly? I don't know how many jobs they create, but it does indeed create jobs.

Even a teapot museum in North Carolina creates jobs. Teapot aficionados from around the world might buy airline tickets to see this world-class teapot museum. They might book motels, rent cars, and do some sight-seeing along the way. (Though to be perfectly honest, I'd rather see the money go for a rather more noble cause.)

So the economy is in the crapper. By some accounts, the worst recession since the Great Depression. It doesn't seem wise to say no because the economic recovery package is "packed" with less than 1% pork. And considering that a large amount of that less than 1% actually are good earmarks, and likely create jobs indirectly--I say suck it up. It's not as bad as Republicans or the media leads you to believe.

I kind of have a suspicious eye on Republicans. I don't really like to pick sides--or at least find an excuse to criticize both Democrats and Republicans rather than single out either side for praise or a smackdown. The fuss over earmarks by Republicans, I think, is mostly because they have little power and can't push through their own earmarks. So they're taking the moral high ground bashing the Democrats for using them. All the while wishing their roles were actually reversed.

But there's a cynical side to me that thinks it's even worse than that. Consider this: The best thing that could possible happen to help the Republican cause is the complete and utter failure of the government. Who'll get the blame? Democrats, of course. They control both houses of Congress AND the presidency. The Republicans actually have a vested interest in making sure the government goes down in proverbial flames. They could be thinking, "Hey, this economic stimulus package thing might actually work. And those darned Democrats will get all the credit for 'saving' our nation! But if we can stop it from passing.... and the recession keeps getting worse.... the Democrats will get the blame since they're the ones in power."

Don't get me wrong--I have absolutely no reason to think that sort of thing is going on. I think the more likely scenario is they're just pounding drums about pork because they can't push through the pork advantageous for themselves, so they're claiming the moral high ground instead. It's the logical thing to do.

But I still find it somewhat disconcerting that Republicans as a whole really have no incentive to pull us out of this recession. At least if Republicans had a majority in at least one of the houses of Congress, THOSE Republicans would have a vested interest in getting the country straightened out. The blame for anything bad that happens would be spread among both parties (and likewise, any good news would be shared among both parties).

Politics as usual....

Don't believe the hype, though. Pork is not as bad as the media generally makes it out to be. Not that I'm a huge fan of it either, but in the grand scheme of things, there are more important things to worry about.

Saturday, January 31, 2009

The One-Second Scam

Have you heard about the so-called "one-second" commercial that will be showing on the Super Bowl? I first heard about it while watching the Tonight Show. The star of the commercial was a guest on the show, and they showed a number of one-second commercials that were shot plus the one that will be aired.

You can read all about it at among lots of other news articles posted about the commercial.

Locally, here in Seattle, the one-second commercial barely gets any notice because there will be a half-second commercial by Ivar's. You can read about that commercial at

But here's the thing--they're scams. These aren't really "one-second" or "half-second" commercials. They're gimmicks that get enormous amounts of press and talk. I haven't heard much about any of the other commercials that will be airing as I have about those one-second and half-second commercials. They get more free air time in the news, which I think should count towards the total real "time" of the commercial.

Frankly, it's brilliant marketing. These people are smart--they only have to buy one (and one-half) seconds of airtime, and they wind up with hours of free publicity it generates.

Only a sucker would pay full price for a 30-second commercial and wind up with less press as a result.

So anyhow, I'm calling the one-second and half-second commercials a scam. It doesn't count in my book if the people who make them expect lots of free publicity because of it.