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We biked in the woods thrice last week, only stopping to water the dogs and to eat salal berries, thimbleberries, blackberries, dewberries, salmon berries, and red huckleberries. We covered ten miles some days, no more because of the dogs.
Baxter has diabetes incipitus, so he must never be without water. He drinks as much as Peggy, Bonnie, and me together, so much water that his pee looks like water. We carry a gallon for a ten-mile trip and, on warm days, stop every ten minutes or so to check him for heat exhaustion. We note whether he collapses in a heap or hunts for game in the bushes. We check his gums to be sure they are pink. We talk to him to gauge his alertness. We give him time to catch his breath.
We are aided in our attentiveness by reminders of how everlastingly guilty we would feel if we ran him to death. I say we, but Peggy leaves Baxter’s care on the road to me, which is a reversal of what we do at home where she looks at the dogs’ piss, pokes at their poop, feels their bodies for growths, observes their eyes; and sometimes works herself into a panic for little reason that I can see. I took Bonnie to the vet last week simply because Peggy was worried about a fleeting pain. The vet didn’t know what to make of it, and suggested x-rays. I demurred at the price, and came away with a bottle of anti-inflammatory pills of which only two were used—and them only because we had them.
Without dogs, we would bike faster, farther, and sometimes on pavement, but dirt and gravel are conducive to slower speeds and are easier on their feet. Their joy is worth our sacrifice. It is even worth having to bathe them when we get home.
Thoughts of investing
There are as many mutual funds as there are stocks on the Wilshire 5000 (which actually contains 7000 stocks). Many mutual funds charge a four to eight percent sales fee, a one to two percent advisory fee, and a 12b1 fee which goes for advertising. This in a market that averages ten percent. Less than half of these actively managed funds earn, after expenses, a return that is equal to the market, and that’s in one year. With every subsequent year, the winning funds have less chance of beating the market average again. By year five, the number is down to one in four, and those investors who own a market-beating fund pay higher taxes (due to the fund’s portfolio turnover) and incur greater risk.
Impartial financial writers often advise investors to not even try to beat the market. Instead, buy a fund that replicates the index. The passively managed Wilshire 5000 index fund that I own has no sales fee, no 12b1 fee, and a 0.1% maintenance fee. Furthermore, the portfolio turnover rate is almost nil (compared to 100% or more for many managed funds), so there are few capital gains. I also own a bond index fund that follows the broad American bond market, and a third fund that tracks the EAFE (Europe, Australasia, and the Far East) stock index. I own 50% American stocks, 5% foreign stocks, and 45% American bonds. If I were younger, I would own more stocks, but since there have been whole decades in which the market lost money, I can’t take the risk.
Yesterday, I heard over NPR that the stock market might crash this very week due to the domino effect of mortgage loan defaults. The brokerage houses are in a panic. The hedge fund managers can’t slow down long enough for their in-house shoeshine boys to polish their shoes. Some fund managers have even stopped honoring redemptions.
Maybe the sky is about to fall, but then again stocks are never more popular than at the end of a bull market or more shunned than at the end of a bear market. This is why I mostly ignore the prognosticators. I say mostly, because I understand only too well the twin emotions of greed and fear that drive the market.
Still, I’ve seen the market drop 38% without being tempted to bail. I’m not brave; I just think in terms of shares instead of dollars. If I own 100 shares of a mutual fund, I will still own those 100 shares whether they are worth a lot or a little unless I sell them. This means that I have reason to hope. If I owned 100 shares of stock, it would be a different matter because a person can ride a stock all the way to the ground. By contrast, a mutual fund is spread across many stocks, and my investments are spread further than any actively managed mutual fund. If big company stocks are rising, I rise with them. If small company stocks or Japanese stocks are having their day in the sun, I get in on some of that. If no stocks are going up, I have bonds to fall back on. And no matter what, I won’t pay high fees and taxes.
My only indulgence is 350 shares of a fund that invests solely in oil and gas exploration. It’s breathtaking to watch its movements on a given day, and, over the course of a year, it can go up or down by 80%. I tell myself that I should sell it while it’s flying high, but I love that fund. It’s like having a poisonous snake for a pet. The snake kills your rats, but then you can never trust the snake not to kill you too, and there’s something attractive about that.
Impartial financial writers often advise investors to not even try to beat the market. Instead, buy a fund that replicates the index. The passively managed Wilshire 5000 index fund that I own has no sales fee, no 12b1 fee, and a 0.1% maintenance fee. Furthermore, the portfolio turnover rate is almost nil (compared to 100% or more for many managed funds), so there are few capital gains. I also own a bond index fund that follows the broad American bond market, and a third fund that tracks the EAFE (Europe, Australasia, and the Far East) stock index. I own 50% American stocks, 5% foreign stocks, and 45% American bonds. If I were younger, I would own more stocks, but since there have been whole decades in which the market lost money, I can’t take the risk.
Yesterday, I heard over NPR that the stock market might crash this very week due to the domino effect of mortgage loan defaults. The brokerage houses are in a panic. The hedge fund managers can’t slow down long enough for their in-house shoeshine boys to polish their shoes. Some fund managers have even stopped honoring redemptions.
Maybe the sky is about to fall, but then again stocks are never more popular than at the end of a bull market or more shunned than at the end of a bear market. This is why I mostly ignore the prognosticators. I say mostly, because I understand only too well the twin emotions of greed and fear that drive the market.
Still, I’ve seen the market drop 38% without being tempted to bail. I’m not brave; I just think in terms of shares instead of dollars. If I own 100 shares of a mutual fund, I will still own those 100 shares whether they are worth a lot or a little unless I sell them. This means that I have reason to hope. If I owned 100 shares of stock, it would be a different matter because a person can ride a stock all the way to the ground. By contrast, a mutual fund is spread across many stocks, and my investments are spread further than any actively managed mutual fund. If big company stocks are rising, I rise with them. If small company stocks or Japanese stocks are having their day in the sun, I get in on some of that. If no stocks are going up, I have bonds to fall back on. And no matter what, I won’t pay high fees and taxes.
My only indulgence is 350 shares of a fund that invests solely in oil and gas exploration. It’s breathtaking to watch its movements on a given day, and, over the course of a year, it can go up or down by 80%. I tell myself that I should sell it while it’s flying high, but I love that fund. It’s like having a poisonous snake for a pet. The snake kills your rats, but then you can never trust the snake not to kill you too, and there’s something attractive about that.
Scandi Festival
I helped my Masonic Lodge staff a food booth at the Scandinavian Festival last week. When I arrived, I was handed a fake-embroidery vest and a pointed hat that looked like a limp dunce cap. Our specialty was meatballs on a stick. I assumed they were called meatballs-on-a-stick, so when a customer asked me for a frickadeller, I asked her what she was talking about. She pointed to our big sign (which I hadn’t read), and looked at me as if I had pretty much ruined the exoticism of her gustatory experience.
Another customer asked what kind of food we had. I knew what kind of food we had. We had Costco precooked sausages and Don Juan tortillas, but I didn’t know what kind of food we were supposed to have. I called Donald over since Donald was the only one of us who actually knew what he was doing. “It’s Swedish,” he said. Of course, Swedish meatballs, why didn’t I think of that? Maybe for the same reason that I don’t know what countries constitute Scandinavia. Sweden and Norway, I suppose. Denmark, perhaps? Finland possibly? Do I care? A little.
I neither hated my shift nor loved it. Mostly I watched women, felt mildly annoyed when we had customer, and wondered if everyone else who was serving food (eating appeared to be the point of the festival) was as fake as we were.
Another customer asked what kind of food we had. I knew what kind of food we had. We had Costco precooked sausages and Don Juan tortillas, but I didn’t know what kind of food we were supposed to have. I called Donald over since Donald was the only one of us who actually knew what he was doing. “It’s Swedish,” he said. Of course, Swedish meatballs, why didn’t I think of that? Maybe for the same reason that I don’t know what countries constitute Scandinavia. Sweden and Norway, I suppose. Denmark, perhaps? Finland possibly? Do I care? A little.
I neither hated my shift nor loved it. Mostly I watched women, felt mildly annoyed when we had customer, and wondered if everyone else who was serving food (eating appeared to be the point of the festival) was as fake as we were.
The sad story of American Home Mortgage
Last week, I lost $14,000 in the stock market. I didn’t do anything wrong—it was just a bad few days. Still, $14,000…. I pick up pennies from the sidewalk. If someone gave me $14,000 to actually spend, I would be stumped.
I gain and lose money all the time in the stock market (I surely lost several thousand more today), but I don’t normally track my investments. I simply look at my monthly statements, groan or smile, and file them away.
My investment style is a combination of whatever looks good at a particular time (I buy but seldom sell), and my desire to protect Peggy from volatility. When we got into the market, she worried about how I would react to losing money, but I soon realized that she was more grieved by it than I. She interpreted every up as a fluke and every down as the start of Great Depression II. I accepted both as normal, and held to the belief that, over time, the market would go up more than it went down. The worst down we saw was 40%, and that was okay. It wasn’t something to sneeze at, but it wasn’t tragic either.
My first thought upon investing in stocks was to buy low and sell high. Everyone thinks that, only it’s harder than it looks—a bit liking throwing rocks at darting night birds. That’s why I mostly stopped selling, that and the tax liability.
Over the years, I felt like I should study investing more, but the subject didn’t interest me so I kept putting it off in favor of work that I could stand back and look at. Things like remodeling projects. In the last month, I’ve been making up for lost time. The main thing I’ve learned is that even knowledgeable investors have trouble making a significant amount of money in the market (although losing a significant amount is easy enough). Finding a way to beat the market is like finding a cure for the common cold. If scientists can cure a rare cancer, surely they can cure a common cold, or so it would seem, but after decades of work and millions of dollars, colds remain defiant. This gives my market studies a dismal air because, there being no one to tell me what will work, I might do really well, or….
The impetus to today’s sell-off was the fall of American Home Mortgage Corporation. This evening, I saw a graph of its demise that was updated every five minutes throughout the day. A year ago, AHM was selling for $36 a share. Today, it opened at $10.47. At 2:00, it was still at $10.47. By 3:00, it was $1.14. Picture that graph. First, a long horizontal line. Then a sharply descending vertical line. Then a slightly wobbly horizontal line. Then nothing. Like a heart monitor on a dying man.
Imagine that you woke up this morning in Houston or Milwaukee, and went to your job at AHM expecting an ordinary day, and then top management announced to Wall Street that bankruptcy was looming. Bang! By mid-afternoon you’re out of your job and possibly your savings. That’s drama. I once heard about an economist who was so moved by graphs that he sometimes cried. I can see that now, and it makes studying the market a lot more interesting.
I gain and lose money all the time in the stock market (I surely lost several thousand more today), but I don’t normally track my investments. I simply look at my monthly statements, groan or smile, and file them away.
My investment style is a combination of whatever looks good at a particular time (I buy but seldom sell), and my desire to protect Peggy from volatility. When we got into the market, she worried about how I would react to losing money, but I soon realized that she was more grieved by it than I. She interpreted every up as a fluke and every down as the start of Great Depression II. I accepted both as normal, and held to the belief that, over time, the market would go up more than it went down. The worst down we saw was 40%, and that was okay. It wasn’t something to sneeze at, but it wasn’t tragic either.
My first thought upon investing in stocks was to buy low and sell high. Everyone thinks that, only it’s harder than it looks—a bit liking throwing rocks at darting night birds. That’s why I mostly stopped selling, that and the tax liability.
Over the years, I felt like I should study investing more, but the subject didn’t interest me so I kept putting it off in favor of work that I could stand back and look at. Things like remodeling projects. In the last month, I’ve been making up for lost time. The main thing I’ve learned is that even knowledgeable investors have trouble making a significant amount of money in the market (although losing a significant amount is easy enough). Finding a way to beat the market is like finding a cure for the common cold. If scientists can cure a rare cancer, surely they can cure a common cold, or so it would seem, but after decades of work and millions of dollars, colds remain defiant. This gives my market studies a dismal air because, there being no one to tell me what will work, I might do really well, or….
The impetus to today’s sell-off was the fall of American Home Mortgage Corporation. This evening, I saw a graph of its demise that was updated every five minutes throughout the day. A year ago, AHM was selling for $36 a share. Today, it opened at $10.47. At 2:00, it was still at $10.47. By 3:00, it was $1.14. Picture that graph. First, a long horizontal line. Then a sharply descending vertical line. Then a slightly wobbly horizontal line. Then nothing. Like a heart monitor on a dying man.
Imagine that you woke up this morning in Houston or Milwaukee, and went to your job at AHM expecting an ordinary day, and then top management announced to Wall Street that bankruptcy was looming. Bang! By mid-afternoon you’re out of your job and possibly your savings. That’s drama. I once heard about an economist who was so moved by graphs that he sometimes cried. I can see that now, and it makes studying the market a lot more interesting.
The whys of organizing
I’ve spent the week organizing, or rather reorganizing, our finances and file cabinets. One of the traits Peggy and I share is that we are born organizers. The difference is that I organize everything—socks, tools, pantry shelves, even the kitchen junk drawer, whereas she is a selective organizer. She’s content to let things overflow in her purse, desk, and closet; but her checkbook is an accountant’s envy, and her button collection is displayed so symmetrically that a flea couldn’t crawl through the margin of error. I stop short of such perfection, though I still qualify as neurotic by most standards, my garage being tidier than other people’s living rooms.
Well, anyway, I organized this week. It was such fun that I had to force myself to go to bed at night. Organizing is, of course, an attempt to control reality—to make it safer, tidier, more predictable. The problem is that reality is inherently dangerous, messy, and unknowable. The harder I try to tame it, the more aware I become of its dangers, and the greater my need to eliminate those dangers.
The most frightened man I ever knew carried a .45 everywhere, even into the shower (he put it in a baggie). I visited him once. He had a yard alarm, and every time a squirrel walked by, that alarm would go off, and my friend would run to the window with his .45. So it is that prudent watchfulness can grow into full-blown paranoia. On the other hand, the world really is a dangerous place, and it makes sense to try to avoid the most likely dangers.
The trick here, as in all things I suppose, is balance. But where is the fulcrum? I don’t see it. Do you see it?
Well, anyway, I organized this week. It was such fun that I had to force myself to go to bed at night. Organizing is, of course, an attempt to control reality—to make it safer, tidier, more predictable. The problem is that reality is inherently dangerous, messy, and unknowable. The harder I try to tame it, the more aware I become of its dangers, and the greater my need to eliminate those dangers.
The most frightened man I ever knew carried a .45 everywhere, even into the shower (he put it in a baggie). I visited him once. He had a yard alarm, and every time a squirrel walked by, that alarm would go off, and my friend would run to the window with his .45. So it is that prudent watchfulness can grow into full-blown paranoia. On the other hand, the world really is a dangerous place, and it makes sense to try to avoid the most likely dangers.
The trick here, as in all things I suppose, is balance. But where is the fulcrum? I don’t see it. Do you see it?
The whys of organizing
I’ve spent the week organizing, or rather reorganizing, our finances and file cabinets. One of the traits Peggy and I share is that we are born organizers. The difference is that I organize everything—socks, tools, pantry shelves, even the kitchen junk drawer, whereas she is a selective organizer. She’s content to let things overflow in her purse, desk, and closet; but her checkbook is an accountant’s envy, and her button collection is displayed so symmetrically that a flea couldn’t crawl through the margin of error. I stop short of such perfection, though I still qualify as neurotic by most standards, my garage being tidier than other people’s living rooms.
Well, anyway, I organized this week. It was such fun that I had to force myself to go to bed at night. Organizing is, of course, an attempt to control reality—to make it safer, tidier, more predictable. The problem is that reality is inherently dangerous, messy, and unknowable. The harder I try to tame it, the more aware I become of its dangers, and the greater my need to eliminate those dangers.
The most frightened man I ever knew carried a .45 everywhere, even into the shower (he put it in a baggie). I visited him once. He had a yard alarm, and every time a squirrel walked by, that alarm would go off, and my friend would run to the window with his .45. So it is that prudent watchfulness can grow into full-blown paranoia. On the other hand, the world really is a dangerous place, and it makes sense to try to avoid the most likely dangers.
The trick here, as in all things I suppose, is balance. But where is the fulcrum? I don’t see it. Do you see it?
Well, anyway, I organized this week. It was such fun that I had to force myself to go to bed at night. Organizing is, of course, an attempt to control reality—to make it safer, tidier, more predictable. The problem is that reality is inherently dangerous, messy, and unknowable. The harder I try to tame it, the more aware I become of its dangers, and the greater my need to eliminate those dangers.
The most frightened man I ever knew carried a .45 everywhere, even into the shower (he put it in a baggie). I visited him once. He had a yard alarm, and every time a squirrel walked by, that alarm would go off, and my friend would run to the window with his .45. So it is that prudent watchfulness can grow into full-blown paranoia. On the other hand, the world really is a dangerous place, and it makes sense to try to avoid the most likely dangers.
The trick here, as in all things I suppose, is balance. But where is the fulcrum? I don’t see it. Do you see it?
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