Warren Buffett’s Investing Secrets, F-Troop, and Amazing Bigfoot Investments

“Well if there were no Gods then anyone can do anything and nothing will matter.  You could do as you like and nothing would be real.  Nothing would have meaning, or value.  So even if the Gods don’t exist, it still necessary to have them.” – Vikings

DSC03968

Even Bigfoot appreciates the climate in Margaritaville.

It was reported (quite a while ago) that Jimmy Buffett of “Margaritaville” fame and Warren Buffett of “Having All the Money” fame were related.  However in 2007 they spit into a tube (well, separate tubes, one tube would be gross) and had their DNA tested.  The results showed that if they were related, it was more than 10,000 years in the past, as Warren Buffett was related to Scandinavians and either Iberians or Estonians.  Jimmy Buffett was related to the Dutch, sunscreen, tequila and salt.

I’ve always regretted that they weren’t related, since my ideal restaurant would be the Buffett Buffet™.  All you can eat cheeseburgers (from Jimmy) and Coca-Cola® from Warren (who owns a large chunk of the company Coca-Cola™).  The television screens would alternate between surfing, bartending shows, and a stock ticker.

But this post is all about Warren, and only slightly about Cheeseburgers in Paradise©.

Warren Buffett is smart.  You don’t start with (relatively) small amounts of money and end up with billions by luck, unless you’re Mark Cuban, who is the only person on planet Earth who sold a company with 330 employees for enough stock to make him a billionaire.  Thankfully he has a billion dollars, so he can hire people smarter than him.   (Yes, he has more money than me, but, really – aside from being so lucky?  He’d be a wonderful bartender.)

One data point in my favor in stating that Warren is smart would be that he graduated from the University of Nebraska at the age of 19, and then went off to Columbia (the college, not the country).  Why Columbia (the college, not the country)?  He knew that Benjamin Graham taught there.  Ben Graham is known as the “Father of Value Investing,” and Buffett wanted to learn from him, and took his class.  After finishing at Columbia, he wanted to go to work for Graham, but Graham said no.  Buffett went back to Nebraska to be a stockbroker.

One day, Graham called and said that Buffett could come to work for him – he was being called up to the big leagues.  The next day Buffett killed all of his customers (no witnesses that way) and went to New York to work for Graham.  Okay, Buffet didn’t kill anyone.  That we know of – this isn’t Game of Thrones.

So, when Buffett got the job with Graham, he learned a lot.  Eventually Graham had enough money and wanted to spend the rest of his life on, well, whatever he wanted to spend it on (PEZ®, pantyhose and elephant rides?), so he shut the company down.  Buffett was, by most standards, pretty well off, and decided he wanted to move back to Omaha and open his own value investing shop because he missed all of the corn and the corn smells.  Buffett’s various ventures were pretty small – in 1990, his company (Berkshire Hathaway) was worth $7175.  Per share.  Recently that same share would cost over $260,000, and Berkshire Hathaway’s total value is over $440 billion dollars.

Warren Buffett has done okay.

He’s also known for being pretty frugal.  I know you’re happy I added frugal to that last sentence, because otherwise you’d just think that I thought that Warren Buffet was pretty.

DSC01920

I personally think that this picture is pretty, even if Game of Thrones® has made dragons the good guys.

Warren has lived in the same house since the 1950’s, (it is a nice house, but not that nice), drives a car for years at a time (rumor is he bought a hail damaged one because it was cheaper), and recycles Pringles© canisters into air conditioning ductwork for his house and saves the trays for TV dinners to use to microwave Oscar Meyer® hot dogs.

Me?  If I had as much money as he does, I’d probably buy a new car every time mine ran out of gas (I kid, I drive my cars forever (LINK)).

I was watching a video while exercising (I work out for only for you and I study for only for you, Internet!) and heard Warren state “ . . . if I could invest as a small investor today I think I could . . . I know I could make a 50% return.”

That was a pretty powerful statement, since I certainly count as a small investor by Mr. Buffett’s standards.

Why can’t he do that?  He’s got billions of dollars he has to invest, so he has to do big deals.  There are a lot of good deals you could do with a few million dollars, but very few good deals in the billion plus region.  Turning the company’s $440 billion into $660 billion in a year is hard.  He could turn $10 million in to $15 million in a heartbeat.  Small deals are easier since there are so many of them.

Warren’s advice to investors is simple:  buy a low overhead (low fees) index fund (an index fund is a fund that is created to match an index, like the Dow Jones Industrial Average or the S&P 500).  If you can’t do what he does and value invest, this is the best way to get a good return.  And that’s good advice (in my opinion) for any small investor that doesn’t have the time to do the required research.

Let’s repeat that:  Warren Buffett says you should buy an index fund.

But me?  I know Warren didn’t get all of those Pringles® cans by investing in an index fund.  What did Warren Buffett do to get really rich?

What research did Graham and Buffett (reminder:  not Jimmy Buffett, but Warren Buffett) do prior to investing?

  1. Good Leadership, Good Business – Graham and Buffett were looking for leaders that had experience, capability, and great integrity. Warren can call CEOs and talk to them and give them the sniff test.  You can’t, so this is harder for you.  The business also has to be a good one. (More on this later.)
  2. Low Price to Earnings Ratio – The price to earnings ratio (P/E ratio) is how much you have to spend to get a dollar of the company’s earnings.

Before the 1980’s, the rule was a company that had a price to earnings ratio of over 20 was ALWAYS overpriced.  But the rule back then was to take the P/E and subtract the current prime interest rate.  Today the prime interest rate is ~1%, so using that old rule, a P/E of 19 would be acceptable.  Right now it’s difficult to make a return on capital because so much money is flooding everywhere . . .

Why was the rule like that?  It was assumed that you could either get returns from saving your money or from investing it.  Currently there is no benefit from saving it with historically low rates, so the P/E has continually wandered higher.

Alone, however, P/E tells you nothing.

  1. Low Price to Book Value – The book value of a company is how much all of its “stuff” is worth. In theory, if a company has a price to book value of less than one, you could buy the company (price), sell all of its stuff (book value), and come out ahead.  In theory.  If you have ever driven past a boarded up factory (and you have) you know that the book value just might be overstated.

Again, like P/E, Price to Book tells you nothing.

One video I watched while climbing on an infinite staircase to nowhere showed a screening method for value stocks that was alleged to have come from Warren Buffett:

  • Pick the Price to Earnings ratio,
  • multiply it by the price to book value, and
  • if the number was less than or equal to about 30,
  • the stock was a candidate.

Simple, right?

It is (and it’s overly simple).  Because what stocks have low P/Es and low Price to Book?

  1. Great, Undervalued Companies in Great Markets and
  2. Failing Businesses in Crappy Markets.

How do you tell the difference?  Sometimes you don’t.  Buffett will go on at length, if you let him, about all of the failures he’s had in picking companies.  But he had a consistent strategy that he followed for years that obviously resulted outstanding returns.  And he didn’t pick only small companies – Coca-Cola® was one of the companies he picked that produced amazing gains for Berkshire Hathaway.

So, how does a company like Berkshire Hathaway measure up on the value score?

  • It has a P/E of 20, and a Price to Book of 1.5. This would result in a score of about 30, so it would be within Warren’s window.  According to Warren, Warren is a value!  Also, Berkshire Hathaway has a credit rating better than (really) most countries.

What about . . . Tesla?

  • Tesla has never made any money, so its P/E is infinite. Its price to book is 12, so, 12 times infinity is  . . . still infinity.  Probably not a Buffett candidate?

And Honda?

  • Honda, maker of the best-selling electric car has a P/E or 8.6. It has a price to book of 0.77.  That means it scores an amazing 6 or so on Warren’s scale.  Wow!

So, let’s also look at a company that no one understands, Amazon:

  • It has a P/E of 120.  A price to book of 20.  That’s an astonishing 2400.  Again, probably not a “buy” rating from Buffett.

But is Honda a good buy right now?  Or not?

The only way to tell is to go back to Buffett’s first point.  But you and I can’t call up the CEO of Honda and expect to get real answers.  Warren probably could.

But we have help fortunately:  Joseph Piotroski, an accounting professor at the University of Chicago came out with a list of criteria that are objective and that anyone can find in the annual report of any publically traded company and named it the F-Score, which I really hope was based on the 1960’s show “F-Troop.”  I’d go through the list, but it’s much easier to pop up a link.  So here’s the (LINK) to Piotroski’s criteria.

ftroop

I think that Agarn was a horrible value investor . . . did you see the episode where he traded the blankets for a handful of small marbles that were supposed to bring Custer back from the dead?

Source- mycomicshop.com

Profitability

  1. Return on Assets (1 point if it is positive in the current year, 0 otherwise);
  2. Operating Cash Flow (1 point if it is positive in the current year, 0 otherwise);
  3. Change in Return of Assets (ROA) (1 point if ROA is higher in the current year compared to the previous one, 0 otherwise);
  4. Accruals (1 point if Operating Cash Flow/Total Assets is higher than ROA in the current year, 0 otherwise);

Leverage, Liquidity and Source of Funds

  1. Change in Leverage (long-term) ratio (1 point if the ratio is lower this year compared to the previous one, 0 otherwise);
  2. Change in Current ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  3. Change in the number of shares (1 point if no new shares were issued during the last year);

Operating Efficiency

  1. Change in Gross Margin (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  2. Change in Asset Turnover ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);

The lower the F-Score, the crappier the company.

And it, when combined with the screen above the Piotroski F-Score produced a return 7.5% higher than any other Value Investing test.  So, does Honda suck or not?

I don’t know.  But I’m going to check with the help of Dr. Piotroski.

But the biggest failure in Value Investing is to allow your emotions to rule.  Markets are driven by emotion:  Elon Musk is awesome, so I’ll buy Tesla!!!!!

Tesla might be awesome, but there are way too many Tesla fans for the price to be rational.  Part of finding value in the market is understanding that you want to buy at the lowest prices.  When are the lowest prices?  “When blood is running in the streets.”  When people have given up.  When people are running scared.  At that point, amazing companies can be picked up at incredible values.

In April of 2000 I was thinking of buying Microsoft®.  I had generally been a pessimist, but, at a certain point, I was finally ready to give up being a pessimist.  I was talking to a broker and then . . . the Dotcom Bubble burst.  If I had bought Microsoft© back then?  It would have taken thirteen years to be at breakeven.  And that’s not including inflation, which ate away at the buying power of the dollar.

But can I still get a Cheeseburger in Paradise?  Sure!  Jimmy Buffett will even have a Margarita with you if you have the proper parrot apparel.  But don’t expect Warren Buffett to pay for it.  But he will take your discount coupons so he can use them to get some suits he bought in 1983 altered.

 John Wilder has no positions in any stock mentioned, and won’t take any for the next week or so, until he can calculate the F-Score of Honda.  Especially Tesla – he’s not buying that though he loves Elon.  John Wilder is NOT a financial advisor.  And he’s had wine tonight.  Don’t trust him.

Jordan Peterson, Success, Bruce Campbell, and Roman Emperors

Discovery Channel© has Shark Week™, and at Wilder, Wealthy and Wise® we are lucky enough to have Dr. Jordan Peterson Week©.  This is the third of three posts on Dr. Jordan Peterson – his website is here (LINK). My first post on Dr. Peterson can be found here (LINK), and the second post here (LINK).

 

“Jamie, how many 29 year old record company presidents operate out of their mom’s trailers? Know what I’m sayin’?”- J-Roc’s Mom, “Trailer Park Boys

DSC04463

Oil Tank Dennis Quaid (playing Sam Houston) knows a little bit about Oil Tank success, starting his own Oil Tank country and all.

I had intended on just doing three posts this year on Dr. Peterson, but will probably do updates from time to time, since his ideas are stone-cold interesting and I think I could do six weeks of posts on those ideas without repeating myself, but if I did that we’d just have to hand over the reins to Jordan, and I own the domain name, and I don’t think he’d share the revenues.

Elon Musk almost always has something going on, too.

Monthly updates about these guys?  We’ll see.

(By the way, Elon, GOOD JOB dumping Amber Heard, she’s really not worth a Prius®, dude.  I’m telling you – she is trouble and likely a Terminator® sent by James Cameron from the future to mess with your Mars (LINK) plan.  You dodged a bullet!!!)

The_Man_Who_Sold_the_Moon_Shasta_Ed

Now a 100,000% better with no Amber Heard. (image, Wikipedia)

But this is Wealthy Wednesday, and Dr. Peterson has a lot to say about success (and, it seems, almost everything else), which is reasonable given the unreasonable amount of success that he’s had, especially recently.

Today we’re going back to those forty points that Peterson laid out on Quora (LINK) in response to the question “What are the most valuable things everyone should know?”  In the analysis on Truth last post (LINK), Dr. Peterson had 16 out of 40 points that related in some way to Truth (I know, we could quibble, was it 15 or 17, but why quibble, since we’re friends?).  Are there any of the 40 points that speak to success?

Yes.  Dr. Peterson speaks on things I consider to be huge when it comes to a deep, meaningful success that combines significance with economic success.  I mean, why would you want a Justin Bieber-level success if you could have success that mattered, like Bruce Campbell?

Bruce

A perfect gift for any occasion!

Peterson has several videos on YouTube® that directly tackle important personal development points that lead to success:  fear (and how to overcome it), the importance of having a routine, where to find the freshest and plumpest Pez®, and how success leads to even more success.  I encourage you to watch the videos.

But going back to the 40 points.  Many relate to behaviors (behaviours in Canada, eh) that lead to success.  These are quoted below (bold) with Dr. Peterson’s gracious permission.  My commentary follows.

  • Pursue what is meaningful, not what is expedient. – There is always the opportunity to do things just for the moment, but when you work on what matters? That leads to long term success and value.  This means that, no, eating only appetizers doesn’t make a good dinner.  You need cake, too.
  • If you have to choose, be the one who does things, instead of the one who is seen to do things.   Do them so you how to do them.  Do them because they are meaningful.  Do them because it’s right.  Doing them just to be seen?  Yeah, we wedgied that guy in High School.  That’s the worst kind of smarmy dude.
  • Pay attention. Sorry, dozed off.  Oh, yeah.  People notice when you take them seriously, when what they say matters to you.  If you’re not present in the moment, those that are will notice.  And you’ll miss important things.  “Hang on, honey, I have to tell Google that they should lower their price to $750,000.  They want a million bucks!  Stupid college kids.”  (Yes, that really happened, and he did not get the deal.)
  • Assume that the person you are listening to might know something you need to know. Listen to them hard enough so that they will share it with you. There is an implied Trustworthiness in this statement.  Be worthy of their trust.  Realize that Truth is not where you look, it’s where you find it.
  • Be careful who you share good news with. Bad bosses get jealous, and even good people get jealous.  Similarly, don’t appear too good to your boss.  A boss that’s intimidated by you is not generally a rational boss.  If you have to make that calculation, beware.  Likewise, sometimes your friends get a bit tired of hearing of an endless sea of victory.  Be real to them.
  • Be careful who you share bad news with. People who don’t like you (or to whom you just represent a tool) can use that news against you.  Similarly?  Don’t share your weaknesses.  Hey, Clark Kent – your boss does NOT need to know that you’re nearsighted and break out in hives every time you’re near a little kryptonite©.  Also, your bad news might be insignificant compared to someone else’s bad news.  Your very worst day might be better than the best day of the person you’re talking too.  “Oh, my, and the caviar was nearly off!  I made do, however,” won’t go too far if the other person can barely afford to pay their chauffer and their private pilot.
  • Make at least one thing better every single place you go. The right people generally appreciate this.  They see it, and it’s obvious.  If they don’t see it?  You know, deep inside, it was the right thing.  A guy was working really hard on making a concrete footer smooth.  I pulled aside his great-great-grandboss.  “You know that’s going to be buried, right?  I’m good if it’s a bit rough.  Heck, it’s really even better if the concrete is rough.  More friction.”  Boss’s response?  “It’s his work.  The man has pride in it.  I’ll let him own it.”  What a good answer.
  • Imagine who you could be, and then aim single-mindedly at that. How many days do you want to spend being the you that isn’t the best you?  The first step is imagining.  Once you’re there, Von Mises (LINK) will take over.  If you see a better you, a path to get there, and believe that your action can take you there?  Nothing can stop you.  Unless you told your boss about the whole kryptonite® thing.
  • Do not allow yourself to become arrogant or resentful. Good things will happen to you during your career.  Bad things will happen to you during your career.  People will step on you (if they can) to elevate themselves over you.  You’ll forget the contributions of great team members.  Focus on this:  You’re never as good as people think, or as bad.  You have had amazing help through your life.  “Don’t spend time hating the situation.  The situation doesn’t care.” (Marcus Aurelius, probably)

Marcus

Unknown Sculptor, Pierre-Selim (Self-photographed) [CC BY-SA 3.0]

Why is it that when I wear a toga to work that they think I’m a little off?  Marcus rocked his!

  • Work as hard as you possibly can on at least one thing and see what happens. This implies that you’re going to get rid of the fear of failure.  If you try, really hard, and fail, what will happen?  Mainly, nobody notices, except you.  And you get stronger.  It has been my experience that the harder I work at something, the better I get.  And sometimes I achieve results that are beyond anything I ever could have expected.  And other things fail, but I learn a little bit more each time.
  • Maintain your connections with people. Outside of graffiti artists, The Mrs., and Keanu Reeves, most of us don’t work alone.  Most of us depend on others to make us better, make us stronger.  There’s a natural pull for certain people (introverts and those under stress) to pull back, mainly when they need other people the most.
  • Do not carelessly denigrate social institutions or artistic achievement. The stupid form you just filled out?  Yeah, somebody had to design it, and they had a reason.  See if you can make the form better, after understanding why it even exists.
  • Nothing well done is insignificant. There is the possibility of beauty in the most mundane and base of tasks – cleaning a microwave oven can be significant, especially when it’s done well.  I can show you the fulfillment you will get from cleaning a microwave.  See you at my house on Saturday?  Only a minimal charge for this lesson.  (H/T M. Twain)
  • Dress like the person you want to be. True enough.  Some days I’m Homer Simpson.  I would just love to be involved in those wacky adventures!  Danger point:  If you work at a construction company and dress like an investment banker you will be mocked.
  • Be precise in your speech. Meaning is important, and certain people follow only concrete statements.  Precision in a concrete fashion is especially important to them – their brains don’t understand exaggeration for effect.  Likewise, when someone asks you a yes or no question?  Answer yes or no before you explain the answer.  They might not care why.  And precision in speech leads to truth.
  • Stand up straight with your shoulders back. Posture feeds directly into mindset and emotion, and in guys pumps testosterone up when done right.  Standing tall and strong like a superhero, hands on hips?  Yeah, you’ll feel like a superhero, and being a superhero is a great way to get important things done.  Especially if “things” is slicing up people with metal claws.
  • Don’t avoid something frightening if it stands in your way — and don’t do unnecessarily dangerous things. Bosses hate fear and like courage (good bosses).  They also understand risk.  They like it when you take appropriate
  • Notice that opportunity lurks where responsibility has been abdicated. There will be times when you will see something undone.  Do it.  It will be noticed.
  • Be grateful in spite of your suffering. Nobody likes a whiner or wants to spend time with a whiner.  Nobody wants to hear a whiner whine except his enemy.  Everyone suffers.  To repeat myself, your worst day is better than someone’s best day.  Act like it.

Dr. Peterson is doing more than writing about success, he’s quarterbacked creation of a software suite called “Self Authoring,” (LINK).  Note that I am not as of this writing date getting paid if you sign up.  I’ll let you know if that changes.

The concept behind Self Authoring is to work through issues – fix yourself – by revisiting and writing about events in the past that were particularly difficult for you or in some way may be holding you back.  Additionally, there’s a focus on writing a future as well to create a meaningful goal or set of goals to work for, sort of an anti-nihilism pill.

Bill Gates probably doesn’t need this.  Those who are able to be pretty clear of their past and are able to perform at a high level already based on solid future goals are probably not the target market, though Dr. Peterson did say that one driving factor in designing and creating this tool was from requests by companies for ways to help their high performing employees perform on an even higher level.

When people write about their painful past, people experience long term positive impacts (compared to a control group).  Likewise, another group constructed and wrote about their future, and had similar impacts (when compared to the control group).  I have theories about everything, but I wonder if confronting past trauma made them braver?  I wonder if it allowed them to really examine what happened in context and they were able to trace the impacts to their present state?

In the end, Self Authoring is consistent with Peterson’s maxim – you have to fix yourself.

I wonder if that’s part of the mission of this blog?  I know that Orthodixie (LINK) (another blogger from my past, an Orthodox Priest with a Carolina accent, and no, I’m not making that up) and I would talk about how blogging let us mentally, “take out the trash,” and how much better we felt after we’d gotten something out on paper, even something unrelated to the things that were bothering us.  I’ll probably give the Self Authoring program a try.  I’ll let you know how it works out . . . but get yourself a Priest as a drinking buddy if you can.  It always amused The Mrs. when I engaged him in theological debate after wine.

Me, I’m still cleaning on my room, making it a little better each day.  I know that The Mrs. is very much looking forward to me being done with that.

The Lighter Side of Identity Theft

“Truth is, identity theft isn’t hard. A number and an ID is all you need to drain a bank account and return some money to some very surprised retirees. But why stop there? As long as you’re stealing someone’s identity, why not use it to contact some known terrorist organizations on unsecured phone lines? Why not use it to threaten federal judges and insult the local drug cartel? Most fun I’ve had in Miami.” – Burn Notice

DSC04251

Come and Take It was a Texan callback to Leonidas and his comment to the King of Persia.  Not an invitation to my bank account, weasels!

It was a Friday afternoon, and I’d just finished a business meeting about 250 miles from home.  As I got into my car for the drive home, literally as my butt hit the seat my phone rang.  It was an 800 number, so I have expected that it would be some sort of telemarketer selling off-brand Pez© knockoffs – the cheap stuff made by Elon Musk’s offplanet Martian robots (LINK).  I answered anyway.

Turns out it was my credit card company.  I only have two credit cards, pay ‘em off in full each month, and they’re issued by the same bank.  Why two credit cards?  That will become apparent shortly . . .

Bank Lady:  “Mr. Wilder, did you open an account with us on July 12?”

Since opening a credit card account is something I do, on average, every five years or so, I shook my head.

Since this isn’t the future, she just waited until I answered in actual words.  “No, I’m pretty sure I’d remember that.  Besides, I’m too busy digging in the blogging mine each night to take valuable minutes of my day to eat, or open a completely redundant credit card account.”

“Well, someone did.  And, Mr. Wilder, they have your birthdate.  And your Social Security Number.”

Great.  There’s another one of me out there – exactly like me, but with a goatee.  Oh, wait, no . . .

spockgoatee

I need a gold sash.  Does it matter if yours is on the left or right?

Name, birthdate, and Social Security Number are the trifecta for an identity thief.  Those were the Holy Grail of information.  With that information, anyone can open an account.  It wasn’t another person – it was a thief!

Me:  “How much did they charge?”

Bank Lady:  “This is weird – looks like nothing.  Only the annual fee.  We sent the card and it was returned to us.  I’ll cancel this account.”

Me:  “Where did they send the card?”

Bank Lady:  “Looks like Texas.”

Great.  Stupid hot summers, and now full of credit thieves.  Stupid Texas.

The Bank Lady (who was very nice) promised to send me information on the fraudulent account, along with an identity fraud kit.  She gave me the number for Experian©, which is one of the three credit rating agencies that lenders check with prior to issuing credit.  Experian®, she explained, would put out a fraud alert and let Transunion™ and Farkleknobber© (I forget the other stupid made up corporate name) know about the fraud.  Any new credit applications would have to be proceeded by a phone call to me prior to issuing credit.

And I wondered how I got hit?  I’ve tried very much to practice safe financial practices:

  • No online banking.
  • Shred all personal information and credit card offers before throwing away. Preferably treat like a witch and burn.  Bonus points if the credit card offers scream while burning.
  • Only share information with those that “need” it. I had to punch a Nun one time because she was too nosy.  My religion?  That’s “need to know.”
  • I wear latex gloves while in any bank. No reason.  It freaks them out, though.

I had dreaded this moment.  There is some portion of my personality that is works off of fear.  There is some part of your personality that works off of fear, too (LINK).  The oddest part of this fear coming true?

The dread was gone.  The identity theft had happened, and it was “go” time.  Let’s fix it!

cartman beard

Me meeting evil me.  Or is it me meeting nice me?  Probably me meeting nice me.

My second call was to my bank.  I verified my account balances and wasn’t missing any money, though I did tell my banker about the time that over 10% of my net worth went missing from my account (LINK).

She laughed.  (And you will too – read the story).

I also asked her about account security.  Since she wouldn’t talk to me without a special code that was texted to me, that was nice.  Additionally, she said:

“I see that you don’t online bank, and you don’t have a debit card.  You should be good.”

Let that sink in.  My banker just pointed out that online banking and debit cards are huge potential security holes.

And they are.  I did some research, and it turns out if you online bank and get hacked?  You’re screwed.  This one gentleman had nearly $1,000,000 lifted from his accounts over the course of months because his laptop was hacked.  And debit cards?  That’s like walking around a pitbull pen in porkchop panties.  Not a good idea.

My last call was to LifeLock®.  I vaguely remember the CEO put his Social Security Number (457-55-5462) on billboards, on commercials, and everywhere.  I also remember that someone opened a fraudulent line of credit on the guy.  And I seem to recall hearing that the CEO went to the thief’s house and kicked his butt – I think it was a story I heard on the radio.  I can’t find any record of this online, but I like the concept:  “If someone messes with you, our CEO will go to his house and beat him with a broken pool cue.”  That’s one way to earn a consumer dollar!

Signing up with Lifelock© was easy, if somewhat like talking to a living, breathing infomercial.  Everything was an upsell:  “Did you know that a fetus can have his identity hacked in the womb by skilled psychics who can take the baby’s Social Security Number . . . before it’s born????”

I normally hate the hard sell, but this day I was okay with it.

So, I got the double-platinum bejeweled version of LifeLock®.  Normally I like to think about financial decisions before I make them, you know, let a bit of reason kick in so I make a sound decision.

This wasn’t rational thinking.  It was total, complete reflex action.  Doctor taps my knee with rubber hammer?  Knee jerks.  Robber takes personal information?  Wallet jerks.  I want the best plan, you know, the CEO ass-kicking plan.  Can LifeLock™ waterboard?  If so, I want to add that to the plan.

Can I get the “Wet Electrodes on the Nipples” plan?  Oh, yes, I’d pay double.

In retrospect, I did some looking online about LifeLock©.  It turns out that it’s pretty highly rated, but it’s also thought to be a bit overpriced.

What the heck does LifeLock™ do for you, anyway?

What LifeLock® does is send you alerts on people messing with your credit or other accounts.  Since I don’t online bank, LifeLock© can’t see my accounts, but I’ll check those regularly.  LifeLock® also offers a pretty professional team to help you after your Social Security Number has been popped naked into the world.  And, in theory, it will replace up to $1,000,000 in losses, but I’d bet $10 that they’ve never (or rarely) ponied up that money, since they have fine print and lawyers, and also due to laws that limit your losses due to identity fraud.   Mainly, banks have to take the hit, and since they have skin in the game they’ve developed algorithms that look for fraudulent accounts and purchase patterns.  And they’re effective.

A thief took my information.  Could they get more?  Yup.

At 6:50 AM Monday morning, my bank (credit card) texted me, asking if I’d made a purchase from an online store at 5AM for $300.  They’d declined the purchase.

Did I make the purchase?  No.

If there is anything that all Wilder family members are in agreement on?  5AM is the devil’s time.  We should sleep through that.  And, my bank probably noticed that.  And also noticed I don’t live within 750 miles of the state where they asked the stuff to be delivered.

So a thief has my Social Security Number, my birthday, my name AND my credit card number.  One of those I can change (credit card).  Actually, two if I decided I was transgender.  Then I could change my name, too.  But I would be an UGLY woman.  But I could be Laura Ingalls Wilder.  Has a ring to it?

lorde

I have not been nor ever will be a geologist.  Just sayin’.

My bank politely asked me to call them.  When I did, they asked me if there were any purchases that I had to make today?

No.  I’m okay.

(THAT’S WHY I HAVE A SECOND CARD!  Two is one, and one is none.  Always have a backup on important stuff.  And I even carry emergency cash.  And a small parachute.  And a nosehair trimmer.)

The credit card number I’d had for nearly 14 years was cancelled.  A new one, with a new number, would be headed my way immediately, per my bank.

I’d gone through the data that LifeLock™ had provided.  LifeLock© also said my credit score was good, really good – 800, so any nonsense on my account had just barely started.

And it turns out this is fairly common.  11,000,000 people a year have to go through this.  So, statistically?  It’s not if, it’s when it hits you.  Sorry to be the voice of bad news.

But now I have to deal with other stuff.  Notify the IRS (there’s a number for that) and notify the Social Security Administration (there’s a number for that, too), because both of those are also conduits for fraudsters to mess with my life.  Somebody messing with my tax return, which in some years would buy a small country in South America (very small country, like an acre or so).  Somebody taking my Social Security (don’t want to get old and find out that somebody other than politicians has stolen my Social Security).

And it gets even more twisted – identity thieves are also stealing identities for getting prescription drugs.  And for having medical bills charged to other people.

And, honestly, I think that’s where my leak was.  I think an M.D. I went to hired a sticky fingered weasel that deserves to be nipple-electrocuted like Mel Gibson in Lethal Weapon, since that’s one of the few places where I can see all the above information being in one place.

I’d pay extra if they let me be Gary Busey.  Not in the movie.  I’d pay extra just to be Gary Busey.

Note:  John Wilder has received no compensation for this post, or any of them, yet.  If LifeLock(R) offers me a big pot of money?  I’m on it.

 

 

Self Control, Soviet Tanks, and Stanford Marshmallows

“Any problem caused by a tank can be solved by a tank.” – Family Guy

DSC00229

The featured image is geology.  Which is way cooler than what the class made it seem.  This is one I took in Alaska.

The first all-night study session I that I did involved studying for finals the first semester of my freshman year at college.  I do recall getting increasingly tired, and at 4AM I jumped in my car to buy, for the first (and last) time ever:  No-Doze®.  No-Doze™ was awful.  I felt jittery.  I felt my teeth moving around in my gums.  I felt my eyes moving around in their sockets.  It felt like there were bugs walking around on the inside of my skull.  Thankfully, I was distracted by actual pain in my stomach (due, I’m pretty sure) to the No-Doze©, which is what kept me awake.

I ended up doing fine in my tests, but can only recall that “Cops On Streets Detain Crime” (Cambrian, Ordovician, Silurian, Devonian) and “Miss Pennie’s Panties” (Miocene, Pliocene, and Pleistocene).   I think I’m missing a billion or so years of geologic history because there wasn’t a sufficiently naughty mnemonic involving underwear.

Oh, and I can also recall that No-Doze© is the work of the devil.

Looking back, it seems so simple.  A little effort each day would have paid off at finals.  Big time.  Study a subject (like geology – lots of memorizing) a little bit each day.  By the time finals rolled around?  With just a few minutes of study, I’d be ready to take the final, and do so on a full night’s sleep.

However, while study may payoff later, not studying always pays off now.  Present Me can have a beer, go to a movie, read a book, watch an episode of Twilight Zone®.  These are all better than studying geology.  Honestly, a dentist visit is more fun than studying geology, though it’s still probably easier to sleep through geology.

What has all of this got to do with Wealth?  It’s Wilder Wealthy Wednesday, so how does all of this tie in?

I’m glad I asked.

Everyone makes choices about how they spend their resources.  There are the needs of the Present, and those of the Future.  Example:  if retirement and putting The Boy and Pugsley through college weren’t issues?  I would own a tank.  You can buy them, you know.  (LINK)  Real tanks, sold by Eastern European arms merchants.  It sounds like Bruce Willis should be in this movie, right?  Oh, and I’d also own a swimming pool filled with Pez® that I would swim in like Scrooge McDuck™.

But I won’t.  I value Future Me enough to forego the fun of riding around the neighborhood in a fully functional WWII Soviet tank.

Barely.

And it’s mainly so The Boy and Pugsley can get jobs and not have to live in my basement and borrow my tank.  Future Me likes that Future.

This is also the way borrowing money works.  Present Me decides he wants something, like a house.   Present Me obligates Future Me for thirty years’ worth of mortgage payments.  Good deal.  Let’s pretend I don’t have the cash to buy what I want.

If that’s the case, I find someone who has cash, and trusts me enough that I’ll pay ‘em for the next thirty years.  For their trouble, they get, say 5%, of the unpaid balance each month as rent on their money.  They like that deal because they’ll have more money when it’s all done.  I like the deal, because I get the house now.

An economist would call the interest rate charged to me for borrowing the money a “discount” rate.  It’s the amount that the bank charges you so that they have a durable long-term investment that makes sense for them.  If you can’t afford to meet their discount rate?  The bank is required by Federal law to invest their reserves in Russian tanks and Pez®.

The discount rate in most cases is simply a numerical rating of your will power.  If you knew I was going to give you fifty dollars at the end of the month, how much would you give up to get it today?  Of you said, oh, five dollars, that means you are willing to give up 10% of the value . . . for one month.  That’s (we can quibble about this number, but we won’t for now) a huge premium, the equivalent of 314% annual interest.  If I could get a 10% monthly return, I’d retire . . . this afternoon.

So, our “discount” rate is really a numerical measure of our ability, our willpower, in delaying gratification.

Delayed gratification, it turns out, is a pretty significant human characteristic.

In the 1970’s, Stanford was known for several radical psychological experiments:

  • The Stanford Prison Experiment – A really creepy experiment where students dressed as guards and inmates and completely cost me my faith in Californians.
  • The Stanford Pizza Experiment – I think this was a 1970’s B-Movie. Adrienne Barbeau – don’t miss it!
  • The Stanford Marshmallow Experiment – The one that goes with this post.

In the Stanford Marshmallow Experiment (SME), young children were given a marshmallow.  They could eat it now, or be given two marshmallows later.  I’m obviously simplifying this – they used cookies, too.

About a third of the children made it long enough to get the second treat.  Between this and a previous experiment, there were several primary correlations on just which kids would get the second treat.

  • The older kids were more likely to get the second marshmallow.
  • Intact family. If there was a dad in the house?    No dads around?  No second treat.

So what?  A lot, actually:

The longer a child could wait, the:

  • Better the expected SAT score,
  • More education the child would likely complete, and
  • The child would likely be skinnier.

Those are pretty positive, and pretty significant outcomes.  And, although there has been complaint about the study (small sample size, flawed methodology) since it matches my biases, I’ll assume it’s right.  (Hint:  this is how some journalists actually think, or rather, avoid thinking.)

Are there other examples of discount rates/willpower out there?  Sure.  We keep creating academics, and they have to look busy, so they keep writing papers for each other.  Thankfully Jesse Shapiro wrote one (LINK) just to prove a point in my blog.  Thanks, Jesse!

Shapiro looked at food stamp recipients.  He found that there was a 10% to 15% drop in calorie consumption from the start of the month when the EBT card was filled up to the end of the month.  Some people ate enough at the beginning that they had to skip meals at the end.  Additionally, it looked like the food that folks ate through the month also was . . . not as good.  The overall quality of the food consumed appeared to have dropped during the month as well.  Might there be other contributing factors to this?  Sure, but the data didn’t seem to indicate that was the case.  And that 10-15% discount rate is huge.  Over 300% annually (compounded).

So, why should you delay gratification?

  • When it’s clear that it’s good for you.
  • When there’s certainty to the payoff.
  • When the payoff is big enough to make Current You value it almost as much as Future You.

Most of the time we have enough real information to know if it’s good or not and how certain it is.  It’s that last bullet point:  making Current You care enough.  Why do people smoke?  Their Current You runs a big discount rate on the first two factors.  And maybe Future You just pisses Present You off?

One last thought on willpower.  Remember that study that showed intact families mattered?  Yeah.  If the Mom is impulsive enough to get preggers by a man she can’t have around, or if the man is impulsive enough to bolt?

Bad news for those kids.  Willpower and the ability to delay gratification is, like intelligence, highly inheritable.  Looks like it’s late nights and No-Doze® for the lot of them.

Elon Musk: The Man Who Sold Mars

“Actually, they theoretically can separate the hydrogen from the oxygen and process that into providing fuel for man’s space flights. Ostensibly, turning Mars into a giant gas station. So it’s a . . . yeah. We live in an amazing time.” – Breaking Bad

 DSC03599-001

The featured picture above the title is of the Saturn V.  It’s longer than a Harry Potter novel.  This picture shows the engines from the main stage of the Saturn V.  About 275,000 horsepower for all five engines, you can totally tell by the lens flare!  But it got over two miles per gallon of kerosene used (TRUE)!

This is the third and final part of Elon Musk Week® (sort of like Shark Week©, but with 100% less Discovery™ channel).  An annual feature?  Maybe!

Part 1 is here (LINK) where we take apart Tesla®, and Part 2 is here (LINK) where we understand Elon’s Matrix® plan.

I first read about Elon in (probably) 1977 or 1978.  Oh, sure, you’re saying, that would have made him six or seven years old, and at least a continent and two hemispheres away from me.  My only response is, “so what?”

When I was a kid, I lived fifteen miles from the town I went to school in.  My house was the farthest away on the school bus line, so I was the first to get on in the morning (7:15, every morning) and the last to get off (4:30, so I missed F-Troop).  I could stare out the big picture window and see the bus a mile away – Ma Wilder taught me it would be rude to keep the bus driver waiting – and out I would go to be there waiting when the big yellow bus pulled into my driveway.

For about two hours a day as the bus stopped to pick up and then let off children, I could either stare out at the mountain scenery, or I could drop with Johnny Rico and The Roughnecks into Klendathu.  Or I could visit Trantor, first with Hari Seldon, and then later with The Mule.  Or ride Sandworms on Arrakis with Paul Atreides.  Or be shocked at the mysteries when we Rendezvoused with Rama.  Or finish all the science fiction anthologies at the middle school library by the middle of my seventh grade year.

And reading wasn’t confined to just bus time.  There were only three channels of television available (no one ever counted PBS, unless Monty Python was on) an half the time nothing interesting was on.  So, if I had built all the model kits around (the usual condition – they didn’t last long) and it was too cold to go hiking or fishing, I always had a book ready to read.   And Ma Wilder said I had to go to bed, but she never said I had to go to sleep . . . my parents bought me a reading lamp that clipped on my headboard for my tenth birthday.

But I remember reading the Hugo®-winning “The Man Who Sold the Moon,” by Robert A. Heinlein fairly clearly – it wasn’t on a bus, but on the couch by a crackling fire on a cold (-20˚F) winter’s day.  And that’s when I met Elon Musk.

The_Man_Who_Sold_the_Moon_Shasta_Ed

(source, Wikimedia)

Delos David Harriman (better known as D.D. Harriman) is the billionaire who decides to go to the Moon.  Why?

He envisions a new economy – an opening of the Moon is the first step to opening the Solar System to humanity.  Rather than living in a world which with a fixed horizon, D.D. realizes that getting off this rock is the only possible positive future of humanity.  But getting there is possible, and only takes will.

To quote Harriman:

“In fact, the real engineering problems of space travel have been solved since World War II.  Conquering space has long been a matter of money and politics.”

Contrast with Musk:

“Boeing just took $20 billion and 10 years to improve the efficiency of their planes by 10 percent. That’s pretty lame.”

And how was Harriman going to do it?

“I’ll hire the proper brain boys, give them everything they want, see to it they have all the money they can use.”

Contrast this with Musk:

“The path to the CEO’s office should not be through the CFO’s office, and it should not be through the marketing department. It needs to be through engineering and design.”

And I could go on and on about the similarities but the one thing I know is this:

Musk read the same stuff I did when he grew up.

Musk knows D.D. Harriman.  Just like I did, Musk admired D.D. Harriman.  However, Musk has become D.D. Harriman.

And for that, my hat is off to him.  D.D. Harriman is much more important than Tony Stark®.

And Harriman was willing to do absolutely anything to open space to humanity, convinced it was too important to leave to governments and bureaucrats.  Harriman manipulated stock, forged fake space-diamonds, and extorted advertising dollars from soda companies.

Musk feels the same way.  Musk formed SpaceX™.  Musk got involved in Tesla®.  One is his passion, one (even though he believes in the mission) is there to fund his passion.  Make no mistake:  Musk has created more applied rocket engineering faster than any person in history except maybe Von Braun (though Bezos is giving him a run for his money and has super-cool biceps for an old man).

Why not NASA?  Isn’t it their job?

During the 1960’s, NASA had a mission.  It was going to get three guys to the Moon, by the end of the decade.  Lots of engineers worked lots of long hours and made it happen.  In July of 1969, NASA dropped the mic after “One Small Step” and walked off the stage.  Mission done!

Well, almost fifty years on from that date, and six of the twelve men who walked on the Moon are now dead.  During the middle?  NASA developed one (anemic) space launch system – The Space Shuttle, whose sole purpose appeared to be to construct the International Space Station.  Why construct it?  So the Shuttle had a place to go, silly.

And now we have no space launch systems available to us except through the Soviets, er, Russians, and . . . Elon’s SpaceX™, which currently plans to have a manned launch of its Dragon/Falcon taking place in early 2018.  The first manned Orion flight?  Maybe 2023.  Maybe.

Why is NASA so sick?

The original group they hired were engineers.  Their job?  Get into space, get onto the moon.  Then they fired most of them, but kept enough to send out a fairly constant stream of unmanned probes as well as lame manned space missions.  But during the 1970’s they also hired a lot of administrators.  And people who had no connection in any respect to a spacecraft, or science, or aeronautics.

Except for brief bursts of public interest when something worked really well (Viking and Voyager) or when something worked really poorly (Challenger and Columbia), NASA has reached an irrelevance in national policy.   NASA appears to only be important when it comes to funding large amounts of money to projects that take place in certain Congressional Districts in certain strategically important states.  In Houston they love NASA, or at least NASA dollars.  Efficiency?  Progress?  Why would you need those things?  Heck, we can have astronauts but not have spaceships!

These are the depths that NASA has fallen to showcase its technical bankruptcy:  it has a division called the “Solar System Exploration Research Virtual Institute.”  This division produced 5,000 braille books about the eclipse for the blind.

DSC03617

These are the official shot glasses of the Manned Spaceflight Center.  At least it’s one way to blast off?

I am not opposed to a company doing this – I’m not even opposed to a government agency producing books in braille, especially those that aren’t available on audio.  But I am opposed to NASA doing it.  Why?

NASA’s mission is:

To pioneer the future in space exploration, scientific discovery, and aeronautics research.

Nothing at all in there about getting blind people books about an eclipse.  Nothing close, so this is a symptom of a system that has gone beyond dysfunctional to trivial.  A dysfunctional system (or in this case, organization) just can’t get anything done.  A trivial organization works on everything.  It invents steps where none need be, make-work (like the books), bureaucracy (credentials for everyone!), and hurdles (did you file the right form?) until Pournelle’s Iron Law of Bureaucracy is achieved:

From Jerry Pournelle himself:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers’ union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

I think that in NASA they actively look for jobs that they can do that are:

NASA could spend time and effort designing a new hypervelocity spaceplane, but that’s hard!  And someone could get hurt, and that would be bad publicity.  And we know that we as a society will only allow people to be put upon the equivalent of 2,000 tons of TNT (Saturn V) if it’s totally safe!  Otherwise, it’s an outrage!

So, faced between making a new launch system that might help get people into space OR putting together a braille book?  Let’s go with the book.  It’s A. Easy and B. Safe.

DSC03616

These are the official flip flops of the Manned Spaceflight Center.  They look Safe, unless you blow out your flip flop and step on a pop top and cut your heel and have to cruise back home.  It’s okay, because there’s booze in the blender and you have the Official Manned Spaceflight Center shot glasses.

The only way to avoid the Iron Law and the A. Easy and B. Safe people is to have a personality that keeps focus on the goal.

And since NASA administrators don’t go in and fire everyone in NASA not involved in the mission, you can be certain that they’re fine with . . . whatever the heck it is that NASA is doing.

How is SpaceX® Different?

Elon Musk is a laser of focus on getting spacecraft into the air.  People at SpaceX® want to work long hours, and if you look at jobs on their website, it notes that long hours, working evenings and weekends are probably going to be a thing for you.  And, want to get fired?  Talk about part of your “mission” at SpaceX® being producing coloring books on planetary nebulae.

Sounds like old Harriman himself, “. . . sweet talk them into long hours – then stand back and watch them produce.”

Some Libertarians HATE Musk because of the government subsidies that have driven money to Tesla® and even SpaceX©.  I can understand that, especially if their goal is less government.  Heck, I’d like less government.  But even though Musk has to go through roundabout ways to get only a portion of NASA’s funding, he’s running circles around them on talent recruitment, technology development, and actual results.  We have a choice if want to really get into space.  Elon appears to be the only winning answer (unless Bezos is holding back on a few aces).

Musk could fly people in space tomorrow, if they’d let him.  NASA is six years out.  Six years out.

What does Musk plan to do in the next three?  Send a capsule (unmanned) to Mars.

I’d be surprised if Orion ever actually flies people.  NASA seems incapable of spaceflight, and, really incapable of anything more complicated than Twitter.  But if Orion ever flies, I imagine that in orbit the Orion astronauts will get to see Elon’s butt pressed firmly against the window of his Mars Transfer Ship (Red Dragon 11) as he gives them a full moon (pardon) as a parting gift as he heads to Mars.

It’s a long trip to Mars.  I imagine that Elon might take a book or two along with him for the trip.  Probably not “The Man Who Sold the Moon.”  But maybe Dune, or Starship Troopers.

What would D.D. Harriman read?

I’d like to think he’d bring my blog . . .

Hey, everyone (including you, Elon) you can subscribe, and it gets sent out directly when I hit the publish button.

Bill Gates, Bill Shatner, and Billionaires

“Yeah, that’s nothing. Peter would spend millions just to mildly annoy Gavin. These are billionaires, Richard. Annoying each other means more to them than we’ll make in a lifetime.” – Silicon Valley20170725_232152 (2)

So, I met William Shatner.  He wasn’t as thrilled as I was. I saw him sign this, for me.  It looked like he wanted to get to the Holiday Inn and soak his feet.

Part of great success is built by luck.

Yes, that’s a declarative sentence, and of course I know my old granddaddy Quintin Tarantino used to say, “The less a man makes declarative statements, the less apt he is to look foolish in retrospect,” but I’ll stick by this one.

One of my favorite stories is about an author who submitted his novel to about a zillion publishers, only to be turned down by all of them.  All of them.

He was working a crappy night job at a dry cleaner, and after the novel came back, in a fit of anger he threw it into the trash, right on top of last night’s dinner.  He had given up.  His wife, however, still had hope.  She picked the novel out of the trash.  She replaced the cover – the old one had gotten spaghetti sauce all over it – and she sent it in.

One more time.

The publisher loved it.  Soon a book contract.  Then a movie, “Carrie.”

Yeah, that was Stephen King.  How many Stephen Kings are there working that just never got a break?  That didn’t have Brian dePalma direct a masterful movie off of their work?  Hundreds?  Thousands?

Heck, I have my own magnum opus I wrote on construction paper about a robot that could kill all of humanity and then died.  Because . . .

Dang, that was the hard part.  Yes.  Because humanity was so strong!!!!!

But, that’s me, not Stephen King.

Stephen King can write fiction that millions want to see.  But he was lucky he married a woman who believed one more time than he did.  Unlike my Mom, who cried on the construction paper.  She told me she was happy, but I still think those weren’t happy tears.

Let’s switch gears . . . .

Pick anyone named Bill who is wildly successful, and I’ll point to the break that they had – the luck – that got them over the top.

I’m NOT saying that Bill Shatner isn’t a gift to the world, because clearly he is.  But he was the second person who sat at the helm of the Enterprise, not the first.  He had a stroke or two of luck in that one . . .  But I follow him on Twitter®, he doesn’t follow me. (Yet)

I’m NOT saying that Bill Gates isn’t brilliant as I write on Microsoft® Word™ on a Microsoft© Windows® operating system (though Microsoft® Explorer™ . . . really, Bill?) because Bill Gates is clearly brilliant.  I follow him on Twitter© – he doesn’t follow me.  (Yet)

There were thousands of people who competed with Gates.  But we should all be honest:  it took more than one lucky break for Gates to end up with enough money to buy up all of the Pez® in the world three times over:

  • Gates was born rich. Not mega-rich, but rich.  As we all know, that’s the best way to get rich (LINK).
  • Gates had access to computers at a private prep school when only NASA, MIT, and The Hair Club for Men had access to that kind of computing power.
  • He met lots of the “right people” at Harvard.
  • He was lucky enough to bring some of those “right people” to Microsoft®.
  • He had a lucky meeting with IBM®. They’d use his new DOS® software, because (laughing) WHO WANTS TO OWN SOFTWARE?  Look at this cool green screen!

Bill eventually won – he built a monolith of a cash-generating company from the ground up.  At the right moment in history, Mr. Gates either developed or found:

  • The Right Vision. As early as 1980, the vision was a computer on every desk, in every home, running Microsoft® software.  By 1998 geriatric grandfathers had them to get e-mail from distant family.  By 2002 they were getting e-mailed photos regularly.  By 2004 they were sending money to Nigerian Princes and sending out virus-encrusted email greeting cards to EVERYONE in their address book.
  • The Right Skills. Bill Gates developed a wide variety of skills beyond his programming chops – he developed team leadership skills, accounting and sales skills, and the skills to hire the best.
  • The Right Team. Windows 1.0 sucked.  So did Word 1.0.  So did Excel 1.0.  They were the WORST.  But the team did second and third versions that were so good, so strong, so well integrated that dominant products like “Lotus 1-2-3” and “WordPerfect” were smashed harder than an Amish girl at spring break in Cancun.
  • The Right Business Environment. The early vision of computers on each desk meant . . . they had to be usable.  They had to provide value.  They had to be something that people wanted to use.  By creating that software, by creating Windows 95™, Gates got rid of the old constraints of the IBM clone as a business machine, and brought it into the home, massively multiplying the user base in a single year.

Mr. Gates was always going to do well.  He had too many factors in his favor from day one, even without the family wealth and support.  That was like having a springboard.  With his intellect at that time and place?  No way Bill walks away with less than $100,000,000.  He was going to create something awesome no matter what.  But one of the largest and most profitable companies on Earth?

Nah.  That wasn’t a cinch.

Again, I’m not saying that these Captains of Industry (Gates, Musk, Jobs, Thiel, Bezos, Brin, Page) aren’t worthy.  They most clearly are.  (But do you think that Page gets mad that I put Brin first?)  Again, clearly, each of them would have been very successful without luck.  But luck has played a part in vaulting each of these men into the massive success that they now enjoy.  (I was tempted to throw “clearly” into that last sentence, but, I think you’ve gotten the point by now.  Clearly.)

So you should Get Lucky.

Good heavens!  There must have been a LOT of bad decisions in the 1980s.  Starting with this album cover.

But, you’re asking, “How, John Wilder, can I, like Loverboy®, Get Lucky©?”

Well, you’re in luck!  I have a fairly short list that I’ll expand at a future point, when the astrological signs are right:

  • Hard Work – There is no substitute for this. Okay, there is.  Massive piles of talent and luck.  And money.
  • Live in a Big City (A Rich One) – For heaven’s sake, if you’re not rich? Hang around rich people!  They have opportunity, and, most importantly, businesses you can learn to work with.  And . . . run.
  • Work In a Job Where The Money Is – There are rich cities and poor cities. And there are rich portions of the economy and poor ones.  Would you rather work at the place where they recycle used water bottles, or the place where they build underground secret bases for aspiring Bond villains?  (I’m looking at you, Elon Musk).
  • Expose Yourself At Your Best – Have you ever seen that show, Cops? It’s every person, ever, at their very worst day.  On film.  Honestly, we all have bad days.  And we all have things we’re bad at (hopefully the thing you’re bad at isn’t personal hygiene – and it wouldn’t be, since you read this blog – you must smell like roses and fresh bread, and that’s on a bad day!).   But when you get a chance and you’re with a billionaire?  Show him what you do best.  Unless what you do best is eat Pez®.  Focus on things you can do for the billionaire that make him even more money.
  • Believe You’re Lucky – Sounds crazy, right? No science behind it?  But if you believe you’re lucky you’ll see good things when others see only bad.  You’ll see opportunity when others only see stone walls.  And if you stare at the Sun long enough . . . WAIT . . . don’t do that.  But I’m not kidding – believing you’re lucky makes you lucky.  Me?  I’m the luckiest guy you’ve ever read, unless you’ve read something that Keanu Reeves wrote, because that man is golden (LINK).

In 2016, there were 540 billionaires living in the US.  If 35% of them inherited their great gobs of billionaire cash, that leaves 351 who did it themselves.  Yay, them!  That gives you a 0.000117% chance of being one.

By doing the things I’ve listed above?  If you’re really smart (like 140+ IQ, PLUS read this blog)?  That means you can force those odds several orders of magnitude closer to your own private island.    Maybe even to 0.01% of a shot at the Tres Commas (A Billion has Three Commas) club.

This much, much closer than you could ever become with a lottery ticket.  And, the good news?  You will certainly become a millionaire, you know, with the shameful two commas.

All of this is better than winning the lottery.  Certainly your biggest shame?  You’re only a millionaire.

But none of this will allow you to become as cool as Bill Shatner.  Because there can be Only One True Shatner!

RV Ownership for Fun and Profit

“What? Come on! Man, you’re smart. You made poison out of beans, yo. Look, we got, we got an entire lab right here. Alright? How about you pick some of these chemicals and mix up some rocket fuel? That way you could just send up a signal flare. Or you make some kind of robot to get us help, or a homing device, or build a new battery, or wait. No. What if we just take some stuff off of the RV and build it into something completely different? You know, like a like a dune buggy?” – Breaking Bad

overview

Our camp, as viewed by the disembodied spirit of Elvis.

“I can’t believe you did this,” The Boy was flat out surprised.

“Why not?”

“This . . . this is so not like you.”

“This” was buying a Recreational Vehicle (RV), specifically a travel trailer.  You have to be specific when you describe what exactly your RV is, since (upon checking the Internet) everything from a little red wagon to the Death Star© qualifies as someone’s RV.

And, I’ll admit it, when you have a guy that drives a 12 year old car (LINK) until it gets totaled (LINK) it would seem a bit out of character for him to buy what can only be considered a luxury item.  Or at least that’s what I thought of, when I thought of RVs.

The Mrs. and I had actually discussed purchasing an RV for the last 15 or so years.  At first it was a little pop-up camper that occupied our dreams.  When we moved to Alaska, we looked at several different campers and camper types, and were pretty close to offering some money for a little integrated camper with its own engine, etc., but I couldn’t quite get comfortable driving in the bush in Alaska where there were no cell phones with a camper that had 271,000 miles on it.  That’s just asking for Hollywood to make an “Into The Wild”-type movie starring your family and a grizzly bear that stalks you for 231 miles of your trek back to civilization while you have to fight it off with marshmallow roasting forks.

I like to think that they’d get Liam Neeson to play me.  If he works out and gets some bigger biceps.

Anyway, we put the idea of an RV on the back burner living in Texas, because the last thing you want to be is a Texan with an RV.  That’s like ALL Texans, and, since The Mrs. and I have never read Harry Potter, we figured why join the crowd now?

But I like camping, and after a few camping adventures that seem more like a horror movie to The Mrs. (Just a little farther, dear – you can stop throwing up whenever you get to the top!), she decided that she liked . . . showers.  And a bed.  And not throwing up on the trail.

But, to buy a camper seemed so frivolous.  And not that I don’t buy frivolous crap – I do.  Right now I’m wearing a 2016 Campaign t-shirt for The Flight of the Conchords (Jemaine & Brett 2016 – It’s Business Time).

It’s worth the watch – 3:55 minutes of New Zealand’s second most popular comedy-folk duo.

Anyway, it seems so frivolous, something that someone with LOTS of money would do.  It’s something that . . . rich people would do?  Or old retired people who wanted to drive a house around slowly so they could have their house be in different places.  Kind of like the Tardis, but with Social Security.

I started stalking Craigslist around where we live.  And, after getting a whole lot of free Styrofoam packing peanuts, I finally found two candidates.  I’d also looked at a dealer, but the brand new one he showed me had a table that was split open due to humidity.  Not a great selling point.  The one I liked best was an R-Pod.

An R-Pod was designed to be smaller.  We have a generic pickup, and a youth-skewed 4×4 SUV that The Mrs. likes to remind me is older than Pugsley.  Pugsley is 12.  She is not exaggerating.  It doesn’t have a cassette deck, but . . . close.  Both of these vehicles could pull the R-Pod, which weighs in at a whopping 2800 pounds, with a cargo capacity of at least another half-ton.  This is important, since we’d have two vehicles capable of pulling the beast around, since our 4×4 was capable of “only” pulling 5,000 pounds.

First lesson?  If I wanted to do this cheaply (and, Internet, you know I do!) I would have to buy something light, or I’d have to buy a trailer AND a car.

Again, we’d found two of these located two hours away in River City, Lower-Northern Midwestia.  We texted and, without hearing back, turned our pickup to go buy an RV.

Now, I’m not opposed to other people buying brand-new RVs.  If they didn’t, I wouldn’t have a pool of cheap used ones to pick from.  Make no mistake – an RV isn’t an asset.  All it does is either take you to the lake for fishing (or gold panning! (LINK)) or sit in a storage space.  It creates no income.  And every second it sits on the planet it depreciates, until it turns 50 and becomes either “classic” or “constructed entirely of prohibited components like lead and asbestos.”

An RV is not an investment.

So, on our way to River City someone returned my Craigslist email, and said they’d be there when we got there.

They were.  They were a nice couple who had bought the RV to go to musical concerts, but the wife couldn’t manage to get around the trailer.  I looked the trailer over, checked what I could figure out, and then, consulting Kelley’s Blue Book for RVs® (yes, this is a thing), made an offer of $1,000 less than the asking price.  Unbeknownst to me, The Mrs. had been talking to the Mrs. of the owner’s side, and, they’d had it on the market for some time and were just getting ready to lower the price.

So, while I felt like a wheeler-dealer, I probably pegged the number that they really wanted.  I wrote out a check, they wrote out a title, and we hooked OUR RV to the truck and headed back home.  It looked strange, since most RPods have decals that make them look all pretty.  In this case, the original owner (not the one we bought from) had painted over everything to advertise his traveling patent medicine show that he ran with Gypsies, Tramps and Thieves.

I know, I know, but you have to give the 70’s some slack.  They’d just discovered polyester.

The Mrs. and I talked about what to do about our generic, white RV.  In general, we decided we should either paint it like the mystery machine or like the shuttle Galileo from TOS Star Trek.  In general, we both liked the way that we imagined the shuttle . . . . and we’ve gotta paint it . . . but can we bring our phasers?

Upon getting it home and hooking it up to power, I found that everything was functional, except the refrigerator and sensors that indicate the levels in the waste tanks and battery.  RV refrigerators are mind-numbingly expensive, since they are configured to run on propane, plug-in power, batteries, and hope.  They are apparently only made in Germany by small gnomes that live in the Harz Mountains.  I resigned myself to buy a cheap college dorm fridge (there was a plug in) and move on.  I went to work (mildy) brooding on this.  Primarily I was depressed because the nice man hadn’t told me the fridge was on the fritz.  I would have still bought it.

Most RV folks say the sensors are useless, and often stop working quickly.  Not a problem.

I decided to not make our new toy a source of sadness.  I buried any disappointment in a determination to fix it.

Pugsley had spent the night in the trailer.  The Mrs. had bet he’d get in the first night it was home, but he waited until the second night to make his move.

Upon returning home from work, I decided to check out other systems.

Nothing electrical worked.  Nothing, except the air conditioning, microwave . . . . hmmm.

It was hot, I was sweating, and I began to check various components.  I suppressed the burning desire to choke Pugsley.  I really reasoned that he was only a bystander – and honestly, the fact that everything was broken was really encouraging.

I know, that sounds weird.  But when one thing breaks?  Yeah, that thing is generally broken.  When it all breaks?  That means your mind can generally fix it if you think smart enough, or have a great deal of experience really screwing things up.  Me?  I have a great running history of not giving up when I should (LINK).

After a bit of investigation, I found that two main fuses were blown.  I sent The Boy to buy new ones.  During his absence, I flipped the battery terminals on the brand new battery the previous owner had installed.  The Boy arrives.  I pop in the fuses.

Everything works.  Everything.  Including the German Ice Machine!  Even the sensors that tell me how much onboard poop we have!

So, in best Star Trek® fashion?  REVERSE THE POLARITY AND EVERYTHING WORKS!!!!

picard polarity

The previous owner had flopped the terminals on the battery.  Now I had a flawlessly working system.  Yay!  And, unlike constructing tire chains by hand, this didn’t take sixteen hours to noodle through.

During this time, I remembered that the previous owner had stressed I should look at the wheel bearings.  For those of you that may not be aware, a wheel spins.  But the trailer does not.  The contact part for the spinny-part to meet the non-spinny-part is the wheel bearing.  It’s essentially a bunch of greased up balls (no jokes here) that allow everything to spin around without getting hot or grinding the nice metal into a pile of hot, combusting metal dust.

vulcan stand up

On side had a great place to inject grease into the bearing, which is what we used to do when Nixon was president (or so I’m told).  Now most cars have sealed bearings that would last to Jupiter and back, but in the 1960’s (I’m told) you had to grease stuff all the time or else you’d die when the wheels flew off of your Model T at 22 miles per hour.

My crappy $500 trailer has sealed bearings.  Not this trailer.  Nope.  It has bearings that must be greased.  So I greased the ditch-side (think about it) bearing.  There’s a small dust cap that covers the grease Zerk.  The grease Zerk is the fitting that allows grease to be pumped on a one-way journey to the bearing, and is named for . . . Austrian engineer Otto U. Zerk.  I know it sounds like a joke.  It’s not.  It should be.  It’s not.  Otto.  U.  Zerk.

Anyway – one side done, new grease covering all the nice bearing parts.

Next side . . . where’s the Zerk?  Where’s the cap that holds the grease in?

I pulled the Zerk off the other side – Otto’s THREADED Zerk!!! – and put it on the other wheel.  And pumped in a LOT of grease.  And resolved on our trip to gold country that I’d pump grease into that wheel every hundred miles.  (Spoiler, that seemed to work.)

Things I never really thought about:

  1. It takes a LOT of gas to pull even a small trailer. I thought that perhaps if I had one much larger that I’d need to pull a small refinery behind me to supply me with gasoline.
  2. Even a slight uphill was devastating to our progress. Speeding?  Uphill?  Ha!  Never, never, never going to happen.
  3. What I could normally do at the Real Speed Limit (normal speed limit +5 miles per hour) I now had to do at my Maximum Thermodynamic Speed Limit – which was often normal speed limit -5 miles per hour, sometimes -20 miles per hour.
  4. It matters how you load a trailer. For the first 90 miles, whenever I approached 55 miles per hour, the trailer would start to sway from side to side like a break-dancing backup singer during a seizure.  When I stopped to fill the Wildermobile with gas the first time I looked up “Trailer Sway” on the Internets.  It turns out you simply have to put most of the weight forward so that there’s more weight on the hitch.  I moved a bunch of things forward, and it worked like to stop the sway.
  5. I’m not comfortable running a consumer engine at 5000 RPM for 12 hours. I let it back down to 3000 RPM just so I didn’t wreck the family’s hearing.  Mine is already shot.  Thank you very much, Iron Maiden.

But it worked.  We even had one offer at a gas station (while we were on our way) to buy the trailer from us for what we paid for it.  Nope.

The issue we had that concerned me the most was the trailer breaking.  Apparently all travel trailers have electric brakes.  These brakes interact with the braking system on the vehicle pulling the trailer and have the trailer brakes slow the trailer at a (similar) rate to the pulling vehicle.  Why?

Because if not, the trailer would be pushing the pulling vehicle as it tried to stop.  Worst case, it would keep going during an emergency stop (Newton’s Second Law – A fully loaded travel trailer in motion without brakes will keep going even when you’ve decided that stopping might be in your best interest.)

What concerned me were the mountain passes in gold country.  They’re steep.  And, while going up would certainly be slow, I wanted going down to be at something less than the speed of sound and not resemble CW McCall’s Wolf Creek Pass.

For these brakes to work, however, an electric controller has to be installed.  While I am pretty sure I could install one okay, I’m not going to settle for pretty sure when it comes to preserving my pretty face, unless I want them to pick my remains up off the highway with a stick and a spoon.  I farmed it out.  But halfway to the mountains, it wasn’t working – showing a code that it had short circuited.

Well, when we stopped to buy a new fuse because Pugsley had plugged a Cray2200 supercomputer into the power outlet.  While stopped, I looked a bit closer, traced the wires from the battery back, and found one of the crimped connections that the mechanic had installed had worked its way loose.  Ten seconds later?  Electric brakes back in business.

We got the camper to gold country, and then, well, camped.  In a never-before-happened event, the family decided to extend the vacation for an additional day.

Here is my personal review of the camper:

Sunday Night:  Omigosh.  We’re here after 70 hours of driving today.  And now?  We have to set it up.  In the dark.  Without waking other campers. Three occupants. Only I will pee in camper restroom, and only when no one around.  Camper cold, windows left open by Pugsley.  Found the next day.  Closed windows.

Monday Night:  Everyone now fine with peeing in the camper – bathroom walk way too long at 40˚F.  Camper way too hot.  Four of us.  I open the windows.

Tuesday Night:  Four of us.  Firefly.  The Mrs. closes the windows, causing me to have a dream that I live in Houston again.  Aaaaargh!

Wednesday Night:  Four of us.  Lots more Firefly.  Slept great all nights.  Too many stupid little dogs with stupid hot dog breath.

JayneNVera

Thursday Night:  Going to stay in it overnight at some nameless city, but we had the “great rush home” which was unanimously approved by the Family Subcommittee on Travel Hours.  Sometimes it’s better to sleep in your “other” own bed.  Plus I get to wake the neighbors by trying to back the trailer into my driveway at 3AM.

Once I bought the trailer, I now notice that there are trailers . . . everywhere.  There are trailers parked out in front of houses where the trailer would CLEARLY be a better place to live than the home it’s in front of.  I’m not sure I understand how you can afford a $20,000 or $30,000 RV when you clearly make less than $50,000; but then again, I don’t understand fashion.

I read that since they look like a home that interest a trailer loan is tax deductible?  DO NOT use me as a source, unless you’d like to spend a long time in prison for “Using Internet Blogs As Tax Advice.”

My big financial advice on campers – don’t buy one if you can’t do or pay for:

  • Maintenance: It’s like owning an additional home.  There are electrical systems, plumbing, and structural systems.  The first night I got it, it attracted ants from five counties away.
  • Tow Vehicle: No, your Prius™ (LINK) won’t pull one.  If you don’t have a good tow vehicle and need one, can you afford the trailer?
  • Gasoline: You will have to use more gasoline than you ever have, since Elon Musk hasn’t invented an electric trailer puller.  He will, I have no doubt, but it’ll be on Mars.

Economics?  Cheapest vacation we’ve taken in years (except for the whole “buying the trailer” thing).  Didn’t buy restaurant food except twice.  Didn’t spend much on attractions.  And we saw things like this:

This is a video I took.  Felt like Francis Ford Coppola shooting Apocaforest Now.  That’s our trailer at the end.

I did the economics, and it will likely pay out in four or so years, which is better than most investments do.  I may bore you with them at a future time.  But you’re not Vulcans® so you might not like math jokes.

We are planning on using it for many vacations where we’d normally use hotels, so you’ll hear more about it soon.

Dorothy said there’s nowhere like home.  And it’s not home, but it’s like home.  So, I guess there is somewhere like home, and it’s on wheels.  The Boy and Pugsley and The Mrs. rated it the best vacation except for one where we went to Alaska on spring break (yes, we really did this, and maybe I’ll post about it sometime).

So, verdict?  It was wonderful.  It was economical.  It was peaceful (LINK).  I learned about gold panning (LINK).

The Mrs. and They Boy are painting it right now to resemble a Shuttlecraft® from Original™ Star Trek©.  Will keep you posted.