Goodbye "Drake's Bay"?

Drakes Bay Oyster Co. Told by U.S. to Leave the Point Reyes Preserve


The Supreme Court on Monday turned away an appeal from a California oyster farm that has been ordered by the government to cease operations on federal land. Drakes Bay Oyster Co. had received an order in 2012 to shut down from then-Interior Secretary Ken Salazar after its 40-year contract with the federal Park Service expired at the end of November 2012. The farm's owner, Kevin Lunny, has continued his operation while appealing in federal court. But the high court's denial of the case likely spells the imminent closure of Drakes Bay Oyster Co., which produces about a third of California's oysters. The court specifically denied the farm's request to continue operating while a trial on the merits of the case proceeds. Now that the court has denied that appeal, the trial will proceed in the U.S. District Court in Oakland, Calif. Mr. Lunny said his business will continue its fight to stay open. "One thing that's given us strength to go on is that we see this fight as not really just for the oyster farm," Mr. Lunny said at a news conference Monday after the court's ruling. "If we see this kind of treatment to be allowed and not be stopped, we fear there could be consequences for all the ranchers on federal lands." Peter Prows, who represented Drakes Bay Oyster in the dispute, called the Supreme Court's decision "very disappointing." He said his team will be given 30 days to revise their complaint before the trial begins. "We'll be deciding in the next couple weeks exactly what happens, whether we push ahead with the case," Mr. Prows said. "In the meantime, we don't know what the government is going to do." Mr. Prows added that the farm will likely have to shutter its operations within a few days.
Comment: Seems a shame .. sustainable food supply ... jobs ... a way of life ... oh well!

USAT - My "Hail Mary" stock pick

Comments: USAT, Hail Mary image and article. I was thinking ... only about $ 200. Ultimately I did not do it. Will check back in 6 months. Company website


"I know 'broke' ...and girl you've never been!"

Hillary Clinton, for Richer or Poorer


Mrs. Clinton seems to have a peculiar and unattractive relationship with money. She wants it and she doesn't want you to know. She also appears to think she's entitled to it, as a public servant who operated at high levels. But public servants now are less like servants than bosses. When an interviewer compared her to Mitt Romney in terms of wealth, she got a stony look. That is a "false equivalency," she said. You could see she feels she should not be compared to a wealthy Republican because she's liberal and therefore stands for the little guy. So she can be rich and should not be criticized, while rich people who have the wrong policies—that would be Republicans—are "the rich" and can be scorned and shamed. This is seen by some as hypocrisy but is more like smugness. It is Mrs. Clinton's habit to fake identification with people who've had real struggles by claiming she's had them too. All humans have struggles, but hers were not material. She came from a solidly suburban upper-middle-class home, glided into elite schools, became a lawyer, married a politician who quickly rose, enjoyed all the many perks of a governor's mansion and then the White House, and then all the perks of a senator, secretary of state and former first lady. She's been driven in limousines and official cars almost all her adult life. For more than a quarter-century she has seen America through tinted windows. Newly out of the Ivy League, she asked for political power instead of financial power. Many of her generation of liberal activists, with similar bona fides, chose the latter. She married and became a politician and accrued great power and fame. But she still wanted the money. Through speeches, appearances, books and investments, she got it. Bill seems happy with it. She sees a disjunction between her acquisitive streak and her party's demonization of acquisitive streaks, and so she claims she was broke, at the mercy of forces, an orphan in the storm, instead of an operator of considerable hunger and skill.
Comment: Peggy Noonan ... I love her! Above photos ... two of my favorite Hillary Photoshopped! Lastly ... "I know 'broke' ...and girl you've never been!"

Facebook Fone Flop

What Happened to the Facebook Phone? Not Very Much, It Seems


Facebook has long wanted to be a major part of how you use your smartphone. Now, it looks as if the company has all but abandoned one of its major strategies to do so. The company has disbanded the team of engineers originally assigned to work on Facebook Home, its custom-made mobile software for Android devices, according to two people familiar with the matter who spoke on condition of anonymity because they were not authorized to discuss it publicly. ... Shortly after it was released, Home ran into snags. Early adopters rated the software mediocre at best. And six months after the introduction, Facebook’s chief executive, Mark Zuckerberg, said the software was hardly the hit he wanted it to be.
Comment: (yes I know how "Phone" is spelled!). Another article from CNET on same. Image Source

Umbrella insurance: a key weapon in one's "asset protection" arsenal

Insulating Your Assets From Lawsuits - It's Doable, But You Have to Act Ahead of Time


If you listed your financial fears, you might include a repeat of 2008's market meltdown, losing your job and getting your identity stolen. But somewhere on the list, I suspect, would be another major worry: getting sued. That risk can loom large if, say, you are wealthy, a doctor or have your own business. By the time you're slapped with a lawsuit, it's likely too late to protect yourself, so you need to act ahead of time. Here are some key weapons in your "asset protection" arsenal: ...

Umbrella liability insurance: Creditors can easily get at money in regular taxable accounts. What to do? You might buy umbrella liability insurance. This is typically bought from the insurer that provides you with auto and homeowners insurance, and it offers additional liability protection
Comment: Image source with a helpful article about umbrella insurance. When my boys started driving our agent wisely recommended we purchase umbrella insurance. This past year we were able to increase our umbrella policy and decrease our auto premiums. It's less expensive than you would think. How much? Total all assets in a Net Worth Statement.


The Golden Gate Bridge and the 'nanny state'

Golden Gate Bridge suicide barrier funding OK'd

San Francisco's iconic Golden Gate Bridge moved a big step closer to getting an oft-debated suicide barrier after bridge officials on Friday approved a $76 million funding package for a net system that would prevent people from jumping to their deaths. The bridge district's board of directors voted unanimously in favor of the funding for a steel suicide net. The funding sources are $20 million in bridge toll revenue, $49 million in federal money and $7 million from the state. A tearful Dana Barks of Napa, who lost his son, Donovan, to suicide on the bridge in 2008, said after the vote that he was almost speechless. "A lot of people have done so much incredible work to get this accomplished," he said. He rose from his knees and shared a tearful embrace with Sue Story of Rocklin, whose son Jacob jumped off the bridge in 2010. "We did it!" Story said. "It's no longer the Bridge of Death anymore."
Comment: Nice retro image of the Golden Gate Bridge under construction. Source. News flash ... there are other bridges! (I actually have walked across bridges and not jumped!)

The "Goldilocks-like" market

Broad Market Gains Power Historic Rally - Stock, Bond, Commodity Indexes Rise in Unison for First Time Since 1993; Some See Clouds Forming

From stocks to bonds to commodities, world financial markets have rallied in unison during the first half of 2014, a feat not seen in more than 20 years and a reflection of investors' optimism that central-bank policies will boost growth. Six closely tracked gauges of world stock, bond and commodity performance are headed for gains in the first six months of the year, the first time they have done so since 1993. The Dow Jones Industrial Average is up 1.7% for the year, putting it on pace for its fourth-straight first-half rise.

.... "We are in a Goldilocks-like age at the moment,'' said asset manager Jack Flaherty, referring to markets perceived as not too hot and not too cold—just right. Mr. Flaherty is head of U.S. fixed income at GAM, which has over $120 billion in global assets under management, At the same time, the price gains and decline in trading volume and drop in volatility have made many investors and analysts nervous.
Comment: Image source: "Jessie Willcox Smith – “Goldilocks and the Three Bears”, Swift’s Premium Soap Products calendar illustration, 1916." My take .... she is running from three bears: Inflation, National Debt Crisis, and Global Uncertainty (eg Rise of ISIS)! Interesting thing about Goldilocks (the story): ""The Story of the Three Bears" experienced two significant changes during its early publication history. Southey's intrusive old woman became an intrusive little girl in 1849, who was given various names referring to her hair until Goldilocks was settled upon in the early 20th century. Southey's three bachelor bears evolved into Father, Mother, and Baby Bear over the course of several years. What was originally a fearsome oral tale became a cozy family story with only a hint of menace."

4265 Deerwood LN - $437,500

4265 Deerwood


Description for 4265 Deerwood Lane N Plymouth, MN 55441 Must-see rambler, lots of updates. New carpeting, new paint, refinished wood floors. Extensive use of vaults. Large gourmet kitchen w/ SS appliances, Silestone, reverse osmosis H20. XXL heated garage. Must-see lower level. Close to French Park.
Comment: Tracking all "for sales" in our neighborhood. Currently 3 homes for sale (and possibly one in foreclosure). This house is one street away. Slightly smaller than our's (we have a 4th bathroom and a full sized den). Hennepin County estimated market value (for taxation) is $383,500. Last sold in January 2002 for $375,390. (Property ID: 14-118-22-13-0088). Our house would probably be worth about 4.5% more (my estimate based on public data)


The Crowded 3% Club

The 3% club is getting crowded: Dividend investors beware


There is now an extraordinary crowding of big U.S. stocks around the 3% dividend yield level, a threshold that seems to exert a gravitational pull as investors bereft of easy sources of income bid up equities until they yield just a bit more than the 10-year Treasury note. (A stock's yield, calculated as the annual dividend payment divided by price, falls as shares climb.)

But too many investors may implicitly be betting that these bond-like stocks will act like stocks in a low-rate bull market, and like bonds in an equity downturn. It won’t likely work out that way. If the stock market remains strong, these are unlikely to be the areas that continue to thrive. If it hits the skids, such stocks will not offer much of a buffer.

Of the 422 stocks in the Standard & Poor’s 500 that pay any dividend at all, 58 of them now have yields within a narrow band between 3.3% and 2.7%. This roster spans virtually all industry sectors, with the expected over-representation of consumer-staples names but plenty of energy, real estate investment trust, industrial and healthcare entries as well.

Widened out a bit, almost a quarter of dividend-paying stocks in the index yield between 3.5% and 2.5%, including more than half of the members of the Dow Jones Industrial Average. Looking at a handful of stocks yielding almost exactly 3% shows how disparate their business trends and other valuation measures look. ....

Tobacco, personal-care products, utilities and REITs are all among the most richly priced. Rising-rate beneficiaries, in contrast, such as communications equipment, consumer- finance and autos appear inexpensive.

The investing site Magic Diligence, which uses the “Magic Formula” value-investing ideas popularized by hedge-fund pioneer Joel Greenblatt, this week offered interesting views showing that steady-seeming names such as Kraft Foods Group (KRFT) and Kellogg Co. (K) do not truly qualify as value stocks at all, in part because of their aggressive treatment of pension obligations.
Comment: My take is that the market is near the top. Must be cautious about investing.

Entrepreneur Barbie: If I really wanted to "piss off" my daughter ...

Why ‘Entrepreneur Barbie’ is another miss for Mattel


Silicon Valley Barbie is finally here! Mattel is rolling out a new line of ‘Entrepreneur’ Barbie dolls, adding to a resume of various careers fashion model to astronaut, veterinarian, firefighter, and fitness instructor. It’s understandable why Mattel wants to push another line of Barbies from a business perspective, but the question remains if this will be (1) a profitable move, and (2) a good way to encourage young girls to get into the business world. Danielle Hughes, founder and CEO of Divine Capital Markets (which is a WBENC certified Woman-Owned firm), isn’t a fan. "Barbie sales have been decreasing, it's an opportunity for them to try this out, but i just think it's going to fall flat," she says in the attached clip. "It just hits the wrong note." The message being sent is what bothers Hughes the most. “Is it the right message to take a doll who’s always been a fashion icon with unbelievable measurements and then stick a cellphone and tablet in her hand and say ‘oh, she’s CEO Barbie’? I don’t think so.”
Comment: (In 2nd year of MBA at M.I.T. majoring in entrepreneurial finance and now doing internship at major investment bank in San Francisco.) Entrepreneurial Barbie also available in black, asian, and hispanic models!


The Panic of the Lost Wallet

I was at a Wells Fargo sponsored event at the Earl Brown Center all day today. 

Shorty after 11 as I was moving from the main central event to breakout sessions, I noticed my wallet was missing.

There were more than 700 Wells Fargo employees in attendance, plus a myriad of vendors, conference center employees, et cetera. 

Kathee was with me. I told her perhaps it had fallen out of my pocket in the men's room. I went that way and she backtracked through the main hall retracing our steps.

We regrouped and neither of us had found it. As we walked towards the welcome booth, I whispered to Kathee to pray we would find it. 

Sure enough some kind and honest soul had found it and turned it in.

As we left at the end of the day, I stopped by the welcome booth again to thank them. I asked the woman there if she knew who had found it. She said that a taxi driver had dropped someone off at the event, went to the men's room and found it there. 

Nice! Thank you Lord!

Comment: Image source


The best time to begin taking Social Security

At what age should you start claiming Social Security?


"Most people take it at 62," he says. "They end up losing in the long run. If they delay it till 70, they will get 30% more. Unfortunately," he says, "most Americans can't do that." Improper timing can cost you $100,000 to $150,000 over a lifetime, says John Gajkowski, of Money Managers Financial Group in Chicago. When should you take it? If you delay taking Social Security, it increases your monthly benefit about 8% a year until you're eligible for the maximum at 70. Most financial planners pretty much recommend that you do that if you can, or delay at least until age 66. But most people can't delay.
Comment: Obviously we have not taken it at 62. Kathee is 63 and I am 65. Image of "gramps": "(1939). poster of old man smoking pipe. This poster announces the passage of the 1939 Social Security Amendments." Source. (many cool retro posters here!)

What You Don't Know About Social Security—but Should - A Look at Claiming Strategies, Tax Angles and More to Help You Make Sense of a Complicated Program


You may have heard the advice countless times: Minimize (or avoid) withdrawals from your nest egg (401(k), individual retirement accounts, etc.) for as long as possible to take advantage of tax-deferred growth. Many investors who follow that advice grab Social Security benefits, typically at age 62, to help pay the bills. But that advice ignores the possible tax benefits associated with following the opposite course: accelerating withdrawals from savings early in retirement so that you can hold off on claiming Social Security. The thinking here is tied to the fact that Social Security benefits are taxable. As much as 85% of a married couple's benefits are subject to tax when their income exceeds $44,000 ($34,000 for individuals); as much as 50% of benefits are taxable at lower income levels. If you delay claiming Social Security and, as a result, end up with larger benefits, future withdrawals from savings will likely be smaller—a recipe for lower levels of taxable income. (For a detailed discussion of these tax issues, see "Innovative Strategies to Help Maximize Social Security Benefits," from James Mahaney, vice president at Prudential Financial Inc. "Many retirees don't consider the impact of their withdrawal strategy on how their Social Security is taxed," says Mr. Meyer, the SocialSecuritySolutions.com founder. "Missteps in tapping the wrong account and investments to generate income can significantly increase your taxes."



Edward Fashingbauer's final request



Ed joined the Marines during World War II, taking part in the Battle of Okinawa, the largest amphibious assault of the Pacific War. Ed later said that war movies showing beautiful palm trees waving over a tropical beach were all Hollywood, for during the war, he never saw a palm that wasn't shattered. Ed was a businessman by day, but came home to his White Bear Lake farm by night, hung up his suit jacket and threw hay to his horses. He never met a piece of wood he couldn't craft into something beautiful, had a soft spot for any and all animals, and stayed loyal to Minnesota sports teams in bad times and in worse. He would've liked the Minnesota Vikings to be his pallbearers, so they could let him down one last time. Semper fi. -Published in Pioneer Press on June 22, 2014
Comment: Kathee saw in today's Star Tribune


Islamic Proselytism

How to Convert to Islam and Become a Muslim


Converting to Islam is easy. This article explains how to convert and become a Muslim in a simple way. In addition to that, it gives a brief overview of Islam, the faith of 1.7 billion people, and sheds light on the benefits of converting.

"We did not send before you (O Muhammad) any messenger but We revealed to him: ‘none has the right to be worshipped except I, therefore worship Me.’" (Quran 21:25)

"We have not sent you (O Muhammad) but to all mankind as a giver of good news and as a warner, but most people do not know." (Quran 34:28) "Whoever seeks a religion other than Islam, it will never be accepted of him, and in the Hereafter he will be one of the losers." (Quran 3:85)

Becoming a Muslim is a simple and easy process. All that a person has to do is to say a sentence called the Testimony of Faith (Shahada), which is pronounced as: I testify "La ilaha illa Allah, Muhammad rasoolu Allah."

These Arabic words mean, "There is no true god (deity) but God (Allah), and Muhammad is the Messenger (Prophet) of God." Once a person says the Testimony of Faith (Shahada) with conviction and understanding its meaning, then he/she has become a Muslim. The first part, "There is no true deity but God," means that none has the right to be worshipped but God alone, and that God has neither partner nor son. The second part means that Muhammad was a true Prophet sent by God to humankind
Comments: As one of the "losers" it strikes me that Islam proselytizes at the end of a gun or the blade of a sword. Examples seem to abound (warning ... stacks of bloody bodies). To be fair at times Christianity has done the same (see Crusades and Spanish Inquisition).To be (or become) a Muslim one must reject the Deity of Christ and the Trinity and:
O People of the Scripture! Do not exaggerate in your religion nor utter aught concerning Allah save the truth. The Messiah, Jesus son of Mary, was only a messenger of Allah, and His word which He conveyed unto Mary, and a spirit from Him. So believe in Allah and His messengers, and say not “Three”—Cease! (it is) better for you!—Allah is only One God. Far is it removed from His transcendant majesty that he should have a son. His is all that is in the heavens and all that is in the earth. And Allah is sufficient as Defender. The Messiah will never scorn to be a slave unto Allah, nor will the favoured angels. Whoso scorneth His service and is proud, all such will He assemble unto Him (Surah 4:171-172, emp. added).

They surely disbelieve who say: Lo! Allah is the Messiah, son of Mary. The Messiah (himself) said: O Children of Israel, worship Allah, my Lord and your Lord. Lo! whoso ascribeth partners unto Allah, for him Allah hath forbidden Paradise. His abode is the Fire. For evil‑doers there will be no helpers. They surely disbelieve who say: Lo! Allah is the third of three; when there is no God save the One God. If they desist not from so saying a painful doom will fall on those of them who disbelieve. Will they not rather turn unto Allah and seek forgiveness of Him? For Allah is Forgiving, Merciful (Surah 5:72-74, emp. added)
This leads to the essense of Christianity:
  • God is Triune (not time to defend it now but for a full treatment consider: Delighting in the Trinity: An Introduction to the Christian Faith and The Forgotten Trinity
  • Jesus IS God. Much evidence but briefly: "In the beginning was the Word, and the Word was with God, and the Word was God." (John 1:1). He is the only begotten Son.
  • He died to save sinners: "This is a faithful saying and worthy of all acceptance, that Christ Jesus came into the world to save sinners, of whom I am chief" (1 Timothy 1:15)
  • He rose victorious over the grave: "For I delivered to you first of all that which I also received: that Christ died for our sins according to the Scriptures, and that He was buried, and that He rose again the third day according to the Scriptures, 5 and that He was seen by Cephas, then by the twelve. After that He was seen by over five hundred brethren at once, of whom the greater part remain to the present, but some have fallen asleep. After that He was seen by James, then by all the apostles. Then last of all He was seen by me also, as by one born out of due time." (1 Corinthians 15:3-8)
  • Christians do not worship Allah .. we worship Christ. 
  • Both Christianity and Islam may be error (obviously as a Christian I believe New Testament Christianity to be true!). But both Christianity AND Islam cannot both be true

30 Stocks analyzed

Comment:  A companion (click image to enlarge) to my previous post. Lessons:

  • Note MRK where the payout ratio is 115%. This cannot be sustained. 
  • COP, IBM, INTC, T, and WMT have an Enterprise Multiple less than 10. All pay dividends with a nice return. Worthy of purchase and holding

How I evaluate a stock - Example Intel

Someone recently asked me how I evalutate at stock. Here's my basic process. First of all I want to make money on a stock. I don't buy stock just for the fun of it. I buy with an expectation of a return. And my return horizon is less than 5 years.

  1. Am I familiar wiht the company? Have I read articles about the company over time (Example)? Is the company a major player in its industry sector?
  2. How do I expect to make money? Generally I expect to make money on both dividend returns and stock growth. I almost exclusively invest in dividend stocks.With Intel I expect to hold this for a long term and enjoy the dividend returns. 
  3. Do I expect growth? If not, I pass.
  4. What is the P/E ratio? Defined . Caveat: The P/E ratio looks at the last 4 quarters of profit. It is not forward looking. Generally I look for a P/E ration of less than 20. 
  5. What is the Dividend yield? In the case of INTC, it pays an annual dividend of $ .90 and the price of the stock is about $ 30. So the yield is .9 / 30 or 3%. 
  6. What is the Payout Ratio? INTC earned $ 1.87 per share over the last 4 quarters. That's a gross yield of 6%. The Payout Ratio is EPS / Dividend = 48%. If all of the earnings are paid out in dividends, it means that nothing is kept back for R&D. Not a good thing. A company with an unprofitable quarter may have a Payout Ratio of greater than 100%. They may be able to sustain that for a few quarters but not over the long term. 
  7. What is the Enterprise Multiple? This topic is a bit complex so click through to my longer blog post. I look for an Enterprise Multiple of less than 11.
  8. How does the stock compare to the company's competitors? finance.yahoo.com is my go-to website for all of this information. 
Conclusion: Intel is a buy for me. We currently have holdings in INTC. We are not adding to that at this time.


Ready to Retire?

5 Ways to Tell if You Are Ready to Retire Early

One way to estimate if you're ready for early retirement is to divide your investable assets by your annual expense. I call this the financial freedom ratio. If your financial freedom ratio is above 25, then you're in pretty good shape. You can use the 4 percent rule to withdraw from your portfolio, and chances are good that your money will last for 30 years or more. Of course, if you retire very early, then you probably need to be a bit more conservative and withdraw less until you're near 65, the normal retirement age.
Comment: As for us
  • We meet all of the above criteria except my wife is 2 years younger than I
  • She does not want to retire yet AND
  • I don't want to retire without her
  • So basically we are waiting 22 months (her 65th birthday)
  • And using these months to double down on investments.

Are you Ri¢h?

Definition of ‘Rich’ Changes With Income


I asked survey respondents to tell me how much money the people in their household would have to earn in a year for them to consider themselves rich. I evaluated answers that began at $10,000 and went through $4 million. In households in the lowest quartile of income, those earning less than $25,000 a year, people thought they needed about $293,000, on average, to consider themselves rich. And in households earning between $30,000 and $60,000 of annual income, the magic number was closer to $394,000. As people earn more, the multiplier on current income goes down, but the absolute number goes up in a somewhat linear fashion. In households with annual income between $60,001 and $120,000, the dream of becoming rich comes true at $426,000, on average; and, for the top 15 percent of incomes ($120,000 and up), the average number was $501,000.
Comment:  See earlier Richie Rich blog post. So much could be said about this from a Christian perspective. Off the top of my head:

  • "When you have your health, you have everything. When you do not have your health, nothing else matters at all" (This is not a Christian perspective ... but a frequently quoted axiom. Actually one could be sick unto death and suffering and have true riches!)
  • The Bible speaks of "true riches" (Luke 16)
  • "Now he who received seed among the thorns is he who hears the word, and the cares of this world and the deceitfulness of riches choke the word, and he becomes unfruitful." (Matthew 13:22)
  • Romans 2:4, "Or do you despise the riches of His goodness, forbearance, and longsuffering, not knowing that the goodness of God leads you to repentance?"
  • Romans 11:33, "Oh, the depth of the riches both of the wisdom and knowledge of God! How unsearchable are His judgments and His ways past finding out!"
  • Ephesians 3:8, "o me, who am less than the least of all the saints, this grace was given, that I should preach among the Gentiles the unsearchable riches of Christ,"


Medtronic: Sweet Home Ireland

Medtronic, Covidien in Advanced Talks to Combine - Deal, Valued at More Than $40 Billion, Would Be Structured as So-Called Tax Inversion

Medical-device maker Medtronic Inc. is in advanced talks to combine with rival Covidien PLC in a deal valued at more than $40 billion, according to people familiar with the matter. The deal, which could be announced Monday, would be structured as a so-called tax inversion, according to one of the people. In such deals, acquirers buy companies domiciled in countries with lower corporate tax rates than their own as a means of lowering their overall rate. Covidien is based in Ireland, which is known for having a relatively low tax rate.
Comment: Corporate Inversion defined:
Re-incorporating a company overseas in order to reduce the tax burden on income earned abroad. Corporate inversion as a strategy is used by companies that receive a significant portion of their income from foreign sources, since that income is taxed both abroad and in the country of incorporation. Companies undertaking this strategy are likely to select a country that has lower tax rates and less stringent corporate governance requirements.

Comments: Others domiciled in Ireland: Accenture, Seagate. The problem: High US Corporate tax rates.


"To Serve Man" means to help people

For even the Son of Man did not come to be served, but to serve, and to give His life a ransom for many.” (Mark 10:45)
"For you, brethren, have been called to liberty; only do not use liberty as an opportunity for the flesh, but through love serve one another." (Galatians 5:13)

Reflecting today on a conversation I had about sales and salesmanship. The best salesman matches his company's offerings to the genuine needs of the customer. If there is not a match, he will walk away from the sale. Having been a salesman, I did not always do this.

The two black and white images above are of the famous "To Serve Man (The Twilight Zone)". It's old (1962). And it's a classic. Click the link for the explanation. The classic closing line was "It's a cookbook!". The colored patch above (source) is the unofficial badge of the 509th Bomb Wing based in Whiteman Air Force Base in Missouri, shows a space alien with huge eyes holding a stealth bomber near its mouth. The text reads, "To Serve Man," and the caption below reads, "Gustatus Similis Pullus"—dog Latin for "Tastes Like Chicken".

Now my lesson for ministers of the Gospel. Look out for what is best for your flock! Don't treat them like chicken!

EV/EBITDA (Enterprise Multiple) better than P/E ratio for value investors

A Superior Metric for Value Investors


Enterprise value (EV) is calculated in the following way:

EV = Market Cap + Total Debt + Preferred Stock + Minority Interest – Cash

This gives us a theoretical takeover value, which is similar to how an investment banker might value the company.

The denominator of the ratio is EBITDA, which stands for earnings before interest, taxes, depreciation and amortization.

Basically, it’s the earnings that are available to all stakeholders. Similar to the P/E ratio, a lower EV/EBITDA represents a cheaper valuation, all else equal.

Luckily, the EV/trailing EBITDA ratio can be found on the Yahoo! Finance Key Statistics page, so we don’t have to dig through financial statements.

.... The median EV/EBITDA ratio for the S&P 500 is currently 11.4x. If we own a stock with a much higher multiple, there better be a really good reason.
Comment: So ... low EV/EBITDA is preferred. See samples above. Also known as the Enterprise Multiple
Some other links:


Retailers you won't miss

The future of 'Zombie' RadioShack

Unfortunately for everyone involved, RadioShack has entered a sort of undead ‘zombie’ retailer state. The company is being run for cash flow and liquidity. That means there are unlikely to be many grand remodels completed or revamps in the works. The stores will still be there, at least for now. Some chains such as CompUSA seem to disappear overnight, but at least for now the people calling the shots at RadioShack seem to think it’s more expensive to close the stores and get out of the leases than to let them run as is.
At Sears, 'closing stores is going to be part of our future'


Speaking at this year's annual shareholders meeting in Hoffman Estates, Sears Holdings Corp. Chairman and CEO Edward Lampert today said the retailer would close stores and look for ways to leverage its real estate while sticking to its focus on integrated retail and its Shop Your Way program. "Closing stores is going to be part of our future," he said. "I'd rather do (fewer closures) rather than more, but the world has shifted." He outlined a vision of Sears' stores five years from now that will be physically smaller and sell both Sears merchandise and goods from third-party retailers, much the way the company's online Marketplace currently sells 120 million products, the vast majority of which are not Sears' own merchandise. "We want to be a partnership company," he said. "Sometimes we're going to be the big dog and sometimes we're going to be a (smaller) piece of a solution." Sears has closed about 500 stores since 2005 — 305 of them since 2010 — but Mr. Lampert said he could not estimate how many more will shutter. He did say that whereas he previously would have kept a marginally performing store open in the hopes of improving it, industry changes and the shift to online means that today "the decision more often than not is to not renew the lease." "We think you don't need 2,000 stores to be relevant in the United States," he said. Currently there are 1,152 Kmart stores and 778 full-line Sears stores.
Is it time to close Kmart?


Kmart used to fill an important role for budget-conscious shoppers. But those customers have many more places now that can meet their needs. Dollar stores sell groceries and household necessities. Wal-Mart has a bigger selection than Kmart, often at lower prices. In fact, the Journal cited data showing Kmart's prices were higher than Wal-Mart's and Target's in five out of six items it checked at all stores. Granted, that's a pretty small sample. But if that holds true and Kmart isn't necessarily cheaper than competitors, then what is Kmart's reason for existing?
Sears vs. J.C. Penney: which is worse?


... if you gave me $1,000 in free money with the express condition it be invested in either Sears or J.C. Penney stock, I’d have to come down on the side of J.C. Penney. That’s for one simple reason: Penney is reducing costs and trying to reinvent itself out of necessity, while Sears started the process of bone-deep cuts long ago... with seemingly no intention of ever stopping. Given the choice between a struggling company that is trying to improve and a company that doesn’t care about long-term strategy as long as it makes this quarter’s numbers, I’ll take the former.
My comments (I don't shop so consider that)
  • My wife shops at none of the above but did buy some drapes from J C Penney about 4 years ago.
  • My young adult children (29, 32, and 34) would not visit any of the above. I sense that the above have lost young people.
  • My wife never goes to "the Mall".
  • Image Source

The Disability Gravy-Train

Sen. Coburn: ‘We Keep Putting People on Disability Who Are Not Truly Disabled’


“We keep putting people on disability who are not truly disabled,” said Sen. Tom Coburn (R-Okla.) on Tuesday at a House Oversight and Government Reform Committee hearing entitled, Social Security Administration Oversight: Examining the Integrity of the Disability Determination Appeals Process. Coburn, who also is a medical doctor, was called to testify about disability-payment reform for the House-held hearing.

 “Currently, 8.4 million people are enrolled in SSI [Supplemental Security Income for the disabled], at a cost to the federal government of nearly $56.5 billion in 2013,” according to a June 10 Oversight Committee report. “The number of participants in SSI has nearly doubled over the last 25 years.

Growth in SSI enrollment also increases Medicaid spending since individuals enrolled in SSI are automatically eligible for Medicaid.” “Most of us know that the Social Security disability trust fund is in precarious shape,” Senator Coburn told the committee. “11 million Americans who presently are in need of those payments will receive a cut.”

Coburn, along with Sen. Carl Levin (D-Mich.), reviewed random disability cases from Social Security from three different offices. “What we found is alarming,” Coburn said. “What we found is 25% of the cases should never have been approved by benefits based on Social Security’s own rules and procedures. So, we had 25% where their own administrating law agents didn’t follow their own rules.”

A disability fraud case in Huntington, West Virginia, evoked concern for Coburn. “This got our attention because this office processed more disability cases than any other office in the nation,” he said. “And so when we looked at it, much of that could be accounted to one attorney, Eric C. Conn.” “In spite of practicing in a town of 500 people, he had become the third highest payment Social Security receiving over $4 million dollars in agency fees in 2010,” said Coburn. “When we looked more closely at Mr. Conn’s operation, we found reasons for serious concern. Some of what Mr. Conn did was outright fraud. At times he was simply able to exploit loopholes in the program. Both of those should be a concern for us in Congress, given the current nature of the trust fund.”
Comment: I think I know something about this as I have a genuine handicap AND I WORK for a living.


Bull Market - 62 months and counting

We are about to enter the greatest bull market in 85 years


At 62  months and counting, the S&P 500 index is this close to its longest bull run since 1994 to 2000. Should it continue rallying for just two months more, it will be the longest bull market run in over 85 years

The Condo hunt

We've been looking at condos for almost three years. I think we are 2 years away from buying (based upon a planned retirement date of April 1st, 2016.

These are the condos we like the best:

The Cobalt: Location. I like it more than Kathee. Uber-convenient with a Lunds on the main floor.

Rock Island Lofts: Location

Cream of Wheat: Location
River Park Lofts: Location

  • All have underground parking
  • The River Park is in Saint Paul and has Skyway linkup to Saint Paul Skyway system
  • All are either next door or very close to a park
  • Prices range up to a million or more but often have units available for $ 350,000 to $ 500,000
  • Wanted: 
    • Two parking spaces
    • In unit laundry
    • Balcony
    • Windows on 2 sides (corner unit)
    • At least one and preferably two bedrooms
    • At least two bathrooms
    • At least 1,500 square feet

Winners and Losers in the Tyson - Hillshire Brands deal

Who Are the Winners and Losers in the Tyson-Hillshire Deal?

The deal is a big win for Hillshire, the maker of Jimmy Dean sausages. Tyson is paying $63 per share for Hillshire, a 70% premium over Hillshire’s $37 share price before the bidding began.

  • Of interest to us because we have 100 of Hillshire
  • I bought Hillshare last July and August for an average price of $ 35.11. At the time I viewed it as fair priced but did not expect it to soar. So $ 63 minus $ 35.11 is a gain of almost $ 2800.
  • I don't intend to sell but will wait for it to close and take the Tyson shares.
  • With Tyson trading at $ 37.62 (today) our 100 HSH shares would be about 167 TSN shares.



The Topography of Tears

Image source


  • The first link above is to a study of 100 different tears under a microscope
  • It's interesting because the images tears of different types of stimuli vary
  • Tuesday we drove out to Litchfield MN to great Roger's 849th unit back from Afghanistan. 
  • The unit organized in a rectangle in the center of the Litchfield civic center (a hockey rink really). 
  • Families were in the perimeter 
  • Upon dismissal family members scrambled towards the dispersing rectangle of men. 
  • I witnessed many family reunions. The first struck me ... a soldier red faced and in tears embracing his spouse (this was not my son and his wife ... it took some time to find them)
  • I've seen many tears ... funeral tears at the funeral of a child (At an actual funeral that I conducted, I myself cried from the lecturn during the funeral of a teenager). 
  • I remember my own tears at my Dad's funeral. I stayed back and watched as the mortuary personnel closed the casket. They took off Dad's glasses and folded them. Tears came to my eyes.
  • This post isn't very  elegant - I doubt many of mine are! But check out the microscopic in the above link.

GM: a pattern of "incompetence and neglect"

GM fires 15 people following ignition switch investigation


General Motors said a pattern of "incompetence and neglect" led to a decade-long defect in an ignition switch that has killed at least 13 people, and probably more. On Thursday morning, CEO Mary Barra said she had reviewed an internal report on the safety crisis compiled by an outside investigator, former US Attorney Anton Valukas, and that the company had taken aggressive action to fix problems and ensure such a pattern never occurs again. General Motors said it has fired 15 employees related to those series of failures unearthed by Valukas during his investigation and disciplined five more. At least half the employees dismissed were executives, Barra said.
Comment: Was this automaker worth saving? U.S. government says it lost $11.2 billion on GM bailout


Burt Shavitz: The Iconic Beekeeper behind Burt's Bees

Co-founder of Burt's Bees says he was ousted


Conventional wisdom suggests the Burt behind Burt's Bees left the company after he became disillusioned with the corporate world in North Carolina and wanted to return to his solitary life in Maine. The reality, Burt Shavitz says, is that he was forced out by co-founder Roxanne Quimby after he had an affair with an employee. So the man on the Burt's Bees logo that promises "Earth-friendly natural personal care products" ended up with 37 acres in Maine, and an undisclosed sum of money.
Comment: Now owned by Clorox. I love their products!

The 4% Rule

4 Percent Rule Facts You Should Know


The rule is designed to work over a 30-year period, which will practically never be your timeline. For people who retire in their 60s, the expected lifespan is well within the 30-year window. A 65-year-old retired couple has about an 18 percent chance of either of them reaching 95, which gives them a very small probability of outliving their assets. Some people would say they are almost guaranteed to not run out of money too soon, especially when you factor in the fact that almost everyone will have some form of Social Security and home equity to tap if the worst case scenario actually materializes.
Comment: Not sure if I will live 30 years! (Frankly not sure if I want to). But my Mother is 94 and going strong. She has not run out of $$ and believe it or not still saves! Summary: want to live as long as the Lord enables me. And I want to serve Him faithfully until the end. We are approximately 21 months from retirement (if the Lord wills!). Kathee will be 65 in April of 2016. I will be 66 1/2. Feels right. My initial plan is to withdraw at a 3% rate. Maybe even 2.9%


Retirement: How to invest wisely to live comfortably

Retirement: How to invest wisely to live comfortably

People think, "I've accumulated this much," and their inclination is to put it in stable investments — cash or bonds, but they run the risk of eroding their purchasing power. Their essential expenses will increase in retirement — taxes will go up on their property, health care will go up, the cost of food will go up — so they need an equity portfolio that is growing so it maintains or increases their purchasing power in the future. ...

Fidelity offers this rule of thumb: Save at least eight times your final salary to help increase the odds that you won't outlive your savings during 30 years in retirement. This amount assumes that you'll get some money from Social Security and that your expenses after you retire will be lower than when you were working. Higher net-worth folks usually need to save more than eight times their final salary.
Comment: Message is start investing early and stay in equities