Author: Steve LeBel

Gridlock Party

It is obvious to me that our political process is deeply flawed.  The frustration I hear and feel every day that emanates from Washington is getting worse and worse.  I think I have a solution.

The Abuse of Power

To begin, let me define the basic problem.  Each political party is made up of a variety of special interests. This isn’t necessarily a bad thing; it just means it only takes a vocal minority to establish a position within a political party.  Once that is done, the party is obligated to honor it and advance if it can.

The parties advance their causes by passing laws and regulations.  We all know to pass a law, the House of Representatives and the Senate pass it and then the President signs it.  It is my thesis our biggest problems happen when the House and the Senate and the Presidency are all controlled by the same political party.  Let’s call these power brokers (House, Senate, and President) the Big Three.  And we will call any party that controls all three the Ruling Party.

Consider this: most of our legislative actions are done by majority vote.  If 51 people want something and 49 do not, it can become a law, no matter how much the 49 disagree with it. This is the “tyranny of the majority”.  There really is no way to guarantee protection of or respect for the minority position.

Regardless of which party is in power, that party tries to pass laws and regulations to satisfy their special interest constituents. If they have enough power, they get their way and they effectively move the societal pendulum away from the center. (Think of the “center” as the “comfort zone” for the vast majority of us.)  If they have enough power and/or stay in office long enough, they push things so far away from the center that things start getting bad for the rest of us.

And, to further complicate things, the Ruling Party is often driven by one of their minority special interest groups, who are often not even a majority opinion of their own party.  What kind of check and balance is there to prevent the “majority” from changing things that the real majority wants?  Not much.

I know you are thinking right now, “Well, it is true of the other guys, but not about MY party.”  Sorry.  It is equally true in either direction.  Given enough power and enough time, neither party is immune.  Absolute power corrupts.  Just that simple.

Do We Need A Ruling Party?

My argument is the best times for the American people happen when no single party controls all of the Big Three. Why is this?  It is because when no one has all the power, neither party can get into too much mischief.  Even if one Party wanted something, if the Other Party is in control of just one of the Big Three (House, Senate or Presidency), then it isn’t likely to happen. Neither party has the power to force its will on not only the Other Party but also on all the rest of us.  This is a very good thing.

We have all heard the term “gridlock” applied to Congress. They usually say it like it is a bad thing; I think it is a great thing.  As long as we have gridlock, then no single party can ramrod a piece of legislation through just because they have one more vote than the Other Party.  When we have gridlock, we have a balance of power that is good for the rest of us.

When the Pendulum Is Out Of The Comfort Zone

When we find things are starting to feel bad, there really aren’t a lot of choices for us as individual citizens.  We really have only one choice: vote out the Ruling Party and put in the Other Party. This sorta works. We elect the Other Party because they promised to move the pendulum back to the center.

When the Other Party Gets the Power

If the election throws out the Ruling Party and makes the Other Party the new Ruling Party, then we have effectively transferred absolute power to the Other Party. The new Ruling Party, proclaiming their mandate, will do everything they can to reverse the actions of the previous party and move things further back in their own direction. If they take it too far, of course, it causes us pain, because once again we have been moved out of our comfort zone.

And when that happens, what do we do? We do the only thing we can do: we vote them out and put the first party back in.  And the process begins all over again.

When the Other Party Gets Some Power – Gridlock

If the election resulted in something less than a clean sweep, and we have a situation where there is no Ruling Party (because both parties control at least one of the Big Three), then we have managed to break up the power block of the Ruling Party. This, in my opinion, is the ideal outcome.  The Ruling Party no longer has the power to rubber stamp whatever they want done. This gridlock environment means there are no more slam dunks in the legislative arena.

It is true that a gridlocked Big Three isn’t going to be as “productive” as a Ruling Party with complete control over the Big Three.  But do you want that?  I don’t.  That just guarantees more fussing and fighting while the dominant party jams its agenda down our throats.  And then, of course, we have to wait until the next election when we can throw them out and try to reverse the damage they have done.  Am I worried about a do-nothing congress that just sits around and collects their fat paychecks? Nope. Not a bit. Our country is used to paying people not to work. I have no problem bribing 435 + 100 + 1 elected officials to just sit on their hands.

I think Gridlock is a much better solution than throwing one party or the other out every 8-12 years. It would produce a lot less wailing, name calling, gnashing of teeth, biting of knuckles, and general animosity than any other solution.

My Proposal

So here is what I propose. Right now, we can all go into a voting booth and vote a straight party ticket. I want to add one more check box to that ballot. I want the option to vote for the Gridlock Party.

So who is in the Gridlock Party?  How does it work?  Well, it is quite simple, really.  The Gridlock Party ballots get counted last.  Count up the other ballots first.  Figure out who would have won.  Then if it looks like either party will become the Ruling Party with control over the Big Three (i.e., winning too much power), then our votes go for the Other Party.  Think about it.  We are voting to limit the power of the majority by denying them absolute power.  Then everyone has to play nice if they want to accomplish anything.

We combine the full force of our voting power (liberal, conservative, and independent alike) to vote for a condition we believe will be better for everyone.

Gridlock Party Credo:

We, the members of the Gridlock Party, are made up of all races, creeds, ideologies, and religions.  And we are liberals, conservatives and independents.  But the thing that unifies us is we don’t want to be jerked around by either party every few years.  We don’t care about various social issues to the exclusion of all else. We don’t want causes. We don’t want raging debates. We are tired of half of the world being divided into enemy camps because they are conservative or liberal.  We are tired of not being able to talk with neighbors about politics for fear of offending or inciting them.  We just want a quiet enjoyment of our lives.

What are the advantages of the Gridlock Party? Easy. We know when gridlock prevails, neither party has enough power to pass anything over the trampled remains of the Other Party; this puts an end to ramrod legislation and unpopular laws passed by a “majority”. Yes, it’s true that fewer laws will be passed. This is a good thing. If they do pass something, then both of their fingerprints are on it. If it turns out to be a problem, they’re both motivated to fix it. There will always be ideological differences. But if both parties can agree on a solution, then it is probably OK for us too. If they can’t agree on a solution, it is probably because each party wants to take us further away from the center. So it’s fine with me when they don’t reach an agreement. If they agree, then OK. If they can’t, then I don’t want to go there either.

I can’t think of a better system than our democracy. But I think we need to control the abuses of power that happen when one party gets too much Power.

I, for one, will never again say “gridlock” like it is a bad thing.

The Sky Lantern Incident

On Wednesday, June 27th, there were seven of us that met on the beach at Pere Marquette Park for a cookout.  It was a great idea.

Afterwards, I decided it would be fun to launch some Sky Lanterns Peg had given me for Christmas.  I first saw them in Thailand.  They filled the night sky as they drifted leisurely out over the Andaman Sea.  At times, you could see dozens of them.  It was a magnificent sight.

The Sky Lanterns Peg got me are very similar.  They are like small hot air balloons.  You light a fire in the bottom, and the balloon part fills with hot air, making it rise.  Simple, right?  Well, it turns out there is a bit more to it.

It was windy on the beach, even by Lake Michigan standards, so we gathered to light the first one in the shelter of one of the dunes.  I was the self-appointed torch man whose job was to get the fire started.  There were 2-3 others who helped hold the lantern upright; the others were busy shouting out instructions and encouragement to the rest of us.  The fire wasn’t too hard to start.  The real problem was holding the lantern steady and upright so it could fill with the hot air.  And, of course, the wind didn’t help.  It swirled around us, trying to put the fire out.  And then, when the fire was going well, the wind changed tactics and tried to rip the lantern out of our hands.  But we didn’t let any of that happen, and slowly, the lantern filled with hot air.  Eventually, we knew the time was right, and we released the lantern.  And watched as the lantern moved slowly upward into the darkening sky.

By this time, we had attracted a crowd.  I wasn’t aware of them until I noticed the applause that accompanied our launch.  I was so proud.  My first launch was a complete success.  And I looked back to watch my baby as it moved further up and away.

The Lantern Snatching TreeThat was when I realized our sky lantern was not heading out over Lake Michigan.  To be honest, I knew the wind was blowing north, but I thought it would be shifting toward the north-west, which would have been fine.  As I took in more of the surroundings than just the lantern, I realized 1) the lantern was not heading out toward the water, but instead was moving north-east, 2) there is a line of trees in that direction, 3) the trees marked the boundary of the Coast Guard Station, and 4) the wind about 10-20 feet above the ground was moving hard and fast toward the trees.  My poor lantern had no chance.  He struggled to gain altitude.  But the wind held him down.  The nasty wind drove our helpless lantern relentlessly on a direct collision course with the trees.  There was never really any hope.  Our lantern tried to move around the trees, but the wind pushed him this way and that, never waivering from its target.  Suddenly, it looked as if the lantern might have out-maneuvered the wind, but then a tree branch reached out and grabbed the lantern and held it tight.  My heart sank as I saw my little friend trapped and without hope.  Meanwhile, the wind and the tree were busy giving each other high-fives in celebration.

I knew the lantern was not happy at the ruination of its maiden and only voyage.  Fire would be his answer.  My thoughts were furiously trying to calculate the chances of the tree catching on fire.  I stood there helplessly looking 50 feet up, waiting for the tree to burst into flame and the Coast Guard to come rushing out to save the day (and arrest the arsonist who had threatened their lives).

Whichever god it is that watches over children and fools was also taking care of me that day.  The fire sputtered and went out.  The relief was palpable.  You could feel it everywhere.  No arrests would happen on this day.

We stood around breathing great sighs of relief.  Happy nothing bad had happened.  We had dodged the big one.  That was when someone said, “There isn’t as much wind down by the water.”

Something should have told me that was a bad idea, but it made so much sense.  Being closer to the water would avoid the trees.  It might even increase the chances of going straight north or even out over the water.  It was a good plan, really.

The Evil Wind

It turned out there was more wind down by the water, not less.  But my group of accomplices were prepared, and they quickly got into the wind-blocking huddle formation, and we made fire again.  Although there was more wind, it didn’t bother us because by now we were highly trained experts in the launch maneuver.

Finally, we achieved lift off.  But our poor lantern!  As soon as it got past our sheltering embrace, the evil wind was waiting.  The same evil wind that destroyed the life of his brother.  But this time, there were no trees.  I smiled.  We had outsmarted the wind.  He was helpless to do anything except lift our lantern upward on his way to the stars.

That was when I realized the wind had yet another trick up his sleeve.  He didn’t have to let our lantern go up; he could make it go sideways.  And he could do this for a very, very long time.

A quick calculation of the wind direction revealed that once again the Coast Guard Station was to be its target.  But this time, it would not be a tree.  This time, it would be the building itself that would burn.  A Coast Guard tree going up in flames might be considered a foolish prank, but a second attempt on the same day would surely brand me as a terrorist.  If only it hadn’t been a military installation the wind had chosen.  How I hated him for this awful betrayal!

But could I catch that runaway lantern?  And somehow abort this impending disaster?  I could see the wind had a 75 foot head start on me.  But fear is a great motivator, and I burst into the fastest run I have done in years.

I could see I was gaining on the lantern.  Or maybe the wind was just toying with me.  The wind seemed to pause.  The lantern saw its chance and quickly rose 2-3 feet.  I was overjoyed.  If it rose at this rate, it might yet rise above the building and escape.  I dared to hope.  Still 50 feet away, I slowed my headlong rush.

Suddenly, the lantern was pushed down again.  It was now only 3-4 feet off the ground.  And picking up speed.  I saw the fence that surrounds the Coast Guard property.  I desperately hoped the lantern would get caught by the fence.  Maybe then it would not  endanger the lives of the military people living there.  Suddenly, the wind began lifting the lantern.  That was when I realized the wind’s fiendish plan.  The wind had hoped I would give up, thinking the fence would save me.  The wind knew I would be stopped by the fence.  He also knew he and the lantern could easily sail over it and go on to the building just a few feet away.  I, however, would be powerless on this side of the fence, left with nothing to do but watch the building as it burned to the ground.  I wondered if I could climb the fence.  I also wondered if trespassing on a military base would be excused if I did it to put out a fire.  Maybe.  But a fire that I caused?  Maybe not.

Have I mentioned that fear is a great motivator?  This time, I ignored everything except my need to catch that lantern before he cleared the fence.  The quality of my remaining years hung in the balance.  In an amazing burst of speed, I tackled the poor lantern just before the wind could lift it over the fence and out of my reach.  It was close.  I mercilessly killed the fire in our little lantern.  There were strangers on the beach who had watched me speed past them.  They watched me now, carefully avoiding eye contact, and clearly afraid to do or say anything that might draw the attention of the mad lantern murderer.  As I dragged the broken body of our poor lantern back to my friends, I could feel their silent stares at my back.

For some reason, my friends failed to understand the situation as I did.  When I returned to them, still dragging the dead lantern behind me, I did not receive the accolades that were my due.  Instead, I was greeted by laughter and ribbing about how fast I had taken off running.  Did they not see my heroism and the ultimate sacrifice made by my little friend?  Did they not understand the terrible peril that had been averted?  Did they not picture me in a federal lockup somewhere?

I did notice that no one suggested we try lighting the third lantern…

The adventure continues here…

 

China Trip

Marge and I had a great trip to China (April 13 – April 27, 2012).  It is an amazing country and many of the pictures in my head were totally outdated and/or wrong.

I would like to share some of our experiences here.  The goal isn’t to produce a travel log, but rather a series of insights and observations.  First the disclaimers:

    • Our tour was with Viking River Cruises, which is first-class all the way.  Almost all the excursions were included, and we stayed in excellent hotels with excellent service.
    • The trip began in Beijing and ended in Shanghai.  Our travel was by jet between the cities except when we were on the river cruise when we were on the boat for six days.
    • The tour guides were outstanding (they worked for Viking).  Our guide particularly so; he kept us entertained and laughing and touched by his candor about his own life story and what it was like for him growing up in China.
    • We were kept busy almost all the time.  We did not have a lot of time to wander on our own.  I can’t say we saw the “raw underbelly” of China; we didn’t.

Some of the things that were absolutely impressive:

    • The streets are wide and clean and the traffic is mild by USA big city standards.  I was expecting an overwhelming number of bicycles and motorbikes, but we did not see them.  Apparently, the bikes don’t dare go on the roads and the motorbikes are restricted in the cities (at least in the big ones).
    • Everything is on a scale of grandness unlike anything I have seen before.  The streets are very wide, the sidewalks are very wide.  The buildings are all new and shiny.  Almost all the buildings are multi-story structures.
    • The buildings are unique.  They were designed by different architects from all over the world with what appears to have been a nearly unlimited budget.  They are amazingly unique and elaborate structures.  And on certain buildings, you will hear about things that had to be changed or done differently because the architect simply didn’t understand the feng shui.
    • The only duplicated buildings we saw were the high-rise condos that were everywhere.  You see clusters of 4-8 condo buildings that look the same; next to them on all sides are more clusters of condos with their own style of building.  Most of the the buildings were 10-20 stories, but a few were as short as 5-8.  These buildings were not as “pretty” because, even though they are new, the air conditioning units are installed outside the buildings.  And you often see laundry hanging on the balcony to dry.
    • We saw huge swaths of bulldozed land.  At one end, you would see the bulldozers sitting idle.  In the middle, you would see what looked like a flat tilled field full of broken concrete and other building materials.  These were the remains of the houses that used to be there.  The government has a program that knocks down your house, gives you a certain amount of money for it (a little more for larger houses), and then sends you to the bank to arrange financing for a condo.
    • Condos are build by private contractors.  You have to pay them in advance for your condo (and then hope they don’t go bankrupt and you lose your money).  The buyer is subjected to various up-sells by the contractor for extras (tiled bathrooms, American toilets, carpeting, non-toxic paint, etc.).  The mortgage rate our tour guide got on his condo was 7%.
    • Energy use is a big concern in the country.  On the outside of condo buildings you can see panels of lights.  There is one light for every unit.  If you turned up your air conditioning unit too high, then you get a ticket for over-using the energy.
      • We went into an amazing indoor shopping mall.  Surprisingly few people there.  The biggest surprise is that it was around 80 degrees everywhere inside.  The second biggest surprise is that all the posters with people modeling clothes, holding up products, etc. were all Western.
    • The Chinese people we met were very friendly; they seemed very willing to go out of their way to be helpful.  I got separated from our group once and had no problem finding someone who made phone calls to get me back to them.
    • Chinese have a reputation for very bad manners.  Things like blowing your nose (two finger style), spitting on the floor in restaurants, etc. were supposed to be common.  We didn’t see any of this.  Apparently Chairman Mao introduced and popularized these bad manners as a way of showing disregard for the rich folks.  China over the last few years told its people to improve their manners because the tourists don’t like it.  Apparently it worked.
    • It was very easy to get around with English.  Children study three subjects in elementary school:  Chinese, Math, and English.  There are more people in China who speak English than the population of England.
    • The Three Gorges Dam project (done to generate electric power) displaced over 1.3 million residents.  The government built new homes for them.  In some cases, we even saw where the government moved topsoil higher up the mountains so the farmers could continue farming.  Can you imagine a project in the USA that would move 1.3 million people?  It would never get approval.
    • Some of the older people don’t like “the new ways” and having to move.  There is a family value that says it is very good to live and die where you were born (and where your parents and grand parents lived and died).  Displacing people who believe this is hard on the people.
    • We saw a huge number of gigantic monitors everywhere.  Imagine Times Square and all the electronic screens there.  Now imagine it everywhere you go.  Some of them are government displays (like the gigantic one we saw in Tieneman Square) that carried the latest government slogans.
    • Western franchises and branches were everywhere.  You can go to McDonald’s or KFC or TGI Friday or Subway in all the cities.  You can find all the big name extra fancy stores there too.  And the GM and Ford dealerships.  They don’t discount their prices either.  But you will also see lots of non-American brands there too (lots of European and Japanese brands).
    • Pollution is a problem (and a growing one).  Half way into the trip I had to get some medication to supress an alergic reaction that had been building up since my arrival.
    • Our guide told us to be careful when buying things on the street.  He was primarily concerned about toxic materials in the products.  Avoid things that come into contact with your skin.  Avoid things that might give off odors in your home or other closed environments.
    • Religion is an interesting thing.  I know China had been largely Buddhist before Communism, but I had read that almost none of them were considered Buddhist any more.  I was surprised to see the few temples we visited were full of young Chinese people.  Our guide said most people practice a blend of Buddhism and Taoism and ancestor worship.  Somebody is going to have to do another count, because it is definitely higher than what was reported a few years ago.
    • I have to say something about the Great Wall.  You can’t climb it without being overwhelmed by the enormity of their task:  building a gigantic wall over 3,000 miles long.  It is hard to imagine the amount of work that went into this.  Up and over mountains and any obstruction in its way.
    • The government seems to understand capitalism.  They created three state banks and they compete with each other.  So do the 2-3 state owned airlines.  And lots of other companies.  Lots of the businesses we saw are locally owned and operated.
    • People work for private companies where their wages are not uniform.  Some pay much better than others.  If they get fired, they can get government assistance until they find another job.  However, there is great reluctance to doing this because it can affect your credit rating (yes, that is right).  The government doesn’t always know when you are working, but it always knows when you have drawn assistance.  Because the banks have access to this info, it can show them that you may not be credit worthy.  So people usually rely on family or savings during these times.
    • One child per family.  If you have a second one, you don’t go to jail, but you do get fined.  You could also lose your government job.  You also have to pay for your child’s schooling by yourself.  And more.  In spite of this, according to a Pew Research survey (2008), 76% of Chinese support this policy.
    • It is the male child’s responsibility to contribute to the retirement needs of his parents.  But what happens if you do not have a son?  Even having only one son to take on full responsibility for the parents can be a lot of pressure.
    • One child per family has also produced significantly fewer female children (abortion, etc.).  This changes the marriage dynamic since the guys are in competition for fewer mates.
    • Education is very important.  And it is competitive.  The kids study hard to qualify for advanced education.  Our guide told us he studied 16 hours a day to pass the entrance exam to get into high school (otherwise he would have gone to trade school – and his dad would have “killed him”).  He said the only TV he watched was the one hour news show because current events were on the exam.

 

Feeling Bored

For the last 2 months, I have gone back to “discretionary trading” (not using computerized programs to trade).  I found (to my disappointment) that I have done better in the last couple months than in almost any other two-month period in the last 4-5 years.  I knew I could do the discretionary trading, but I really wanted the computer trading to be better.  But for me (so far), my discretionary trading is better than my computer trading.

This leaves me sitting in my chair, feeling somewhat bored, thinking there has to be something I can do to stay busy.  (That feeling of having a nice short vacation has obviously passed.)  I can feel the growing need to keep my mind busy again.  This has produced some new projects:

    • I have been helping the condo association with some technology projects like setting up an advocacy website and enhancing a request system we had created for managing owner requests.  We are also going to do a re-organization for the main condo website to make it easier to use.
    • I went down to the Chamber of Commerce to talk with the head of SCORE (Service Corp of Retired Executives).  I have been thinking of this for a while.  They basically serve as advisors to people who want help with their businesses and/or business plans.  I turned in my application.  We will see.
    • This summer, I definitely want to spend more time on my deck.  Reading, listening to music, or just zoning-out.  It doesn’t matter.  When you are in Muskegon in the Summer, there isn’t much reason to go anywhere else.  When I spend time on the deck, things seems to slow down, and I have time to enjoy it more.
    • More traveling is something also on the short list.  This year, we have already been to Disney World and Universal Studios, and a great tour of China.  This summer, Dad and I are going to spend a week in Maine pigging out on lobster.  This fall, we booked a cruise from Rome to Istanbul with Jeff & Peg.
    • I have even been thinking about starting up my exercise program (again).  I guess I really am bored.  🙂

 

Market Prediction 6/22/12

So what is the market prediction between now and the rest of the year?

The market seems to be suffering lately from lots of bad news.  Some of it our own economic data and plenty of overseas news (esp., Europe) as well.  I don’t see this changing significantly in the near future.

However, it is a presidential election year.  The first way to view it is from incumbancy:

    • When incumbants win, the market tends to go up in a fairly stable way throughout the year.
    • When incumbants lose, the market tends to have a nasty drop beginning around September but a nice bounce after the election.

The second way of viewing this is from the perspective of the party.  In this case, we see:

    • Regardless of whether you have a newly elected Republican or a re-elected Democrat, the market tends to perform very well during the election year.

So, consider this mix:  a weak economy, vulnerability to bad news, the historical tendency to have a weak-flat summer, and the likelihood of economic uncertainty and consumer sentiment being depressed by the election media.  At a minimum, it is a high-risk trading environment.

It would seem reasonable to stay conservative at least until toward the end of August.  Because utilities tend to do well during these periods, I plan to stay with them.  I am also going to hedge my positions by adding some treasury notes and a hedge fund; these are primarily in case we have a really big drop.  It won’t protect me completely, but they will soften the blow.

By early-August, I will start re-evaluating my positioning.  I will either reduce my market exposure significantly or I may just get more hedges to neutralize any downward drop during September-October.

By election day (plus or minus a couple weeks), I plan to be fully invested in bullish securities for the remainder of the year.

It is helpful to articulate an overall plan and strategy.  That way, I have something I can use to measure market activity and my performance.

And, of course, if anything changes, so will I.

Whacking the Market

Have you noticed how sometimes market segments simply don’t do what they are supposed to do?

We all know that when the market gets ugly, we look to gold, consumer staples, utilities, bonds, etc. for downside protection.  And, for the most part, these do work.  However, there are times when the market gets “whacked” really hard, and all the rules seem to go out the window.

I have worked with utilities for the last 2-3 months.  I chose them because of the historical poor performance during the May-October period.  For the most part, it seems that:

  1. When the market drops, the utilities drop only about 50% of the S&P 500 drop.
  2. When the market goes up, the utilities seem to gain about 75% of the S&P.
  3. When the market is choppy, the utilities typically gain against the S&P.

There are times, however, when the market just gets whacked (this week being a good example).  On Wednesday, the utility market misbehaved by being one of the lowest performers in the lead-up to the Fed announcement.  This is understandable because lots of people were hoping for a Fed surprise that would thrust the market up.  Everyone wanted to have their cash ready to buy bullish sectors, which meant few people were buying utilities and many others were selling utility positions to raise cash.

When the Fed decision came and produced a yawn, people seemed to pause.  This seemed to whack the utility sector more than others.  Utilities continued to slide for the rest of the day.

Then came Thursday with some bad economic news and the market started down.  Utilities tried to jump back into their normal role and were up for a while.  But then when the market decided it was serious about going down, the utility hedge factor quickly disappeared.  The one of the “normal rules” (#1) still applied, however, and the utilities only lost about 50% of what the S&P lost for the day (about 30 points).

Today, Friday, the utilities are lagging behind the market.  We are showing a +.4% for S&P, but flat for utilities.  On the sector list, utilities are almost at the bottom.  For the first three hours, aside from opening gap, the market has been flat.  The “quick” money people that jump in and out of the market are busy jumping on the equities that were beat up the worst yesterday.  And everyone else is sitting in cash and licking their Thursday wounds.

I hope the utilities get back to “normal” soon.  They have been good to me for the last 2-3 months, and I want that goodness to continue.

 

Retirement Attempt #2

I have retired twice now.  I failed on my first try, but I think I am doing better on my second attempt.

In 1997, I retired as President of Insight Recovery Centers, a position I held for 17 years.  It was a great job, great people, and I felt like we really made a difference.  When I retired, I had no serious plan to work again.  I thought I would putz around with computer and technology things (a long-standing interest of mine) and develop a few web pages for some friends.  After about six months of working out of my home, Marge (my wife) came up to me and said, “I am tired of tripping over extension chords and not having any table space to serve meals because they are covered with computers.  You have to move out of the house and get a real office!”  I protested, saying that it was just a hobby.  She told me, “It stopped being a hobby when you hired your sixth employee!”  Thus began another 10 years of employment that I had not planned.

The company evolved from a web design company to a data center specializing in web hosting.  After 2 years of re-working the business to make it easier to sell, I sold the company to another company in Detroit.  Marge and I were extremely lucky, and we sold both our house and the business the same month.  That is when we moved to Muskegon.  And thus began my second attempt at retirement (2007).

This time I have done better.  I attribute this to Marge.  She told me, “You can start any kind of business you want.  But this time, you are not allowed to hire anybody.”  That rule, along with the need to manage my investments (especially in light of the stock market crash in 2008), put me into a new kind of business:  investing.

Naturally, I began by reading lots of books on the subject.  I also set up trading strategies with E*Trade to manage my investments.  I studied equities, mutual funds, ETFs, options, and futures.  To my delight, I seem to have a knack for trading.

My major goal was to develop computer programs to do the trading for me.  I reasoned that as I get older, if I have programs that will automatically make good trades for me, my investment success can be extended far beyond the normal time frame that I might otherwise be able to trade.  And, I won’t be chained to the computer all day long.  To take advantage of the best automated trading platform, I moved everything over to TradeStation.  I developed some excellent programs which give me a variety of tools for trading the markets.  My disappointment is the trading programs seem to have a limited shelf-life, after which they fail to perform as well as they had before.

So far, this second retirement attempt is going better than the first.  I get to work out of a home office.  I can go into work in the morning in my PJs if I want.  Nobody cares.  I don’t have to make extra profit to cover overhead, employee payrolls, payroll taxes, or any of that stuff.  I don’t have a Board of Directors to answer to, agendas and minutes to prepare, meetings to attend.  No customers to contact or appease.  I don’t have to worry about employees: hiring, firing, compensation, personnel issues, etc.

Life is good.  Thank you, Marge!