Month: February 2002

Back in the heyday of junk bonds, there were a few names a CEO dreaded hearing: Milken, Boesky, Perelman, and Posner. Yesterday Victor Posner died after being ill with pneumonia for some time at age 83. Most of his career was as a spectacularly successful real estate investor beginning in Baltimore in the depths of the Depression. He got caught up in too many shenanigans in the ’80s playing games with Milken and Boesky and in 1993 a judge finally barred Posner from any further involvement with public companies. His Security Management Corporation is one of the largest landowners in Florida and while he bought and traded public companies, he only bought land. Throughout his troubles, though, he was a generous man, backing hospitals, universities, and other causes.

Boston Globe columnist Jeff Jacoby shows us what ‘peace’ means to Yasser Arafat, really, and doesn’t paint a pleasant picture. On the one hand Arafat writes an op-ed piece for the NY Times claiming all he wants is for the violence on both sides to end and for everyone to live in harmony. On the other hand, he appeared before Palestinean rallies the same week and called for “Millions of martyrs marching to Jerusalem!” And by martyrs, he does mean suicide bombers and the like, have no doubt about that!

One would think at this point the Glazer boys down in Florida would learn to keep their movements, meetings, and mouths shut unless they have something good to say. Maryland coach Ralph Friedgen might not be a bad choice for their head coaching slot, he is hot and has solid offensive-side credentials, but he decided to stay at Maryland. I suppose the press conference Friedgen held to announce this would have let the cat out of the bag anyway, but one must think that this whole tryst could have been kept under wraps, at least for the time being, if some effort had been made. The previous candidate, Marvin Lewis, got a nice consolation prize: the biggest contract ever for an assistant coach to be the Redskins’ defensive coordinator. Someday, Marvin, someday, you’ll get that head coaching gig you deserve and have a chance to show all the owners and GMs what they passed up these last few years.

The good folks at Intuit Online Financial Services are going to pay me 100 smackers (das right, a whole Benjamin!) to be on a consumer survey panel for Quicken Bill Pay next Friday morning. Bringing home the (non-unemployment compensation) bacon at last!

Some life events took place this week, births, an anniversary, that brought to mind a way of looking at investing that I thought would be good to share with my huge reading audience. I call this, ta-da, age-related risk investing, and I do not claim to have originated this approach, although as far as I recall I did back when I was finishing up graduate school 15 years ago. I will go into more details in future entries but here are the fundamentals.

The basic premise of ARRI is that the younger you are, the higher the level of risk you should be willing to take in your investments. As you age, the level of risk in your portfolio is lowered until there is essentially no more risk. There are two key considerations, that higher risk often means higher reward and that at some point one no longer has enough working years left to earn one’s retirement nestegg. The goal of this strategy is to ensure a sufficient amount of savings to fund a 30 year retirement although I won’t go into how to calculate that amount here. Should the strategy work very well, an individual could consider retiring at a younger age.

ARRI splits one’s investing life into three stages: under 45 years old, 45-55, and over 55. People under 45 should essentially go for investments that have as much risk as possible, common stocks. If an individual is willing to take some time to educate themselves, options and futures should be added to a portfolio. People at this stage should have no, or nearly no, low risk investments like government bonds. As mentioned above, high risk often brings higher reward and, in this age range, people still have time to take chances. Historically, common stocks have provided the best return over time and should be the main investment vehicle; picking specific stocks requires an effort to do some research and analysis, as blindly following an individual newsletter or Wall St. analyst has rarely been successful.

The middle stage is a transition period. Some risk is still worthwhile, given the value of compound interest/return. ARRI calls for gradually changing the risk profile of the portfolio over the 10 years, so that at the end their is essentially no risk left. Some discipline is required here so that the transition is gradual although moving in 10 equal steps is also too strict. By age 55, the entire portfolio ought to be in investment grade bonds, preferably a mix largely slanted towards medium term government issues. There is no risk-free investment, of course, but the biggest foreseeable risk in American government bonds is inflation and there is little safe harbor from this risk that does not entail others.

Some people look at the stock market as a game, one they enjoy playing. I know because I have a close relative who does and as well off as this person is, the question could be asked as to how much better their account would otherwise be. For these individuals, the discipline of ARRI may be difficult if taken to an extreme. However, as long as one keeps the underlying goal (funding for 30 years of retirement) in mind and has a separate account for this purpose, there is no reason not to keep playing.

The remake got terrible reviews, so we decided to watch the 1975 original version of Rollerball. Note that with the exception of the general play of the game and the idealistic main character, there is not commonality to these two Rollerballs. James Caan plays Jonathon E, the most famous athlete in a future world where nations, war, and poverty have faded away and six corporations rule everyone’s life. Jonathon has become bigger than the sport and this the corporations cannot allow.

But Jonathon has not become the champion he is without also learning a few things, so we have a sweet scene where he confronts the system, in the form of his ex-wife Ella (the gorgeous Maude Adams, who was taken away from him years before when an Executive desired her), and he tells her people have made the wrong choice: comfort over freedom. She replies that comfort is freedom but from the look on Jonathon’s face we know that we are to to understand that Ella is a captive of the system unable to break free from the blinders imposed by it.

Director Norman Jewison has never been afraid to use blood to make a point and he certainly does so here. Players are as likely, and in the end more likely, to end up as splatter as to walk away. His previous film was Jesus Christ Superstar and he definitely gives Caan’s Jonathon somewhat of a messianic cast, not unlike the apotheosis Keanu Reeves undergoes in the Matrix. Jewison made a Hollywood movie, but one that was obviously influenced by the visual and auditory techniques developed by European directors in the ’60s.

The film has strong performances from John Houseman as the Executive who confronts Jonathon, John Beck as the teammate who is sacrificed to teach Jonathon one final lesson, Burt Kwouk (Cato in the old Pink Panther movies) in a small role as a doctor, and Moses Gunn as Jonathon’s mentor.

If you want to see a good Rollerball, save your $9 from the new release and rent the original.

Barron’s reports on Ron Perelman’s latest shenanigans and that he’s likely to get his way in selling a stake in Panavision to M&F Worldwide, another publicly-traded company he controls. Somehow, this other company was willing to pay $17.50 per share when Panavision stock was trading at $4. The other shareholders of M&F weren’t so happy and drove the stock down 18% Friday after the news cme out. Perelman is an operator whose exploits go back to the junk bond salad days in the 1980s. As the article mentions, one wonders how much longer such financial engineering will be going on in light of Enron, Global Crossing, and (speculating) Calpine.

I’ll just go with the article headline for this one, hard to put it better. I kept thinking, “Why is Costas/Couric talking now? I would like to listen to the show.” Over and over. How stupid. I was surprised just how touching the Native American and Sting/Yo-Yo Ma performances were and there were some lovely visual touches with the stadium audience, but NBC really blew their coverage. Just hope the event commentators aren’t such blabbermouths.

Today’s Monty comic strip apparently it a few nerves and so they swapped in a generic “substitute cartoon” while pointing readers to the original online. Not too hard to see why. And I agree, it is creamy.

Over the past few years, more money has been spent on breast implants and Viagra, than on Alzheimer’s. In a few years we will have millions of people running around with huge breasts and stiff dicks, but won’t remember what the hell to do with em…

Well, one day after the Bucs werethisclose to naming Marvin Lewis as head coach, they dumped him. And now GM Rich McKay’s future with the Bucs is unclear, since he wanted Lewis and the Glazer boys told him no. On one hand this is not too surprising a development since ex-coach Tony Dungy was shown the door because he couldn’t move the offense and Lewis has no track record on that side of the ball. On the other hand, their search has been so high profile, what with being jilted by Bill Parcells early on and being left with their noses pressed up against the Raiders window with a birght shiny Gruden doll just inside, that you’d think the team would go with the obvious choice and calm the storm. Lewis now appears resigned to another defensive coordinator stint, getting paid near head coach dollars, with Spurrier and the Redskins. Marv Levy, 76 years old and obviously bored out of his skull with five years of retirement, is offering his services on a one year deal (leaving the Bucs in position to grab Gruden when his contract expires), but the initial reaction from Tampa Bay is not too bright. Tick tock, tick tock boys!

BBC brings us the latest amusement from North Korea, which is oh so sad after being named a member of the Axis of Evil by GWB. But aren’t the good communists in that fair land atheists and if so, why would they believe in religious being like a devil?

Microsoft is positioning certain aspects of the .NET initiative as much more flexible and unconstrained than Java/J2EE, the main competition. However, in One Runtime to Bind Them All, Osvaldo Pinali Doederlein and the Java Lobby post a detailed rejoinder to what looks more and more like a marketing-only feature, the ability of the Common Language Runtime to support many different programming languages. But, and this is a big but, only of the language is modified to in some very restrictive ways. C++ and Eiffel, for example, support multiple inheritance but the CLR does not so the .NET versions of these languages, Managed C++ and Eiffel#, don’t either. So much for out of the box compatibility with existing code bases. Anyway, read the article and be enlightened.

I know that economics in the computer publishing industry have been difficult lately, causing several well-known magazines to shut down and pushing rivals into mergers. But I expect that still-going concerns like eWeek/ZD Media to at least use their resources wisely. Instead we get pieces like DB Test Pioneer Makes History written by the West Coast director of eWeek Labs. I wrote him the following via email:

“”Just curious as to the point of this article. Most people in the industry are already aware of the license limitation, although I suppose the point of origin is an interesting tidbit. Seems like recently there have been an increasing number of such short pieces in eWeek. Given the lawsuit filed by the NY Attorney General against Network Associates on a similar license clause, I would have expected the article to at least speculate on similar applicability in this situation. How, after all, is Oracle’s clause different from NA’s?”

ZD did post an article on the New York case as well. Though a similar question could reasonably be posed to the New York AG: why sue NA now and only them and not other companies with speech-stiffling license clauses as well? For example, Microsoft has similar restrctions on SQL Server and the .NET Framework components.

Back to my original point: what useful value is served by Dyck’s article?

Update: Mr. Dyck replies “I had talked to David DeWitt and thought the origin of the license clause was an interesting historical event — that was the only point. I wrote that story a few weeks ago, before the NY Attorney General’s lawsuit, so couldn’t reference that event, but I’m very supportive of it, and hope the state is successful. All these clauses are on similar legal ground, and so this case will be precedent setting.”

The Learning Channel had an interesting show last night, World Trade Center: Anatomy of the Collapse. The producers interviewed a number of individuals, some of whom were involved with building the WTC 30 years ago, structual engineers who analyzed the collaps, and Paul Johnson, architectural critic for the NY Times. The show was generally very well done and brought out a lot of important information. Sadly the structural engineer who was responsible for the WTC towers’ innovative design feels guilty over his choice but I don’t think he can be blamed. Did you know these two buildings had more office space than Cincinatti?

I’m sorry, but did we just start the year 2002 or 1002? A German archbishop and high-ranking Vatican official says people get sick because they sin. And I thought illness was due to those nasty microbes and viruses and other tiny little things that get into our bodies. Which leads us to the question of what sin has the Pope committed recently that caused his current maladies. Simply using the 10 commandments as a rule, I better be careful because I’m due for a whopper any day now. Of course, so are essentially every single other person with whom I am personally acquainted. I could be wrong but I thought that even the Church of Rome had given up on the idea that God directly intervenese in all our lives on a daily basis quite some time ago.

Brent has an amusing idea and lists his Top 10 time/places he would go if he had such a machine. I believe one other assumption is a universal translater. This is a cool meme, so I’m adding mine:

1. Moses at the Burning Bush, ~1250 b.c. This would cover all my religious curiousity.
   

2. Bruce Springsteen at the Stone Pony in 1974.
   

3. Haight-Ashbury, July 1967.
   

4. Princeton’s Institute of Advanced Studies, 1925, to hang out with Einstein and the gang.
   

5. Shakespeare’s England, have to agree with Brent on this one.
   

6. Southeast Asia, 30,000 b.c., to ride along with the migration fom the mainland to Indonesia and Australia.
   

7. Delhi, 326 b.c., riding along with Alexander the Great as he rode through India.
   

8. Europe with Machiavelli, 1500-1512, on his missions abroad.
   

9. Playboy Mansion, 1974, ’nuff said.
   

10. Chess Studios, Chicago, May-June 1955, recording Chuck Berry’s first album

Flangy, Fahrni. Fahrni, Flangy. Flangy, Fahrni. Fahrni, Flangy. Amusingly enough, I have actually been reading both these guys for months now and this just occured to me. Uma, Oprah…

Targeting the initial voyage for 2018, astronaut Buzz Aldrin and a team of engineering researchers at Purdue university are planning a space hotel (50 guests, all the creature comforts) that will cycle back and forth to Mars (the trip is six to eight months each way). In 16 years I’ll be 56, give them a few voyages to work the kinks out, so I expect to be on this ship sometime in the mid 2020s. Cool!

The funhouse show continues in Tampa Bay as the owner’s sons and their general manager, who was almost booted a couple of weeks ago when Parcells was on the way in, can’t seem to agree on a new coach. Latest rumor is they have made an offer to the Raiders for right to talk to Jon Gruden. A big offer. But old crank Al Davis has to take it by today or it’s off the table. Then we have Ravens DC Marvin Lewis, the most discriminated gainst man in football (seriously), who is the first choice of GM Rich McKay; Lewis has no choice but to sit and twist in the wind publicly if he wants to break through the barrier. For sure he better not say anything impolitic. You have to figure this exemplifies the hidden reasons why the Bucs have never made it into the Super Bowl despite having had a quality team the last few years.