Substantial Story

Posted on February 16, 2011 by Tom Trimbath

A friend posted the query on Facebook, “What opens your heart?” My response was “another open heart.” One of my favorite things is listening to stories. From Garrison Keillor to a friend’s blog (Dave Day’s amazing life) to after-dinner chats with wine in hand. Story is what adds the subjective to the objective, and what makes the objective interesting. It is what makes investing interesting, at least for me. Story, more than any advice, is what sees me through my toughest days and helps me celebrate champagne moments.

Yesterday I was asked to be judgmental. The University of Washington invited me and dozens more to judge, catch breath, The Global Social Entrepreneurship Competition, more concisely known as GSEC. It is an international week-long competition between student teams. They present their business plans for improving the world. Why think small, eh? We judges listen to their stories told many different ways. In previous years I listened to their PowerPoint presentations. Yesterday I listened to their elevator pitches. The school suggests criteria, but effectively, we mock investors were asked to judge the teams the way we would judge any company. These aren’t play companies. The students are serious. Their goals are serious. Sustainable businesses that improve quality of life, health, and pull people out of poverty are built on passionate platforms. So, we were judgmental, and nice about it.

(Pity that I had to leave early, but intuition and serendipity proved it to be a good idea.)

I don’t know who won that round, and the finals aren’t over yet. I do know that I enjoyed talking to the teams. As an investor, one thing I looked for was whether they could tell me the story. Numbers are essential, but after the numbers I wanted to hear why they were doing it, why the customers, suppliers, and locals would want to participate, and whether they would pursue the business regardless of the competition and their education. Numbers can substantiate business plans, but they are based on assumptions. Stories tell me if they are sincere and passionate, and if the people in Bangladesh, India, or the Ukraine want to see them succeed.

Their stories and presentations are online at the GSEC web site, so I won’t repeat them here, but I will pass along a note about two of them. Sanergy, a company that improves human sanitation and turns the product into power, interested me because they turned a negative into a positive, and had a bit of fun with the presentation. It isn’t easy coming up with appealing graphics about a subject that is so graphic. Wello was the other one that pulled me in, partly because of the simplicity and usefulness of a device for transporting water; but what solidified my opinion was the way the presenter could listen to a question and then provide a concise and conversational answer. There was a why to the how.

Story is not enough. Story without substance is hype, or fiction. Story without balance is suspect, or fiction. Fiction is fine. It is the basis for literature, but fiction is best when it epitomizes a truth. Stories that are supposedly real, but that lack a foundation or that only tell one side are only useful to me if I can get a second or third perspective. It is one of the reasons that I use waffle words. Very little is certain and I like leaving open the door that acknowledges those other possibilities. Within the realm of writing, that detracts from the clear, definitive statement, but I think the clear, definitive statement is too often misleading.Take it to an extreme, only use clear definitive statements, and story becomes diatribe and the basis for shock jocks and overblown pundits.

Companies tell stories. It is usually in retrospect that we recognize hype or limited perspective. Investors though must listen to stories in real time and judge whether the story is complete enough. Dendreon (DNDN) has consistently told its story and received lamentations from the investors because the company didn’t expand the tale to include grand possibilities. I like their success, and each new bit of news improves their story. (I wish the stock would reflect that, but oh well, patience lad.) Microvision (MVIS) has a history of over-promising and under-delivering. The word “hype” was used frequently when describing the early CEO, so great things were expected from his replacement because surely the new CEO would be more grounded. Whether through intent, inexperience, naivete, or unfortunate circumstance, the new CEO’s story for Microvision’s future frequently falls shy of reality. If I can’t trust the storyteller, I don’t listen to the story, or I look for other storytellers.

I am in the midst of a story. Each of us is. Over the last few years there have been painful episodes. Many phone calls and emails have centered on unsolicited advice. What I’ve found most useful has been story. Many of my friends are well-educated in various health care modalities: traditional and not, professional and not. Such a breadth of advice means that much is contradictory. Stories have been the most useful. Texts are good resources, but personal experience is most appreciated. One friend advocated many different things and was slightly ticked that I didn’t try them all, yet was surprised when I picked one out of the mix and followed it. To me it was simple. That solution was supported by their direct experience in a situation that was similar to mine. They were surprised that I acted on it because they didn’t consider it advice, just a story. Precisely.

Fiction has its place (as I eagerly await some sci-fi in the mail). But listening to real stories, substantial stories, told with passion and at least a bit of humor and humility is a fine way to spend a day, or an evening, or a life.

Story is powerful. Tell me your story and make it real.

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Golden Revolution

Posted on February 12, 2011 by Tom Trimbath

Egypt is Poland. In both cases change came from within, and the change came from a disgruntled populace, not from an opposition political party. After Poland changed, everything in the USSR changed. With Egypt and Tunisia  changing, what other countries will change? Was the US or India the initiator of change for the British Empire? It doesn’t matter. The change happened because enough people wanted it. In other countries people who aren’t actively challenging authority are at least aware of examples and history that proves change is possible. What could happen here?

People impress me. People, all of us, are simultaneously flawed and magnificent. A society can live in ignorance or repressed dissatisfaction for decades or generations, but eventually people say enough and change things. The sad part is the pain and injustice that occurs over those years and through those lives. The good part is that we tend towards justice and equality. I don’t discount the hurt. But when I say I am a long term optimist about such issues I’m looking at trends that are generational. Over spans that long, our progress has been impressive.

Information is the key. When people are aware that their problems aren’t isolated incidents, but are happening to their family, friends and neighbors, then they are more likely to solidify into a cohesive force. Poland benefited from Lech Walesa and others in the Solidarity Movement which existed because of a labor union. Evidently, the communication chain that inspired change was Lech Walesa hearing and passing along news throughout the shipyard. He was a repairman, so he went everywhere. The workers found a common spirit and changed more than they imagined. I wish I could find the study that mapped the subsequent revolutions and tied them to televised broadcasts. As one country was freed, the neighbors across the borders could pick up uncensored television and radio. The wave propagated, news then action.

Egypt and Tunisia are more modern. There will undoubtedly be sociology and anthropology PhDs handed out for investigating the role of Facebook and Twitter. Various regimes are fighting back, but news is progressively harder to contain.

I watch these progressions with the realization that they can happen anywhere. Even here in the US we’ve had a couple of political revolutions. Back in Pittsburgh where I was brought up, Memorial Day celebrations sprout Revolutionary War flags in the cemeteries. They are few, but they existed. But even there, The Revolutionary War wasn’t the only revolution. Just south of there was the Mason-Dixon line. The Civil War, or the War Between the States (depending on where you live) was political. Each side saw injustice and fought to correct it.

There are few countries where I would rather live, and those that I look fondly upon undoubtedly have flaws that I can’t see from here. I see many of our flaws as do many of us. I like Winston Churchill’s commentary on us:
“I want no criticism of America at my table. The Americans criticize themselves more than enough. “
We can take decades and generations to try to make things right, and most of the intervening time is spent arguing over what “right” is. We aren’t a quiet people. We will try to fix things. I also like another of Churchill’s observations:
“The United States invariably does the right thing, after having exhausted every other alternative.”

The recent financial crisis happened under the greatest scrutiny in history. Movies have captured it fictionally (Wall Street – Money Never Sleeps) and possibly factually (Inside Job). I say possibly factually because I haven’t seen the movie. Blogs, discussion boards, books, and talk shows have delved deeper. Enclaves of wealth and power that historically operated unseen are being brought into the light. The audacity of one aspect made the Jon Stewart interview of Jim Cramer legendary. Hundreds of billions of dollars were thrown at imploding institutions. We don’t have hundreds of billions of taxpayers. Per person, thousands of dollars were spent propping up failed and flawed businesses. People shouted and complained, and as we recover, Wall Street bonuses are blossoming as if nothing bad happened; even though the rest of the country sees unemployment, a disabled housing system, and massive federal debt – at the same time that some are asking for extensions of tax breaks.

I know people that are infuriated because it seems that the bad guys won.

I have faith in us. We are all talking about the situation. Any censorship we experience is mild in comparison to countries that overcame higher hurdles and found ways to pull together and change. We have regular elections, and while the two parties seem more interested in schoolyard squabbles and maintaining their privileges, we have many opportunities and mechanisms within them and without them.

This blog is primarily about balancing money and life. I tend to delve more into the money side of things because I think enough other people are telling each other how to lives their lives. Here, I try to limit such commentaries to my own experiences. I bring this topic up though because within each of these changed countries life and money were affected. Life typically is better, though can go through a painful transition. Money isn’t as clear of a story. In such circumstances money and power shift. Sometimes well. Sometimes poorly. The French had a turbulent time changing from elite privilege and entrenched monarchy to “Liberty, Equality, Fraternity”, but I hear France is now a fine place to visit. I still wonder about the shift in Russia from the Tsars, through communism, to where they are today.

What’s next here?

The US may never see a revolution like we’ve witnessed in Egypt. I hope though that we are in the midst of a Golden Revolution, where the interpretation of the Golden Rule switches from the cynical, “He who has the gold makes the rules.” to the original, “Do unto others as you would have them do unto you.” Historically, we are a self-reliant yet mutually supportive people. We can stand on our own, and are ready to led another a hand. That gives me great hope that any revolution we see here may be peaceful, powerful, and results in better lives for us all. Balancing life and money might just be a lot easier then.

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Tangible Wealth

Posted on February 10, 2011 by Tom Trimbath

Scrooge McDuck made his wealth tangible by filling a room with gold coins and then diving in. Ouch. Doing the same thing with paper money is softer, but no less ridiculous. Do you know where all that money has been? Imagine the paper cuts. Most monetary wealth today is intangible. Even the phrase, “you’re only rich on paper” no longer applies because most assets are stored as magnetic patterns. There is considerable, tangible wealth, that isn’t in my wallet, and sometimes I have to remind myself of how rich I am.

I went for a walk the other night. My neighborhood is almost as quiet and dark as I’d like. We’re down here on the tip of the island, six miles from the highway. We aren’t on the way to anywhere unless you have a boat in our marina. A nighttime walk can be right down the middle of the road with no traffic and just enough street lights for a walker to connect the dots without disturbing the views of the stars or the clouds. I’ve said before that I think I don’t have “enough”. That was on my mind as I wandered the neighborhood.

Intellectually I know that I am wealthier than most of the people on the planet. I live in America well above the poverty line. I ponder having enough to sustain a happy, healthy, long life. The majority of the species is hoping to have enough for tomorrow’s meal. Logically I have nothing to worry about.

Emotionally I worry. Write a book about my personal finance (Dream. Invest. Live.) and such issues as enough and wealth are far less private, even without blogging. Despite the book and this blog, I’d have the same internal conversation. Part of my emotional response is tied to my mathematical appreciation for my financial situation. The numbers might add up, but nothing is certain and some highly probable events haven’t happened yet. So, I worry.

I am also an optimist and a dreamer. “What If” games are one of my favorite pastimes. As I strolled, I wondered. What would be different right now if I was rich? Years ago, when I first pondered that possibility, the answer came slowly and as a revelation. Now it comes quickly and with a chuckle. The answer is almost always “nothing”.

I was out for an evening walk. If I was worth ten million dollars (a man can dream) I’d probably be out for a walk. I’d possibly live in the same house and therefore the same neighborhood (I might own the adjoining vacant lots though.). The stars would look the same. The weather wouldn’t be any different. The neighbor’s dog stranded on a wintry porch would still be barking at me.

The same revelation came to mind while I was walking across Scotland in the Fall of 2010. It was Scotland. It was autumn. Why wasn’t I on some warm, sandy, sunny beach? What would be different if I was worth a lot more? I realized that I was walking because I wanted to. I was in Scotland for many reasons. Sitting on a beach is a nice stereotypical vacation, but I wanted to move not sit, and I wanted to walk hundreds of miles through a place that was friendly, safe, and comfortable. More money wouldn’t change the fact that most towns only had one inn. More money wouldn’t change the weather. Rocks would get in my shoes, and rain would fall on my head regardless of my bank account.

The other day I was day dreaming again while looking out at Puget Sound. I’m a space cadet, so I am aware of the desolation of every planet that our probes have visited. I put myself in the position of a galactic tourist who was given the opportunity to travel to the richest planet they could imagine. Then I looked at the view again and laughed. The forests, mountains, clouds, water were all rich in detail; and, the much of the richness wasn’t static. A tree is infinitely rich in detail because of its fractal nature. Temporally it changes from seed to maturity to termite dust. Expand the view to include its neighbors, overlapping but not intertwined branches, and the neighborhood populated with squirrels, crows, and the requisite termites. I laughed when I realized the richness of my view.

Such wealth is to be appreciated. It doesn’t fill the fridge or pay the bills, but it shouldn’t be discounted either. We overlook considerable wealth every day.

I don’t feel wealthy when I pay my bills, but am glad that I can pay them. I do feel wealthy though when I list my skills, my talents, my network of friends, my good fortune to be born in America, my lifestyle, my books, my photos, and even my work history as an engineer. There may be great chaos under heaven, but the situation is excellent – probably. I even feel wealthy when I look at my portfolio. It isn’t enough now, but I’m glad to have that much invested in good companies.

Most people I know are worried about money, even those with enough. One of the downsides of American culture is the problem Johnny Rocco had in Key Largo (a fine Bogie and Bacall movie).
Frank McCloud: He wants more, don’t you, Rocco?
Johnny Rocco: Yeah. That’s it. More. That’s right! I want more!
Our culture frequently teaches that more is never enough. Resisting that societal pressure is difficult, but highly beneficial.

Of all the people I know who worry about money, I am impressed the most with the ones that have an idea of what enough means for them, that they are invested in something, and are positive about their possibilities while being realistic about risk and their situation.  That level of understanding is more than mathematical. Understanding enough and understanding risk means understanding self.

The greatest wealth is in appreciating what you already have within you and around you. The old axiom is that the best investment is in yourself. That usually refers to education or entrepreneurship, but I think it extends to an appreciation for experience and connections. The most tangible wealth that I know of is each other and this planet. Reach out and touch someone – and go for a walk.

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When To Sell

Posted on February 8, 2011 by Tom Trimbath

When to sell? When you want to. When you need to. Okay, let me be more specific than that, even though those two short sentences are wonderfully concise. Of course, I am talking about when to sell stocks; but, the topic applies to many aspects of life. Remember that line from The Matrix? “Everything that has a beginning has an end.”

Deciding to start an endeavour can be a colossal chore and event. Sustaining it and maintaining the process usually takes less effort. It’s like having a pile of rocks delivered to your house. You know you want to build a rock wall. Deciding which Saturday morning to devote to it may take months. Finally trying to budge one of them takes a lot of grunting and sweating, but after it’s moving, it may roll along on its own. Knowing where and how to stop it though is what’s required for getting what you wanted.

I started investing decades ago, so those first hurdles are long cleared. Recent economic realities mean that my plans for a life of secure comfort have been delayed. So it goes. But effectively, by having invested in stocks, I’ve set a lot of energy in motion. Granted the motion is currently slow, and sometimes rocks back and forth, but things are moving and they are, in general, heading the right way. Some day I will have built a life that is even better than the one I enjoy today. For that to happen though I have to keep in mind that at some point I’ll probably have to sell at least some of the stocks. Knowing which stocks to buy is an exercise in imperfection. Knowing when to sell them is equally daunting.

I’ve had many reasons to sell stocks.

I no longer believe the company will succeed. (Sad, but true.)
I think another company is more likely to succeed. (Sad, but true.)
I think the stock’s price is far above it’s probable value. (Maybe they’re right, but I’m out of here.)
A stock position is large enough to possibly, dangerously unbalance my portfolio. (Not always a bad thing.)
I’ve made enough money. (I haven’t actually done this yet, but I’m hoping.)
Sometimes I have to sell just to pay some bills. (A very common occurrence.)
That last scenario exists throughout the market and is the reason why there is almost always a seller in every stock and why every stock has a tendency to drift down if there isn’t uplifting news.

Allow me to point out some specific wording: believe, think, possibly. These are waffle words, subjective judgments. I have few definitive statements to make about selling, or investing for that matter. Without being able to predict the future everything is, at some level, a guess. The main thing that isn’t a guess is having to pay the bills. Even “having enough”, sustaining a desired lifestyle, is a guess because it involves guessing that desires and realities won’t change significantly. Also note that I didn’t use the word taxes. I’ve only sold for tax purposes a few times and each time the sale was coupled with one of the other scenarios mentioned above.

I’ve sold when I thought the company would not succeed. Sometimes I did that after everyone else realized it and I lost a lot of money. Oh IRIDF, why didn’t I listen to my friend’s comments about your debt load? Sometimes I did it early, when something about management, logistics, marketing, or competition was unsettling. I liked HOOK very early, until they made a deal with Anheuser Busch that seemed counter-productive and they decided to expand into the northeast without appreciating that region’s different labor culture. I got out at about the right time then. I’ve also jumped out because of management changes. I sold AAPL when they kicked out Steve Jobs. That story’s more complex.

I’ve sold when I thought other companies would succeed. Competition happens. That’s been especially the case with computer hardware and software. Dynamic industries may eventually include icons, but during their early growth spurts many more companies sprout and either wither, fade, or get absorbed. Anyone else remember Massachusetts Computer Company?

I’ve sold when I thought a company’s stock exceeded its value. I did that with FFIV. I was wrong because I misinterpreted one of their annual reports, but I acted upon the math, not the emotion. Fortunately, I didn’t sell everything that time and a stock that I bought for about $5 went to $90. I sold when it had grown ten-fold and made a down payment on this house, my favorite home. Since then FFIV has split and closed recently above $126, or $252 adjusted for the spilt. Such is investing. I didn’t make as much as I could have, but I made a very nice return and got something very nice in return.

Anyone that was invested during the Internet boom prior to the bubble can recall stocks that far truly outstripped the value of their companies. Exuberant investing may be hard to recall, but exuberance is a human emotion heightened by social contact, that can take any issue beyond logic and reason. I’d like to tell some marvelous tale of selling at that peak, but I was in there with the rest. I sold some there, but bought others. Partly from exuberance, partly from personal doubts mixed with the possibility that others knew better, and partly from relationship communication issues, I didn’t sell and hold. Lessons learned. I hope.

Selling to rebalance my portfolio has occurred so often that the examples are too many to mention. Usually though the sale happens from an unbalanced portfolio coupled with one of the other concerns or the desire to use the proceeds for bills or a house downpayment. Even now, with DNDN representing the majority of my portfolio, most of my DNDN sales have been to pay bills; though there have been a few slivers shaved off to buy into other positions that are downtrodden (MVIS, RSOL). Selling high in one stock to buy low in another is a marvelous way to grow a portfolio, but care is required because there’s never a guarantee that the purchased stock won’t go lower.

The clearest sell signals I’ve received have been from acquisitions and mergers. I invest in small companies. Sometimes they are bought by much larger companies. Pixar was bought by Disney. Lands End was bought by Sears. QFC was bought by Fred Meyer, or was it Krogers? My life is easier when I am only trying to track simple companies. Pixar made animated movies. Disney has that plus theme parks, television networks, and enough divisions to warrant hours of research. I sell when the stories get too complicated. Besides, the success of a small company can drive its stock price rapidly, but the same success can be lost within a behemoth. I’ll take the greater gains and leave the greatest gains for the professionals and the greedy.

Buying stocks is one possible first step to making money (and remember that losing it is also a possibility), but for me the goal isn’t financial excess. My goal is a sustained, healthy, fun, and long life. Selling the stocks wisely after buying them wisely, with a bit of luck thrown in, is how that can happen.

PS After I wrote this I realized that I covered this in more detail in the chapter titled “Managing and Harvesting” in my book, Dream. Invest. Live. Some topics can always be repeated.

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Solutions Or Answers

Posted on February 4, 2011 by Tom Trimbath

We don’t know everything. What is life? Where does consciousness reside? Why are we here? How do bees and ants manage complexity with tiny brains? Are we alone in the universe? Is this the only universe? What is reality? What is art? What is electricity? What’s the next big thing? Who really shot JFK, JR, Mr. Burns? Why don’t my books sell better? What’s happening within the delayed choice double slit experiment? (Okay, that one’s kinda geeky, but very spooky.) Does cold fusion work?

Some truths are lost to history. Subjective questions and mysteries rule the realm of religion and philosophy and may never be answered to everyone’s satisfaction. Sometimes unknowns exist because they truly are mysteries. Sometimes we don’t have answers because we don’t have the right vocabulary for the questions. Objective mysteries are the sort that are answerable and are what keep scientists busy. Even there though, mysteries are created by using the wrong words to ask the right questions. But at least we are trying.

Ideally, objective conundrums are solvable by logic and the scientific method. We have a hope of answering them, yet despite this technological world that we have created, many things we rely on involve mysteries that we ignore as long as solutions exist. The major scientific programs of the mid-twentieth century proceeded amidst great unknowns. The Manhattan Project didn’t know if the first nuclear bomb would fizzle, blow up, or ignite the planet’s atmosphere. The Apollo Program didn’t know if life in far orbit was possible, or if the lunar lander would sink when it finally contacted a sea of dust in a crater. Modern computers operate with such fine wires that quantum mechanics is no longer a philosophical debate, but an operational concern. We didn’t have all of the answers, but we worked from our solutions.

My definition of a scientist is someone who seeks the truth objectively. My definition of an engineer is someone who seeks a solution. (note: No college degrees are required for either of my definitions.) Of course, in modern life the distinctions are blurred. Engineers, scientists and technicians are lumped into the category of geek or nerd. In major corporations, geeks or nerds can be treated like bureaucrats, endlessly filling out forms and trying to justify their existence to non-techie managers who can never truly understand. Less gratifying is a technical job that becomes only hand-holding, walking others through complicated yet important processes. Imagine spending years of your life learning the appropriate math, physics, and pragmatic philosophy, yet being sent to other continents for weeks to make sure that a supplier’s bureaucrats fill out the paperwork correctly. That work doesn’t change truth, so it doesn’t require a scientist. That work doesn’t require a solution, so it doesn’t require an engineer. Lifetimes of education are misused.

Aside from the distractions of large organizations like corporations and federal agencies, there is a need for truths and solutions. If time allows, truth can precede solution. If time is critical, solution may precede truth. Just ask a firefighter. Do you want the truth behind the blaze or do you want the fire put out?

During the Apollo and Manhattan programs there were perceived needs. Solutions were wanted now. Scientists acted more as engineers. Engineers acted as engineers. Technicians that acted and solved problems were re-titled as engineers. We are currently facing situations that are defined by their perceived needs. Pollution, energy consumption, food production, sea life depletion, over-population, etc. The list is familiar and too long and too depressing to complete. We want solutions, but global scrutiny can stall progress by demanding absolute truth, certainty, and guarantees. Companies, especially large ones, are overly cautious because they can’t answer every question asked of them, none of us can, yet they can be taken to court and interrogated mercilessly. Solutions languish.

The press and public opinion enjoy making fun of the flaws of authority figures. Intense enough exposure can kill innovation or drive it far underground. Remember cold fusion? In 1989, two electrochemists, Fleischmann and Pons, discovered that they could initiate a reaction that produced more energy than it consumed. That suggested cheap, renewable, possibly clean energy. They couldn’t explain the process in detail and were laughed out of their careers and the public spotlight because less innovative physicists claimed it was impossible to have fusion occur in such a small vessel with such small energy required with so little radiation and pollution. It would be no surprise that the career aspirations of hot fusion scientists may have affected their perception of events. The debate centered around claims of fusion rather than claims of cheap, renewable, possibly clean energy. Fleischmann and Pons didn’t have the truth behind their discovery, but they had presented us with a solution. We ignored it because they possibly used the wrong working title.

Last month the news from Italy was that a 1MW power plant would begin producing power from cold fusion. The pundits reached back to reuse the old counterarguments. The developers don’t have the truths documented. The arguments may become moot if they have produced a repeatable and dependable and clean power source, a solution. The arguments will also be moot if the system doesn’t work.

In America, it has become fashionable to proudly stop others. The political parties seem to do nothing but try to stop each other. Doing things for us is secondary to doing things against each other. Imagine if in 1989, we hadn’t laughed Fleischmann and Pons out of the country. Imagine if their invention and discovery had succeeded. For the last twenty years we would have been decreasing our oil imports, had less reason to go to war, had cleaner air, less strip mining, and would have led the world towards a more sustainable future. We may have had a solution even though we didn’t have every answer.

These devices tend to be small. The reactor for that 1MW plant is only one liter in volume. Imagine electric cars that never need to be plugged in, or backed up with gasoline engines. Almost every vehicle would be lighter, quieter and cleaner. Decentralized power and energy could allow houses to come with their own power, just like they have their own water heaters. Power lines would come down across the country. Power outages would be household events instead of regional emergencies. Fewer homes would heat with coal, gas, propane, or wood, unless they wanted it. The implications of what we’ve potentially missed are staggering. Without going to war and with fewer ecological catastrophes we probably wouldn’t be a debtor nation and many lives would’ve been saved. The planet would be healthier.

I mention those implications because if their 1MW powerplant operates as claimed, then our lives will change dramatically, and no one blog post is going to capture the consequences; but the vast majority of people will be caught unaware.

I do know that there are preparations that can be made. I certainly won’t invest in coal, gas, or oil stocks. I will watch to see which public company leads the revolution, as an investor if nothing else. And I will prepare myself for the traumas and dramas that will play out in entrenched bureaucracies, industries, corporations, and governments. Middle East policy will probably change unimaginably.

Do I think this will happen? I don’t know if cold fusion, whatever it really is, will succeed; but, I do know that it or something similarly revolutionary will occur. Human history proves that out. Revolutions happen. Maybe the revolution is cheap, portable, clean, renewable energy. Maybe we find a way to cure most ailments and diseases cheaply through mass produced stem cells. Maybe the planet teaches us how to treat it sustainably. Maybe we meet a civilization that isn’t from this planet. I don’t know. But I do know that laughing at every idea is a sure way to end up on the wrong side of the joke in the end.

Cold fusion? Sure, why not? You got any better solutions?

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Let It Out

Posted on February 2, 2011 by Tom Trimbath

Okay my friends. Many of you are positivists. You know I am an optimist. But there are days when the only responses are to grimace or scream. Just ask the Egyptians. You can put up with a lot. You can have a cheery attitude and always look on the bright side. But sometimes a day comes along when you have to stand up and make sure they hear what has to be heard. You gotta let it out.

Yesterday I did that in a big way. I probably shocked the neighbors; well, maybe not. They were probably inside with the windows closed. I was doing some gardening. Yes, I know that it’s February and it had been a frosty morning; but it was sunny and an opportunity to transplant an overgrown patch of Pampas grass. If you aren’t familiar with it, Pampas grass grows into thick bundles of slightly saw-edged leaves that reach eight feet tall with flower spikes that rise feet above that. It may actually be listed as a noxious weed. I haven’t checked. Instead I was following the frugal minded logic of using what I have instead of throwing something away and buying something to replace it. Instead of a bundle of grass, I was going to plant a hedge.

No problem. Dig out the old plant. Separate the root ball. Drop the pieces into prepared holes. Refill. Water. Watch them grow.

That actually all happened. Insert one detail. After I’d dug out the two-foot diameter root ball and had partly separated it, I went to roll it over to work on the other side. I have a bad back. I wasn’t going to lift it. I was only going to roll it. It hesitated. Evidently, I put a bit more of me into it by either twisting or lifting. I can’t quite recall because the next thing I remember is a scream of pain and my hands clutching my back. I didn’t care who heard it as I staggered into the street. I wanted to lay down and curl up, but I knew that the best thing to do was move, slowly and steadily to keep the muscles from locking up. I walked into the house, grabbed some Advil (ignoring one doctor’s advice while remembering another’s) and grabbed the phone so I could walk and talk to a friend to calm myself.

The scream and the talking were possibly as therapeutic as the drugs. I know the walking helped a lot.

About twelve days ago I bought a MacBook. My venerable PowerBook fried and died from a power surge (despite protection). Since then, as you can read in a previous post, I’ve had a series of problems with my new machine. Apple, Adobe, HP, and Quicken have all logged errors as I’ve haltingly made this computer operational. There’s plenty to scream about, but each event happens more slowly and subtly than a ill-executed turn, lift and twist of a back.

My back and I have a long relationship, and we’ve been negotiating this issue since 1988. I know what I need to do for recovery and then for maintenance. It may be counter-intuitive, but my back tends to go out when I’ve neglected my karate exercises.

I have a long relationship with computers. My second personal computer was a Macintosh 512k. My first was from Texas Instrument. Unfortunately, computers don’t heal themselves. The computer problems I am experiencing won’t get better with time. There aren’t exercises to strengthen and protect against future failures. I’ve even had a cascade of faults occur from trying to use the automated backup software.

A scream can release hormones that encourage the body to act. If nothing else, the shout moves muscles that might be locked up. In today’s society though, stress can build from accumulated errors, workarounds, and incompatibilities. Online support can be polite and patient, but the result is still useless if the software people think it’s a hardware problem and the hardware people think it’s a software problem. At the end of the call, they’ve moved on to another customer, and we can be left with more unresolved issues and more internalized stresses than we had before we made the call.

We gotta let it out. We shouldn’t carry the stresses that are the consequence of bad design or narrow boundaries of support. I don’t know how anyone else can do that for themself, but I relieve a bit through this blog, social media, and dreams of so much wealth that I can hire someone to fix all of this.

I don’t expect everyone to start a blog, and I don’t expect a behemoth like Apple or HP to change because I said or wrote something, but I hope that enough of us tell the people we’ve sent our money to that their products and services can make life better than they have. A flashier interface or a better search function isn’t as important as compatibility (even amongst competitors) and a recognition of how people live their lives. Our lives involve so many devices that it is unrealistic that they will operate from within the same operating system or set of proprietary cables.

And if they don’t, if the existing companies don’t understand everyday lives, then some day a new company will and that company will tap into a massive, overlooked, underserved and very appreciative populace. That’s the company I looking for, for their products and their stock. Then what we’ll be able to let out will be a global sigh of relief.

PS To continue the irony from the previous post, all of the Microsoft products are working fine; and while WordPress wasn’t able to resolve my iWeb issue by porting over my old blog posts, Andrew, one of their Happiness Engineers, went far beyond the norm in trying to make my life better. Hmm, I wonder if WordPress is going public and if they’d consider making computers. TT

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Not a Pro

Posted on January 29, 2011 by Tom Trimbath

I am not a professional. I might have professional ethics and attitudes, but those are from my days as an engineer and from my upbringing. As for investing, I am an amateur, experienced, but an amateur. The only way I get paid for my investing is by selling what I’ve bought. If you define a professional as someone that gets paid, then I might be called a professional writer. Let’s not mistake that with being a profitable writer, though I continue hoping. (Remember Dream. Invest. Live.?) I may not a professional money manager, but I do know a few.

This month I earned my big red star. Before I started blogging I was posting to the discussion boards over on The Motley Fool. That was back in the previous millennium. My how time flies. This month I finally posted my 1,000th post. Yeah. Well, it wasn’t exactly a champagne moment. Some folks post so often that they reach 1,000 in a year. I guess either I don’t have as much to say, or only say something when I think there’s something worth saying. My 1,000th post was part of a discussion started by one of my earlier posts; my year end review of the economy and markets. It’s nice to get something started.

I post, not to pontificate, but to initiate. I have my views. I know they aren’t the ultimate and definitive view on any matter, except for what happens within my life. Discussion boards are great sounding boards, places to introduce a topic, concept, or question and possibly get a variety of responses from disparate points of view. There have been plenty of times when, given the same facts, diametrically opposite conclusions have been drawn. That’s what makes the markets work. If everyone agreed investments would barely budge for years.

My semi-annual post about the economy and markets frequently spawns such a debate, sometimes online, sometimes offline. In general I am a long term optimist and a short term realist. Bumps and dips jostle the market and sometimes puncture one of its tires, but the US Constitution and the American business culture haven’t changed dramatically in decades. I’m talking really big picture stuff like representative government and entrepreneurial spirit here, not quarterly Fed policies or greedy corporate governance. (I am amazed that so few managers looked into the assumptions behind aggressive loan bundling.)

But, like I said above, I am not a professional. I am an amateur, or rather, an independent individual investor who is very aware of how I manage my investments, finances, and expenses. I dig deeply enough to satisfy my curiosity and manage my risk, and then go dancing. For more details it makes sense to go to others who dive deeper. Usually that means they aren’t going dancing or that they are professionals.

A couple of my friends are in that professional camp. They can back up their assertions with more data than I am willing to collect, but that’s partly because they are trained and paid to do so. I listen to them. I can’t claim that they are the predominant experts. They probably won’t make that claim either. Humility does exist. Mike Brady from Generosity Wealth Management even starts off his newsletter with; “I start out by talking about what I got right and wrong from my 2010 preview 12 months ago (you mean I’m accountable?)”

So, it seemed like a good idea to reprise my review and add links to their similar reports. In general, I think we are in agreement, and I am sure that if we were sitting at a bar with beers in hand, that we’d have plenty to argue about. Nodding heads saying, “Yes”, “Yes”, “Yes” don’t make for as engaging a conversation as, “What hole did you pull that out of?”, which is usually phrased more Spock-like as, “Fascinating, but illogical.” I’m pretty sure neither of these guys would buy some of the smaller stocks that I own, but they aren’t burying money in Mason jars either.

Brad Hessel through Intelledgement (an investment advisor service company, and no, I don’t know exactly what that means) produces a newsletter that covers what appears to be every conceivable investment from stocks to coal to currencies and weaves amongst them as the data suggests.

Mike Brady’s newsletter is supplemented by weekly videos, a bold move I can’t see myself doing, with an emphasis on generating wealth that is more than financial. There’s wealth in community and charity too.

Part of Brad’s conclusion is that:
“Conclusion: We are in the eye of the storm, and most everyone is sipping the QE2 (quantitative easing) Kool-Aid and singing Kum-Ba-Ya. Accordingly, it is time to make love, not war…but we remain prepared for both.”,
which doesn’t cover everything he says, but does point out that financial newsletters don’t have to be dull.

I find Mike engaging because, like Brad and I, he is willing to be open about what went right and what went wrong.

A month’s gone by since my end-of-year posts, and while my portfolio seems frozen, which can drag down my emotions, I also know that almost every company in my portfolio had good news. Short term reality = a painful experience selling stocks in good companies to pay bills. Long term optimism = more than enough shares across a diversified portfolio and a frugal enough lifestyle to allow for a generously wealthy future. How will it turn out? I don’t know. Even the pros don’t know the future. But the more we talk about it, the better we are at guessing, or at least having something to talk about over a beer.

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A Mac is Not a Toy

Posted on January 25, 2011 by Tom Trimbath

“Have fun with your new toy.” I haven’t heard that at Christmas in a long time. I’ve heard it a lot this last week though because I just bought a new MacBook. A nearby mall on the mainland has a real Apple store, trend setting design, big crowds, lots of light and white. Very impressive. As a purchaser of a Macintosh 512k in the mid-eighties I can tell you that the feeling is going away. This week’s experience has been headaches and frustration, not ease-of-use or evangelical bliss. Sad to see the old feeling fade.

Buy a new computer and have fun filling out computer user surveys; especially for semi-geezer geeks like me.
How long have you used computers? Since 1976.
What types of computers have you used? Am I allowed to fill a few pages? Lets just take it from my first, an IBM mainframe, through the PDP series, PCs, Kaypros, Macs, Vax’s, Newton MessagePads, and do I count the chip in my cell phone that is more powerful than most of the pre-millennium equipment?
What’s your level of proficiency? Well, I was programming in Fortran and Basic before you were probably born, but since then I have happily left the coding to others.
How often do you use computers? Let me see if there’s a minute in this house when there isn’t a computer operating. Oh yeah, during a power failure we’ll take a break.

It was a power failure that precipitated this episode. I took a vacation, and while some will take vacations and leave their computers behind (like I did in the Autumn of 2010 as I walked across Scotland) I usually take my computer to stay in touch with friends, and for entertainment. I was playing a game (Civ) when the power dropped then spiked. The machine seemed fine then, but within a day it degraded to useless, unable to reliably boot to Safe Mode. Bad.

Considering that it was a five year old PowerBook G4, it had served me well; and amortized out over five years, it hadn’t cost much. Fortunately, I do regular backups, so I wasn’t afraid of losing much data or many files.

I had a need, so as soon as my mighty computer expert (Gail LaForest) confirmed that my venerable machine had fried and died, I drove over to the Apple store and bought a brand new MacBook. Their expert wanted to make sure that it would serve all of my home and business needs and that maybe looking at the cheapest one wasn’t the best idea. I pointed out that five years of their progress probably meant that the lowest end machine should have more capacity and capability than the one from 2005. They agreed.

For something over $100 or more, they offered to help migrate all of my files. Their store is on the mainland. I live on an island. The dead machine was back home and every trip costs about $20. I decided to use my local expert. Besides, it’s a Mac. How hard could it be? One of Apple’s major sales pitches began when it became easy to transfer from PC to Mac. Prior to that it was two guarded camps. Then the thaw began.

Somehow we’ve come to the point where transferring from Mac to Mac comes with a price tag. Something was lost along the way.

Hope lived because of my frequent backups, non-pirated software, and reasonable level of experience. I hoped that the new machine would be fully operational within a day or two. Monday, four days into the process, I’d reinstalled MS Office, Firefox, Apple’s iLife, and some Adobe products; but, none of my original files, emails, or photos have made the jump. I won’t worry about printer drivers for days. The installation of everything else was fine, but Adobe and some Apple software have some sort of rights issues, the same sort of thing that may be holding up the file transfers. Apple to Apple transfers shouldn’t take days and expert assistance.

One particular glitch inspired this post. One piece of Adobe software installed properly, so it said, but when I opened it, it said that my personalization information was incorrect. Serial numbers were right, it recognized my Adobe account, but it needed something else, maybe something that was on a dead machine. I couldn’t call the company. They don’t provide a phone number. I couldn’t email the company. They didn’t provide an address. I went to their online chat agents as instructed, who after 45 minutes and some bad directions got me to a screen that told me to contact an Adobe online chat agent; at which point he said something like, “So, I guess that should do it.” He’d led me in a circle. My blood pressure felt like it was rising. My face had reddened. My headache was tremendous. I stood and shouted at the world. Then I pointed typed that the use of their product is not more important than my health. I gave them my phone number and encouraged them to call me if they wanted to resolve the issue. They haven’t called. I’m not surprised.

My experience is common. My frustration is common. But, except for people how like to build their own computers and keep current on innovative operating systems, we accept spending either hundreds of dollars or days of effort to switch from one machine to another. If it doesn’t feel that way, time it. How long does it take from opening the box and firing up the computer for the first time to having everything accessed and running again? What other product that costs as much requires so much effort by the consumer?

My experience is common, but not extreme. Others have had far worse. My situation is exacerbated by some personal health issues. For someone out there, they’ve had poorer health, harder computer problems, and a greater need with less time and money to spend chasing solutions.. Yet, the companies that enable our digital lives do so by selling the potential of marvelous personalization while treating individuals impersonally.

Success breeds hubris. Empires and leaders have experienced that long enough that it was old news when the Greeks began using it in their tragedies. Our country and some of our leaders take success for granted. Organizations and corporations do too. Arrogance or too much familiarity with success can lead to acting as if everything attempted is blessed and no wrong can result. For some, it is an aspect of being human, but it is not a requirement and like any bad habit, it can be countered.

I think Apple, Adobe and others have fallen into that trap. Apple’s onsite expert sold me equipment that couldn’t be used with my new MacBook. Adobe treated me as if my problem wasn’t worth their time, which is a business model that works if you are a semi-monopoly. It is reminiscent of American car makers that tried to sell cars based on emotion and nationalism rather than by giving drivers what they wanted: quality and dependability at a reasonable price. Eventually the companies learned, or at least some of them, but the lessons only came after crisis. Now that Apple is on top in terms of market cap, I wonder if a competitor will unseat them, or if Apple will learn and change. When the customer must accommodate the company, then the balance of goods and services delivered for money received is out of balance. Curiously, Microsoft, the one company that historically made the most noise about product codes and such, is the one provider that successfully re-installed without a glitch.

My first Mac had the feel of a useful machine and the joy of a toy. This impressive MacBook has really only added two features that were lacking in the first: color photo quality graphics and internet capability. Much of the rest is bloatware. With that first one I finished my Masters in Engineering, did word processing, managed home finances, and played games. With this one I get all of that, plus a massive headache. But it looks prettier, and I guess in today’s world, that’s important.

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Coffeehouse Morning

Posted on January 22, 2011 by Tom Trimbath

This isn’t my father’s coffeehouse. It isn’t even one of Howard Schultz’s. I sit and type in Island Coffeehouse, ” . . . a non-profit community-driven, youth-powered business and community “living room”. Which happens to be filled with grey haired folk at 9AM on a Saturday morning. I doubt that the “kids” are staying home to watch cartoons. Many things have changed, even if the names stay the same. Stick with an idea long enough and fashion or logic will come around to it, but probably not in the way you expected.

I don’t know if it was my Dad’s favorite coffee spot, but for years we went to The Blue Flame, a diner in the suburbs of Pittsburgh that’s been there longer than I can remember, and I’m over 50. When Howard Schultz decided to reinvent the American coffeehouse by basing it on the Italian version, he was laughed at. Now, Starbucks has over 16,000 shops. I wonder if the Italians are now, even unconsciously, modeling their shops on his model. Ah, but there’s still only one Blue Flame as far as I am concerned, and it’s the sort of place where they’d all call out my Dad’s name when he walked in even though he moved to California years ago.

I am not alone in having memories of, “Hey, you know that thing that is popular? I was doing that years ago.” I was doing dancing, running, and bicycling in the mid-seventies. My photography and writing go back that far too. But even after that I can point to activities, interests, concepts, unpursued innovations that I was introduced to early that are common now. I remember arguing with my boss that it’s more efficient for an engineer to type up his own reports on a word processor instead of writing it all by hand and negotiating the product with the secretary. I enjoyed spending time with the secretary, but I knew that I wasn’t getting as much work done. Another boss didn’t believe me that this newfound parallel processing way of computing will eventually end up on people’s personal computers. I even remember getting to use a $24,000 one mega pixel digital camera and something called Arpanet (the predecessor to this thing called the Internet).

I didn’t invent these things. I was simply willing to listen to new ideas as they came by. Some I acted on. I was an early investor in Starbucks (SBUX), America Online (AOL), Pixar (PIXR, now part of Disney), and several more. Each was laughed at. Starbucks for trying to build a business on coffee. America Online for thinking there was a business in selling access to amateurish stores of information. Pixar for thinking that computer graphics would ever look good enough to make an interesting movie. I also invested in many that didn’t succeed. Not every new idea will be successful.

The world has troubles, some caused by us. Amongst the seven billion of us there are answers. When they’re born, the useful ones are indistinguishable from the tragically flawed. Many are being laughed at. Paint your roof white? Silly idea, except that it is cheap, simple, and saves lots of energy costs by reflecting heat in regions relying on air conditioning. Enforce financial regulations? Silly idea. The baddies have too much power to ever be brought to justice, but if they were reined in then wasted trillions might be available for progress instead of panicked patchwork bandaging. Eat local? Quaint notion, until enough people do it that local farmers become more profitable which makes it easier to buy local which makes it more profitable which makes it self-reinforcing while reducing the need to ship a fifty cent pepper thousands of miles. Hang around me long enough and you’ll hear about other crazy ideas. Cold fusion, graphene, orbital tethers, LED projectors, radical life-extension biotech, digital singularity, ad nauseum are all ideas that are laughed at or dismissed rapidly.

My childhood neighbors back in the suburbs of Pittsburgh would smirk at me as I went for a run and sincerely ask me if I wanted a ride home. When I bicycle commuted to my summer job at the steel mill, my fellow workers seriously thought I was crazy. If I’d taken my running, bicycling, writing, photography, and dancing more seriously back then, imagine how much better each of those talents and skills would be. They would have been given the proper environment to develop and mature.

Schultz, Case, and Jobs maintained that perseverance with Starbucks, America Online, and Pixar and look at the success it produced for each of them. The rest of the world benefited as well. Coffeeshops like this one are far more common. The value of access to information is no longer disputed. Art has added the stylus to the artist’s quiver of brushes.

That’s why I invest in small startups led by passionate people. It’s why I reflect on my current activities and pass times. There’s no way to know where each may lead. It’s also why I’m impressed with anyone that persistently tries. Any of our paths may lead to personal growth, or progress that benefits the planet and everyone on it.

So, do you think the persistent style of shorts, socks and sandals will ever hit the runways of Milan? I think it is quite comfortable. Is there any reason why fashion or any fad can’t be something comfortable?

Can you imagine a solution to global warming and rural poverty that is also easy to live with? Well, let me tell you about tapping into dark energy or the possibilities of quantum entanglement. They only sound silly. Here, have cup of locally grown tea while we talk.

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Maintaining Sustainability

Posted on January 15, 2011 by Tom Trimbath

What a boring title, Maintenance. Unless you’re an auto mechanic you probably don’t care about maintenance. Maintenance though is the crucial step that allows sustainability. Lifestyles, innovations, relationships, aren’t sustainable unless they can be maintained. Just ask my car and my computer.

This blog comes to you today from a tired rental PC.

A few days ago I drove up to Silver Star, a ski resort in Canada. It’s a birthday present to myself. In the last 7 days they’ve received 32 inches of fresh snow and more is coming down as I type. (The lifts aren’t open yet and the trails aren’t groomed yet, so why not blog, eh?) Nice present. Knee deep freshies, quiet slopes because there’s no skittering along on ice. Easy snow to ski, and I’ve skied enough that my quads are tired. (Telemark skiing = free the heel, kill your quads.)

Then came the other side of a middle-aged birthday. Lots of the equipment I carry is old. It needs maintenance. Besides my skis, one pair of which is 23 years old, my car is 12 years old and my laptop is more than five. On Wednesday I discovered that the car was dead and the computer wouldn’t boot. Bummer and a bite. Not the sort of news to encourage a happy anything.

The good news has been that the car is working again, probably; and that the laptop booted to safe mode once. (Though it hasn’t done so since. Help! Gail, help!)

Interruptions in service happen, especially with flashy products. Fortunately, my frugal lifestyle encourages me to buy quality when it counts. The car is a Jeep Cherokee Classic with a straight inline six, a very robust car with a very reliable engine. The laptop is a Mac PowerBook that probably just sucked down some bad power during a surge. It’s backed up and it can be repaired I suspect.

My lifestyle is probably sustainable. How many years does it have to be lived to prove that statement? I don’t know. I do know that I’m only comfortable with repairing and would groan at having to replace any of my gear; so maybe my lifestyle is currently sustainable, but not confidently comfortable. The key difference is the need or the ability to maintain the various components of this life.

Living a frugal life is easy to do for a while. The trick is to continue to do so as things break down. With enough money it’s easy enough to replace old with new. The impressive folks are the ones that buy old and maintain it even longer. I’m somewhere in the middle.

I blogged about my portfolio back on New Years. Last night I did my birthday review of more than just my stocks. It’s a yearly maintenance task when I look at where I am, where I was, and where I want to go. Frequently I’m not where I expected to be, but I’m in better shape than I was and heading somewhere very positive. It doesn’t put money in my wallet, but the exercise puts confidence in my attitude.

It isn’t as obviously necessary as an oil change or a computer backup, but it is more valuable. It takes me outside the worries of today’s issues and shows me progress, trends, and confirms the hopes I have for my life.

It is a good thing to do for portfolios. It is a good thing to do for life goals. It would be wonderful to find that governments would do the same, but aside from voting and blogging, I have very little influence on that.

In the meantime, the snow is coming down heavy. The groomers will probably be done by the time I wander back to the room and suit up, and then I’ll take out my aged skis to help maintain my health, my attitude, my love of this life. It’s one fine way to make this all sustainable.

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