Representative Larsen And My Personal Finances

Posted on January 17, 2015 by Tom Trimbath

If you ever give a talk in a coffeehouse, be prepared to pause while the espresso machine shrieks and the barista calls out the drink orders. Rick Larsen, my representative in the House of Representatives in the US Congress, came to a local coffeeshop to give a one hour talk.IMG_0404 In a rare event, I attended. Even though I think the US government is somewhat anachronistic, the talk was so convenient that the cost of attending was minimized to the point that there would be some worthwhile benefit. (It happened next to coworks that I use as an office.) Regardless of politics, I am interested in the current economic situation of individuals and wanted to hear if anything was about to change. Maybe, if we’re patient, and we work at it – for those that have the resources.

I’m impressed with anyone who has held office, even if I don’t agree with them. For me, if someone can vote and doesn’t vote, their complaints are heavily discounted, especially if they take more time talking than it would take to mark and mail a ballot. If you vote, congratulations. That’s the essence of a democracy or an elected republic. If a person takes that next step and runs, they deserve a higher level of respect because they tried. If someone gets elected, they’re doing more than almost everyone. Granted, to get elected runs into a money issue and has led to the rich leading because they can afford to; and yet, they get credit for surviving what appears to be an excruciating process. At the same time, gaining my respect is not the same as gaining my trust or removing any criticisms.

Walk into a packed room. Try to summarize the nation’s issues in 15 minutes. Then talk with a bunch of strangers for almost an hour without knowing the topics, the agendas, and the histories publicly where everything you say can be dissected and possibly taken out of context. Not an easy job.

The topics he introduced were: Citizens United, Transportation (because he is on the committee), and – there must be something else from those first 15 minutes, but I can’t recall it.

The topics the crowd introduced were:
(My quick commentary is in the parentheses. For those familiar with my stockholder meeting notes, this doesn’t get the same treatment. Sorry.)

  • Income disparity (as something to fix, eventually)
  • Healthcare (I missed the reply. Sorry, but I am human.)
  • Social Security (where the question was phrased using the word genocide)
  • F-35 overruns (the military-industrial complex continues)
  • Syria et al (where he pointed out that extremists happen and don’t respond to logic)
  • TPP, Trans Pacific Partnership (where the audience was vigorous but he reiterated that comments were moot because nothing has been written yet)
  • Growlers (a local issue where the Naval Air Station’s practice flights are measurably painfully loud, and where he wants more data, and where I already decided to not live on that half of the island because the Prowlers were too loud)
  • Pipelines, both Keystone and in British Columbia (Jobs versus environment)
  • Coal trains (which is a jobs versus environment versus monopolistic railroads issue)
  • Seattle (which is not his district, but they care about him, he’ll care about them)
  • Ukrainian civilian bombing (where there was a cry for an outcry that’s missing)
  • Afghanistan and torture (where he applies skepticism in any hearing and some folks were more vigorous in their outrage)
  • 9/11 commission (Missed this one too.)

The quickest synopsis from my perspective: If profits are involved, action happens sooner. Personal finance issues are important and get addressed, but not as quickly. If money isn’t directly involved but data is, collecting more data seems to be the response. If the issue is more subjective than objective, then it is harder to deal with. That progression in topics probably wasn’t the intent, but it was my perception – which is necessarily subjective and therefore imprecise.

Regardless of the validity of my perception, it is what I have to work with. That is true for each of us. Regular readers have witnessed my issues with unemployment, housing, healthcare, securities irregularities, taxes, and a transition from frugality by choice to frugality by necessity. Pairing my list to what I heard today, little will change, and any change will happen far enough in the future that the current Congress’ actions are moot. I wouldn’t be surprised to hear that it will take about a decade to resolve most of these issues. I must find solutions within the next few weeks and months.

Being disengaged from my government is not a good sign. I suspect I am not alone. There are limited resources for the government and for me. That’s why neither of us can get everything done. Neither of us are as wealthy as we were. Personal finance can be a lonely task. When there’s a surplus, it’s easier to find help and options. When there’s a deficit, there’s a greater need for self-reliance and acceptance that there are many things that can’t be changed. I believe this is one reason the Sharing Economy is growing; informal community rather than organized government is more responsive. More sad news for a government.

Rick did a good job of fielding the questions, and yet the majority of people asking for change probably felt unsatisfied. If they thought something was getting done, they probably wouldn’t show up to cheer him on. They showed up to express what they thought wasn’t being heard. I know I left unsatisfied, but that also met my expectations; which is another sad commentary.

Personal finance is personal. Self-reliance has always been useful. Frugality remains powerful. Politics, at least until I have a significant surplus, will remain inconsequential. I’m just going to keep doing what I’ve been doing and hope something positive happens for this ex-aerospace engineer who has seen too many sides of America’s economic cultures.

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Social Media Is The New News Source

Posted on January 13, 2015 by Tom Trimbath

I waited for news and was glad for YouTube and Twitter. From January 6th through the 9th, the Consumer Electronics Show (CES) provided thousands of companies opportunities to show off their gadgets. I follow trends, but I am not a gadget guy – unless it is an awesome gadget. There was a chance that this year one of the companies I follow would reveal an awesome gadget. The company was quiet. Maybe their major customer would make a major announcement. As the days passed, very little news passed – officially. Unofficially, people were talking on YouTube and Twitter, an in blogs. Social media, the new news source, particularly for individual investors.

There was a good chance that MicroVision’s recent mystery would be resolved. In the first week of January a small Korean company, Celluon, released news of a projector that would fit in your pocket, and that MicroVision’s technology would be involved. Finally, news for MicroVision, and its stock MVIS. Then, the notice was pulled from the Internet. Maybe pressure from one of MicroVision’s large customers squelched the news so they wouldn’t be upstaged. Sony might have that much power.

CES began. Sony announced a variety of products in their keynote presentation; but without a mention of MicroVision. A mention may have been asking too much, but even the allusions to the technology were only directed towards prototypes and possible, not committed, products. No news.

Hello, Celluon. Now, they felt comfortable officially re-releasing the premature release. They posted the original text, posted videos, and started the stream of tweets. MicroVision echoed the basics. No videos. No tweet stream. They let Celluon do the work.

Searching for news is easy if you are satisfied with the official story. Thirty years ago, that was the only option, except for those who could devote their time and money to newsletters. Now, if there’s an official story, there are unofficial stories too. If an official story was expected and not delivered, there will be unofficial stories about that. Thirty years ago we in the US relied on ABC, CBS, NBC, and PBS – and newspapers and magazines. Editors were involved in every media. Now, anyone can produce news, they can produce it quickly, and we can receive it for free. The editor’s job of filtering the content, however, is ours. That is still much better than nothing.

If Sony had exalted MicroVision and sent MVIS to $200 I’d be satisfied with that news. Even $20 would be good. The lack of news may be what let the price of MVIS fall back below $2. The news from Celluon may be what helped it back above $2; but wasn’t enough to raise it higher. Such a small name has a small effect, until it proves itself. Celluon’s PicoPro pocket projector (not pocket protector) will be available by the end of January 2015. This is good news, but until the gadget folks get one and tear it apart to review it, there really isn’t any news.

Sony said little. MicroVision said little. Celluon said the most, but even that wasn’t much. I knew someone would be saying something, so I brought up my two favorite, unofficial, unfiltered, somewhat suspect, news sources: YouTube and Twitter.

People visit trade shows. Companies may have strict pronouncement procedures, but people post things for the fun of it, and maybe because it can be useful. In both Twitter and YouTube I’d search on the same names: MicroVision, Celluon, PicoPro (or in twitter-speak @MicroVision, $MVIS, @Celluon, and #PicoPro ). Visitors to the trade show posted tidbits and reviews. (Thank you, @PrimePremise.) Piecing them together, filtering out the obviously planted opinions, and watching in the backgrounds of the videos provided insights that may never reach an official outlet.

The good news. People seemed generally pleased when they played with the projector. That fact that it is always in focus is so seamless that it is easy to overlook, but they noticed – which tells me that focusing the other projectors is a problem for the competitors. The ease of use, the weight, the heat, the noise, the image were all so innocuous that they didn’t have to be mentioned. The PicoPro worked the way you want an everyday gadget to work, without a fuss.

The not so good news. Nowhere in the non-Celluon YouTube or Twitter feeds did I find a mention of MicroVision. Either the Non Disclosure Agreements are amazingly efficient, or there was nothing to say, not even about the prototypes described by Sony. This is like going to a family gathering and realizing there’s a cousin everyone is not discussing. Is the news so good that no one wants to jinx it, or is the news so bad no one wants to mention it? Even some non-committal tweets about how tired the company representatives were would at least humanize the event. Maybe they didn’t have much to do. I don’t know.

I use YouTube and Twitter for much of my news. The major news institutions are tending towards opinion and gossip and tending away from data and logic. YouTube and Twitter certainly do not enforce objective rigor, but they don’t stop it either. I can draw from the feed the pertinent and objective, flavor that with some subjective insights, and get a better feel for what is truly news. I do so for investing, but I also do so for world events, scientific breakthroughs, sociological trends. In the act of finding the central truth, I also get the ancillary environment.

MicroVision may not be doing much publicly to increase demand for their products or for their stock, but I can at least supply some of my demand for news by reading what others produce. Heavy filtering is required, but that’s the nature of our new news source.

Considering that, I’ve created a short MicroVision playlist on YouTube. Watch and enjoy, or at least learn.

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My Spreadsheet For Tracking My Stocks

Posted on January 11, 2015 by Tom Trimbath

Not bragging. Just saying. I’ve been investing for over 30 years. I started investing in about 1977. Thank you US Steel. Your stock helped me buy my first camera.Wind Prayer (And, thanks to my parents for showing me how to buy and sell.) The records of those early trades may only exist in the IRS’ files. It would be six years before I had a computer for tracking my investments. Since then, a spreadsheet has grown that tracks almost three decades of trades. I didn’t realize until recently that it might be useful for others. A friend asked for a copy as a template to build theirs. While I am comfortable including the summaries in my book, Dream. Invest. Live., I am at least private enough to not pass along the raw data. If the spreadsheet is useful to them, it might be useful to you; so, for the data geeks out there, here’s how I track my stocks.

A bit of an introduction first. All I am passing along are the column headings, because they convey the majority of the practicality of the spreadsheet. Most of the columns are simple data entries like buy and sell dates. Most of the math is simple arithmetic like addition and subtraction, with a bit of multiplication and division. The opportunities for compound interest calculations I leave to those who actually know enough to ask the question, because most of them already know how to perform the calculation, or at least how to get the spreadsheet to do that work. I don’t find fine detailed analyses to be necessary because a trade was either obviously good, obviously bad, or close enough to market performance that luck could explain much of the difference.

Okay, a bit more of an introduction. As I’ve said before, I am not a financial professional. Your professional advisor or your broker should be able to provide you this same information. But. I found having such a spreadsheet to be handy because over the decades I’ve changed brokerages, or had them changed for me; and because the realities of life mean inevitable complexities that can’t be foreseen by automated and institutionalized external entities. Life happens.

Enough with the introductions. Here are the column headings as of January 11, 2015. The original file was simpler. The file will undoubtedly change, unless something bizarre happens. Bizarre happens. Stay tuned.

Column Headings

  • stock (Duh. Simple except that names change, even without mergers and acquisitions.)
  • date acquired (I use the trade date instead of the settlement date.)
  • date sold (I use the trade date instead of the settlement date.)
  • days held (To check for long term capital gains, and my curiosity.)
  • sales price (The total value of the sale, not the per share price, including cost of commissions.)
  • cost basis (The total price of the purchase, not the per share price, including cost of commissions.)
  • profit (For tax purposes, but also because I also want to see how I did in terms of real, spendable dollars.)
  • % return (This is the total % gain, regardless of how long I held the shares.)
  • simple ROI (I use the ridiculously simple version for Return On Investment based on the profit divided by years held because reality can be too complex. It usually is not as simple as buy a share sell a share)
  • shares bought (If life is simple, this is the number of shares bought. And yes, it can get more complex than that.)
  • shares sold (The shares sold may not equal the shares bought if I sell only a portion of them.)
  • total sale (Note, the sales columns come before the buy columns because I like to subtract from left to right so profits are positive. It is simple, but I aim for simplicity. The total sale may involve selling shares from different purchase dates – all of the same stock, of course.)
  • total buy (The total buy is the sum of the purchases when I bought the shares. If I am selling everything, I want to see the total purchase cost, regardless of trade date.)
    profit (For tax purposes, but also because I also want to see how I did in terms of real, spendable dollars. This column is for the total purchase and sale, not the individual positions as above. Frequently, they are the same.)
  • % return (This is the total % gain, regardless of how long I held the shares.)
  • splits (Splits happen, and many of the descriptions about simple calculations are because splits, mergers, acquisitions, and other weirdnesses can change the number of shares between purchase and sale.)
  • shares held (The list of shares in each position or purchase accounting for splits.)
    sum (The total number of shares held or sold, which is also useful for checking against the brokerage’s portfolio report.)
  • portfolio then (Shares can shift between portfolios as brokerages change, or as life events like rollovers or divorces shift shares.)
  • portfolio now (Shares can shift between portfolios as brokerages change, or as life events like rollovers or divorces shift shares.)
  • purchase price derived (The total of all the purchases divided by the total number of shares held, also known as the overall cost basis.)
  • average price (Once upon a time I had an idea for this column. What was it?)

Lessons Learned

  • Managing the data is necessary for tax reporting, if it is outside something like an IRA.
  • Brokerages are not infallible, and if a position was brought over from another portfolio, they won’t have complete records. As a responsible investor, I find it valuable to keep records that are as complete as is reasonable.
  • Current average of the averages of time between purchase and sale is 3.44 years. I’ve said I was LTBH. My current record was a sale after 6,500 days or 17.8 years. Sadly, that was a loss; but it taught me much about the realities of investing. (See the book for details.)Dream Invest Live cover
  • Despite my current portfolio’s performance (as of January 11, 2015) my overall performance is very encouraging. My strategy of investing in small, disruptive companies is risky enough to record dozens of losses, but the gains are substantially greater. Rationally, I recognize both possibilities: my patience will be rewarded, and past performance is no guarantee of future performance – in either direction.)
  • While I usually hold stocks for years, I’ve also sold if a stock moved faster than I thought it should, and I’ve also sold within months if I uncovered reasons to sell.
  • Patience is not always rewarded.
  • By buying long instead of selling short, I’ve never lost more than 100% and have gained far more than 100%. The record so far is in excess of 2,400%.
  • I started small, a few hundred dollars, and learned more from those trades than I did from any book or lecture.
  • Investing can be intimidating, but can be approached at any pace; and, given enough time, much can be learned.
  • Figuring out profits and losses sounds easy when the exact same number of shares are bought and sold without splits. I frequently buy more than once, and each time can be a different number of shares. I frequently sell more than once, each time involving a different number of shares. Profits and losses, therefore require averaging costs, profits, and hold times. In a portfolio that is nothing but purchases, each row can be a stock. In a portfolio with combined or fractional sales, it becomes necessary to add rows for subtotals and tracking selling parts of purchases. That’s complicated enough to warrant its own post; but, I’ll wait for feedback before devoting time to chronicling those details.
  • Past performance is not much solace if current holdings are performing atrociously. And yet . . optimism remains.

I don’t know if anyone else will find this useful. My friend found it so, and found it a bit intimidating because of the nuances induced by the realities of selling. Undoubtedly more sophisticated spreadsheets and analyses are available. I contend, however, that investing should only be a part of life, not an all-consuming devotion. I update my spreadsheet whenever I make a purchase or a sale. That means, on average, about five minutes per transaction. Considering my average hold time of 3.44 years, it means I don’t have to spend much time massaging the rows and columns.

My book is called Dream. Invest. Live. because investing is only a middle step between dreaming and living that dream. This spreadsheet is a stepping stone, something that helps me keep my balance, as I follow that path. I hope it helps you too.

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Little Things Matter More Now

Posted on January 7, 2015 by Tom Trimbath

I can flush again. It is amazing how big the little things are when you miss them for a while. A working toilet, quiet time, water from a faucet, heat and light with the flick of a switch. Many people spend a lot of money on big things, and without getting the satisfaction that comes from a return of a vital part of life. The law of diminishing returns detours many financial plans. The frugal life, the minimalist’s life, takes the seemingly silly step of celebrating the little things as they are, without asking for embellishment, and saving money in the process. For years I lived such a life by choice. Now I live it by necessity. As wages stagnate and benefits fade, large segments of the population are learning the same lessons.

There are grand houses with temples to water. Master baths take on the scale of their own wings of a house. Tens of thousands are spent on expensive materials like marble or etched glass. Fixtures run hundreds or thousands of dollars for the simple act of turning water on and off. Phenomenal remodels don’t change the fact that people are human. The food that came into the house via the kitchen, and was served in the dining room and breakfast nook, gets flushed out the bottom of the house via gallons of water. (I salute those of you with composting or incinerating toilets.)

I got a new toilet. This month I’ll celebrate my eighth year in this house, the only house that’s truly felt like my home.DSCN5593 It was built in 1964. I don’t know for sure, but a lot of the appliances and fixtures look original. Renovations were, and are, in my plans. But, I was waiting for sufficient funds. Oh well, the wait continues. The toilet always had a few quirks. It was old. The water was hard. Its life was possibly hard as well. Before I bought it, this house spent decades as a vacation cottage. Strange things happen on vacations. Every year the toilet flushed less efficiently. A few years ago, a couple of flushes for required for every visit. A few months ago, sometime during the day, the toilet would empty the bowl at least once. A few weeks ago, I was simply glad that at least nothing solid was left behind, usually. The trend was not good.

Those of you with septic systems understand the possible problems. Solutions can cost tens of thousands of dollars. The closer the problem was to the bathroom, the cheaper the fix. I was lucky. Something, sometime fell into the toilet and blocked a channel. A service call confirmed that whatever was in there was as hard as a rock, and could be one. I don’t go chucking rocks down the toilet, and I doubt my guests do, but there have been parties and who knows what was bumped and fell in. About a hundred dollars and a couple of hours later, flush. Whew.

Remodeling that bathroom would cost a few thousand dollars, and wouldn’t create the same level of relief as the installation of a hundred dollar toilet.

Travelers, adventurers, explorers appreciate coming home to faucets that produce clean water, electricity that is always available, and a house that is warm and dry regardless of the weather.

Those simple things cost a small fraction of what people spend on houses. Transportation doesn’t require the fanciest sound system. Communications don’t necessitate smartphones. Entertainment doesn’t require electricity.

People are intrigued by tiny houses, even if they don’t plan to buy one. Cabin by AngelaMass transit, bicycles, and walking are gaining in popularity even with declining gas prices because people are recognizing the benefits of quiet time and exercise. (Though there probably will be a blip with this particular plunge in prices.) Flip phones are back in style, because smartphones do too much and cost too much, in both money and time. Distractions are intoxicating, but the wasted time is convincing people to kick the habit. Entertainment has never been more available, and yet, there’s probably nothing on (especially now that Ferguson and Colbert are off the air.)

Living simply seemed monastic but our planet’s resource limits and our population growth means getting by with less is becoming a necessity, not a choice. Getting by with 10% less, then 10% less, then 10% less, will be painful. Do that ten times and you’re getting by on 65% less, not 100% (compound interest in reverse.) If, however, you lose 90%, and get back up to 35% (the same point as the ten 10% losses) there is a potential 350% increase. What a gift!
10 percent 10 times
As I am chronicling on my other blog, Pretending Not To Panic, there is good news too. Minimalism is becoming easier, and better. Projection screens that fit in your pocket (come on MicroVision.) Lights that last longer and use less energy (Yay, LEDs.) Electric autonomous cars that are so smart and efficient that you may not have to buy one; just call it up and it delivers itself like a taxi. Disconnecting from the complexities of the grid are becoming easier as power, water, and communications become decentralized. Even waste treatment is decentralizing. Septic systems have always been decentralized, but even those expensive and complex systems have alternatives like the composting and incineration options.

I continue to recover from my financial upset (understatement, oy), and am not comfortable yet; but along the way, each bit of recovery is celebrated more than it ever was when everything was simply assumed to work without a thought.

Our society is in various stages of denial and adaptation. Most of the hurts are of the 10% less kind. I don’t wish anyone to have to go through the 90% drop, but as we work through losses we may better appreciate the recoveries. Little things matter more now, and that’s good.

Now, pardon me as I want to use the toilet.

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Mysterious MicroVision

Posted on January 2, 2015 by Tom Trimbath

It never happens the way you expect. MVIS shareholders have been waiting months for news from Sony. A Sony product with MicroVision Inside should be launched this year. We expected news by the end of 2014, and didn’t get any. January 2nd, the first trading day of 2015, and here we have it, an attractive, well-designed, pico-projector that unambiguously acknowledges using MicroVision technology, for a product launch by the end of January. It even has a price range because there are a range of options. But, it wasn’t Sony. A much smaller Korean company called Celluon announced their PicoPro – and, then they didn’t. The news vanished. The information, however, hasn’t.

For those of you who are unfamiliar with MVIS and who are surprisingly reading past the first paragraph, here’s a synopsis of a synopsis from My Semi Annual Exercise.
“MicroVision is a promising small company with a technology that could dramatically change our electronic world. The company is based on a one key technology: an oscillating mirror built into a chip (MEMS, MicroElectroMechanicalSystems), that can acquire and display images very cheaply, at high resolution, at high frequency, for low power, in a very small space.”
There’s a longer, but older, post Micro Vision, that explains more. The post’s age also tells a tale of patience.

Celluon’s press release vanished from the web. At least that was someone’s intent. Those aware of the workings of the Internet know that anything that is posted once was probably copied many times. Rummage around through the cache and the original can be found – and oops, that was deleted too. And again. The copies existed for a while, but now they too have vanished.

The video hasn’t.

Unfortunately, the video is of the device, doesn’t have time to mention details like suppliers, and is old.

The video age reveals something that is out of synch with the press release. According to the video, the AirPico was to be launched back in September, but it doesn’t seem to be for sale yet. CES, the big Consumer Electronics Show held in Las Vegas, starts Monday. The press release alluded to a launch then (as I recall).

There is where a possible conflict arises. Sony, which has already mentioned MicroVision as a possible supplier for a number of products, makes their big presentation at CES Monday at 5pm. Sony may not be happy being upstaged by an upstart. Maybe Sony convinced someone to retract the release. If so, then Sony cares about getting the right press with MicroVision, which is good for MicroVision and MVIS.

But, why would one competitor (Celluon) bow to another competitor (Sony)? Upstarts like to upset stalwarts. This would be a perfect David versus Goliath opportunity. Maybe something else is happening.

Rather than create a long list of speculations that will be moot either by the end of Monday, CES, or January, I’ll introduce one other possibility as caution. It is possible that the press release was faked, or at least generated by someone with great enthusiasm for the concept or the company without thinking through the implications. Investing in small companies also means investing in companies that have too few people to manage the corporate message across all media. Considering the hack against Sony, it is easy to imagine someone creating a wishful release, posting it, watching the reaction, possibly profiting from it, and then watching some authority like Celluon or Sony erase the effort. It is a scenario that fits the style of the various companies involved.

The press release was possibly legitimate. It may have been posted as intended and run into unintended reactions. It may have been released prematurely. It may have contained errors or revealed more than contracts allowed.

Regardless of the real reason, the reaction wasn’t mysterious. MVIS rose over 12% on reasonable volume. If nothing else, the news tested the market. An authentic looking press release from a relatively unknown company was sufficient to raise the price significantly. If a company of Sony’s size releases a similar or more significant product, the stock’s reaction will probably be much larger.

The mystery that continues to shroud MicroVision is similar to the mysteries that shroud many small companies. Information fog is one reason why investing in small stocks is considered speculating. Even when you think you know something, something tangible and quantitative, it can be deleted from at least the electronic memories.

As with any good mystery though, the hints along the path intrigue us and draw us to an eventual, yet unknown, conclusion.

Monday, January 6th, 5pm, Sony makes an announcement, and we’ll see if MicroVision’s story changes. I intent to tune in.

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Semi Annual Exercise EOY 2014

Posted on December 31, 2014 by Tom Trimbath

Happy Invoice Day, EOY Stock Report Day, and Backup All Your Files Day. Oh yes, and evidently many people will use this time for celebrating the new year, or in many cases, having survived the old year. Pop that cork. Meanwhile, I’ll be sipping a cocktail as I end the year by sending out invoices, reconciling my business and personal finances, backuping up a few hundred gig of data – and, oh yes, posting the results of my semi-annual portfolio review.

I look at my stocks daily, as much for entertainment as anything; though lately it has been hard to tune in when my portfolio shrinks while the markets hit records. That is one of the consequences of investing in overlooked stocks, when the big money is running to the big companies, the little companies are left behind. Long-term investing, however, relies on patience, perseverance, and confidence in analyses and logic. That’s hard to do when downward trends run for years.

Emotionally, investing or speculating in small companies isn’t easy when the downturn is so severe that emergency funds are all that is left. Logically though, regular reminders of the basis of the decisions is valuable. While I may rationalize my holdings readily in conversation, or allude to it in posts on discussion boards, writing down the reasons is valuable and requires more logic. Writing down the logic behind positions and comparing it to the current situation is more valuable because an investor should always be willing to sell if the situation has dramatically shifted from the original intent.

I’m very aware of the irony of writing a book about personal finance, frugality, and independent investing and then losing almost everything. While most people see the book and the subsequent performance, I see almost 40 years of data interrupted during the last most public episode. (The pre-2008 data is in the book, if you want to see my investing history.)Dream Invest Live cover

Ironies are entertaining in the media, but this irony created a massive scramble as I successfully struggled to keep my house, build my business, and pay the rest of my bills (which prominently involves health insurance). 2014 was better than 2013 which was better than 2012; and 2015 must be better than 2014 because certain bills will come due. Paying taxes in April is an obvious goal.

My portfolio has the potential to recover and ease those concerns, even within the April deadline. My portfolio has had that potential for years. Each of the companies represented by my stocks has made progress despite falling share prices. Each has also had issues, but if they had none I’d suspect them of hiding something. Long Term Buy and Hold (LTBH) investing, as I do it, requires patience and is usually eventually rewarded, though there are no guarantees. I don’t expect them all to recover in 2015, though that is probably more likely than having them all fall as they just did. So, 2015 has better future odds than the recent past performance.

I feel that my world, and the world in general, are in races between good news and bad news. Will my stocks recover sufficiently before I need to pull money from my IRA? Will we develop the attitudes and technologies that will help us adapt and change to the shifting environmental, financial, and societal shifts? If you haven’t visited it yet, I’ve launched a blog for “news for those of us who are eager and anxious about the future” called Pretending Not To Panic,

PNTP

PNTP

a phrase that nicely captures an attitude I and others find we must adapt. (Hip flasks now available.)

I post the semi-annual review of each of my stocks on various discussion boards. I could post the entire collection here, but: 1) it would be very long, 2) the more public the conversation, the more valuable it becomes, and 3) reading my posts on those boards introduces you to individuals who have different perspectives, strategies, and experiences. Collectively, those communities are more powerful than large financial institutions because the motivations and incentives are those of similar individual investors rather than that of profit-minded corporations.

Here are the links to the discussion boards I use. Feel free to comment here or there, and to pass along links to others. The bigger the discussion, the better the chance of valuable insights (as long as the trolls and flamers are moderated appropriately.) Congratulations to those who are using the same exercise. I hope it is working for you too.

Investor Village
AMSC
AST
GERN
GIG
MVIS
RSOL

The Motley Fool
AMSC
GERN
MVIS
RSOL
Economy and Markets

Silicon Investor
AMSC
GERN
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MVIS

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Things To Look Forward To In 2015

Posted on December 28, 2014 by Tom Trimbath

2014 was better than 2013. 2015 has to be better than 2014. While that may be a personal wish, it is also a global one because some things continued to get worse in some topics while good news came in for others. Despite the cautions many send my way, I am an optimist. It is the only thing that makes it easy to go through life pretending not to panic.

Graphene
We are in the first years of the Age of Graphene. Graphene is simple, ingenious, and we’re only beginning to understand it. Wonder materials come along and are incorporated into our lives, but none of the recent discoveries match the potential of graphene. Graphene is simply a sheet of carbon. That simplicity obliterates the failings of almost every other material. A sheet of graphene is a single molecule. Almost every material we use relies on chemical bonds for strength. Molecular bonds are much stronger. To restate an old example, an elephant standing on a pencil couldn’t poke through a sheet of graphene the thickness of a sheet of plastic wrap. So, it’s strong. The gaps between the molecules are so small that they are the best barrier. So, it’s watertight, airtight, and maybe even hydrogen-tight. The sheets are made of carbon, which you’ve probably heard that we have an excess supply of. So, the basic material, the basic element is cheap and readily available.

The list of potential uses basically covers everything that requires strength, impermeability, at low weight. My favorites are incredibly light waterproof roofs, resilient roads, and structures strong enough for any impact, including bullets. Cheap desalination has been suggested. Emergency shelters become simple. Throw-away becomes more expensive than built to last.

Solar Energy
Solar energy has developed from a gimmick, to a way to power remote facilities, to an economic choice for ranches and farms, to an economical choice for sunny suburbs, to a direct competitor to conventional grid power. Feeding power back into the grid is becoming common. Disconnecting from the grid may be sparking a spiral in the decline of centralized power. As more houses create their own power, there are fewer using the central power plants. As fewer people use the central power plants, each person pays proportionally more. As each person’s costs rise, solar and other renewables become better economic choices, regardless of ideologies.

Economy and Markets
The stock markets are hitting new records. People are finding jobs. The number of homes at risk is declining. Obamacare is pulling more people into the insured ranks. The US dollar is strong. Interest rates and inflation are low. Each of those has caveats, but the picture would be far worse if the markets were down, unemployment was up, foreclosures were rising, and millions were left uninsured.

Societal Awareness
Ironically, the great exposure being given to racial and ethnic injustice is a positive sign. The debates aren’t just with words, but the words have been far stronger than the violence. Issues that weren’t being talked about are being debated, and leading to action. It won’t be easy to erase generations of suppressed emotions, but sooner is far better than later.

Peace
Just like with social awareness, there’s an irony. We are so much more aware of war that the total casualties are decreasing. We’ve always known war was bad, but it wasn’t until the US Civil War (aka the War Between The States), that the reality was visually revealed to the public. World War I proved the uselessness of treating people as pawns. World War II brought back movies within days. Vietnam brought back reality within hours. Now, atrocities are available on YouTube almost in real time. Our collective vote is No. Conflicts are smaller. Negotiated resolutions are more common. And we’re so appalled that we want even less. Good.

Frugality
Frugality is coming into fashion. For some, frugality is necessity, just like in the Great Depression. For others, frugality is a choice based on their understanding of the world, our economy, and each other. While many maintain the mainstream, increasing crowds are minimalizing, de-cluttering, re-using rather than recycling or discarding. Car usage is down. Tiny houses fascinate many. Local shopping has led to better business for small businesses, and lower transportation impacts on the planet.

The list goes on, but you’ve probably read enough. There are enough positive things happening that there are reasons for hope. There are enough negative things happening that there are reasons for worry. That balancing act, that race between good and bad, is why I find enough material to feed my other blog, Pretending Not To Panic.

PNTP

PNTP

We are an incredible species that is only now learning about itself and how to live as a species on a planet. We are quick learners. I look forward to seeing what we learn, and what we do, that will make 2015 and every subsequent year better than the ones that came before.

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Thanks For Real Gifts 2014

Posted on December 23, 2014 by Tom Trimbath

Amidst the frenetic times in the days before Christmas I’ve received a few gifts that didn’t come with bows or ribbons but which I appreciate.

Work, and hopefully pay.
In addition to my work with the museum (HCLE), my new blog (Pretending Not To Panic), my books and photos, and my ever-shifting list of clients, I’ve also been sitting in as guest editor for Curbed Seattle where I also am a contributing writer. More succinctly, in addition to everything else I do, I’ve also taken on a full-time job so a friend can take a vacation. Considering the workload I’m witnessing from the inside, he deserves it. In financial situations like mine, work is a gift (as long as I get paid appropriately.) A bonus gift was posting one of my slightly flawed articles that hadn’t been published. It needed work, but I needed to post something quickly to meet a deadline; so, up it went. Within hours it increased the traffic to the site ten-fold. Thanks, I needed that.

Charlie Brown Tree

Thanks to artist and friend, Pat Brookes

Thanks to artist and friend, Pat Brookes

Working seven days a week, and then adding a full time job on top means things like cards, decorating, shopping for gifts, and socializing are only happening as bare reminders of normal years. I like tradition and ritual so there are some things that must be done! During a two hour forced gap in my schedule, I managed to harvest mega-rosemary from my yard and turn it into a wreath, and string the lights around the poor pine tree in the front yard. The deer use it for a scratching post during antler season. The tree is unhappy. The rosemary bushes are shorn. But, the wreath looks fine and the lights hung just right to make a postcard Christmas tree.

But, I still wanted a tree indoors. Half-jokingly I put out a call on Facebook for anyone who had too many trees on their property. I’d help by harvesting one. Pat Brooks was eager and generous. We found one that wasn’t getting full light, so it was only growing on one side. Great! My living room is small, and this way the tree would fit up against the wall. Just guessing at the height to cut for the length of the truck bed, and it fit just right. Bring it into the house, and again, it fit just right. I like it when a lack of a plan comes together. (PS You may notice that real trees are far more open an delicate than the groomed and trimmed ones from the lot. A bonus is that the ornaments hang free, as long as they don’t weigh too much.)

Food
The day draws near. So does the feast and so does the awareness that a lot of baking hasn’t happened. (My apologies to those who’ve requested my fruitcakes – yes, that happens – but this year I may only have time to make one, for me.) Shopping for dinner and dessert made me aware of the plenty that I live within. While I know my financial situation is temporarily unsustainable, I also know that I live within a civilization that distributes food around the world in variety and quantity never matched by royalty in history. Inequities exist, but I will celebrate the ability to choose and enjoy. There are few things as fundamental as food, and they are all appreciated.

MVIS
Surprise! I snuck in a stock. This isn’t some ploy to sell my book (but hey, while I’m at it – Dream. Invest. Live.

My book on frugality

My book on frugality

). A few days ago at bit of logic wandered into my brain. One of my storied investments is in a stock called MVIS, which is for a company called MicroVision. Many of us have been hoping for a Christmas surprise from the company, but nothing yet. During my disappointment, I thought about how long I’ve held the stock (since 2000) and its history (down, down, followed by down.) The company has made progress, but they haven’t made commercial profitability because they haven’t released a high-volume and successful product. Supposedly such news can happen any time; which has been the case for years. Well, the company is certainly in better technical shape than it was five years ago, so the stock should be in better shape. I knew it wasn’t, but my curiosity decided to look up that price from 2009. MVIS was over $20. Now, it is under $2. Many people bought it five years ago because logically it should be worth more than $20. If the company has made progress, and those earlier analyses were conducted with due diligence, then MVIS should be worth more than $20 today. There are a couple of “IF”s in there, but there was some cash in my self-directed IRA so I treated myself to a few extra shares for Christmas. If the Sony news hits by the end of 2014, great. If the CES show reveals some magnificent news, great. If not, I’ve provided myself an opportunity to dream a bit more, for less than some people will spend on shoes.

Thanks
A day or so ago an artist friend wanted to find a few minutes in my bizarre schedule to bounce an idea off me. Normally, I just say yes, but time is precious this week. Serendipity happens and a slot opened. They want to interview me. Sure. Why? They have some new equipment and a new idea for a series, and wanted to try it out with me. Ok. They got the new equipment because of a job they had for the last couple of years. They got the job because of something I’d helped them with years ago.

I had to interrupt.

The knowledge that somehow I’d helped someone get past a tough spot and into a place where they’re getting to do what they want and earn a living is a sweet gift. The interview is nice, and I appreciate it; especially, because it will be a promo video for my business. I’m honored. Knowing I helped, though, is worth far more.

We never fully know how we affect the world, and which side the balance tips, but at least in one case I’ve learned that at least one person’s life is better. That is truly a real gift I am thankful to have delivered and received – and it didn’t come with a ribbon or a bow.

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Insurance Maintenance And Repair

Posted on December 20, 2014 by Tom Trimbath

It costs less to live healthily than it does to pay for health insurance. Unfortunately, health insurance is required. Living a healthy lifestyle isn’t. A healthy lifestyle drops in priority because of financial pragmatism. Insurance, which can be a good idea, is becoming counter-productive on a personal and a national level.

If it wasn’t for the profits, insurance would be the embodiment of “We The People“. As much as I think my health insurance costs too much, I understand the bigger picture. Insurance is inherently simple. Accidents happen. Whether it is for healthcare, or cars, or houses accidents (and ailments at al) happen and frequently cost money. If the accidents didn’t cost much, there wouldn’t be a need for insurance. Each person saves a bit, and then has just what they need. Accidents can cost a lot. People have a tough time saving. Even for people who save, if the accident hits before the savings accumulate there is still a problem. Simple solution. Everyone puts in a bit, but we all put it in the same place, and whoever needs it draws from it. Ta da! We The People rule!

Put a lot of money into a pile and someone will volunteer to watch over it. Someone else will offer to watch over it and not take any. Someone will offer to watch it, not take any, and ask to be paid a fee for extra vigilance. Someone has to make sure that the money is coming in and going out appropriately. That costs more. Then someone points out that if they could invest the money they could make it grow, bring down the costs for everyone, and be able to pay themself from the profits. That isn’t how insurance was born. Communal protection has existed for millennia. But, it probably didn’t take long for the agents to think the steps.

There are plenty of hypotheses about the high cost of healthcare. The details of doctors, hospitals, pharmaceutical companies, insurance companies, lawyers, and patients make a simple collaboration into a very tangled situation.

I will set that debate aside because this blog is about personal finance.

Frugal people know that the best use of time and money is to properly maintain what you have. Repair costs more than maintenance. Replacement costs more than repair.

That’s true for healthcare as well because it is true for humans. Gain and maintain health by eating right, drinking plenty of fluids, get regular exercise, and enough sleep. Throw in some meditation and stretching, and some mental health activities like relaxing and having fun. The only item in that list that costs money is eating, at least in today’s society. Water is nearly free. Exercise, sleep, meditation, stretching, relaxing and having fun are free. Any costs associated with them come from our choices: joining a gym, buying a better mattress, paying for coaches or resorts, going to a movie.

My choices aren’t totally free. The exercise part is simple.

I like to: hike Walking Thinking Drinking Across Scotland, ski merritt cover, bike Just Keep Pedaling,

dance, practice karate, and an assortment for the sake of variety. The gear and lessons cost money, but all of it results in things I can do for free (except for food and gas). My preferred entertainments: conversations, some of that exercise for the fun of it, sharing meals (there’s that food again), reading, seeing shows (they cost), and an even wider variety – for the fun of it.

Staying healthy is important regardless of wealth. The good food part is fun because I also like to cook and eat; but, when money is tight the healthiest options have to be set aside. The good and fun exercise part is largely a case of time. When I have enough time it is easier to fit in a run, stretch, practice karate, and meditate; but, when money is tight in this society so is time.

Evidently the new health care system requires annual renewals. So I heard back in November. The process was thankfully simple. One half hour phone call and everything was arranged. It was also a half an hour when I wasn’t making money. It was also a surprise that, even though nothing had changed except getting less than 2% older, my monthly premium was going to up 17%. My health insurance was redirecting more money, and therefore time too, from insuring my health.

My monthly premiums are more than I spend on food. A bit of that premium devoted to organic, or fresher, or more nutritionally dense foods would improve my health. The time spent working to pay for insurance so far exceeds the recommended exercise requirements that I would be be in good enough shape to fend off a bad back, lose weight, and relieve stress. The power of that extra money and time is apparent because there is no extra money or time (My Rule of 7). If there were, I’d take days off more frequently than once every two months.

I’ll continue to pay the premiums, which are for healthcare that is 17% more distant than before. The distance is moot because, as I’ve written before, I could afford the insurance but insurance is not care.

There is a larger consequence that provided a new perspective. My monthly premiums are about what I should be saving to pay income tax (estimated). Premiums are paid to collect enough to cover recoveries. Collectively, that should be an impressive number. From my personal perspective, collectively the healthcare number is larger than what we collect to run the entire country. In 2012, healthcare costs in the US were about $2,800,000,000,000 ($2.8T). US GDP was $16,200,000,000,000 ($16T). It is not a surprise that the expenses and incomes of the US are not a scaled up copy of my finances. The comparison does, however, point out to me how much good could be done if money and time were being devoted to maintenance rather than repair; and how much healthier the nation would be.

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Russian Ruble Proves Currencies Change

Posted on December 17, 2014 by Tom Trimbath

Feel sorry for the Russians, if not Russia. The Russian Ruble has collapsed as abruptly as it did just before the USSR collapsed. This time is different though. And it can only happen there. Or not. Personal finance can’t ignore global finance; but people can always control themselves by controlling how they live. It is our strength.

Fracking is a big issue. And yet, fracking is merely the fulcrum used by many for a variety of economic agendas. Fracking is worrisome to those near it because of the environmental hazards. The Russians are probably cursing it because fracking caused their crisis, at least partly.

Fracking isn’t something to do for the fun of it. It’s done to extract more oil and gas from wells that were losing their productivity. It’s like Red Bull for oil wells, but on a lot bigger scale. Neither is sustainable, but the short term rush is addictive. Fracking has produced so much oil in places like North Dakota that there’s an oil glut. Yay! say the fans of fracking who argue for American energy independence. Normally, OPEC, and particularly Saudi Arabia, would cut back on their production to keep the supply down and prices high. They like high prices. They don’t, however, like losing revenue.

Saudi Arabia decided to keep pumping oil. If they produced enough that the price dropped enough, then it might drive the frackers out of business. Yay! say the opponents of fracking. As long as Saudi Arabia has a lower cost of production, they’ll eventually win. In the meantime, the price of gasoline has dropped to mutli-year lows. Yay! say any cash-conscious American filling the tank – except maybe those whose jobs are at risk.

The battle may be between North Dakota et al and Saudi Arabia etc., but one of the casualties is Russia. Russia isn’t the only casualty. Every country that relies on oil revenue for a large part of its national revenue is hurt if their production costs are more than Saudi Arabia’s and North Dakota’s. That’s a lot of countries. Making a lot of money from something in demand is great, but not diversified. Russia, Venezuela, and Iran aren’t directly involved in the conflict, but they do rely on selling oil. Well, as long as they have stable economies they’ll be okay. Oops.

Russia is largely Putin. Just like oil, Russia has been relying on a singular strong central figure. The adventure into the Ukraine may have seemed like a good idea at the time, but the costs and sanctions that followed stifled Russia’s economy. Its reliance on a very few key figures meant Russia was a riskier investment. With the costs and sanctions, the expenses went up. With the oil war, the income went down. The Russian economy is now bad enough that the Russian Bank had to raise interest rates to 17% to convince Russians to keep their money in rubles. Yay! say people who have money to invest and who expect interest rates to exceed inflation. Maybe that will work. Maybe people will remember back about 100 years to another bond crisis in Russia.

“The Russian Ruble Is In Free Fall” – Slate

In less than a year, the Russian Ruble has fallen to 50% of its value in US Dollars. People with foreign debt effectively owe twice as much money. That sounds like a rich person’s problem, but if you’re an auto mechanic in Moscow working on Jeeps your parts prices just doubled. Borrowing from your local bank will be tough when you have to pay high interest rates. If your income growth is greater than the interest rate, great! If not, as is true for many, then individuals ride a downward spiral.

Back when I was an aerospace engineer for Boeing I spent ten days in the Ukraine soon after the Wall fell. We were there trying to find commercial uses for Soviet military rockets. (Ah, my days on Sea Launch, a real bit of seemingly sci-fi few know about.)

The days were busy, but a few times I had a chance to walk through the neighborhood. One walk alone would be sufficient for a book. Every time though, I encountered the same thing: a long line of sidewalk stores. Don’t think Parisian. Every store was a cardboard box about one foot wide, long, and tall. All were tended by someone sitting behind it. The typical fare was simple: one fish, one root vegetable, one loaf of bread. The river was near. There must have been gardens. I wondered if there was a flour allotment. The government had so little cash that they had to turn out the eternal flame honoring their war dead. The people who had so little cash, did whatever they could. They were resourceful. I don’t know if they were successful.

Russians are stocking up, probably trading old stories for insights rather than entertainment, and adapting. Russians are used to hard times, for good or bad.

We assume that only happens over there, somewhere else, to someone who hasn’t “figured it out.” As part of compiling the daily news feed for Pretending Not To Panic I’ve come across enough data to confirm that, we in the US are in a bubble.

Pretending Not To Panic news for those of us who are eager and anxious about the future

Pretending Not To Panic
news for those of us who are eager and anxious about the future

It may not be a financial bubble, though that’s possible too. The US Dollar seems steady, and it is, because no other currency is. The major currencies; the Euro, the Yen, the Yuan, all have uncertainties. The investment community doesn’t like uncertainties. The EU doesn’t seem stable, so why should their currency. The Yen has Japan’s aging demographic imbalance to worry about. The Yuan is tied to China’s impressive growth, but the growth may be ephemeral. The US looks good because everyone else looks far less good.

The US isn’t as reliant on one commodity, good, or service. Our debts are large, but so is our productivity. The fact that we have so many disparate voices also demonstrates that for any situation we have lots of potential solutions.

My worry is that too many Americans assume it can’t happen here. We assume the US Dollar will always be there, solid and sound. That is not normal. Personal finance is personal, and people respond differently to crisis. Even rocket scientists can find themselves sitting behind a foot-tall cardboard box selling a fish, a potato, and a biscuit. Some Russians may be doing the same thing in the Spring. It’s one reason I lived frugally before I had to, and will continue to do so after I no longer need to.

My book on frugality

My book on frugality

Our adaptability is our strength, especially when we watch what’s going on so we know how we might have to adapt.

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