Yes, it is a different mind set and self fulfilling. I am thinking about replacing some wood flooring and got a quote and now makes me think better do it now before the wood becomes less available and/or more expensive. Meanwhile cash is losing 5% this year. Multiply this mindset x 100m people and you get some inflation. Fed won't raise rates, wages won't keep up, but assets should do well until the yield curve is so steep that rates have to go up, which is the big unknown. Who will be our Volcker of 2020s? Does this not make the case for all the supply-siders. You can demand all you want, but someone has to make the stuff.

Steve Ellison adds:

I worked in technology supply chain management in a previous career and have been thinking about a scenario called the "dreaded diamond".

Technology part shortages occurred with some frequency as the transition from designing a next-generation product to ramping up production did not always go smoothly. And even before covid, accidents happened; some years ago, a factory in Japan caught fire. Many specialized components have only one supplier.

What typically happened in shortage situations was that the supplier would allocate the limited supply among the buyers. The buyers would try to game the system by placing 3x to 5x their normal orders, hoping that would increase their share of the allocation. Meanwhile, executives would want daily updates on the situation: how many units were delivered, and what the likely delivery schedule was.

This situation might continue for some months, with buyers continuing to place inflated orders, and the apparent shortage stretching out longer into the future with the higher orders.

As actual deliveries increased, one day, all of a sudden, the buyer would cancel all the excess orders. As other buyers did the same, the demand on the supplier would crash to near zero. This phenomenon of illusory orders that would vanish later was called the "dreaded diamond". A few quarters later, there would be big inventory write-downs because technology products lose value fast as they age.

Maybe some variation of this scenario could occur in the general economy as some of the shortages are alleviated in the course of time. We might find out the shortages have been exaggerated by purchasers trying to maximize their own supply.

Alston Mabry offers:

The Odd Lots podcast (BBG) had a recent episode about the chip shortage, and the guest described this exact scenario, where a customer orders 10x chips and is told by the supplier, "We can deliver 1x chips now, and the rest within 50 weeks." So the customer then orders 100x chips, hoping to get a 10x allotment, after which they cancel the rest of the order. But suppliers must be catching on.

A reader comments:

Sounds like how the Street allocates hot deals. The “pad-my-order-by-a-factor-of-10” move can’t help but to attract attention on the syndicate desk… and the result rarely benefits the customer.

A reader adds:

This has been my base case for some time. Interestingly, I get the sense that complacency is increasing lately, which us odd.

I expect a deflationary shock from overproduction within 24 months, globally synchronized. The delay us from supply chain snafu’s continuing for about another 18 months.

The difference between this and the diamond is deliveries being made and a simultaneous demand drop (ie they get their increased orders).

Hybrid system in time models are rolling out still.

Pamela Van Giessen writes:

This is not rocket science or even dismal science.

Quit testing healthy people for covid so companies that engage in non-Zoom activities can work at capacity and people aren’t "scared" to be around other people. We are still testing well over 1M and sometimes 2M people daily. ~2.5M people were unable to work between June-Sept because of covid. Since there weren’t that many sick people the bulk of them were out of work due to covid related quarantines. And I can promise you they weren’t the zoom class. Supply issues and inflation last as long as covid is a 24/7 threat that "must be conquered."

Our World in Data: Daily COVID-19 tests: USA

Yes, hoarding makes the problem worse but that will evaporate in 2 seconds once we have reliable supply.

Last week I saw a man on a bike wearing a mask in Park County MT where we have nearly 3000 sq mi and a population of ~16k. No helmet but he had a mask on. I should have snapped a pic as it was a perfect illustration of the brainwashing insanity that plagues our economy and health right now. The vaccines may prevent serious illness/death from covid but they don’t seem to be good for much else be it the supply of canola oil, engines, or other health conditions/injuries, etc.

Duncan Coker writes:

The reformers always make the assumption that supply will just naturally bubble forth like a spring constant and unaffected by the world around, be it for labor, capital, services, products. It is assumed no incentives apply and the curve is a vertical line stretching to the the outer limits of the universe. However, this assumption is always wrong and being tested right now.



The energy crunch in China and Europe may grow into a bigger trend worldwide. Its one of those small line notes you notice and go hmmm. Like the pandemic was in early 2020. Hmmm, shortage of masks. Hmmm, Shortage of gas, coal. Things that make you go hmmm.

Water shortages also coming up. See how this winter is. Reservoirs are quite low. Look at weekly chart of FIW water etf.

Jeff Watson adds:

I’m noticing many holes where product should be on shelving at every retail establishment we patronize. I’ve been waiting on a part for my Jeep that’s been on back order for 6months. Still see little to no ammo in stores. The system is full of hiccups.

Tim Melvin notes:

I saw a lot of empty shelf space at Costco last week. Very unusual.

Pamela Van Giessen writes:

No joke. We have a huge problem. This is what happens when the world gets shut down and everything is all covid fear all the time. No workers. Test school kids constantly and they will end up being sent home and parents won’t be able to work. Then stuff won’t get made or shipped to where it needs to be. Freight train, fully loaded, sat parked in Livingston MT for nearly 2 weeks. Just left the other day.

As someone running a business that relies on actual commodities (flour, sugar, etc) I find myself overbuying out of concern that I will not be able to get basic ingredients. I had a hard time getting boxes about 2 weeks ago. It’s ridiculous.

Laurence Glazier writes:

It’s getting reminiscent or the Atlas Shrugged movie.

Nils Poertner suggests:

UK is worth to watch as most things we are going to see here in Eurozone or you guys in the US are happening a touch earlier over there (UK being such a tiny, little, open, exposed, econ).

Laurence Glazier adds:

Yes, over here in London it's harder to get petrol (i.e. gas) for the car, less things available in online stores.

James Lackey writes:

I can get everything to build a car a bike or a motorcycle and mysteriously no spikes no single bearing or one simple chip - I call BS. This is almost as big as a Vatican scam.

Jeff Rollert adds:

The most common boat engine, the Merc Cruiser, is quoting deliveries of full engines for next summer.

Duncan Coker notes:

Motors being taken out of production. Sounds a lot like a book I know.



1. Human Error, James Reason. A rather disappointing academic treatise on cognitive analysis of how humans make errors which is really dragged down by obtuse academia speak. Two major sources of error are lapses and slips, and secondly errors of reason and rules. Slips are when you forget steps, lose your place, get distracted, fall into a habitual practice inappropriate for the situation. Errors of reason are using the wrong rule for the situation, where the plan does not go as expected, or the plan was wrong. When the rule doesn't fit, the expert acts like a novice.

There are the raft of heuristics. One is how humans utilize familiar patterns rather than calculate or optimize a current new situation. It is cognitively difficult to consciously think through a new situation.

An interesting section was about how the brain uses "autodrive" to do many familiar things to make room for conscious thought. I was driving down somewhere thinking, and look up and arriving at my destination, realize that I basically had no recollection of the drive there - just on autopilot. A lot of daily life is on auto pilot thus ripe for error.

It's a difficult read. Better to rent, than buy.

2. The Genetic Lottery: Why DNA Matters for Social Equality, by Kathryn Paige Harden

A flawed book addressing a difficult subject. Galton's biggest failing was his theory on eugenics. One of Harden's main points is to debunk the misconception that the genetics of race has any meaning. Race is close to meaningless in genetics. For example, people with genes from people from Africa have a much larger variation in genes than in all the other races, and the categorization of Black and White becomes meaningless.

Genetics does have an effect on personal traits. It predicts certain diseases. The attempt at connecting genetics with achievement in education, life satisfaction, and wealth, suffers from too many variables to have any use.

Their statistical studies, not disclosed, I think will not be robust.

3. John Steinbeck, Sea of Cortez, recommended by Andrew Moe. A beautifully written book and a joy to read.

4. Yottam Ottolenghi, Plenty More. Highly recommended cook book with smashing recipes for vegetarian dishes with a mideastern influence. He has other cookbooks such as Jerusalem with recipes that are real home runs. I've made a number with great success.

5. Michael Lewis, The Premonition. Excellent book about the sad state of the lack of preparedness for a pandemic in the US. Outlines some of the goings on in California to deal with pandemics and disease. Lewis is a fine writer and easy to read.

Pamela Van Giessen comments:

Lewis is a facile writer who performs a parlor trick by bringing forward, in Vanity Fair like story telling, that which will convince you that his view is the correct view. He will not be remembered 100 yrs from now.

A reader writes:

There are three sentences in the short review of The Genetic Lottery that are utter nonsense:

"Galton's biggest failing was his theory [sic] on eugenics."
"Race is close to meaningless in genetics."
"The attempt at connecting genetics with achievement in education, life satisfaction, and wealth, suffers from too many variables to have any use."

These sentences could probably be accepted in, say, the NY Times given that and other leading publications' denial of much of genetic science, but not on this Spec List.

James Lackey appreciates:

Fantastic report! I dig Lewis because moneyball was a great movie lol but really love him because his Wife is so amazing that he must be a good dude to keep her.

Duncan Coker

Thanks for the list. Has anyone read the latest from Steven Pinker, Rationality? It seems like a more scientific analysis of what Kahneman failed to do. We humans have trouble with advanced probability in every day life, so appear to be irrational, but there is more to the story. Do the shortcuts we use help or hurt. Try doing Bayesian Analysis at the grocery story. I think Pinker is one of the best writers we have at present.

An excerpt from Pinker's latest:

Why You Should Always Switch: The Monty Hall Problem (Finally) Explained
By Steven Pinker



 Has anyone read any good books lately that they can recommend. I reiterate my rec for: The Time it Never Rained by Elmer Kelton and I'd add rec for books by Bernard Cornwell. I just read Waterloo with much learning its a good antidote to chapter on Waterloo in Les Miserables.

Pamela Van Giessen writes: 

Empire of Shadows by George Black about the people who explored the Yellowstone area, all of whom had an impact on the space being made a national park. Some were dark people who ended up doing great things; others were "good" people who did some terrible things, and some were just lame. We are a complex creature. Way too much detail but probably more fascinating American history than you ever got in school.

Indian Creek Chronicles
by Pete Fromm about a young man who takes the craziest job in the world on a lark, living for 7 (winter) months in the Idaho backcountry guarding salmon eggs. Great tale of isolation, resiliency, stamina, and ingenuity. 



 It has been awhile since I have engaged with the list. Alas, the job left little bandwidth for email lists. The good new is that I currently have some free time on my hands in advance of relocating to Montana.

With this once in a lifetime sabbatical I am pursuing a side project: market-based solutions to wilderness protection. I am currently in the research phase of the idea and could use specs' assistance in locating good reading materials (journal articles, white papers, books, etc.) on extractive commodity-based economies. I have a theory that no society (maybe ever) has a strong economy where that economy is based on extractive commodities (eg., mining, drilling). Rather, these societies suffer terrible booms and busts and all eventually go bust. I would like to know if my theory can be supported or refuted, and the data that can be used in storytelling (if my theory is correct)–the time between booms and busts, how long it takes to go permanently bust, what happens to the land when miners leave, what happens to the people and their lives?

Specifically, I am looking for material that will provide data, facts, figures, and not "policy" which tends to be partisan in nature.

Does Triumph of the Optimists show historical returns for commodities?

Stefan Jovanovich writes: 

If you include livestock herding, fishing and logging as "extractive" industries, all civilizations have depended on robbing "nature" of the energy humans need to live. When no more net calories can be extracted, people either move on or die out. The resources last longer where they owned by people who want them to be productive for their ancestors and their ownership rights are secure enough for them to believe that they can, in fact, be passed on. The terrible fallacy of the non-profit world view is that it presumes that humans will be less wasteful if selfish individual and small interest group ownership disappears and the unselfish collective takes title. The opposite is always the case as the environmental record of all believers in central authority continue to prove each day. 



 In the event NYC specs are interested in taking a break from the markets (and they still have a few dollars in their pockets), I recommend an evening with Andrea Marcovicci singing movie tunes from old Fred Astaire movies such as "Roberta" to more modern takes such as "Tootsie." In addition to lovely vocals, Andrea also provides interesting storytelling about the history behind the scores. A charming evening offering much needed respite from markets gone wild.

Sort of. . . after telling the audience that at the age of 60 she can do something that most her age can't (move her face muscles), she proceeded to inform us that she had invested her monies in her lovely sparkling gown. "It doesn't go up, it doesn't go down, and I don't have to watch TV all day to learn what it's been doing."

Cute. Andrea will be at the Algonquin through 12/27.



 There is a book that lists most bestsellers from 1900-1999 called Making the List by Michael Korda.

You can claim "NY Times bestseller" status if you made the list one week, which is, theoretically, relatively easy to do (I overstate, of course) by selling 5,000 copies, give or take depending on what other books are selling in any one week period, through tracking accounts (such as Barnes & Noble, Borders, Amazon, etc.). Thus, one may be a NY Times bestseller and still sell relatively few copies. Conversely, a book may sell quite a lot of copies over, say, a year period and never make the NY Times list because: 1) other books outsold it in every reporting week period; 2) it sold through outlets not tracked by the Gray Lady; 3) it had legs vs. a one-hit wonder.

Marketing everything involves utilizing "ploys," much as I dislike that word. Whether we are selling a product or service or ourselves for a job or a romantic partner, we use anything that will give us an edge, make us seem sexy and appealing and wanted. Animals do it — the cliched example is the male peacock strutting his colorful feathers. Imbuing ourselves or our products with seemingly important or sexy attributes may be ploy but if we didn't do it then there would be no books, no movies, no Google, no Ford Explorers, and so on.

Why do some Specs have such disdain for "marketing"? How do they imagine that the companies whose stocks they buy sell their products and services? By magic?

Steve Leslie writes: 

I agree with Pamela. What is so unseemly about marketing? It may have to do with the people who work in marketing and advertising.

When you think about it, they are hired to do one thing. That is to represent the client and promote someone or something. Their tastes, political views, morals, opinions as to the quality of the product etc. do not matter. They are hired to do one thing and that is to sell a product to the public however unattractive that product may be.

There are some other professions that come to mind who perhaps stand out in this respect.

Lawyers for example. When you hire a lawyer it is for one purpose. They represent the client to the best of their abilities and with great passion and prejudice to their cause within the confines of ethics and the law. The lawyer has latitude to accept or reject representation but once they come on board they are expected to bring their full skills to the arena of play.

We hold athletes in high esteem, yet they are just paid entertainers who are promoting themselves constantly through their skills and statistics. And if there is a market for their skills in another venue, such as when Shaquille O'Neal left Orlando for Los Angeles and onto Miami, we soon find that they are more than willing to accept another offer.

My point is that everyone is involved in some form of marketing and advertising and even "ghast" selling. It is the form of the promotion which may be uncomfortable to the observer.

Look at money management. One may be one of the finest money managers around however that is defined, but if nobody knows about it and you don't have money to manage, then you won't be around for very long.

In my view, a professional can be both, excellent at their work and excellent at promoting themselves.



For those of the bearish persuasion, especially, perhaps you need a good therapy dog? 

Archie? He's the Dog Star

The 165-pound Newfoundland works his magic daily with abused and neglected children at Camarillo's Casa Pacifica. Only his drool is 'yucky!'



 On 2/5 we acquired a 4-5 year-old field English Setter stuck in shelter hell since at least November. His name is Boomer and he's excellent. Upon entering our home with three Newfies he immediately got the message that he's low man on the totem pole. When he saw our cat, Shitty Kitty, he was overcome. Clearly here was good bait. Well, maybe not. Mr. Kitty proceeded to march right up to him and telegraphed an important message about the pecking order. Check. Read you loud and clear. Most evenings Boomer and Mr. Kitty can be found curled up on the sofa together.

Boomer does have one flaw: outside means hunting time. He is forever on the chase and alerting to whatever small creature may be around. The other day we were perambulating down the block when a loud bang burst forth from a construction site. Boomer stopped, cocked his head, and when the boom/shot happened again, the hunt was on. All of which served to have me flat on my you know what, sliding down the sidewalk, legs straight out, like a Looney Tunes cartoon. Thankfully no YouTubers around.

So Boomer got a personal trainer. Someone convinced me to call in the positive reinforcement people (otherwise known as clicker trainers). Thankfully the clicker has been replaced with voice commands and treat rewards. I was skeptical about the methodology but have become a convert. Boomer is now sporting a handsome magic halter and I've got this groovy new command "Watch me" that really works. Even better, it works on people including punk teenagers. Turns out that animals, human and otherwise, can't resist responding positively to eye contact accompanied by a happy yet commanding voice and a smile. And there is the secret to getting your way in life. No charge.



 The best coffee is Arabica. You guys drink the worst coffee. I'll bring some good Kona stuff out when I come next.

I got a sampler of eight different international coffees with the new iRoast 2, in green bean from Mexico, Peru, Timor, Sumatra, Congo, Panama, Nicaragua, Guatemala, and a few others. I'm not sure if it's what they're trying to sell or just trying to get rid of, but none held a candle to fresh roasted homegrown hand-picked sun dried Kona Coffee. Most were bland. Peruvian was about the best of the bunch, but still rather bland. Some were close to undrinkable. Sumatra tasted like dirt, Panama very bland, Nicaragua very bitter, and Peru mellow, good to mix 10% with 90% Kona.

Sam Humbert asks:

Why does anyone voluntarily drink "flavored" coffee? I'm having a cup just now, because "hazelnut flavored" beans were all we had on hand in the office today. But I feel like the high-school stoner who's so desperate he'll smoke roaches. The stuff tastes like something the EPA would send HazMat-suited guys out to Jersey to detoxify.

Who buys it? Is it a ladies' drink? Would appreciate insight.

Yishen Kuik adds:

A coffee importer once told me that the flavoured coffee industry grew out of a desire to use cheaper robusta beans and yet avoid the inferior aftertaste that caused manufacturers to prefer arabica. But then flavoured coffee took off. 

J T Holley writes: 

Having earned and financed my college education working at various coffee shops such as Mill Mountain Coffee and Tea in the Roanoke Valley, and Food For Thought in Missoula, MT, I can tell you very few [buy flavored coffee]! Most coffeehouses have pots of coffee lined up on the counter of some sort for self pouring. The ratio to the best of my knowledge on refilling those was around 5 to 1 compared to regular coffees of many varieties.

Not that what you drank was good but there are two ways to flavor coffee. I have utilized both ways. One is with a horrible flavored oil and the other is via bottled syrup. The oiled way is to roast a rather cheap Columbian bean and then mix the oil and coat the beans (like applying chemicals to kill weeds). The other is much better and that is having an individual cup of coffee and adding a shot of flavored syrup. This seemed less toxic to me even though both are probably the same.

I witnessed very few people other than women that would order flavored coffee. Espresso drinks would be the exception to that. I would classify flavored coffee along the lines of 100 cigarettes. We used to joke that those extra long 100's were for people that like to ash not smoke. They don't smoke the cigarette they simply puff to be able to "ask" so they look sleek and sexy or something. Same with flavored coffee drinkers I've witnessed. They don't drink coffee like you and me, they sip and end up throwing half of it away in those plastic lined trash cans that weren't made to hold liquids!

My experience in the Navy taught me something about coffee as well. Cream and sugar were rarely added to a cup on my ship. Your sexual orientation back in the early 90s when I served was questioned if you had a stir stick in the cup. It was taunting or hazing thing on my ship. Words were slung at you in humiliating ways and made a man either quit drinking coffee altogether or go with the straight black cup of coffee to avoid the hassle.

It's amazing how psychological warfare works. I drank my coffee straight anyways so it wasn't a bother to me, but literally saw fights break out. Can't even imagine what would've come about if someone would have brought their own International Flavored Coffee onboard.

On a lighter note, I spent 6 to 8 years of my life roasting and serving coffee in all of its varieties. I have to confess that it is amazing how much caffeine is abused and that literal addicts consume the beverage. The mark-up on a cup of coffee from raw bean, to roasting, to brewing and serving is utterly amazing to me as well. The shops that I worked in did absolutely zero advertising as well, another fascinating fact of the coffee business.

Pitt Maner adds: 

I hate to think of the abuse one might get for using the following, but based on a crude experiment it does seem that cold brewing makes for a smoother (some say lack of) taste.

With respect to Nicaragua there seems to be a fair amount of variability in the taste of the coffee. The best coffee growing region is up around Matagalpa and Jinotega in northern Nicaragua.

The Nicas seem to like to drink it black with a fair amount of sugar.

Problem with all coffee though seems to be how long it has been sitting on the shelf. You don't always get a "born on date" on the package. Of course you can pay $9 a pound for some of the brands that are sealed with nitrogen gas.

I know of someone who actually was marketing small discs that you put in your coffee maker to flavor the coffee of your choice. Better living through chemistry indeed. 

Pamela Van Giessen writes: 

The Irish coffee flavored stuff is the worst. My mother served it to me once when I was visiting. Being sleepy I didn't focus on the malodorous nature but the second it hit my taste buds I literally spit it out. Thankfully we were outside. I think that stuff was made for older ladies. 

Scott Brooks writes: 

Chicory is a plant that I use in my food plots to feed and attract deer and turkey. It is highly desirable, palatable, and nutritious to deer and turkey as well as many species of birds, and other assorted animals.

Gordon Haave adds:

I am a big chicory fan. The only kind to get is Cafe Du Monde. Every other kind I have tried is terrible. That being said, I don't know that it mellows the flavor, unless the underlying coffee is much more harsh than regular. I drink it with sugar and cream. 



 I wanted to alert specs to some new books they may find of interest, the first of which I published:

The Science of Success: How Market-Based Management Built the World's Largest Private Company, by Charles Koch should be read by anyone who works in any kind of organization. I am terribly biased but I have never before seen someone take the free market view and apply it to actual business management. When I read the manuscript for this compelling book my first thought was 'Wow. Now I get how the economic principles that Heyne so wonderfully explained works in real business on a day to day, ground level.' Koch may be the most under appreciated yet brilliant businessman in the world. He's also a succinct writer that should appeal to ADD readers. When I am queen of the world, I will run it Charles Koch's way.

Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement, by Brian Doherty was reviewed last week in the WSJ. It is not succinct (clocking in at over 700 pages), and I'm not done reading it yet but it's proving a fascinating read that is the first libertarian history of which I am aware. The index is a who's who of so many of specs' favorite thinkers and writers.

A big thank you to Chair for his recommendation of His Excellency George Washington, by Joseph Ellis which tops my list of best reads for 2006. Extraordinary and I didn't want it to end. The lessons I learned will, hopefully, stay with me forever.

Finally, I am also finding The Island at the Center of the World, by Russell Shorto utterly fascinating. NYC owes the Dutch almost everything. . . which takes us back to Charles Koch who is, coincidentally, of Dutch ancestry.



You have a Newfoundland dog on hand to save you from drowning. No doubt specs, I wish man's best friend could be trained to rescue drowning stocks. Read Pooch Saves a Drowning Dog



I've been on Victor's wonderful lists for some years now and regularly read disparaging comments about promotion and marketing of this or that product, service, etc. as if the very act of promoting one's goods or services is in and of itself evil and denigrating. How do specs imagine that things are sold? By magic? Do you think that the stocks in the companies you trade would be worth anything if these firms and their affiliates didn't do all they could to promote their goods and services in the most cost efficient and results-oriented fashion? Do you really think that things get sold on advertising placed in declining newspaper and magazine circulations? Why wouldn't one turn to the internet, be it email or banner ads or whatever, where that is clearly where the action is? Or should goods and services not be promoted but sold only on the basis of gatekeeper reviews in these (declining circulation) vehicles? Should GE not promote their light bulbs or refrigerators actively but only in-store (by buying product placement shelf space) or through vetted reviewers such as Consumer Reports? Do you really want a world where gatekeepers determine what is promoted to you, and then tell you what to think about it? I don't — keep those spam mails coming from Nieman Marcus and zappos.com!. One would like it if only the best rose to the top, magically, with no promotion (of course, then your newspaper subscription would cost a lot more, and you'd pay for all tv, including local stations or your tax dollars would support such, or the Amazon discount wouldn't be as generous) but all firms would save a bundle in time and money. But this is not reality and it's never been the case. In time, the best survive but in the short run the best promoter wins (and the two are not mutually exclusive). Promotion is necessary and I'll go as far as to say it's not even a necessary evil. Promotion is good and long live promotion. With the internet it is an increasingly level playing field that anyone can join. People are inundated daily with messages from the stop sign on the way to work to the song in their head. They have a million things to do and see and read. The most effective promotion is not magazine or newspaper or whatever advertising (and I would suggest that it is ultimately the least effective because we've conditioned ourselves to ignore it) but promotion that reaches out and touches you. It may touch you by repetition, it may touch you personally, it may touch you by its outrageous message. But it must touch you, and often more than once. If you got the message the first time and responded, great, it was a message you were open to. But millions of other people might not have received the original message, or may not have been open to it at that moment. Jim Cramer is brilliant for his keen sense of promotion. Whether you buy what he is selling or not, millions adore the manner in which he delivers. Madonna is not the most talented singer in the room but she packaged herself in a way that reached out and touched people personally. She and Jim Cramer got our attention; the only difference is how they did it, but it was, at heart, extremely self-promotional. Before them there have been no shortage of savvy and aggressive direct mail marketers who have achieved great success by such promotions. The best promotion will hit you over the head like a Jim Cramer commercial, a Madonna sex video, or a repetitive email message. The best promotion is the personal touch. GE trying to sell you a fridge will lead to 0 sales which is why they bring in celebrity stand ins. Sony trying to sell the Justin Timberlake album will get 0 sales which is why Justin gets out there and self-promotes. The 'tude that the good and worthy (or successful) shouldn't promote because it is beneath them or tacky is exactly the attitude that has the libertarian party ranking somewhere below the Green party and Ralph Nader. No promotion = no attention and that is a ticket to failure for anyone or any business trying to sell something. I can well imagine any number of dead artists who achieved "success" after the fact who would love the opportunity to come back and have another go at the promotion thing. Even the rich and famous promote, and heartily. How do you think they got so rich and famous? By hiding? Whether Madonna or Tom Cruise or 'insert famous hedge fund manager names here', they all promote.




CHICAGO A police watchdog group is calling Tuesday on the FBI to review whether the Chicago Police Department is hiding crimes to lower the murder rate and make the city seem safer.

We have anecdotal but first hand evidence that they are massaging the data so that reports indicate a rosier scenario in more crimes than just murders. It’s been an ongoing bone of contention that property damage crimes are not being reported, that shootings that don’t result in murder get reported as “assaults,” and similar sorts of schemes are taking place. Frankly, I don’t think that the CPD is driving the data distortion but that commands to do such are coming straight out of city hall, happily aided and abetted by our Rocky Horror Show cast of a city council. God love an oligarchy.



The Hawaiian polymath James Sogi recommends Coercive Family Processes by Gerald R. Patterson. The book discusses how to measure and study aggressive behavior, and has already lead to great controversy in my family, as it recommends an authoritarian approach to raising children by removing what kids value, e.g. attention, when they are bad. Don't give them attention when they cry. Removing the attention is called negative reinforcement. The whole subject of how we behave when faced with stimuli of various kinds, with selling and buying being the behavior, and the environment, e.g. an economic announcement, a vivid change in a related market, or a backdrop of staged conditioning by the Fed Commissioners, would seem to call out for study and testing. This introduction to operant conditioning provides a nice summary of the kinds of things that behavioral psychologists study and might open up some fruitful lines of inquiry. A good reference to Patterson's work can be found here. In examining the diverse bodies of stimulus and response schedules covered by behavioral psychologists, one comes away with the impression that the grass is always greener on the other side and that if instead of following the promiscuous theories of cognitive psychology, that have a hypothesis for any seemingly irrational behavior, (albeit most of them are completely rational and based on rules of thumb that people in real life as opposed to college students for a buck an hour would choose), the often validated and completely specified studies of operant conditioning would be a much more fruitful line of inquiry for market people. One feels he is one the right track here as "Operant Conditioning" and "Stock Market " is almost a Google whack at 337 mentions but "Operant Conditioning" "Cognitive Psychology" has a promiscuous 38,700 mentions. It would be good to take the basic two by two table of operant conditioning and classify it by fixed ratio, fixed interval, variable ratio, variable interval, and see how these relate to predictive patterns. For example: bonds up/ stocks down, a positive reinforcer when it occurs at a steady rate with little variation (fixed interval) versus when it occurs with great variability (variable ratio). But bonds up/ stocks down, if it occurs at an unsteady state, it is an example of a positive punishment variable ratio. All the predictions of operant conditioning could be tested in the real world of humans with prices in markets, instead of on rats.

Reinforcement (behavior increases) Punishment (behavior decreases)
Positive (something added) Positive Reinforcement: Something added increases behavior Positive Punishment: Something added decreases behavior
Negative (something removed) Negative Reinforcement: Something removed increases behavior Negative Punishment: Something removed decreases behavior

Source: "An Animal Trainer's Introduction To Operant and Classical Conditioning"

Alston Mabry Replies:

As I understand it, in animal learning trials, if you put the rat in the cage with the little lever, eventually, in the process of exploring the cage, the rat pushes on the lever, and there is some possibility that a bit of food plops out. The process repeats, and the rat learns to associate pushing the lever with getting food. Interestingly, if what you want is for the rat to push the lever a lot, you provide the food reward only intermittently and randomly. If the food is provided each time the rat pushes the lever, the rat will push the lever only when it is hungry. However, if the food appears only occasionally when the lever is pressed, the rat will press the lever over and over, brimming with anticipation. Now let's assume the Mistress is a master trainer, to her own benefit. She places the rat (trader) in it's cage (home office with high-speed internet access, TradeStation account, etc.) and waits until the rat discovers the plastic keys on the keyboard and starts tapping them. Then she provides the rat with a food pellet (profitable trade). If the Mistress wants the trader/rat to trade as often as possible, she will reward the trader/rat with a profit (food pellet) only intermittently and randomly. If the trader/rat could get profit/food any time it pleased just by tapping the keys on the keyboard, then it would tap the keys only when it needed money. But because it is actually the Mistress who is in control, and she wants to maximize trading behavior from each rat, she keeps the rewards as random and unexpected as possible. In fact, "unexpectedness" is one of her most important tools. By the Rescorla-Wagner model of conditioning, the greater the unexpectedness of the reward, the higher the associative strength of the learning. This is why it is so effective for the Mistress, after a rat has tapped the keys many, many times with no reward at all and become convinced in bleak despair that no further reward is possible, to toss a nice food pellet into the cage and provoke the rat to even greater efforts.

Russell Sears responds:

This is of course the opposite of what is recommended for a baby totally dependent on the parent. I find this one of the greatest challenges of parenting, determining when to use negative reinforcement to cut off the dependency. And looking around to family and friends, especially with young adults, it seems many have never truthfully acknowledged this.

Steve Leslie adds:

This is exactly the foundation of slot machines. Intermittent rewards promote more activity on behalf of the participant. The theory is that if one gets rewarded on equal installments the activity is seen as work, whereas if one receives an intermittent reward then it is seen more as recreation. This is also how companies motivate their salesmen and saleswomen. They conduct sales contests but they do it randomly. It is one way that the company keeps the salespersons attention. Brokerage firms were famous for offering sales contests during the summer months, typically the slowest months for commissions to keep the brokers working and keep the revenue flowing. Here is a sidebar to this discussion. In Las Vegas, if a casino advertises that they give a 99% payout on their slots, then they must pay out on average the machines that they have posted to pay out that amount. This does not mean that every slot machine in the casino pays out 99%. It applies only to the bank of machines that are listed as paying out this amount and the patron has to look long and hard inside the facility to find those. What this does mean is that if you took a large enough sample size for example a $1 slot machine and played this machine forever and each individual were to put $100 in and no more, taken collectively they would receive back $99 on average. Now statisticians will tell you that everyone who plays slots will eventually go broke. The reason for this is that people continually take their reward and plow it back into the machine until eventually they have spent their full bankroll. Therefore the machine will collect everything, it just takes longer if the payouts are higher. This applies to all other games as well including roulette baccarat and dice. Even though you can approach almost even money odds such as betting the color on a roulette wheel, the player only on the baccarat table, and the line on the craps table, if you keep playing them long enough you will lose your entire bankroll.

Jay Pasch replies:

Markets are authoritarian, nature is authoritarian, society is authoritarian, the world they're going to live in is authoritarian, "ya gotta serve somebody" as Dylan would say. Of course there is great benefit to self and others in going against at times, i.e. Thoreau's Civil Disobedience, the rebel call, et al. But on the battlefield of child-rearing, relieving one's self of authority is like dropping one's arms on the field, and pants, and waiting to take one between the… eyes. What works best for the young warriors is that they have 'contracted' to decency and respect with all of the ensuing benefits and luxuries given their meritorious behavior; but break the contract and it is they that surrender their benefits, rather than the mindset that some sort of entitlement has been 'taken away'. Under this arrangement the kids have buy-in, they feel important, creative, their ideas beneficial, because they were asked to help create their world in the first place. They see clearly the reality of their own behavior, understanding it was they that surrendered their privileges rather than the big bad general removing their stripes…

Daniel Flam replies:

It would seem to me that all education revolves around pain. So you say we can't "flik" the kids? Ok let's give them a mental pain Like take away something they like, put them in the corner, its like the way the intelligence interrogators in the western world operate under the democratic laws, we just find a better way of inflicting pain in confines of the law… I find the same with the market… which bring an old adage… "No pain, no gain" How would we go about studying pain in the market?

Steve Leslie replies:

First let me say that "No Pain No Gain" is a very dangerous statement. Physical pain while training is an indication that one is approaching a physical limit. By going too far, one can instill permanent damage. Only a fool would feel a muscle tearing during a set of lifting weights and continue to lift weights. Now there are minor aches and pains that an athlete must endure however there are limits that the body can withstand. An athlete who is in touch with their body is well aware of the difference. I am sure my good friends Dr. Goulston and Dr. Dorn are much more qualified than myself to comment on this subject matter and I hope that they do weigh in. However, there are three distinct subjects here.

Giving a child an iPod for excellent grades is positive reinforcement. Withholding a reward from a child or taking away privileges would be negative reinforcement. Yelling and/or corporal punishment would be forms of punishment They are very different. The problem with punishment is that it has a very short term result. And repeated punishment eventually will result in no positive result whatsoever. Please forgive me for probably misrepresenting this study but here goes: There was a famous study performed where an electric grid was installed in an enclosed box. Mice were placed in the box and half of the box was shocked. The mice went over to the other side away from the pain. Then a barrier was installed so they could not move from one side of the box to the other. Then the mice were shocked. They initially tried to escape to the other side. However the barrier would not allow them to move over. After repeated shocking, the barrier was removed. The mice were shocked yet they did not move over to the safe side. In effect, they were conditioned to just sit and take the pain. Think about this: When your dog runs away and you beat it. That is punishment. If the dog runs away and you beat it again it will be trained to stay away. If you beat a dog long enough eventually it will just lie there and allow itself to be beaten. This is shown dramatically in abused wives. They become beaten physically and/or mentally and that if this occurs long enough that eventually they just sit there and continue to be beaten. And should someone come along and offer them sanctuary, the abused wife will chose to stay with the abuser. Someone once said you train animals but you teach children. If you really want to go into deeper understanding of this, I recommend an exceptional person Dr. James Dobson either in his numerous books on this subject most notably Love Must Be Tough. He also hosts an extremely informative radio show entitled Focus on the Family. My church radio station broadcasts this as do many Christian radio stations around the corner. He is seen very regularly on Fox shows such as Hannity and Colmes.

Daniel Flam adds:

Having spoiled brats that everyone in the room hates to be around because you don't want to put them in their spot, Will just delay the point in time where someone that is not a family member will put him in place in a most unpleasant way. Bringing up Children is like painting a work of art. You must use all the colors of the spectrum, although some colors should be used a very small dose, or you might get an ugly result. I see additional factors to the one suggested:

Today we find names for anyone who doesn't behave like a sedated rabbit. This reminds me of that shirt "I hate it when people think I have ADD! Oh look, a chicken!"

James Sogi replies:

Rather than 'greed' and 'fear', counting, like behaviorism, is more scientific. Quantify to predict. The market trains everyone to do the wrong thing. When one is trained to go long, the market goes south. When one is trained to play the range, it breaks out. Of course it trains one in the just the most intermittent and thus most powerful manner, like slots, to go the wrong way. It is called variable reinforcement. Counting gives the clue that the training is in play and not to follow the masses and to stay a step ahead of the market. Be the trainer not the trainee. Who is in control here after all. Little babies train their parents. It is the brat in public that has the haggard parent running around like a chicken. Both are miserable. Proper training involves the use of love attention and affection. It is not the rats-in-a-box syndrome. The natural reaction is to run to the crying baby. That merely reinforces the crying. The natural crying pattern has variations. When there is a break in the first few moments of crying, use that moment variation to sooth the child. The reinforces the calm not the cry. Inconsistent parents give mixed signals can cause confused children, unhappiness. Consistency give certainty and clearness to the child. I tried to see how many days we could et my kids without crying. How many times per day would they cry? Why did they cry, what were the operant conditions? Quantify the responses. Forget the mumbo cognitive jive. In the market, the public rushes to the upsurge, but is this the correct response? When the market tanks, the public trained panics. Again, scientists, is this the right response? Quantify one's own responses to get an idea of what works, what doesn't. consistency brings profit.

J. T. Holley reminisces:

My PaPa would espouse to me "the grass might be greener on the other side but someone has to mow and rake it too" whenever I would act like those cognitive psychologists! I think the operant conditioning like B. F. Skinner is appropriate for those dealing with the markets. The classic philosophy (shortened and brief) is that Plato felt to "know the good was to do the good", whereas Aristotle had a more operant conditioning belief in that "to do the good was to know the good".

Russell Sears suggests exercise:

What the kid needs is an outlet for his energy. Have the kid run a few lapse, go a few miles on his bike, or even shoot some hoops. I would suggest, that what Lackey encourages his kids to do has more to do with his kids well adjusted behavior . Lackey little league, and coaching wouldn't see these kids. Kids with no competitive outlet, takes it out on the adults. Exercise generally works better than any drug for mild depression. But what Doctor will prescribe 2-3 miles run everyday for 2 months to a single Mom for her kid. Its called "child abuse". But giving him mind altering drugs, to a developing growing brain, is called "therapeutic care."

Pamela Van Giessen laments:

This seems to be part of a larger issue where every single moment of childrens' days are being structured and moderated by adults. There is school, soccer practice, swim lessons, judo, music lessons, play dates, etc. It's kind of like jail. Even worse because at every turn there are adults loitering, supervising, and otherwise keeping a watchful eye. I call them helicopter parents. They mean well, but I can't help but be eternally grateful for my parent's lack of vigilance. I read an excerpt from John Dickerson's book about his mother, Nancy (first female TV news star), where he noted how absent his parents were and that he and his siblings were often left to their own devices, and how, in the long run, that turned out to not be an entirely bad thing. My American nephews are supervised 24/7 and while they are smart and adorable children, I notice that they are more prone to temper tantrums and the like. My Dutch nephews roam free; they rarely have a baby spell. And, honestly, the Dutch kids seem more creative and amusingly naughty. I like children who stick carrots up their nose at the dinner table, provided they are stealthy and quiet about it. Kids don't put up with other kid's temper tantrums and so children who hang out with children stop behaving like brats — at least if they want to have friends. At the age of seven, I was biking a mile to go get candy. I rarely see children about my 'hood without adults. Can't they even go to the bodega without Mom? At what point will they not be supervised and watched over? I've also noticed that the young women (oh, how I hate saying that) that work for me seem to approach their jobs, careers, and even daily to-do list like a school exam that they must ace. They miss the larger point about spontaneity, about creating, about doing as you go and it all becomes about getting an A and moving on to the next "test." They also seem to structure their lives accordingly. From x-time to y-time is work time, from z-time to a-time is not work time. One hopes that romance isn't scheduled so rigidly. When I think of all the wonderful experiences and successes (and even some failures) I've had by being spontaneous, by looking in rooms I wasn't due to be in, by not scheduling my life with much structure it makes me sad to see us creating a society of automatons.

Nat Stewart adds:

One of the most worrisome trends in my view is the "bans" on student organized, spontaneous recess games, which for me were always the highlight of the day in the early grades. The spontaneity and sense of it being "ours" and not a teacher/instructor lead activity also increased the value and fun of these activities. I think for many kids this type of vigorous exercise is almost a need or requirement, It certainly was for me. Kids who are naturally curious, such as this kid in the article who is a "gifted reader" need independent outlets to exercise their own curiosity, and opportunities for individual study and thought. I think many of these kids are just bored stiff! The extreme bureaucratic environment is not a good learning environment for many children. Kid can use logic, and I believe many start to rebel and have trouble when they are repeatedly asked to do things that they do not find logical. "Johnny has a problem…" Well, maybe he is mad that so much of his day is wasted in useless, pointless, mind numbing activities? Maybe he would rather be off on his own, reading a book. Kids can be sensitive to injustice, and little things over time poison can poison ones attitude to the entire process or system, which is unfortunate. All kids are different. Labeling children with 1000 different Disorders is only a smokescreen that hides our severely dysfunctional system.

Professor Gordon Haave replies:

I would suggest that what is wrong with the children is nothing… except a total lack of discipline and their learning at 5 when taken to a psychiatrist that being crazy is normal and they can do whatever they want because they are not being bad, they are "sick". Another good thing about Oklahoma: I don't know anyone who sends their kid to a psychiatrist. Kids get discipline, hard work, and an ass-whupping if they do something particularly egregious.

November 11, 2006 Troubled Children What's Wrong With a Child? Psychiatrists Often Disagree By Benedict Carey

Paul Williams, 13, has had almost as many psychiatric diagnoses as birthdays.

The first psychiatrist he saw, at age 7, decided after a 20-minute visit that the boy was suffering from depression.

A grave looking child, quiet and instinctively suspicious of others, he looked depressed, said his mother, Kasan Williams. Yet it soon became clear that the boy was too restless, too explosive, to be suffering from chronic depression.

Paul was a gifted reader, curious, independent. But in fourth grade, after a screaming match with a school counselor, he walked out of the building and disappeared, riding the F train for most of the night through Brooklyn, alone, while his family searched frantically.

It was the second time in two years that he had disappeared for the night, and his mother was determined to find some answers, some guidance.

Sam Humbert responds:

The long-time sense of the word "discipline" was to instruct, educate, train. It somehow became twisted (as has the word "liberal") to mean, in common usage, Prof. H's "ass-whupping." What does an "ass-whupping" instruct or educate? Well, it teaches that if you're frustrated, angry, tired or stressed, and have the advantage of being bigger and stronger than the other guy, then it's OK to indicate your frustration with verbal or physical violence. Is this the what a parent wants to teach? "Discipline", in the bastardized sense of the word, means the parent has failed. Failed to authentically instruct, educate, train. And is now lashing out, motivated by frustration, not by a desire to educate or improve the child. The parent's reptile brain is in charge. And what becomes of kids who are beaten into submission for 12, 14 years.. But then become teenagers? How will they conduct themselves "out of eyeshot" of their parents, when their parents are around to "control" them with "discipline"? What actually does work in parenting — since "discipline" doesn't — is spending time with kids, and most especially, meeting them at their level, not at your own. Becoming engaged in their lives, their interests, their hopes, fears, dreams. Really hearing them, rather than lecturing them. My kids have never been "disciplined", and many parents in our town have commented to us that there are — far from being "undisciplined" — among the kindest, most thoughtful little boys they've met. The proof is in the pudding.

Professor Gordon Haave replies:

Although, as I have said, I don't believe in Ass whupping, I don't think what you are stating is correct. In its simplest form, it is the most crude way of stating "actions have consequences". Most of this on this list know that there are better ways of teaching that then ass-whupping, therefore they don't do it. Around here in Oklahoma, it is probably not very common, but was even just 15 or 20 years ago. Now, what goes on in NYC is simply the opposite message, that actions don't have consequences, that nothing is your fault, that if you look out the window during class or talk back to your mother you have a problem that needs to be medicated. Mr. Wiz suggests that those who receive an ass-whupping grow up having learned the wrong lessons, etc. I submit that it is better than the weirdos who grow up thinking that actions don't have consequences. They are more prone to destroying families and societies, in my opinion. So, I will restate: Ass-whupping is preferable to the NYC psychobabble approach, even if it is crude in its own right.

Stefan Jovanovich responds:

The "ass-whupping" meme seems to me more than a bit overdone. Striking a small child is like beating a cat. Children are small creatures compared to us adults, and they spend most of the years up to the age of puberty navigating around us comparative giants. Simply restraining them physically - holding them still - is enough physical punishment for "acting out". What was notable in the article about poor Paul Williams is that his father - the person most likely to have the physical strength to be able to hold him still - is nowhere mentioned. You can step on a cat's tail, and she will instantly forgive you even though the pain was excruciating. Intentionally strike the same animal with one-tenth the same force, and she will view you as an enemy until the day one of you dies. I agree with Gordon's skepticism about psychiatric diagnoses. Since they almost always have no clinical basis in blood chemistry or any other quantifiable physical symptom, they are usually like visits before the parole board. The patient - i.e. prisoner - has to reassure everyone that he is "sorry" and will make a sincere effort towards "rehabilitation" - i.e. sitting still in school. My Dad's theory was that compulsory education was invented so that the adults could find somewhere to warehouse the children during working hours. In his darker moments he also speculated that it was an expression of society's underlying belief that poverty was a crime. Since almost all children were destitute, society was simply doing what it did with other criminals - locking them up and then pretending that incarceration had some useful purpose.

GM Nigel Davies responds:

I agree. And given that one of the tenets of libertarianism is to remove physical force and coercion from human affairs, this seems to be given quite the wrong message. I strongly suspect that kids who get beaten will tend towards an authoritarian attitude to life. There are more creative ways to instill discipline, such as gaining a child's attention by showing them something that actualky interests them and using a system of reward and punishment based on what they like to do. If good behaviour is rewarded it represents a trade and fosters an attitude to life based on exchange rather than force.

The President of the Old Speculators Club:

I recently read an article with a darker view — suggesting that Americans who send their children to public schools are allowing the "state" to "kidnap" their children for 8 hours a day. Hours in which they are taught what it is believed they should be taught, and shielded from those things that might make them less than docile, cooperative citizens. The goal is to produce individuals who will view governments the provider of all solutions.

Roger Arnold replies:

When I was a boy, getting a butt tannin from time to time was a part of growing up, as it was for everyone else I knew. I can still hear the sound of my father's belt as it is pulled through his belt loops. My mother would send me and my brother to our room with a pronouncement of "wait til your father gets home", and we would sit in there laughing and joking until we heard the front door open — and oh my god that's when the terror began. Nowadays we joke about it at family get togethers and, although I have never raised a hand to my own child, I can understand the utility of the spanking as a tool of nurturing.

Jim Sogi adds:

The characterization as 'authoritarian' places the wrong emphasis. The reason is that firstly operant conditioning is not necessarily controlled by parents as the authoritarian and that secondly rewards are more powerful than punishments. Everyone is subject to operant conditioning regimes, some of which they may be aware, but also by many others of which they are not aware. There are in fact random conditioning regimes that wreak havoc on the unsuspecting. The result is superstitious behavior and the development of personal "issues" and psychotic behavior due to the various random influences at work creating random patterns in people without their knowledge. We see this in the markets daily. When one is not aware of the theories of social learning, feedback loops can be created that are destructive and create bad habits. When one is aware of feedback patterns in social situations one can control the bad influences and foster the good. A human cannot opt out of conditioning regimes. They exist everywhere in the family, in society, at work, and also as random elements in daily life. The question is not whether social learning takes place, the question is which regime is going to dominate your development? The random crying of a baby? The whims of a teenager? The random flow of traffic? Or the structured goal oriented regime of successful adults in the pursuit of happiness. To believe one is not conditioned every minute is denial. The question is who is doing the conditioning and to what ends? In the delightful and hilarious book, Taxonomy of Barnacles by Galt Niederhoffer, read during the last vacation, the issue posed by the author was whether nature or nurture were the determining factors in the success of a person. This issue has been a great debate in our family and I agree with the author that nature is the predominant influence, and that we in fact are subject to many of the same traits our grandfather's displayed to a remarkable degree, and that conditioning might try to guild refined gold or paint the lily, but the mold is cast genetically to a much greater degree than most are willing to admit.

Steve Leslie offers:

Jim, you have nailed what I find one of the most difficult aspects of trading. If I open a trade and the price goes the direction I want, I feel rewarded; if it goes the other way, I feel punished, but these feelings have little to do with actual success. Success is trading when, and only when, one has an edge. Individual trades may not be profitable because of variance or because the hypothesized edge is illusory or has fallen prey to changing cycles. Success is managing risk so that, after the inevitable setbacks, one lives to fight another day.



Both my grandfathers bought Exxon in some distant time. As my mother is fond of reminding me — it paid for her and my father's parents' retirement, funded some of my parents' endeavors (house, cars, etc.), paid for college for three children, (sadly) enabled her divorce, is now funding her and my father's (separate) retirements, and now is partially in the portfolios of the grandkids', where, presumably, it will be used to further fund great-grandchildrens' education, a retirement or two, etc. Exxon has been very good to my family on both the maternal and paternal side. A colleague tells me about how Disney stock has been very good to her family.

Buy and hold has been a very good thing indeed for me and mine. I hope I will have opportunity to gift my SBUX to a future generation as well. And before some spec comments — regardless of where it has been this year or last year or even 5 years ago, it is still way higher than what it was bought for and it has split several times (I stopped counting at the 3rd split, I think it was). Stocks may not progress in a straight line up but the line is clearly up over time.

That said, we will refrain from making much mention of the Bethlehem Steel stock in the family portfolio, though I imagine Exxon gains substantially outstrip the BS losses. I think.

Vic comments:

As the Abelprecbifurcflecprudents would say, there is little employment in Bethlehem right now, and many unused warehouses and railroad sidings.

J. T. Holley adds:

Yeah, and those Woolworth employees and their shelves seem very empty as well, not that there are umpteen million times more people shopping at Wallymart than ever shopped at the ole' Wooly.

Not to worry about the railroad sidings either, their foundations are put to good use across most of the U.S. through the Rails to Trails program. At least the labor that produced those tracks didn't die in vain!

Tom Larsen mentions:

Here is a buy and hold story that I think comes from a book edited by Charles Ellis called Classics: An Investor's Anthology

A money manager was called by a client's widow, who asked to meet with him about some stocks she had found in her husband's safety deposit box. When he examined the certificates, he came to the realization that the deceased had a financial secret. The money manager realized that each time he had bought a new stock in his client's managed account, the client had bought some more stock elsewhere and had it delivered out to be put in his safety deposit box. He had done this for many years. Many of the stocks were issues the manager had sold periodically for all of the usual good reasons, but that the client had put away permanently. The manager was amazed at the value of many of the individual issues in the box that he had sold over the years for small profits. So the manager was a good stock picker, but the client was a good stock holder.



Having previously debunked love as panacea and the Golden Rule as hogwash, I will proceed to explain that humans are as breeds of dogs, and try to make you happy about it. This first step of cooperation may be the only way, outside eugenics, to rescue our faltering world.

My credential for this essay begins as a semi-feral kid living across a northern swath of American states who took behavioral and social cues from animals. Not surprisingly, I became a veterinarian daily walking for a few years lines of hundreds of kennels of cats and dogs and stalls with horses, cows and pigs. I left that calling to travel the world for a decade under a backpack studying and taking notes on the myriad aspects — toes to earlobes and the conduct — of the peoples in 96 countries. I specialized at once on either end of their bell curves thinking that once these border pieces were in place, the rest of the puzzle of humanity and solution to the world falls into place.

For example, I remember trailing in the streets of Maputo, Mozambique an albino black man I silently called Oxymoron until he noticed, stopped and confronted me. I explained forthrightly that I was interested in his anomalous color to which he intoned, 'Follow me.' We went straight to a laundromat where I met his lovely jet black wife and identical twin albino girls. 'The doctors tell me they are probably the only albino twins in this country,' the wife reported.

As certain as we are individuals, each type in the crayon box of humanity has varying capacities for physical and mental performance. White trash like me think slow as February molasses but are thorough, Mexicans talk rapidly as auctioneers, Orientals have heart and beehive minds, Indians bend and multiple faster, if only Jews could drop their Bible and climb as a superior race, Native Americans booze and brawl, and my favorite line on the football field is 'Did you ever try to catch a black guy.' These and other 'tribes' are the world orchestra sections of evolution.

Their symphony today offers the crash of egalitarianism, the belief in the equality of people. My experience is contrary, that different strains of humanity offer varying capabilities. In a sentence, a barnyard version of George Orwell's Animal Farm reads, 'All humans are equal but some are more equal than others'. This is the specificity of evolution. To embrace its truth is to take one giant step forward in your life as well as be entertained.

Suppose an egalitarian physician is called to set the broken toe of a man and instead goes out and breaks a toe each of nine other men, explaining that it will make them feel better. The study is written into the AMA journal and Congress passes a law that everyone must go about on crutches. That's where the world stands now.

Instead, go forth with compassion to look for the relative pluses and minuses of each race that bring greater vitality and color to life. By giving the next person the benefit of doubt when greeting him, you create opportunities that will not be available if you assume the worst in others and act like it. Oxymoron in Mozambique invited me to dinner after the laundromat which I politely accepted, and that led to mutual gain.

Pay attention to this truth, exert your will, and choose happiness for everyone.

Pamela Van Giessen adds:

Beautiful post. We are like dogs, and that is actually a good thing. I can not imagine a life with just one breed of dog any more than a life with just one sort of human.

Some dogs are flushers, some retrievers, some working, some herding, some are ratters, some are for sitting pretty on lovely ladies' laps. Each serves an important function. I do not always want them all but I admire all of them from Affenpinchers to Yorkies and everything between. Each has something amazing to offer though not all are great at all things. Just this weekend I was perusing my dog books, thinking about which breed would make a good companion for my Newfies as a personal trainer, and there was not a one that did not have wonderful strengths but also some shortcomings. I am leaning toward a Petite Basset Griffon Vendeen or a Brittany for the Newfs.

Bo has written a very wise thing. One can take it even further and recognize that you do not train all breeds the same way. Newfies demand training at a young age, but a soft touch. Rotties need a firmer hand. Pointers are super smart but can be skittish if not given purpose. Springers never stop moving, and Goldens are children well into adulthood. All are great if trained according to their disposition and strengths. But at the end of the day, Clumbers just won't do well in obedience competition, St. Bernards rarely excel in agility competition, and a Pomeranian isn't going to a pull a heavily weighted cart . No amount of training or work will ever overcome their physical limitations and DNA. I often gasp when I see people who insist on forcing an issue with a breed where success is most likely outside the realm of possibility and from which there is rarely a good outcome. If you want to excel in agility why wouldn't you get a dog that is physically appropriate for the task instead of forcing a square peg into a round hole?

Dylan Distasio comments:

In contrast to the previous replier that found the parent post a beautiful one, I found a lot of dangerous posturing bandied about with little scientific evidence for most of the assertions made, some borderline if not outright racial slurs, and an incredibly flawed analogy involving crutches. I may be at a disadvantage in this response, if the parent was actually a satirical post, but I have a hard time reading it that way.

I will also try to set aside my bias of disliking most dogs as pets versus work animals as I find their slavish devotion and dependence on their masters an undesirable trait. That, alas, is a topic for another post …

Bo wrote "These and other 'tribes' are the world orchestra sections of evolution" after opining on the traits of various races. Assuming for a moment these generalizations are true (which I don't in general), there are no allowances made for cultural versus genetic transmission of these traits ( i.e. meme versus gene). The word "evolution" carries a connotation of selection pressures on the gene pool. I am not aware of conclusive scientific evidence for any of these assertions.

Culture is a powerful transmission medium for changes. People cut loose from their historical culture who emigrate to the US develop a new one that is often strikingly different from that of their ancestors within a few generations.

The parent's lumping together of races with an enormously broad brush done with sloppy abandon. "Orientals" (who I am not sure enjoy this term for the most part these days) have a wide variety of cultural traits across tribal and state borders. I don't think a Korean or a Chinese person would appreciate being thrown into the same bucket as a Japanese one. The comment on the Native Americans is flat out derogatory and racist, nuff said on that one.

Would the parent also have us believe that the Jews have a special need for religion in their genes that is not present in the genes of other races?

And while I will grant that selection pressures may have created some physical differences in muscle type distributions across races in general, there are exceptions in every pool. I am not sure that there is even conclusive scientific evidence in this realm, but then again, I'm not up on my eugenics reading.

The assertions made about meaningful differences in intelligence across race is spurious at best, and destructive at worst especially considering the difficulties in defining and measuring intelligence in general.

We are also blessed with this gem "All humans are equal but some are more equal than others'. This is the specificity of evolution. To embrace it's truth is to take one giant step forward in your life as well as be entertained." I'm sure Orwell is rolling in his grave seeing a satire used to rally against the Stalinist corruption of socialism used to argue for the inequality of the races based on a eugenic argument.

The physician analogy is flawed and laughable. It left me speechless; I confess to being unable to elaborate on it.

As the parent closes, we get some mixed signals such as "By giving the next person the benefit of doubt when greeting him, you create opportunities that will not be available if you assume the worst in others and act like it." which sounds like a good idea that would argue for recognizing the individual not the stereotype the parent elaborated on earlier.

However, we are left with a closing that sounds like fascist propaganda "Pay attention to this truth, exert your will, and choose happiness for everyone." In other words, embrace a worldview based on perceived genetic differences of races based on broad stereotyping, and exert it on others.

I can almost see that the parent's intent was good here, it is a shame it's wrapped in a message of stereotype, abuse of the scientific method, and at times outright racism.



Every year I venture back to my roots to visit the Geauga County Fair where it often seems that time has almost stood still. Hoover's fudge has been selling the best fudge in the world to locals since the beginning of time; the corn dogs are hand dipped; the fries greasy and skinny and drenched with vinegar. The 4-H animal husbandry competition is always robust, the draft horses huge and wonderfully tricked out (the agricultural version of Harleys), the Amish kids are almost always found by the grandstand sneaking cigarettes. This year there seemed to be a few more veteran tents, the Dems still had a lousy location, the GOPers had prime real estate but both tents seemed a little empty (maybe everyone was getting corn dogs and fries and too sugary lemonade).

This year did bring some changes, though.

First, a couple of new Walmarts opened in Geauga County, one smack dab in the middle of Amish country and another at the other end of the county. I expected long faces but the locals appeared happy about it. The feeling seemed to be that existing clothing shops such as Peebles would sell more discount "upscale" goods (Woolrich, Tommy Hilfiger, et al.) and let Walmart have the very low end; Giant Eagle might feel it but since their produce is not so hot and their prices are not all that cheap maybe they deserve to go out of business, and Heinen's, the upscale grocery store, would be fine. Meanwhile, everyone was tickled about the low prices. Johan and I ventured into one of the Walmarts, my first visit to the establishment, and I have to say I loved it! I loved the greeter, loved the merchandise, and really loved the prices. It was bright and while not hip in the manner of Target, the goods were nicely displayed. The stores seemed to be doing decent business though it was a bit slow on Labor Day but that was because nearly the entire county was at the fair or stuck in traffic trying to get to the fair (we hit the fair early and took the secret back way, figuring that the wet weather earlier in the weekend would lead to high attendance).

The second change took place at the fair. This year we were fortunate to see the new coon hound races whereby three coon hounds chase a fake raccoon across a large pond and up a tree. It was a crowd pleaser and also offered some interesting lessons. In the first race the hound that seemed to have the greatest lead gave it up because his front legs were too high in the water and he was not properly using his back legs. He was fast, but not using all his equipment led to loss. In the final heat where the three previous winners faced off, two of the hounds were neck and neck the length of the pond. As they neared shore they started snipping at each other. Meanwhile, the dog that everyone had given up for loser and that appeared to be swimming in the wrong direction materialized out of nowhere to beat the other two to the tree. While the "neck and neck" hounds were busy snipping at each other, the apparently really smart hound swam the shorter distance to shore and then ran the rest of the way. Lesson: taking the shortest distance to the prize will not necessarily get you the win; it's important to play to your strengths (dogs run faster than they swim); and, finally, while you are busy looking at your closest competition someone else is bearing down out of left field. The crowd loved it and roared.

Ohio now has two of the poorest 10 big cities in the country (Cleveland and Cincy) but life in Geauga looked to be on an upward trajectory. A fair bit of building, some of it still in the planning stages, more businesses in most towns (though not all). Real estate prices not out of control. You can get a nice farm house, updated, with 6-12 acres in Middlefield for under $400k, and a sizeable ranch or colonial in a very desirable village in Cuyahoga County for $300k or less. One local realtor informed us that it is a buyer's market at the moment, softer than it has been since 9/11, but she is still selling homes. Over on the northwestern side of the state the fields were flush with nearly ready to harvest crops.

Folks looked to be happy and enjoying life. Maybe it was the $2.29/gallon gasoline in Chesterland or the agricultural subsidies. Maybe they are just too fat and happy to know otherwise. Or maybe more rural folks are naturally optimistic or see that life outside an urbanized view of things is not so bad. Anyway, it was nice to go home again and see that the standard of living continues to rise for most.

John Kuhn mentions:

Talk about memory lane: I caught my first calf in a calf scramble at the Idaho State Fair when i was around 11. 1953. Named him "Sir Cumference." Sold at .33/lb. An outstanding price as he weighed over 1000 lbs by the end of the summer a year later. Pretty good ROI, (small rope burn) for an 11 yr old. He had a nasty disposition however, even before the hideous heel flies began to emerge (the 2" long grubs migrate from eggs laid on heel up and out thru the back which ugly emergence irritated even the most docile beast. We would paint the stock in creosote but did not always get 'em soon enough). I got to show him and talk to the folks on the Sheriff Spud TV program too that year. I figured I was pretty much a celebrity what with the TV appearance and being the President of the "Pick and Shovel" club. 4H.

Geeze, makes me want to go out and buy me some cotton candy and fried dough. But now all you can get downtown where I live is mocha lattes. That standard of living thing.


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