Merry Christmas – Sort of

Merry Christmas – Sort of

This holiday stuff is getting old. Yea, yea…Merry Christmas…blah, blah, blah. I don’t feel well this year, but this has been festering for a long time. Even saying bah humbug doesn’t seem to be worth effort. After all, it doesn’t work. The holidays just keep coming – faster and faster. 

How about next year we skip holidays? Just forget them all. Keep the days-off work, after all I haven’t lost my mind. But days-off are clearly the reason for the season. Call it what it is: a day-off. That I can celebrate. Yea! A day off! No work, but full pay. Sounds like a reason to celebrate to me. 

That’s more genuine than Happy Thanksgiving or Merry Christmas and is clearly superior to Happy Presidents day, Happy Memorial day, or Happy Labor day – The last three, to my point, sounds strange because we never say them because we aren’t all that happy about them – except for the day off.

I think I’m on to something. Happy Day-Off Day! Period. Full stop. Every day off is a celebration. It doesn’t matter why, so get rid of the name as it implies obligations. 

For example, Christmas implies gifts. You feel like you need to give certain people something and you hope you get something better in return. What a waste. I have a garage full of “gifts”, some of which I urge Brenda to re-gift, which she resists, much to the benefit of many of you. 

And even though I like the fireworks on the 4th of July, I will give those up to keep the uniformity and clarity of no more holiday names and their implied obligations. If I feel the need for fireworks, I’ll comment on Brenda’s cooking and Boom! I’ll see stars.

And the obligations, especially when kids are involved, never seem to end. You’ve heard the saying; I need a vacation from my vacation. Well, I need a holiday from the holidays. At least one year. Easter egg hunts, pumpkin carvings, and costume parties, all make me think that this isn’t a day off from work. It’s an unpaid second job.

However, that doesn’t mean we shouldn’t share a few moments to reflect on how lucky we have it and appreciate the blessings in our lives. And do my favorite thing in life: share laughs, tell stories, and cook some tasty treats with friends and family. We try to do it every chance we get and urge you to do the same. But that’s not a duty-driven obligation, it’s an joyous thankful avocation.

So Merry Day-off Day and Happy Holiday-Free New Year!

You’re all awesome. Be safe and well.

Doug and Brenda

PS. As you suspect, Brenda isn’t as committed to this as I am. But she went to New York with her sister so wisely I wrote this before she got back. Obviously, I didn’t show it to her until it was too late to edit. That’s not what I should have done. But we’re coming up on our 30th anniversary and so I’m just meeting expectations. No need to mess with what works. To be fair, she would want to add: We’re fine; We hope you are too; Merry Christmas and Happy New Year!

Markets and China

Markets were down a couple points last year and started this year looking worse. As my students and followers know, this was expected. I have been worried about the Fed rate hike and a China collapse for some time.

Today on This Week with George Stephanopoulos Nobel Laureate Paul Krugman finally started to agree with me. Unfortunately, he still is a step behind.

Here’s what he said, followed by my take.

“PAUL KRUGMAN, NOBEL PRIZ-WINNING ECONOMIST: Well, China is really, really messed up. I’m definitely buying into the hard landing for China story now. It looks like a bad mess. Looks like Japan, when it had this big bust up only worse without the social cohesion. So China looks bad.

The question is whether you can make that a story where the rest of the world gets dragged down. And the numbers make that a hard story to tell. Now even now, even with all the globalization, the United States only sells about $1 in $7 of what we made to other countries and most of that is to Canada, Europe not to China.

So it’s a little bit hard sell that story.”

He’s finally on the same page with me on the hard landing. And his point on the lack of social cohesion in China being a problem captures the crux of why the collapse will be so significant.

I can’t tell if he’s biased and acting as a TV pundit pushing a political agenda or he’s a really confused. But when it comes to the impact, I don’t think it’s a hard story to tell at all.

Here’s my story, you be the judge.

China collapses. It’s markets tank. They stop their considerable buying from foreign countries. As the second largest economy in the world, every country that has been selling to them will slow. While we in the US may not be selling a lot directly, indirectly our global companies do see significant indirect economic value in the China purchases.

So it’s not about how much we sell to China as Nobel Laurette Krugman would have you believe. It’s about McDonalds, Coke, and all the other global companies that earn far more money offshore than onshore. We will watch their sales fall globally with a strong correlation with China’s demise.

Their earnings decline will drag our markets down and that will crush confidence. At that point, we will have to wonder what is the Fed, or anyone else for that matter, going to do to get us going again?

So its not be our direct demand, but the end of China as the driver of global demand that will drag down the global economy and impact our lives.

That’s my story, it wasn’t hard to tell, and I’m sticking to it.



Is it a Business or a Hobby?

The article, Get rich or die vlogging: The sad economics of internet fame, provides a good example of how easily people can become about business.

The author, Gaby Dunn, tells us about how hard it is for even the most popular youtube video stars to make a living. It’s a solid piece of work save one thing. It never addresses the most fundamental issue.

Is it a hobby or is it a business?

Hobbies cost money and businesses make money. It can’t be both.

If it’s a business, then where’s the business plan? Where’s the analysis that says things like; if I get X views, then revenue will be Y dollars. Doing this before the first video is shot, not after digging a debt hole, would be acting like a business owner. Not doing this or doing it after the fact spells hobby.

It’s likely that even extremely popular video channels won’t generate enough income, especially if true production expenses were considered, so again what was the plan going in? The only business owner that doesn’t have solid financial plan before they start is a former business owner.

Where are the other streams of revenue? Are you a comic that uses youtube for getting booked? Are you an actor that uses youtube to showcase your ability? If so, then this is marketing and sales, and therefore isn’t supposed to profitable. It’s a cost center, not a profit center.

And before you think of this as a stand alone business, be sure to note that competition for viewers comes from hobbyists and marketers that don’t need income. That makes this a very competitive business and one that, even though I haven’t done the math, wouldn’t attract savvy business people.

The article says one vlogger has 15 streams of income. Now that’s a business person. Others would call them a “sell out” as if making a living was giving into the dark side.

I disagree.

The only sellouts, and this is true of mainstream media as well, are those that disguise the truth and say things that aren’t true or aren’t fully disclosed for money.

Main stream media accepts paid stories that transfer the trust and reputation of the branded media to the product for a price. This is selling out. This is putting the money before the viewer and treating the viewer as patsy. This is taking your good name and using it to hide the underlying truth about the piece being a sales pitch.

But straight up ads aren’t selling out at all. It’s a choice the consumer is faced with more and more these days. Commercials in no cost media or no commercials in paid media. Consumers get a choice.

What works better for advertisers is commercials disguised as media. They want that Good Housekeeping seal of approval. That’s worth money, and some will take that cash. They are sellouts. They do what I call Profit though Deception.

The economics of vlogging isn’t sad. What’s sad, to me anyway, is that so many people go into business but don’t think of it like a business.

They somehow think because they call themselves artists or similar non-business sounding names that they aren’t engaged in commerce. They aren’t in a real business, as if the rules and practices that us business professors teach don’t apply.

For all the artists and others that don’t want to think of themselves as business people, but are trying to make a buck , I need to tell you this…

If money is flowing in, your conducting business. If money only flowing out, you’re engaged in a hobby.

Confusing the two can be very costly.

Financial Advice and Critical Thinking

The requirements for a fiduciary focus on putting your clients interests first. The investment industry fights legislation to make this a law applicable to everyone.

Even a novice critical thinker would conclude that they fight this potential law because it will reduce their profits – which it would.

So it’s no surprise to read in today’s Politico’s Money Money by Ben White the following:

DEMS UNDER PRESSURE ON FIDUCIARY RULE – POLITICO’s Marianne Levine, Patrick Temple-West and Isaac Arnsdorf with Ben White: “The financial services industry is waging a fierce lobbying campaign to turn congressional Democrats against a Labor Department proposal to tighten the regulation of investment advice – amid indications that lawmakers’ campaign contributions may be at stake. … The lobbying frenzy won’t likely be enough to stop the regulation. But already, three House Democrats have voted to block the rule and two more have proposed alternative ‘principles’ to regulate brokers.

“Two House Democrats are urging the Labor Department to withdraw the rule, more than 90 are requesting changes, and 12 Democratic senators wrote to the Labor Department in August to discuss the industry’s concerns. Meanwhile, some influential Democratic legislators who support the ‘fiduciary rule’ are already seeing a drop in their campaign donations for 2016. Two pro-rule Democrats who sit on the House Financial Services Committee – Maxine Waters of California and Stephen Lynch of Massachusetts – find themselves well behind what they raised from the sector during the 2014 cycle”

As always, we need to continue to look out for ourselves.

If you seek financial advice, then make the first question; “Will we have a fiduciary relationship and are you going to be legally required to put my interests above yours?” If they don’t say unequivocally yes, walk out the door and find someone else.

Financial advisers that work under a fiduciary requirement abound. You just have to ask. They should act kinda like a doctor. Find the issues and help you, without the temptation to sell you procedures or drugs that you might not need to collect a commission.

Think of a non-fiduciary investment adviser like a used car salesman – or should I say a used-stock salesman. Some are good, some aren’t, but you think of the relationship differently than your doctor.

Ask that question and keep that in mind when looking for or dealing with professional investment advice.

How to Choose Good Passwords

Do you leave the key for your front door under the mat?

Do you leave your car doors unlocked?

The cyber equivalent of that level of security is the password “123456,” which is the number one password two years running according to Splash Data News. Click the link for the entire list.

Passwords that are obvious make them horrible protection. It’s like a hiding place that everyone would look.

Security is not an inconvenience for criminals. It’s supposed to  prevent them from getting in.

Here’s a few methods that will help… Continue reading How to Choose Good Passwords

Should we give up on privacy?

Assume that everything you type will be on the front page of the NY Times, so type wisely. Emails, texts, even snapchat instant deleted photos can/will come back to haunt you.

Fighting this seems pointless.

In facing this onslaught Sun Tzu would have suggested retreat and avoidance, but that’s not an option in today’s technological driven world.

I am writing this on a Macbook Pro with a camera pointed right at me. I’m pretty sure it’s not on, but with every passing day, I wonder a bit more about it. But at least I know about this.

What I didn’t know until recently was… Continue reading Should we give up on privacy?

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