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Archive for March, 2011

We do not attain the victory of life by selfishness.  Victory is for those who give themselves to causes beyond themselves.  It is very biblical and very true that everyone who exalts themselves will be humbled and he who humbles himself will be exalted.  That is a text for all of us.
  —  John Danforth
(From his eulogy for Katharine Graham)
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The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns.  That business is a compounding machine.
   –  Warren Buffett
(As quoted in: “The Snowball” by Alice Schroeder)
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Most men would rather die than think, and most men do.
  —  Bertrand Russell
From:  “Why I Am Not a Christian & Other Essays on Religion & Related Subjects
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…A person that started in to carry a cat home by the tail was getting knowledge that was always going to be useful to him, and warn’t ever going to grow dim or doubtful.
  —  Mark Twain
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Long-term commitment to new learning and new philosophy is required of any management that seeks transformation.  The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment.
  —  W. Edwards Deming
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As I was driving home from work yesterday, I heard on the radio that Diana Ross was going to be 67 years old this weekend (today, actually).  They then went on to play a number of her solo hits and hits with the Supremes.  The songs brought back loads of memories, so I thought I’d add three of my favorites to my Poems (Lyrics) page.
The three I picked are: I’m Coming Out, Love Child and Ain’t No Mountain High Enough.  Obviously, with such a vast body of work to choose from, everyone will have their own favorites, and really, it’s hard to say these are my absolute favorites, but all three are up there for different reasons.
I’m Coming Out – is a favorite because it’s the Diana Ross song which I most associate with my wife Hilary.  The song (and album) came out (1980) before we met (1984), but it was a favorite of her’s and I bought her a copy of the album as a going away present when she flew back to Liverpool.
Love Child – has been a long time favorite of mine for one line: “I started school, in a worn, torn dress that somebody threw out”.  While this has never happened to me (wearing worn, torn clothes to school), I have always been keenly aware of the “social pressure” of having less or having to make due.  America may just now be a debtor nation and its people living on credit cards, but I have vivid memories of my mother getting store credit to buy our school clothes and shoes over time, because she didn’t have enough to pay for them on the day we went to get them.
Finally, Ain’t No Mountain High Enough, is one of Diana’s biggest solo hits.  I must admit though, that my lyrics aren’t from her version.  The lyrics on my page are from the version by Marvin Gaye and Tammi Terrell. (While Diana’s version was a big hit for her and her version is terrific, I still favor the original.)  If it is true that it is better to have loved and lost, than never to have loved at all – then this is the description of the love you should feel – no obstacle is too great to stop me from getting to your side if you need me.
As always, read and enjoy the lyrics, then go find the songs on-line so you can enjoy them with the music too.
And again, happy birthday Diana Ross!  Thanks for sharing your talent with us.  Our world has been better for you being in it.
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You absolutely never want to be in a position where tomorrow morning you have to depend on the kindness of strangers in the financial world.
  —  Warren Buffett
(as quoted in “The Snowball” by Alice Schroeder)
[…Unless you’re a “too big to fail” bank and the stranger is the American Taxpayer.  —  KMAB]
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Stocks are things to own over time.  Productivity will increase and stocks will increase with it.  There are only few things you can do wrong.  One is to buy or sell at the wrong time.  Paying high fees is the other way to get killed.  The best way to avoid both of these is to buy a low-cost index fund, and buy it over time.  Be greedy when others are fearful, and fearful when others are greedy, but don’t think you can outsmart the market.
  —  Warren Buffett
(as quoted in “The Snowball” by Alice Schroeder)
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The snowball just happens if you’re in the right kind of snow, and that’s what happened with me.  I don’t just mean compounding money either.  It’s in terms of understanding the world and what kind of friends you accumulate.  You get to select over time, and you’ve got to be the kind of person that the snow wants to attach itself to.  You’ve got to be your own wet snow, in effect.  You’d better be picking up snow as you go along, because you’re not going to be getting back up to the top of the hill again.  That’s the way life works.
  —  Warren Buffett
(as quoted in “The Snowball” by Alice Schroeder)
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Today I read two interesting articles.  One is about the use of telephones and the other about the costs of a “war” in Libya.
The first is titled: “Don’t Call Me, I Won’t Call You” and appeared at NYTimes.com.  Basically, it’s about how fewer and fewer people are using their phones to talk to anyone.  Mainly, it’s stated, because we are moving away from land lines and moving to cell phones and text messaging.  I’m not sure if the premise is valid, but I am (myself) a rare case in that I rarely use the phone and send fewer than one text message per day.  By comparison, my wife sends several hundred per month and all three of my kids send over 3,000 per month (EACH!).
I must admit even without a cell phone, I wouldn’t use the home phone.  For one thing, almost no one ever calls me.  And for another, most of the calls I do get are for charities and / or election campaigns and / or bogus business schemes / deals to help me refinance my mortgage or credit cards.  Anyway, I found the article an interesting read – as were the comments in reply.
The second article: “Costs of Libya operation already piling up” appeared at GovExec.com.  The article puts forward the first day and on-going cost of Operation Odyssey Dawn (pretty much as I proposed earlier) at over $100M for the first day and $30 to $100M per week because we are only providing no-fly coverage along the coast of Libya (where the oil fields and pipelines AND the rebels are located).  If we had to enforce the no-fly zone coverage over the whole country, the estimate is $100 to $300M per week!!
On the one hand, I don’t want to see upwards of 100,000 Libyans butchered by Gaddafi’s tanks and army, but on the other hand I wonder how many teachers, police and firemen (let alone bridges, roads and healthcare) we could be paying for with the $30 to $100M per WEEK we seem to be able to spend on this effort.
Being a cynic, I just think we’re getting close to the use by date on these 400 to 500 cruise missiles we’re going to burn-up during the next few months and I guess the President is being advised he might as well use them and pay to replace them as opposed to just dumping them in a land fill in Arizona or Nevada.  At least they’re made in America, so making the replacements will force the Republicans to pay for American jobs.
As a matter of fact, I think we should incorporate all American social programs (healthcare, education, etc) through the Department of Defense and then see if the Republicans will dare to cut the defense budget.  We could even do the same with some non-social programs like transportation, communications and food and drugs.  All of them have at least indirect influence on Defense – we have to have healthy high school graduates to join the military (healthcare, food and drugs and education) and we have to have decent roads to move food and weapons from farms and munitions plants to our bases and ports.  It’s a natural!!
While I am, of course, just  joking, it does give one pause to imagine the votes in Congress for cuts in military spending then.  Doesn’t it?
Finally, I’m going to be slightly rearranging my links to set up and move items to a Charities group.  Just in case you don’t notice the change…  Today’s addition is not really a charity (because it’s funded by the government), but I think it’s an interesting site.  It’s called U.S. AID.  Check it out…
“All I am saying, is give peace a chance…”
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If I have seen further it is by standing on ye shoulders of giants.
  —  Sir Isaac Newton
(Letter to Robert Hook, 5 Feb. 1676)
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When you talk about retraining people — it’s not like they’ll all go become computer technicians by taking junior-college courses or something like that.
But you’ve also got to deal with the people that are displaced.  The free market does all kinds of good things in this country, but we need a safety net.  Society is getting the benefits, and it should pick up the tab.
The market isn’t perfect.  You can’t rely on the market to give every single person a decent living.
  —  Warren Buffett
(Discussing social safety nets for workers in dying industries.)
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On one point, however, I am clear.  I will not abandon a previous approach whose logic I understand (although I find it difficult to apply) even though it may mean forgoing large, and apparently easy, profits to embrace an approach which I don’t fully understand, have not practiced successfully, and which, possibly, could lead to substantial permanent loss of capital.
  —  Warren Buffett
[Invest wisely and the market will come back to you in the long run.  —  KMAB]
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[Nonviolence]  …Has a way of disarming the opponent.  It exposes his moral defenses.  It weakens his morale and at the same time it works on his conscience.  …Even if he tries to kill you, you develop the inner conviction that some things are so precious, that there are some things so dear, some things so eternally worthful, that they are worth dying for.  If an individual has not discovered something that he will die for, he isn’t fit to live.  When one discovers this, there is power in this method.
  —  Rev. Martin Luther King, Jr.
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Book Review:
Yesterday, I finished reading “Predictably Irrational” by Dan Ariely (2008©).  Mr. Ariely is a behavioural economist.  In traditional economics, we (the buyer) are expected (“supposed to”) make all of our purchasing decisions based on rational consideration of which option brings us the greatest perceived benefit (which is not necessarily our greatest economic benefit).  As it turns out, this is “frequently” not a valid assumption.   A behavioural economist studies why this is true and looks for underlying causes in decision-making.  In effect, they are looking for the causes of our irrational behaviour.
I admit up front, prior to reading this book, I had no idea there even was a field of study called “behavioural economics”, although I have been aware for some time that people do things (make decisions) which appear irrational (to me).  For example, why do mid-Westerners and Southerners consistently vote for conservatives (mostly Republicans), when conservatives do not (for the most part) represent these voters economic interests.  (This has always been a curiosity to me, because I always assume that given two candidates, one would always vote for the one who represented your economic interests.)
The book offers individual chapters on a number of “hidden” factors in our decision making processes.  Among them are ownership, positioning, and poor math relational skills.  For example, many people keep things beyond the items utility period because we already own the item.  We even are willing to continue to spend on maintaining ownership – over and above the cost of the item – to continue ownership.  How many of us know someone who rents storage space (in economic terms, cluttered garages and attics are equal to rented storage space although the monthly payment is indirect) to hold items (furniture, books, albums, clothing) which we will never use again?  How many of us do this ourselves?
Anyway, this book is a very fast and enjoyable read and I highly recommend it to anyone interested in gaining a better insight into why people seem to make irrational economic decisions.
Comments on world news:
First Libya – Let me put this as clearly as I can state it – NOOOOOOOO!  NO MORE WARS!!!
This morning’s quote was from Rev. Martin Luther King, Jr.: “The laws are not to change the heart, but to restrain the heartless.”  The U.S. is NOT the law.  The U.N. is NOT the law.  Remember, the Reagan administration supplied (money and weapons) the Afghans in their war against the Soviets and the result was the Taliban.  There is a law of unintended consequences.  With the best of intentions, you are getting precipitously close to the unintended consequences which will result when we get involved in something we know little about and absolutely cannot control as a final outcome.
I wish we could make the world a better place by removing Muammar Gaddafi and his family from Libya, but it is already too late.  Once a dictator decides it is acceptable to kill everyone who stands against him and then proceeds to do so, it is too late to do anything about it.  A no fly zone will not stop his army (tanks and artillery) from pulverizing the opposition.  Ground troops will be required.  Who is going to send them?  The French? The Italians? The other Arab states?  We can “try” to establish a no land travel and no artillery zone – but the cost of maintaining such an effort from the air (and from aircraft carriers) will be astronomical.  Ground troops will be required.  Let’s not kid ourselves…
And even if Gaddafi chooses not to murder his opposition directly, he can blockade them and starve them to death.  Does anyone seriously think anyone (the U.S., France, the U.K.) will be willing to air-drop food and supplies to the opposition for any protracted period of time?
Does anyone seriously believe the tribal warlords who would control Libya’s various regions, will be more democratic than Gaddafi if they should happen to win (with our support)?  Are we really promoting a democratic Libya?  In all honesty, I don’t know either, but I doubt it.   I think we are deciding we know enough about the current devil, that we’re willing to take a chance on the devil(s) we don’t know about in the future.
So where is our national interest?  As near as I can tell, we have no direct national interest in this conflict.   Of course we have a humanitarian interest, but has the U.S. EVER gone to war over a humanitarian interest?  Now, Europe has “national” interests in Libya – oil, not the promoting of a democratic state in North Africa.  So are we willing to help Europe with their oil problems?  If yes, what can we expect to get out of this?  Do we really expect France to support our continuing efforts in Iraq and Afghanistan?  Will they commit air power and troops?  Don’t make me laugh!
Please, President Obama – as much as it pains me to say this – because I know the U.S. would love to be shut of Gaddafi – leave this one alone!!  You are getting bad advice, AGAIN!!  Stay out of it.  And get us out of Iraq AND Afghanistan now!   They are already bleeding us dry (economically and spiritually) NOW!   Mr. President, please read the book reviewed above and maybe you’ll have a better understanding of why this is a terrible decision!!!
Tonight I continue to pray for the people of Libya, for world peace and for the withdrawal of American forces from around the globe.
Second, the disaster in Japan –  my heart goes out to the people of Japan.  No one could watch the TV and not be overcome by the magnitude of carnage.  You are in our prayers.  Today I donated $10 to the Red Cross Japan Relief efforts.  I realize this is more than my $1 donation page generally asks for, but during the last week I read of an elderly man bowing deeply to a relief worker when the man was handed the equivalent of a bowl of rice for a meal.  His simple act of gratitude and civility made me cry.  I am also struck by the courage of the 50 (now approximately 200) brave men who have sacrificed their own lives to save their families and their country (and probably the world) from the nuclear disaster which is unfolding before our eyes on TV.  Please give anything you can spare.  Honor courage!
Other thoughts:
I make no effort whatsoever to conceal the fact I am completely opposed to the nuclear energy industry.  There is no such thing as a safe nuclear reactor.  There are only one-in-a-thousand-years or one-and-a-million-years accidents waiting to happen.  The problem isn’t the odds against when something will happen.  The problem is the result when it does happen.  In this case, the “real” problem isn’t the fuel in the reactors.  It is the spent fuel laying next to the reactors.  There is NO safe place on earth to put spent fuel!  This is the fundamental problem with the industry.
Three Mile Island.  Chernobyl.  Now, Fukushima.  How many nuclear plant disasters and how many deaths have to happen before we abandon nuclear energy?  The only thing a nuclear plant is good for is making nuclear arms and I’m not convinced that’s such a good thing either – but the genie is already out of the bottle on that one.  I’m not saying burning coal, or oil, or natural gas are any better for the environment in the long-term.  All I am saying is the catastrophic risk of damage is less.  And you’ll note I have intentionally qualified my statement to the plant.  We have NO idea what long-term effects the oil leak in the Gulf of Mexico will have on the oceans or the world.  We are playing Russian Roulette with the planet and we have no idea how many chambers or how many rounds are in the game.
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