Wednesday, November 26, 2014

Ain't selling out for a bag of potato chips, sorry.

In the mail today:

Introducing an Exclusive Blogger Opportunity!

Greetings from Save-A-Lot,

We are looking for some great bloggers (like yourself) to join our VIP blogger program > Save-A-Lot Insiders!

As an insider, you will have access to exclusive content, special offers, and rewards. We also do monthly prompts, where we ask to partner with you on a fun blog post. If you are interested in receiving information for these prompts, please fill out this form with your info.

We are currently giving away a sample of J.Higgs Bacon & Cheddar Potato Chips to the first few that sign up. We just ask that you share a tweet & / or photo of what you think of this new flavor. Bonus points for suggesting a dip recipe that pairs perfectly with the chips ;)

We look forward to hopefully working with you in the future!

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Pssst! Have I got an IPO for you, sucker!


It seems America's appetite for IPOs is insatiable, even given their uneven track record.


Uber is making a lot of news lately.   We are told that "Wall Street" has "valued" the company at $18 Billion, making is larger than companies like Hertz and Mattel (you know, the kind that actually sell things and make profits).   A competitor, Lyft, is also getting a lot of hype.   Both are slated to offer IPOs in the near future.

You gotta love Americans - their appetite for IPOs is insatiable.   And it is weird, because if you look at most of these IPOs, they generally don't work out well for investors.   I pointed out before that the whole point of a modern IPO is to sell of a fraction of the company (5-10%), create a marketable security for the company, and then allow insiders to cash out of their "shares" that they obtained early on in exchange for lending money (angel investors) or sweat equity (start-up employees).   They make millions, you might make a couple of bucks - or lose it all.

Facebook has finally turned around, in terms of share price, and those who bought at the IPO price finally have some positive equity.  Sadly, Facebook remains the exception to the rule.  Others, like Groupon, Zipcar, and Zynga, have tanked and left investors with less than half their "investment".   In case you didn't get the memo, you can't keep investing in things that go down in value and expect to get ahead.  For every Facebook that does OK (but not spectacularly) you get dragged down by a Groupon.   Investing in IPOs is highly risky and I would not advise it - even if once in a while some of these stocks don't just fail outright.

Again, the point of the modern IPO is to allow insiders to cash out.   In the olden days, the purpose of an IPO was to raise capital to build factories.   The money raised by a modern IPO is often trivial - and indeed, the company leaves a lot of "money on the table" as the IPO price is often set low, so that it will "bump" on the first day of trading.  It is a pretty asinine way to go about raising money to run a company.   But again, that isn't the point, is it?

Most of these modern IPO companies don't need more capital.   Internet companies need money for operating expenses and they get this from private investors.   The investors pour cash into an Internet startup, and get stock in exchange.   When the IPO drops, the stock soars in value because idiots like you and me have been reading stories in the paper about the company for months in advance (stories that don't just appear by accident, either) and these investors then cash out and quadruple their money overnight.

You on the other hand, usually get stuck, once the stock value drops back down.

So are companies like Uber and Lyft good investments?   I will say No, and tell you why:

First of all, it is ridiculous to think that a company that is just an "app" for a smart phone is worth more than Hertz car rental.  There is not a lot of overhead for these car-sharing companies, as they don't own cars or hire drivers or even have any real infrastructure, other than some office buildings and server farms.  There is no "there" there, no matter what some Wall Street insider says.

Second, there are no barriers to entry.  The company like this has no real intellectual property to speak of.   The business model can be readily copied by others, so the "barrier to entry" in this business is very low.   You can't charge monopoly prices for the service, and if the business becomes profitable, well, others will jump right into it and then dilute the profitability of it.   It is then a business of margins, with the winner being the one who can grab marketshare and keep costs down.   It is a commodity business.  No huge profits to be had here.

Third, the company is losing moneyYou can tell this from the media reports, but also from the fact that they keep having to ask Wall Street investors for more and more cash.   These "investments" are not for infrastructure, but to cover operating costs.   It is like Twitter and its junk bonds - borrowing money to keep the place going, hoping that someday a way of making money from the business model can be found (or that the stock price can be propped up long enough for the founders to cash out).

Fourth, the company has huge liabilities.   Uber has been in the news a lot lately - and this is not by accident.   I haven't seen a drumbeat of news stories like this since the last big IPOs came out last year.   Of course, a lot of the publicity about Uber has been negative - linking the company to sexism, prostitution, and other forms of misconduct.  But like in Hollywood, on Wall Street, there is no such thing as bad publicity.   Even my blog posting here will probably persuade some boob to buy Uber.  

What is disturbing is that the company appears to be operating out of a disused frat house - by the former frat members.   Rather than keep their eyes on the ball (the business model) they spend more time tweeting obnoxious remarks and making salacious blog entries.   Allegations have surfaced that the company is lax in "hiring" its drivers, many of whom have criminal or sex offender backgrounds, and claims of sexual assault have been made.  If an Uber car gets in a wreck, who is on the hook for damages?   This leaves the company open to a lot of open-ended liability.

This leads to the fifth problem - which is coupled to the liability issue - and that is the regulation problem.  Uber is basically running "black cars" - what used to be called gypsy cabs - in many major cities.  Nothing wrong with that, of course, except that it is patently illegal in most cities.   Cabs are regulated and licensed in most cities, and funny thing, they did this precisely because of the troubles that Uber is having - people with criminal backgrounds ending up as drivers.  Cars could be unsafe and unsuspected.  Insurance might not be adequate.  And if cab competition is unregulated, price wars can result, which results in shabbier cab service for everyone.

Far from being some "new Internet concept!" what Uber is going through is what the American taxi business went through in the early 1920's.   And taxi regulations were enacted to protect consumers from abuses of the taxi industry.   Uber claims it is somehow exempt from these regulations.   I am not sure how that argument will fly.   A few court decisions could put the company into bankruptcy, and very quickly.

And if you doubt this, consider the sad fate of Aereo, who went from Internet Startup Darling to Bankrupt, overnight, when the Supreme Court told them that no, you can't run a cable company without paying for the content.   Seems like a simple concept, in retrospect.   And hey, guess what?  You can't run a taxi company without a license - no matter how you try to say that it ain't a taxi company.

But the sixth and best reason not to invest in this nonsense is the fact that it is being hyped and that right there tells you (or should tell you) that another rotten deal is a-comin' down the pipeline, aimed squarely at your wallet.

We are told that this "app" is going to change the world forever - change how we ride in cars - and put taxi companies out of business.  I seem to recall the same things being said about ZipCar and the Segway Scooter (don't call it a scooter!).  You know how those worked out.

I mean, by this point in your life, even if you didn't live through Dot.Com Meltdown Part I (Circa 1995) that the bullshit IPOs of the last few years should have educated you enough to spot these turkeys from a million miles away.  Right?  Or are you still a raging true believer?

See:

http://livingstingy.blogspot.com/2013/11/crocs-goes-private-ipo-story.html

http://livingstingy.blogspot.com/2011/04/nature-of-ipos.html

http://livingstingy.blogspot.com/2013/11/another-day-another-self-serving-ipo.html

http://livingstingy.blogspot.com/2012/03/hey-hows-that-ipo-working-out.html

http://livingstingy.blogspot.com/2012/05/if-you-missed-out-on-facebook-ipo.html

http://livingstingy.blogspot.com/2014/11/twitter-junk-bonds.html

http://livingstingy.blogspot.com/2010/12/does-zipcar-make-sense.html

http://livingstingy.blogspot.com/2011/06/150000-mini-cooper.html

http://livingstingy.blogspot.com/2011/07/what-ever-happened-to-segway.html

Yea, some of these IPO stocks (well, one of them, at least) went up in value - eventually.  Facebook, after face-planting, has finally dug itself out of a ditch.  But in the first year the stock was available, well, you could have bought it at the IPO price.   Those who paid nearly double during the first day, well, they got screwed.   And with a P/E ratio of over 70, you have to hope they find some loose change under the cushions of the couch in the break room or something - and pretty soon.  The company is wildly over-valued (but not as wildly as Linked-In - what every happened to that, anyway?).

So, sorry, no, I don't think Uber is the next big anything, particularly since it appears to be run by a bunch of douchebags - the kind that just want to cash out on an IPO ASAP.   Maybe this "business model" has a future, but then again, just as ZipCar was absorbed by Avis (you know, the "old school" company that doesn't get the Internet) perhaps traditional taxi companies will co-opt the concept of ride sharing as well -with their own fleet of cars (which they already have) and their own "app" - which takes 10 minutes to write.

Tuesday, November 25, 2014

What is Religion?

Some folks spend a lot of time trying to debunk religion.   While this may result in a lot of fun videos, I think it is a waste of time.   There are reasons why mankind has developed religions over the centuries.


The interesting thing about religions is that all of mankind has developed religions, all over the world, independently of one another.  Every civilization has some sort of belief system that evolved over time, merged or morphed with another, or split off into a distinct sub-group.   Very few civilizations exist which have no religion at all.

Why is this?  Religion fills a need in people's lives, apparently.  And from a Darwinian point of view, it may be a survival skill - something that binds people together, gets them organized (and taking orders) and gives them strength to survive in a world that was, at one time, very hostile and dangerous (and in some places, still is).

So why do we still have religions?  What do they really mean?   Here are my thoughts on the matter.


The Big 3 Questions:

All religions, I believe set out to answer what I call "The Big Three" unanswerable questions in life:
1.  Why are we here?

2.  What is consciousness?

3.  What happens when we die?
It doesn't matter which religion you look at - from pagan rituals, to Roman and Greek Gods, to Christianity, Buddhism, Islam, Judaism, Shinto - whatever - they all set out to answer these unanswerable questions.

That basically is the definition of Faith and Belief - believing these answers, which cannot be otherwise verified, are the correct answers to unanswerable questions.

So, how did we end up with these religions - and why are they all so different, yet fundamentally the same?

Well, you have to go back to prehistoric times - at least times before written history.   Once man created language and learned how to talk (and listen), Man created memories.   And recitation of memories became a big deal - oral tradition.   Sitting around the fire near the mouth of a cave, stories and traditions could be handed down from one generation to another, perhaps changing slightly with each telling and iteration.

Of course, one of the first things to be remembered was who was descended from who.   And maybe that is why the early parts of the Bible have a lot of "begatting" recitations as to who begat who.   It is the family tree.

It helps, with memorization, to put words to song, or in poems, or as a chant, and that is one reason why many older stories are told in songs or verse - to ease memorization and reduce the amount of material that is altered over time.

And along with all of this came stories.   Mankind likes stories - which is why we have books, films, television, and so on.   We like to be told tall tales, as a form of escapism.   And no doubt, that is how many of the far-fetched "stories" told in every religion came into being - as a form of entertainment.   And it doesn't matter which religion you are talking about, there are lots of these types of stories - which form the fabric of the belief-system of the religion.

And then, of course there are rules.   It seems every religion has rules, and probably these came about when people found out that eating raw oysters could make you sick, or that pork could give you trichinosis.  These rules made a lot of sense, in an era before penicillin existed and illness and death came unexpectedly and without apparent cause.

Or take sex - which most religions seem to want to regulate.   No doubt primitive man realized quite quickly that while sex was super-fun to do, if you whored around a whole lot, you ended up with nasty infections and diseases.  Obviously you displeased God, right?  So you were supposed to stick to one partner - preferably of the opposite gender - as it would help you and your people to thrive and survive.

Of course, later on, we found out reasons why some of these misfortunes befell us.  And thankfully, the world is now safe for oysters and lobsters.


The Invention of Gods:

Spirits and Gods, of course came about in these fireside discussions as explanations for supernatural and even natural events.   A bolt of lightening, a prairie fire, or an earthquake were unexplainable events for primitive man, so spirits or Gods were invented to explain these things.   Again, belief being a system of trying to explain unexplainable events.   To primitive peoples, things like floods and wildfires and sudden death were unexplainable.

Multiple Gods or Spirits were used in older religions.   The Greeks had numerous Gods, each with his own powers and dominions.   The Egyptians also had numerous Gods, as did the Sumarians, and the lot.  The Romans adopted the Greek Gods and renamed them, but still worshiped different Gods for different reasons.

In the far East and in Native American cultures, multiple Gods or Spirits also developed.   The Japanese had a complex set of beliefs in the spirit world, with different types of spirits controlling the destiny of different aspects of life.   Native Americans had somewhat similar spirit beliefs.

The use of Gods or Spirits are an easy way to explain the unexplainable.   If a thunderbolt hits your house, well, you pissed off Thor, the God of Thunder.   Or maybe you shouldn't have built on the top of the tallest hill.  Or if your entire family dies of malaria, perhaps your house was built on the head of dragon and had bad Feng Shui - and offended the spirits.   Or perhaps you just built it in a swamp, and you just thought mosquitoes were a nuisance and not a threat.

These beliefs also helped answer some of these "Big 3" questions, particularly question number three - when you die, you go to some happier place, so death isn't so bad after all.   This is a comforting answer to a scary question.   And we shall see, this answer can be manipulated to worldly ends.   If you die, you go to a happier place - provided you do as we say while you are on this Earth.

We look at some more primitive belief systems today and chuckle at their naivete.  We have rational explanations, now, for many of these mystical events of the past, so we no longer rely on appeasing the Gods or Spirits to ensure our safety.

And we know about food-borne illnesses, too.   So despite what Leviticus says, we chow down on Lobster, oysters, and crab - as well as bacon.   There are still some in this world - in far off primitive places - who don't understand modern technology and science.   And as expected, they tend to place more weight in appeasing ancient spirits than in penicillin.

Modern man may have solved some of these smaller riddles.  But larger questions remain unanswered.   Since we can't answer the "big 3" questions - and never will be able to answer them - belief and religion are still with us.


The Invention of One God:

Monotheism might be viewed as an improvement or evolution of God-worship, at least in modern times.  Those proposing monotheism were often persecuted during their days.   But once the idea took hold, those who believed in multiple Gods often found themselves on the persecution end of the stick - and their beliefs referred to as "pagan" or "barbarian" or "savage".

Monotheism tries to explain everything in terms of one God, and in a way, there is a parallel between this and Einstein's elusive theory of everything.  Hmmm... .maybe religion and science aren't that far apart after all.

The advantages of monotheism are many - with only one God, you have one-stop shopping, which makes controlling a religion easier to do.   No longer do you have to chase down belief systems for a number of Gods (administered by priests of multiple temples) but rather you can have one God, and one Bible (Torah, Koran, whatever) setting down how that God functions and what the rules are.

And these rules, in addition to preventing people from being killed by bad oysters (or having deformed babies due to incest, catching venereal diseases through promiscuity, or whatever) allowed the folks who ran the religion to control the actions of many people.   Pretty soon religious leaders were calling themselves Gods (or saying they spoke to God), and getting people to obey them.   Hey, if some dude says he'll send a lightning bolt through your house if you don't obey him, chances are you'll listen - if you know nothing about how lightning works.

The weird thing about monotheism is how it has devolved over the years to the polymorphous God.  Catholics seem to be the worst about this.   To being with, we are told Jesus is like God, Jr. - literally the Son-Of-God - although some scholars point out that the divinity of Jesus is something that might have come along long after he died.   Then they threw in the Holy Ghost, which I wrote about before.

In addition to Gods, many folks pray to Saints and even Relics.

But Catholics have more Gods than that - well, sort of Junior Gods, actually.   Saints - which number in the thousands - are prayed to, along with holy relics and the like.  And like the polygods of old, each Saint has a different super-power (sort of like superheros, our new Gods).  Depending on whether you want forgiveness, to sell your house, cured from illness or protection on a journey, there is a different saint and a different medallion, emblem, statue, or place to pray.   It is pretty polytheistic for a monotheistic religion to be sure (and a colorful one, at that).


Creation Stories:

Nearly every religion has some sort of creation story.   Whether it is the Earth resting on the back of a turtle or Genesis.  They all have some tale to tell, and none of them are factually correct.   Back in a time before carbon dating and archeology, you could tell someone the world was created 5,000 years ago, and since that seemed like a long time, they'd believe it.

Sadly, these types of stories run smack into hard facts today, and even more sadly, some folks try to bend the facts to fit the stories of old.   "Creation Science" tries to salvage old Bible stories by trying to literally interpret them as being true - instead of viewing them for that they were and are - verbal histories handed down from primitive times and written and transcribed and re-told again and again.   They were not the "word of God" as he didn't write them.   In fact, come to think of it, no one really has an explanation for that, do they?   Who told the original story of Genesis?  Did Adam and Eve tell this story to their kids, and so forth?  Or was there some third party observer?

Creation stories help answer questions #1 and #2.   Why are we here?  God created the universe and he created us.  Go forth and procreate, so the church will have a standing army.   

I don't think one should take creation stories literally.  To do so would undermine your own faith.   Belief is a powerful tool, and I'd save it for questions that are really unanswerable.

For example, while it is pretty easy to disprove the world was made 5,000 years ago, how the universe was made remains a mystery, and probably will always be so.   While we have many theories about the Big Bang or whatever, they are constantly revised and changed, and to my knowledge, no one has come up with an explanation as to what was here before that event.  And maybe that is the great thing about science - it may answer one question, but each question it answers leaves two new questions unanswered.

Rather than view this as a threat to belief, maybe it is an indication there is still room for belief in the world.


Angry God, Happy God: 

In most early religions, or religions in parts of the world that are beset with poverty, deprivation, and violence, God is depicted as pissed off all the time.  In the Old Testament, which was written (or evolved from oral tradition) at a time when life was full of hardship (see, e.g., book of Job), God does a lot of smiting and smoting of various people.   He is not a happy God,  but rather one ready to "go off" on a hair-trigger.

And today, we see this same depiction of God in poorer countries and countries beset by violence and troubles.  In part of the Arab world beset by poverty and violence, fundamentalist Islam takes hold - and God is depicted as angry all the time - and righteously smiting those who have it coming.   In more affluent places in the Arab world, such as  Saudi Arabia, God is a much nicer kind of guy.  And even within a country, the angry God is more popular among the poor, while happy God is worshiped by the wealthy.

And the same holds true for other religions.   The poor in America often believe in a smiting God.   God is pissed off, they believe, and their lives are proof of that - full of hardship and disappointment.  Meanwhile, wealthy Unitarians and Presbyterians, driving to church in their Volvos and Lexuses (with golf clubs in the trunk for a round of golf later at the country club) have a more charitable view of God.  to them, God has been pretty good, and they look at him not as someone who smites and smotes, but rather someone who has rained down upon them an unbelievable prosperity.   And not surprisingly their religion reflects this - with less emphasis on "Thall Shall Not" and more on "God is Love".

It's a lot easier to say "God is Love" when God clearly loves you, right?

I believe there is a pattern here.  As people become more prosperous, they become less religious - or at least their religious views become more relaxed.   After 9/11 it was reported that church attendance soared in the United States - because a bad thing had happened.  But since then (and since life has gotten better) it has diminished somewhat.   While some sources report church attendance as high as nearly 40% in the USA, some church sources claim these numbers are inflated - and that regular attendance is as low as 20%.  

Historically, church attendance has been in the decline - among wealthy industrialized countries.   Some blame this on boredom of church services, or changes in cultural values.  I think that part of it might be that in times of hardship, people look to God (and try to figure out what they did to piss him off) and in good times, they figure, well, they be must be making God happy - after all, have you seen my new Jet Ski?

And you see this trend historically, I believe.   Ancient Gods were constantly testing and trying their subjects - bring down plagues of one sort or another.   Today we have the same problems, but we blame them on natural phenomenon.   Prosperous people and prosperous countries worship happy Gods.   Poor people and poor countries worship angry Gods.  It is as simple as that.


But What About Jesus?

Believe it or not, only a small minority of people on the Earth believe that Jesus is the son of God.   It is a minority religion.   Some folks believe Jesus was a prophet.  Some folks believe he didn't exist, but was a made-up construct.   Still others think he existed and the historical accounts in the Bible are more or less correct, but that the "son of God" thing was tacked on decades or centuries later.

Regardless of what you believe, the message of Jesus was profoundly different from that of earlier Gods and religions.   The premise was the same set forth in A Beautiful Mind - namely that in addition to competition, cooperation can also work to benefit mankind.   In fact, cooperation offers a more optimal outcome in most instances.  Love thy neighbor and turn the other cheek - in place of an eye-for-an-eye.

And this sort of hippie-talk was no doubt threatening to a power structure based on brutality and violence.  So, old Jesus had to go.   That's how that sort of thing works, as Galileo would discover Centuries later, as people who invoked Jesus' name tried to have him crucified.

Sadly, today, it seems that most "Christians" seem to miss this aspect of Christianity.   To them, Jesus is just a brand-name for their particular form of hate.   And as they see it, Jesus is an ass-kicking action hero, whose return is imminent.  And when he comes back, watch out, sinners! 

Some Fundamentalist Christians have beliefs that have less to do with the teachings of Jesus than intolerance.  The same could be said for fundamentalist Muslims.

So while what Jesus teaches is sort of a "Bible 2.0" upgrade from the Old Testament, it really doesn't change too much, in terms of how religion is wielded in the modern world.


So What Do You Believe?

Most people believe in the religion they are born into and exposed to.  Conversions to foreign religions are not common - but usually accompanied by intensive recruitment, such as that practiced by the "cults" of the 1970's.  I know you think you have a profound belief in your religion that you somehow think it is something you discovered personally.  But for the most part, what religion you "believe" in has less to do with your profound internal beliefs, than with what your parents believed and what part of the world you are born into.   If you were born in the USA it is safe to say you (statistically) are Christian.   If you were born in Pakistan or Indonesia, odds are, you are a Muslim.

What you may think of as "profound beliefs" may have less to do with the actual values of your belief system, than your exposure to a particular brand of religion and your affiliation to a "brand name" of belief.   And that is a scary thought, so naturally it will be shouted down.  Feel free to flame.

For me, growing up in a wealthy Western country and coming from a fairly prosperous family, naturally I tend to identify with Western religions and of course, a happy God, not an angry one.  Like most of my peers, I don't take religion all that seriously or literally.   Funny stories in the Bible about people living inside of fish are not necessarily true.  Trying to re-work the world to make them true seems to me like an exercise in futility.

And to me, anyway, it seems abundantly clear and obvious to any thinking person that an organized religion is a keen way to control people and most importantly, get at their money.   Whether it is the Catholic Church or Scientology, the first thing they ask you for is cash-money.

But what about the Big-3 questions?  The ones that can't be answered - and never will be answered - by Science or man?    Well, from my perspective, the answers will be revealed to me in about 25 years or so (God willing, pun intended) as they will also eventually be revealed to each and every one of you as well.

So why take the word of another human being - who has substantially all the same life experiences you have had - as the final word on imponderable questions about life?   The answers lie all within us, not without.  Why take the word of what some guy from 3,000 years ago, who wore a sheet and wiped his ass with his hands?  What does he know that you don't?  Why does he have a special insight?

And no, I don't think the coma dreams of some 6-year-old kid are "proof" of the existence of  Christian heaven.   Sorry, no sale.

But what about all these religious documents?  The Bible, the Torah, The Koran, etc?   Well, those are fine and dandy for those folks who believe in them.  To me, they are just interesting stories written to fill the void that many folks have in their lives.  

But what about Heaven and Hell?  To me, these seem like obvious constructs of the human mind - created with earthly, not heavenly, ends in mind.  They are simplistic talismans designed to control people in the here-and-now with promises of pie-in-the-sky-when-you-die.  If you can't see that, I think you are being particularly dense - perhaps intentionally.

But more importantly, logically, the premise is flawed.   If we posit there is an all-knowing God, who has infinite wisdom and intelligence, then it goes without saying he (or she) isn't a petulant brat or bully, hell-bent (if you'll pardon the pun) on punishing someone on a lake of eternal fire, for the sin of eating shellfish.  An all-knowing God would be a little smarter than that - and quite a bit more compassionate.

God - whatever that is - has to be a nice guy.  Omnipotence doesn't breed assholism.

In fact, that is the primary problem with organized religions and their written bibles - that they posit that God has all the temperament and behavioral problems of, well, man.   God did not so much make man in his own image, as we have imagined ourselves in his.   And imagined we have.   What we perceive to be as God is an invention of man - a construct.   I posit that it is as impossible for us to truly perceive God as it is for us to correctly measure both the position and momentum of an electron.

But you know, if I was on the fantail of the Titanic, as it made its final plunge into the icy depths of the North Atlantic, I probably would be reciting Psalm 23: "The Lord is my shepherd, I shall not want..."

Why?  Not because I think it really meant anything.  Just that it would be more calming than going "OH MY GOD, WE'RE ALL GOING TO DIE!  AAAAARRRRRRGH!"   And let's face it, better to spend the last 45 seconds of your life calm and collected than screaming like a little schoolgirl....

And that's about it....

Do You Need an Investment Adviser?

Do you need an investment adviser? 
 Remember that Investment Advisers are just salesmen for mutual funds and are on commission.


I have been asking friends and family members (and total strangers) about where they invest and why.  The answers are all over the board.   It is safe to say that most people here on retirement island have a "nice young man" who they invest with.  And whenever they want to know how much money they have, they call him on the phone.

And that is probably how most Americans invest.   The complexities of it all are too much for most of us, so we bring our sack of hard-earned dollar bills down to INVEST-O-RAMA and hand it over with our blubbering thanks and hope that somehow, down the road, there is money there for us to live on, when we get old and close to death.

But as I noted in another posting, these investment advisers can have their own interests in mind, over yours.  In fact, they all do - they are in this business to make money, pay their mortgage, and get rich.  What they recommend for you could be great, or it could suck.   Since you don't know the difference, you can't really make a rational decision.   You are the lamb being lead to slaughter.

Of course, one way to invest, is just to invest by yourself.  When we started out with Fidelity, we had a small IRA started by Mark's Father, in the fairly decent Equity Income Fund, which had no loads and an expense ratio of about 0.66%   We didn't talk to an "investment adviser" with regard to this investment.  We just put money into every years as part of our IRA plan, and when we left a job, rolled over their 401(k) money into it.  Over the years it grew sizably.

Over the years, we set up other funds, such as a SIMPLE IRA and a SEP IRA, when I was self-employed.  The SIMPLE plan was invested with Vanguard, which as we now know, has some of the lowest fees in the country.   I believe this was recommended by Mark's Dad, who in retrospect was a pretty smart guy.  Going through the records on this, I realize that we did not talk to any agent, but did the entire thing via mail and over the phone (doing things on the Internet wasn't big back then).   When I closed my business shortly thereafter, the accounts kept going, but the folks at Vanguard did say they would have to charge me an account fee if I had more than one fund (as the account balances weren't large) so I consolidated four funds into one.   So Vanguard does charge fees, for a SIMPLE IRA apparently, if you don't have a minimum balance.  Other than that, they are a low-cost provider.

Once I went back to solo practice, I set up a SEP IRA, which was suggested by my Northwestern Mutual Life Agent.  He was a real piece of work, let me tell you.   And I blindly assumed that the advice he was giving me was in my best interests.   But I realize now that every investment product he sold me had a fairly high front-end commission (Whole Life Insurance, Variable Whole Life, Adjustable Whole Life, and the SEP IRA).  The SEP IRA was in American Funds, which my Dad used to sell (he was a real piece of work, too!) and they have a 5.75% front-end "load".   I remember asking at the time, "These aren't load funds, are they?" and getting some vague response.   Ask pointed questions - that's my advice.

He also would periodically call me to "re-balance" my accounts - selling one fund and buying another, as each fund would grow at a different rate, or so he explained to me, and you wanted to keep the balances in roughly the same ratios.   I believe he also did this as he got a nice commission (out of that 5.75% load) on this re-balancing act.

But eventually, I stopped buying products from him, and not surprisingly, he stopped returning my calls.  As I got older, I just put money in my Fidelity IRA every month, and he wasn't getting a taste of this.   At first I was a little hurt and confused by this.   After all, he was my best buddy - stopping by my office all the time with some new investment proposal.   But later on, well, he didn't have time to call me back or answer questions I had about my investments, such as whether I should convert my life policies to paid-up status.   He didn't get a taste of that, so he didn't call back.

Let's face it here - I was a first-class chump, and it has taken about 20 years to really see what happened and why.   When I dealt with companies via phone or online or by mail, I got low expense ratios, low or no commissions, and pretty decent returns on my investments.   When I talked with a "live person" I ended up paying more.  And that basically is how it works - these folks have to get paid, and they get paid to sell you investments.

And of course, my experience with State Farm agents has been similar.   They touted the idea of rolling over all of our investments to the funds they were selling, so they could net a cool 5% commission on the whole deal.   The agent touted the "convenience" of one-stop shopping.  And I am sure there are people who fall for that sort of thing, too.

Now, taking my Northwestern Agent as an example, was he a crook?  Did he steal from me?  Did he do anything illegal?   And the answer is, of course, "Hell, no!" as in America, selling people things for exorbitant prices is not against the law.   Overcharging is not a crime, it is how capitalism works.   In fact, by definition, it doesn't exist as everyone is entitled to charge what the market will bear and you are under no obligation to tell a customer, "Oh, by the way, the guy down the block charges half what I do!"

So did I lose money by not making better investments?   Well, Yes, No, and Maybe.   Yes, because if I was more astute and put all that money that went into high-cost investments into something with no loads and lower management fees (expense ratios) I likely would have tens of thousands of dollars (maybe hundreds of thousands) more today.   Then again, if I could go back and buy AVIS stock at 74 cents a share - instead of GM at $30 a share, I would have a lot more, too.   Time machines are dangerous things, and they are usually broken.   You can't unbark the dog, as they say.   But if you are reading this, at age 30, and starting to invest, well, consider my experience.

And I also have to say "No and Maybe" as at least I invested something over the years, and thus have some money set aside.   Some folks, believe it or not, will argue (foolishly) that since you can't win all the time at this game, you should never play.   "You can lose all your money in the stock market, so you might as well buy a jet-ski instead!"   No, I am not kidding, there are people who think this way.  Actually, they are just using this as a post hoc excuse for their poor investment planning.   And every time the stock market goes down, well, they point to that and say, "See! Told you the jet ski was a better investment!"

When you are starting out, you often feel that you need guidance and help, so the "nice man" at the investment company is there to point out which funds to invest in (WillGrowCo, as opposed to CrapCo) and to set up your accounts and all that.

And if you work for a company that provides a 401(k) plan, you might not have a choice as to where to invest - and this is where it gets tricky.   Some companies will have someone like my Dad come in and give a presentation to employees about the 401(k) plan and what funds you have to choose from.   It is a take-it-or-leave-it deal, and there may be loads or high fees for these funds, or the funds may SUCK and you don't have much of an option.

At one firm I worked at, they brought in a guy to sell us on a "401(k)-like" plan, which was actually a Variable Life Insurance plan - with high commissions and management fees.   I am not sure if this salesman took one of the partners out to lunch or otherwise bribed someone - but it is an area ripe for fraud, if you are selling high-load, high commission funds.

And of course, some investment advisers have sold some criminal products to oldsters - annuities that don't kick in until age 80 - that sort of thing.   They don't explain these investments well to their customers, as if the customer really knew what was going on, they wouldn't sign the papers.   Selling investment products to old people really is almost criminal, as old people should be getting out of investments and selling off their savings.

Then there are the real crooks - the account churners.  If you foolishly give your investment adviser trading authorization for your investments, they can buy and sell funds all day long - taking a percentage of each trade as their commission.  And with a 5% load on some funds, it doesn't take long to trade an account down to nothing.

Of course, there is also just bad advice that some advisers give - putting all your money into high-risk funds and stocks, where they can lose half their value in a day.  Or sometimes worse - putting all your money into low-yield funds, when you are at an early age.  You might not "lose it all" but then again, you might not gain anything, either.

In this day and age, you can do a lot of things automatically online.  GEICO is cheaper than other insurance companies because they don't have lots of storefront offices and brain-dead "agents" to pay.    And similarly, fund companies that don't rely on salesmen (which is what investment advisers are) to sell their funds, are going to be cheaper to own.   Banks are going the same route - with teller-less models being touted as less expensive.

But some folks like to put a face to a company.  Many oldsters here tell me that they like being able to "call old Joe and ask my balance" over the phone.   Of course, these oldsters are from another era, and they believe all the scare stories about how the Internet is dangerous.   They don't trust online accounts, and if you are living on your savings, well, maybe trust is a big deal.

And I suppose if you really feel you need "Old Joe" to manage your accounts, that is not a bad thing, but bear in mind that you are paying for Joe when you hand him your money.   And bear in mind that Joe probably won't return your phone calls when you stop investing with him - and at a time when you need him most.

After 30 years of investing, all I can say is that I am glad I put some money away - but that the best investments I made where not through an investment "adviser".





Sunday, November 23, 2014

Why We Believe

What makes you believe in one thing and not another?


I was watching the above video on YouTube and someone made a comment than nearly made me fall out of my chair.  They were discussing whether this "Escherian Stairwell" at RIT was real or not (of course it isn't - duh!) and one fellow commented that, "Well, that one actor was so realistic in his response that he had me believing it!"

Fascinating insight.   Not intentional, of course, but fascinating nevertheless.   Rather than view the video as a stupid editing trick, and realize that "Escherian Stairwells" don't - and cannot - exist, the viewer's response was based on the reaction of others to the apparent trick.   If other people believed it, then, well, then maybe it was real.

Wow, this is how religions get started!

In our lives we tend to look to others for normative cues.   We get in line for black Friday deals, or for the gas chambers at Auschwitz, or even for crucifixion (the Brits are so keen at queuing).  We establish norms and people react to them.

There is an old gag that kids used to do on college campuses.  One person stops on the quad and looks up at the sky.   A second person (who is in on the gag) stops and asks what is going on.  The other person is pointing at the sky.  A third person comes by and so on.  Pretty soon, you have a dozen people scanning the clouds and pointing, and maybe even a few saying, "I see it, right there!"  Meanwhile the original perpetrators have left, and the crowd just feeds itself.

A similar gag is to stand in a line and see how many people just join the line, assuming there is something worth standing in line for.  Pretty soon, the line forms itself.

Like I said, this is how religions get started.

What struck me as odd was that the viewer's first instinct wasn't to engage their own experience, education, and knowledge or even internal skepticism.  I mean, after all, a stairway into the fourth dimension would certainty be news - and documented in more places than an obscure YouTube video.   But rather than rely on these internal compasses they immediately judged the veracity of the phenomenon based on the reaction of the actors in the piece.   If the actors were believable, then the concept was believable.

Fascinating - beyond belief!  (pardon the pun).

And this is how people get snookered.   The snake oil salesman gives his pitch to the crowd.   They likely wouldn't believe if just influenced by his song and dance.   But a shill in the audience says, "Gee, this sounds like a good deal!" and an "audience member" gets up on stage for a free sample, and then says how better it made him feel.   We look to others for their reaction as to what to do.   Crowd behavior at its finest.

A pretty stupid video, to be sure.  But a learning experience for me.

And folks say YouTube is just a way to waste hours of your time!

Defending Bad Decisions (Investing in Ideas)



It is human nature to defend yourself, and to defend the bad decisions you've made.

One thing I keep learning while writing this blog is how much I don't know.   I think I am starting to get a handle on things and then realize there are entire areas of my life I've never really understood.   It is sad, but by the time you finally figure out one or two things in life, you have one foot in the grave.   And sadly, you can't communicate many of these lessons to the young, so the data is lost forever - or at least until the next person figures it out for themselves - if ever.

When I was younger, like most young people, I wanted stuff.   Like 90% of Americans, I thought of success in the terms they show on television - a fancy house like Jed Clampett, and a fancy race car.   Teenagers used to put posters of these things in their bedrooms - a Lamborghini and Farah Fawcett - both objects of desire that the goal in life was to accumulate.

So we go down this path of materialism - going off to college to get a degree, so we can get a "high-paying job" (and protesting Wall Street when the job doesn't appear) and then try to get the fancy car and the girl on the poster.  And we invest a lot of time and energy in accumulating these "things" - we are invested in the idea of materialism, and thus anyone who doubts the concept is a threat to us.  And we lash out at anyone who dares question the premise of it all.

In auto discussion groups, for example, you never want to raise the issue of whether it is desirable to blow all your money and run up credit card debt on questionable aftermarket "mods" to your car.  Junk like cone filters don't really improve the performance of your car at all.   They just look cool, make the car loud, and lighten your wallet.  And if go down that road, eventually, you end up with a tricked-out econobox that is worth nothing and is little more than a rolling clown car.

But you don't want to say that to the guy who just spend $5,000 tricking out his Mom's used Accord, with 180,000 miles on the clock and needing a lot of basic maintenance work.   He spent a lot of money on this junk - mostly goaded on by fellow members of an online discussion group about tricked-out Accords.  You are a threat to his worldview and you will be shouted down if you try to point out that an Accord with a fart muffler is not a Forumla-1 race car.  

And this goes for any kind of insular discussion group, whether it is online, or a group of teens talking (read: texting) amongst themselves, or just reading the same car magazines (back when I was that age).   You are programmed to think a hopped-up Chevelle is the cat's ass and end-all to humanity, when in reality it is just a cheap car made by GM with a truck engine in the front.   Oh, right, you can't say that.

It is no different, really, than people who go on mass-murder websites.   They program each others brains with bad ideas.   Or take the so-called "self-radicalizing" teens who become Jihadists after going online.

And of course, this is not really "self-radicalizing" at all, as they are actually encouraged by others online, and some of those "others" are of course shills for Al Quaeda - just as the aftermarket car parts people shill on the auto boards to spread the holy word about cone filters and stainless steel exhausts.   Same shit, different day.   Just different forms of religion - different forms of belief - and belief can be dangerous, when it is not grounded in facts.

 As with anything else in life, The teen with the tricked-out Accord will eventually learn for himself, once the Accord goes to the junkyard (in about a year or so) and maybe after five years when he is still paying off the credit card debt and it just begins to dawn on him that he was snookered.

But then again, for many, it never dawns on them.  They go on through life running up debts, convinced it is "normal" and somehow the bank snookered them into this.   Or they march off to Jihad and wonder, for a brief moment before the suicide vest explodes, whether they made a smart choice.

Recently, I was lambasted for one of my older postings about hydronic heating.   And what was interesting was, on the website where I was pilloried, they all attacked me personally rather than the arguments I made.   They made a lot of credentialist arguments ("he's a lawyer, and lawyers don't know anything about HVAC systems").  But of course, I used to work in the experimental laboratories of the largest HVAC company in the world, so I do have credentials.   But that is irrelevant anyway - how does that affect the underlying facts of the arguments presented?   It doesn't, of course, and that is the folly of the credentialist argument - you distract people with this nonsense and they don't even realize you failed to address any of the underlying facts.  

It is a pretty neat trick, and politicians and lawyers do it all the time.  For example, there are two rape allegations going on right now, one against Bill Cosby, and the other against the director of the X-men movies.   In both cases, the lawyers for the accused aren't attacking the allegations, but the people making the allegations.   "Well, she's a convicted criminal, ergo, everything she says is a lie and you can't believe her, end of story".   In the other case, the young man who was the accuser filed suit in Hawaii (which does not have a statute of limitations) and lied about his qualifications to be in that jurisdiction.   Again, the lawyer for the accused says, "Well, he was found guilty of lying in court, so he's a liar and everything he says is a lie!"   The problem is, the fellows who had the child-sex orgies in their Hollywood mansion (where the X-man director admits he was present) have already pleaded guilty to the charges, and were convicted years ago.  The story is not as fantastic as it might seem.

And I'm not saying I've never made a credentialist argument, either.  We all do it, I guess it is human nature.   But we should be aware when one is being made, and whether the underlying facts and argument are being swept under the rug in favor of a discussion about whose diploma is better than whose.

In addition to personal attacks, there was the Nitpicking argument.  The argument here was, "Well, he doesn't even know there were two kinds of plastic piping marketed under the trade name PEX, so he doesn't know anything!  Thus, everything else he says is wrong!"  I won't go into detail about the nature of the Nitpicker as it is elaborated on in the link.  But again, it is a sideshow distraction designed to get you to re-think the discussion in terms of the nitpicker and thus blow off all the other salient points.

And politicians get sucked into this all the time.  Watergate, Iran-Contra, Lewinsky, Benghazi - all the same nitpicking arguments.  "What did the President know and when did he know it?"  The underlying crime or event is swept under the rug in favor of more trivial matters.   With Benghazi, the burning issue, we are told, is that news programs were misinformed for almost 24 hours!   Somehow, the ambassador to Libya would be less dead if only the folks on Meet the Press knew sooner.

And of course, this just bootstraps all the Benghazi rumors, spread on websites that are no different in function and form that the "Hop up Your Accord" or "Become a Jihadist" or "Become a Mass Murderer" or "Hydronic Home Heating is Great!" - circle-jerks of people telling each other what they want to hear and reinforcing each other's beliefs.  The crazy shit the Benghazi people tell each other is legion - and of course, all suppressed by the Liberal Main Stream Media, such as Fox News.   No really, they think this.

So why all the negativity?   Why can't people address arguments on their face?   Why do people make personal attacks instead?

You are a threat to their world-view, plain and simple.   They guy who covered his truck with "I Hate Obama" stickers has invested a lot of personal energy in making Obama a talisman for everything that went wrong in his personal life.   He doesn't want to hear that maybe everything he believes in (well at least a lot of what he believes in) might be wrong.

The kid with the 1999 Accord with Lamborghini doors doesn't want to hear that the car is still a plebeian grocery-getter and by the way, he's blown his credit rating over nothing.   And the guy who just spend $15,000 on a home heating plant that should have cost $5000, doesn't want to hear that maybe "warm floors" isn't enough of an excuse to create a home leak-fest and money pit.  He literally has a lot invested in this.

And this is why online discussion groups are not a good place to hang out - and one reason I don't have comments on this blog.  I don't want a discussion group.  No circle-jerking here.   Get your information from a variety of sources.  I have the right to be wrong about a lot of things.  Of course, hydronic heating isn't one of them.....  gotcha.

The reason I know all this about "investment" is that I've fallen into the trap myself - again and again - over time, and probably still do.   I've been on the discussion groups and rah-rahed for the car, boat, or whatever it was that people were convincing themselves was the greatest thing in the universe.

But as an Engineer, however, I have to have one foot in reality.   I had a Russian sidecar motorcycle for a while, and while it was a lot of fun, it was made in Russia, with everything that implied.   Parts, such as carburetors, literally fell off as you drove it (I got home once by literally holding the carburetor against the cylinder head with one hand, while steering with the other).   When you point out to people that hey, these are fun and all, but they are Russian-made pieces of crap, well, you get shouted down.

Similarly, on BMW sites, people will say what great cars BMWs are - and they are.   But they don't fly through the air, and in fact, historically they have not been high-performance cars, just well-made sedans than handle well.   Well, don't say that to the guy who is trying to make a dragster out of an old 3-series.  You will get shouted down.

The same is true with houses.  We are trying to sell an inherited house and one problem is that the family members, over the years, have led themselves to believe the place is priceless (after all, this is Mom and Dad's house!).  More circle-jerk thinking.  They reinforce their beliefs by quoting prices paid in 2007 for nicer houses, but neglecting lower prices of more recent sales of comparable homes.   And this happens all the time, which is one reason why many estates end up abandoned when no one can agree on a realistic price for the house.  "I not just giving it away!" one heir cries.  So they pay taxes for a decade while the house is vandalized and degraded.

And this is true with most houses - which Real Estate Agents call "homes" as that sounds more emotional.   People whine about "losing their home" as if it were the family estate and they are the Joads being forced from the farm.   But in reality it is a tract home they bought four years ago, and could never afford in the first place.   They cash in their 401(k) to "keep the home" when getting rid of the nightmare is probably a better option.  And sadly, politicians pander to this emotional thinking - convincing us all that mortgages are only obligations if you can afford to pay them.

With politics, it is the same way.   I used to follow the "party line" as a Democrat coming from a family of wishy-washy Liberals.   But over time, you realize that a lot of what the Democratic party stands for is nonsense.   Once you join the Teamsters, you realize that Unionism sucks.  And while much of what the GOP stands for (what is it they stand for again?) is nonsense, they are not necessarily the minions of Satan himself.

Try telling that to the party "faithful" on either side of the debate.  They will both eviscerate you.  But a funny thing - a majority of Americans don't feel "faithful" to either party.  So maybe people are smarter than they look.  Some of them, at least.

So what is the point of all this?   Well, in a way, it is a telltale sign - a miner's canary - that when you start defending yourself because you've invested yourself in a car, boat, Jihad, the GOP or whatever.   It is, like the Sacred Cows in our lives.   When you mark off one area of your life as inviolable, chances are, that one area of your life is what is giving you the most trouble.

Think about it.   Religious types, for example, have marked off this huge area of their life as "off limits" to discussion, debate, or criticism or analysis.   They tithe 10% of their income to their church and wonder why they can't pay down the credit card debt.   They spend inordinate amounts of energy and time devoting themselves to what are really political issues guised in the form of religion.   They obsess with what will happen in the afterlife, while ignoring what is happening to them in this life.   They complain and whine and moan about how awful their lives are - and how they want to change it.   But the one thing dragging them down is not up for discussion.  And if you mention it, you will be attacked.

The same is true for the Biker dude.  "Live to Ride, Ride to Live!" - he has it tattooed on his arm.  That and "Never Sell Your Bike!" are the mantras repeated on the online discussion groups, at the bike meets, and in the biker bars (BTDT!).  But then he ends up in credit card debt troubles.   He doesn't ride the bike much anymore, but sell it?  Never!  And to suggest otherwise is heresy.

I had a number of sacred cows like that, that I was invested in at one time in my life or another.   I am happy to say, I have far fewer today.   I don't feel that anything is "off limits" anymore.   Everything is up for discussion.   And yes, I was "invested in" hydronic heating, and it was only when one expensive repair after another piled up that I started to realize that fancy heating systems are fine and all, but not really worth the cost delta.

Cars, boats, houses, politics.   They all went by the wayside.   Today I am not "invested" in much.   I have no car that I feel I "have to keep" or house that I believe "I always will live in".   Things come and go in your life - they have their uses in our lives, but should not dominate them.  When I start to feel "invested" in something, maybe it is time to re-examine why.  It is a warning sign that I am not applying logic, but instead relying on emotion.


Saturday, November 22, 2014

Smotherhood

Can't spell "Smother" without "Mother".

The report is out about the Sandy Hook Elementary shooter, Adam Lanza, and all fingers are pointing to his Mom.   Many were quick to blame the ready access in our society to high-power firearms - and there are some arguments to be made there, for sure.   But in this instance, it was Mr. Lanza's Mother, knowing he had deep emotional problems, who introduced him to the world of firearms, took him to the shooting range, and kept multiple firearms in the house - knowing there was a mentally disturbed person living there.

Sadly, the pattern I see with Mrs. Lanza is one I have seen many times before - Mothers who want to control every aspect of their children's lives - and also to indulge their children rather than seek help.  The warning signs were there.  She knew there was something wrong with her child.   She even took him to Yale's renown child psychology department - and then proceeded to ignore every recommendation they made.

Why was this?  Because if she followed their advice, she would have given up control over her son.   And we can't have that, now, can we?   After all, every Mom needs a hobby, and you son's mental illness is a hobby many women indulge themselves in.

So no medication ("Adam doesn't like that!") and no socialization or treatment ("he'd rather spend time at home!") and towards the end, he was living in his room with plastic over the windows, for months on end, eating sporadically and spending all day on the Internet - in mass-murder discussion groups.

And still she saw nothing wrong - no reason to get firearms out of the house.  No need for further treatment.   Just, "Adam - want to go to the shooting range with me?"

It becomes clear why her husband left this marriage.  No doubt arguments ensued about the raising of their son - and his treatment.   And Dad saw the train going off the track.

Of course, Mrs. Lanza was the first victim of Adam's rage - shot with her own gun (as so many are).  And actually, that is a very reliable statistic - if you keep a firearm in the house for "protection" you are 22 times more likely to shoot yourself or someone you love (or be shot by them) than to stop an "intruder".

And when you throw mental health issues into the mix, well the odds go even higher.

There are a lot of Nancy Lanzas out there.  I've met quite a few during my life.  And their kids came out OK not because of their parent's guidance, but in spite of it.   As I noted in The Parent Trap, there are parents galore out there who love to lord over the ruined lives of their children, while simultaneously nailing themselves to the cross - and boring all their friends about the "troubles" they have with their kids.

Rather than try to "launch" their children, they want to keep them close by, controlled, and having a life of limited scope.   It is not only sad and pathetic, it is dangerous as well.   If you are a parent, try to launch your child - and then ask yourself hard questions about your own enabling behavior.  Are you keeping the kid in your basement, just so you can bitch about it to your friends?   It is a hard thing to confront.

And if you are a "kid" of 18 (which we used to call "adults") get out of the house!   Living in your parent's basement is not something that is desirable.  It is not living a full live.  It is damaging to your mental health.  It is a dead-end.

And it goes without saying, if you have a child with mental health issues - or have them yourself, don't be afraid to seek professional help.   There is nothing shameful about mental illness - except when you make it shameful by denying it exists or by failing to seek help.

One wonders how many other Adam Lanzas are living in their childhood bedrooms, with black plastic taped over the windows, spending all hours of the night on paranoid conspiracy theory websites, slowly starving themselves to death and making plans for massacres.   There has to be more than one.



Friday, November 21, 2014

Chasing Technolgy (Programmable Thermostats)

You probably own a programmable thermostat.  Do you program it?

Quick Question:  How many of you have a programmable thermostat in your home?  1..2..3... - about 80% of you.  They are pretty standard on most home heating systems these days.

Second Question:  How many of you have actually programmed it?   A lot less, I see.  Maybe 10%.

This technology was popularized during the first energy crises in the 1970's.  The idea was, during the day, you could program the thermostat to a lower temperature, to save on heating costs, and then have it heat up during the evening hours - perhaps dropping off a bit a night.

But a lot of people - myself included - found that programming the thing was a pain in the ass, and often it would lose its programming during power failures, or if an internal battery went dead.   When we lost the program we stopped programming it.  It was just too much a pain in the ass, and it didn't seem to accomplish much, anyway.

Do they save energy?   Well, if you cold-soak your house during the day, you have to re-heat it at night.   Arguably, the savings in energy are pretty slim - for a well-insulated home that retains heat anyway.   Also, during the day, the house picks up solar heat, and if it is a well-insulated house in a temperate climate, may heat itself anyway.   Programming the furnace to shut down may be redundant, as it may not come on during the middle of the day when the weather is warm and the sun is shining.

Want to save energy?  Turn it down to 65 or less and wear warmer clothes.  Explore insulating your house and/or replacing your windows (on tap for 2015!).  Simple things like that will save more energy than complicated pieces of technology will.

Today, we are being offered Internet thermostats, such as that offered by Nest.  We are told that in the near future, we will be able to control all of our home appliances via the internet, or even by voice commands.   While part of me admires the Buck-Rodgers Sci-Fi aspects of this, another part wonders if this isn't just more unnecessary chasing of technology - for technology's sake.

For example, I have one of those $1200 three-door refrigerators with all the bells and whistles.  It has digital displays and will beep if you leave the door open.   And that is a good thing, because these fancy three-door latch mechanisms tend not to latch, and if they don't, all your food gets warm.   Progress, it seems.   Meanwhile, the basic two-door no frills refrigerator costs about $250 at the big-box store, and you can add an icemaker to it for not a lot of money.   No digital displays, no gee-whiz-bang features (and fancy crispers whose doors break - or at least my neighbor's did).  No nothing.  Just a reliable, inexpensive refrigerator.    You could buy two of them and put them side-by side, for about half the cost of the gee-whiz-bang model.

We spend a lot of time chasing technology for technology's sake, it seems.   We want gadgets and gimcracks that all are supposed to make our lives easier, but often end up consuming more time - and certainly more money.   Dishwashers, for example, I think are basically worthless appliances.  It takes only seconds to wash off dishes and put them in the rack.   It seems a major chore to empty the dishwasher.  Fancy dishwashers with membrane switches just break down expensively.

Clothes washers are another area where complexity seems to offer no real advantage other than to empty your wallet.  The basic GE top-loader hasn't changed its design in 40 years, and can be had for cheap and then thrown away when it breaks.  These $1000 side-loader jobs are a nightmare to repair (and you spent so much that you feel you need to repair them).   And let's not talk about the mold issues. And tell me, do you really use all those esoteric cycles they offer?  Delicate?   Or do you just toss in your clothes and soap and let 'er rip?   Are you getting four times as much washer for $1000 than you are for $250?

Unnecessary complication just makes our lives more costly and more difficult.   When I bought a house with a hydronic heating system, I was at first impressed with the gee-whiz-bang aspect of the technology.  It had so many shiny copper pipes that people thought I had an organ in the basement!  But when parts - expensive parts - started to fail, and I realized that the limited number of suppliers, dealers, and mechanics meant repairs would be far more expensive than conventional systems, I realized I was merely chasing technology for technology's sake, without getting any real reward in terms of efficiency, comfort, or convenience.

Or take condensing furnaces.   They were all the rage, as they were 99% efficient.   But they have a whole secondary system to condense furnace gases, which makes them more costly to buy, and also more complex and costly to repair when they break.   When it came time to replace furnaces, at our home or a rental property, we chose to go with conventional equipment that was "only" 89% efficient.  The payback, in terms of energy savings, just wasn't there.   The reduced hassle was, however.

We like to complicate our lives, thinking we are simplifying them.  We think machinery will make our lives easier, but instead it just makes it more complex and puts us into debt.  But simple, basic machinery costs a lot less to own and lasts a lot longer in the real world.   When I was a kid, you'd see a lot of basic stripped Chevies tooling down the road after 10 or 15 years.  Their fancier brethren with electric windows and more chrome trim, on the other hand, seemed to go to the junkyard sooner.   And you see this today with expensive cars.  No one wants to buy an old 7-series BMW as they are a nightmare to repair.   But old Chevy Colbalts can be seen cruising around still. 

This is why I sold the BMW X5 and bought a Nissan.   No, it doesn't have heated leather power seats.  But let me ask you this - have you ever had to repair a heated leather power seat on a BMW?   I have, and it isn't too bad, but it is just one more damn thing - and you might not be able to repair such things yourself, as I could.

Computers, cell phones, cordless phones, televisions, DVD and DVR players, laptops, pads, cameras, and all sorts of junk clutters our lives.  And much of it is obsolete within a few years.   VHS players, tube televisions - even CD players - are all deemed junk today.  We own so much technology these days - and much of it is just a pain in the ass.  I am not sure I need to add an internet thermostat to the list just yet.

Our lives become more technologically complex by default.   You can buy the simplest car made today, and it is a nightmare of wiring and control systems compared to the cars of the 1960's or even 1970's.  You can't escape the increasing amount of technology in our lives and the increasing complexity of it.

However, you do have choices as to how much of this technology to consume.  Buying complex or "top of the range" appliances, cars, and machinery, just for the sake of having the best or for status may be short-sighted.   Your life is complicated enough as it is - why complicate it more?

And here's a dirty little secret of the appliance business (and computer business):   A lot of these esoteric features often simply don't work.   Manufacturers put them on in order to "me too!" the competition.   But often, they are underdeveloped features, as the manufacturer knows they will be little used by the end customer.

So no, I don't need or want to access my refrigerator via the Internet.  I don't want my refrigerator to make shopping lists for me and text them to my smart phone.   It really is just easier to jot down some things on a piece of scrap paper.

* * *


A Reader writes:

 "You may not know this but in most other countries people do not prefer to buy top loading washers for the following reasons:

- They use a lot of water and electricity
- The agitator wears out clothing more easily
- They hold less capacity than equivalent front loader due to the absence of an agitator taking up space in the washing bin.

Front loading washing machine on the other hand:
- Uses less water and electricity.
- More efficiently distributes washing powder through the tumbling action, which allows clothes to rub against one another and actually clean the clothes, as opposed to a front [sic] top loader if you overfill, the items of clothing at the top of the washing bin may not ever get sucked into the water and agitated.

If they were inferior why are they used in industrial laundromats? 

The mold issue you refer to only applies to a number of front load washers in production before around 2004 i believe. People just leave the door open when the washer is not in use anyway. 

I have an Miele front load washing machine which is tested to the tolerance of 20 years and has no LCD display or membrane buttons. 

You are right about the fridges though."

All that is true - and when we had our house in NY with a very limited well water supply, we had such a washer and it worked well.

BUT IT WAS THREE TIMES THE COST of a regular top-loader (it was about $1000).

And I would have rather had a better well (or city water) than an expensive washing machine, quite frankly.  And no, it didn't wash clothes better than a regular one and the capacity wasn't larger.  If you fill those front-loaders with clothes, they will not wash well.

The arguments about soaps and the agitator "wearing out clothes" are non-quantifiable.   We've had top-loading washers for more than half-a century now, and well, I am not seeing "clothes wearing out" as being a major issue over the last 50 years.  It does sound a lot like an argument a washing machine company would use to sell a washer to you, though.  And it is an argument than cannot be refuted, due to its nebulous nature.  So I think we have to throw that one right out, along with the "overloading" argument. 

As with anything, you have to look at overall cost and effectiveness.  The cost-savings in Energy and Water usage are not offset by the increased cost of the machine.  In the US, water is very cheap, so that is almost not an issue at all.  As for energy?  We are talking  pennies, if that.
This GE toploader is $399 on sale.    Its ENERGY STAR rating says it uses $22 of electric a year.
This Samsung front-loader is $799 on sale ($400 more). Its ENERGY STAR rating says it uses $10 of electric a year.
Over a 15-year design life, that's a savings of $180.   Whoop-de-freaking doo. The "plain" washer saves $220 up-front!  In order to just break even, you have to find a front-loader that is only $180 more than a top-loader.

Yes, you can even buy a cheaper toploader washer at $299.   That model has an EnergyStar rating of $52 a year, and no doubt that is the model the front-end loader people want you to compare to, when making the decision.  However, even with that energy-guzzler, you are talking about a savings of $630 over a 15-year design life, and a cost delta of $500.  The payback in energy costs is a staggering ELEVEN YEARS.   And for $100 more, you can buy an Energy Star compliant model that will actually save money.


And the big problem is this:  When they break down after five years, the cost of fixing them exceeds their value.  So many folks don't end up getting a full 15-year design life out of the machine.

A friend of mine bought one five years ago and it broke.  Cost to repair was more than the value of the machine.  She bought a new top-loader for $300.  Problem solved.

I think you are "invested" in the idea of the expensive washing machine you bought, and thus feel the need to "defend" your investment.  It wasn't just an expensive toy, right?  No, it made financial sense!

And yes, people do show off their fancy washing machines to their friends.   I know I did it when I had one.   But that was pretty freaking stupid!

Sorry, but no sale to unnecessarily complicated appliances.  I guess if I lived in a place where water was expensive, or I was on a well that ran dry a lot, maybe it would "make sense".   But then again, a better approach is to ask yourself why you are living in places where water is expensive and wells run dry.

Sorry, but no sale.  It is chasing technology for technology's sake.   Our lives are complicated enough as it is....