Oil… What’s Stronger: Reality Or Contrarian View?

Anyone that reads this blog knows I root for oil to go down, down, down… because, while that doesn’t benefit an outdated oil industry, it does benefit every other person on the planet… and, oh by the way, it benefits the planet, too.

The facts all virtually guarantee oil will keep driving lower… because of lack of demand (remember the world has shut down!)… because of geopolitical bickering… and because — go figure — the world is really, truly almost out of oil storage.

Ha, those are some pretty great facts!

So why would anyone take a flyer on oil going up now, with oil trading in the low teens?

Because that’s what contrarians do… the opposite from what everyone else thinks.

Case in point:  After oil getting absolutely crushed over the last few days, it had a rather big pop today.

So oil can go up, if no other reason than a dead-cat bounce.

Or, let’s say there’s a threat of war… like what may have happened this morning given Trump told the military to shoot at any harassing Iranian gunboats they want.  Military disruption like that tends to spike oil prices.

Or, let’s say Trump just can’t help himself and he starts levying tariffs on foreign oil.  The U.S. is (sadly) the world’s biggest consumer — by a wide margin — so tariffs would mean the price of oil would be artificially raised in a rather meaningful way.

Or, let’s say that the world gets unbelievably creative and somehow finds a lot more storage space… like old train storage containers… or old storage silos or such… because it’s the lack of storage space that caused the extreme oil pricing mania yesterday.  (“What do you mean I have to keep all the oil in my swimming pool?!”)

Or, let’s say of the 70 vaccines in testing right now, one of them makes it to the finish line relatively soon.  The real possibility of the world reopening for business would also cause oil to spike.

Or, let’s say OPEC decides that their 9.7m barrels a day cut from a week or two ago was completely and utterly insufficient… and so they call another “emergency” session and cut oil by 30, no, 40 MILLION barrels a day… way more than anyone would expect… because they know the time for horse-shitting around is over.  That would send oil prices skyrocketing.

And, let’s say Trump can’t stand being out of the spotlight for more than 12 seconds and he politically forces the Saudis and Russians to cut supply… by offering guaranteed cuts from U.S. producers (something that was left off the table the last time OPEC got together).  With oil at perceived negative prices, he just might have the go-ahead to make that type of commitment.

Note that nothing above is, “when aliens invade the planet” crazy.

So, call it contrarian or whatever, but I just don’t trust that something, ANYTHING won’t happen to interrupt the greatest “fuck oil!” party ever.

Sadly.

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V-Shaped Recovery? More Like A W…

Dow is a hair away from 24,000 as I write this.  Nasdaq a shade over 8,500.  We’re back to being closer to the top than the recent bottom.

Today’s action felt like it’s really, truly going to be a V-shaped recovery… that we should be back at our old highs in no time at all.

But… b-e-w-a-r-e.

Because it was just a few weeks ago that it felt like the crashing would really, truly never end.

And that’s what happens during a crisis… the mania swings in both directions.

Don’t get me wrong:  We have a lot going for us in this crash.  Oil is really low… and that’s my #1 requirement for an advancing economy.  Companies headed into this crisis with a lot more going for them, too (i.e., real growth, real revenues, and real profits).  And lots of technology companies are going to absolutely thrive in this crisis, for example, Amazon, Netflix, DoorDash… anything to do with the cloud… and so on.

And, critically, the government has backstopped everything with TRILLIONS in bailout money.  (“Oh, yeah, that.”)

But let’s call a few spades spades here:  THE ENTIRE WORLD JUST STOPPED!  That’s going to affect many, many more companies than will benefit.  Stocks ran up waaay too much before the crash, too, so even without a crash, they needed a 10-20% correction just to whack them back in line.  And — most significantly — no one really knows when we go back to normal.

This last point is the key.

This V-shaped rally — where stocks go straight down, then go straight back up, forming a “V” pattern — is almost entirely predicated on us getting back to normal soon.

As in, investors already know this quarter is going to be a disaster, but they think they might have the next one in the bag.

But what about the next quarter?

If I’m the CEO or CFO responsible for offering public company forward guidance… in this environment… there’s no way I’m touching that with a 10-foot pole.  That’s a guaranteed lawsuit just waiting to happen.

So, unless I’m one of the handful of companies that are crushing it during this crisis, there’s no way I’m going to be even the slightest bit optimistic about the future.  Because everything is uncertain.  How long this will last.  What the 2nd wave looks like.  Or the 3rd.  Or if people really are developing immunity.  And so on.

So I either give the biggest low-ball guidance in history — or what is happening more and more — I simply refuse to offer any forward guidance.

That’s when the next shoe drops.

When analysts and investors see this negativity… then try to understand this negativity… then realize they’re now really, truly flying blind… that’s when the rug gets pulled out from under them…

… and the market, too.

Because that’s not going to feel like “soon.”  That will, for a period, feel just like FUD (Fear, Uncertainty, and Doubt).

It’s inevitable.

Because mania is inevitable.

Why Do American Presidents ALWAYS Get Oil Wrong?

Oil — really the cost of a unit of energy — affects the cost of EVERYTHING on the planet.

Which means that when oil prices go up, that FINANCIALLY HURTS everyone on the planet…

… including EVERY AMERICAN.

So why is Trump actively trying to drive oil prices higher?  In fact, why do all American presidents feel the need to do this?

I know people will say, “to protect America’s oil producers” … and so that we’re not strategically dependent on foreign oil.

Hogwash.

The way to do this is NOT to artificially raise set prices.  It’s to innovate.

Either we figure out a way to extract oil less expensively…

… or we figure out economically viable energy alternatives…

… say a conversion to natural gas, where we have a 100-year supply… or, electric cars… or solar-driven residential and commercial buildings.

And so on.

Anything but charging Americans MORE, which means we just end up FUNDING THE VERY PEOPLE THAT WANT TO DO US HARM MORE.

Sorry, energy industry.  Innovate or die.  Just like every other industry has had to do.  But don’t drag the rest of the country down with you.

A Silverlining: Happy St. Patrick’s Day To The Soon-To-Be Greener Planet Earth

Unless you’re short — and other than the great St. Patrick’s Day holiday where we all get to be green — not many silverlinings these days.

Except one big one:  The planet Earth is happier.

Maybe shutting down everything will give the planet a chance to breathe again?

After all, in terms of our stewardship of Earth, we’ve all acting like kindergarteners…

… so it’s fitting that the solution to climate change might very well be a global time out! 

This Time May Actually Be Different

Everyone is weighing in on Coronavirus prognostications.

I will try to keep mine to just the ones I feel are fairly unique.

My theme?  We couldn’t be better prepared for exactly the crisis we’re going to be going through.

*  This isn’t like the last two great crashes.

The 2001 “Dotcom Crash” was based on massive valuations with zero profits — and in many cases, zero revenues.

The 2008 “Great Recession” crash was based on artificially pumped up real estate prices, not real productivity gains.  (It was also exacerbated by skyrocketing oil prices, due to political, not fundamental, issues… and had twice the unemployment we have now.)

Whatever we’re calling 2020 — The Corona Crash? — we’re starting with real businesses, with real revenue growth, making real profits, involved in real productivity gains, historically low unemployment, and extraordinarily low oil prices.

In other words, we’re already starting with a much stronger hand.

*  Ironically, many of the productivity gains of the last decade involve remote technologies, i.e., letting employees work from home, ordering pretty much anything online, and, as important, socializing from a far.

So, in many ways, the last decade or two has been great practice for this exact situation:  Remote working, remote living, and social distancing.

*  Not only are the remote technologies in place, but the entire millennial generation prefers to socially distance.

Half the time millennials have their heads buried in their phones — even when they’re sitting right next to each other.  So do you really think they care whether they’re in the same room or a different state?  Not at all.

*  While older generations panic about bailouts and handouts and such, the entire millennial generation knows nothing but bailouts and handouts.

So do millennials think we’re in a crisis?  Absolutely not.  Feels pretty normal to them, like it’s just something we go through every once in a while.  What’s the fuss?

*  And finally:  The market needed to be popped.  Markets aren’t supposed to go straight up, like they did almost the entire month of February.

So we’re down 20%?  I can easily make the case we were 30% overvalued.  Because markets aren’t supposed to go straight up.

I’m not saying it’s not going to be rough, but I am saying we seem to be particularly prepared for this crisis.  It’s like a lot of what we need to do is already done.

We’ll see.

China Really Doesn’t Get It

I’m fascinated by the events unfolding between China and the NBA.

Yesterday CNBC ran this headline:

… and then inside the article this quote:

Ha!  China really doesn’t get it:  THAT’S WHAT FREEDOM OF SPEECH IS ALL ABOUT!

My respect for the NBA — and Mark Cuban who has also been chiming in — just went through the roof.

California’s Budget Is Completely Freakin’ Out Of Control

I just read an interesting — disturbing — piece on our state budget:

CA’s Budget Doubled In 8 Years To $218 Billion

Both the title of the article… and the title of this post… says it all.  Ugh.

Some Random Odd Thoughts About The Kevin Durant Situation

Kevin Durant came back from a calf injury in Game 5 of the NBA Championship… only to rupture his Achilles Tendon.

I agree with the popular opinion:  Tragic.

I also agree with the other popular opinion:  What a fighter… a warrior!

Having KD in there was awesome.  Easy to tell with his offense.  But I thought the real advantage was his defense.  The Raptors, who have been driving to the basket with regularity, couldn’t get around KD’s speed & massive wingspan.  Indeed, it was clear the Warrior defense simply played at a different level with KD in there.

But, I may be the only one to have some additional, random odd thoughts about this as well:

• Did anyone else feel guilty because we all secretly wanted KD to play, and all secretly thought the calf injury couldn’t be that bad?  I certainly was feeling guilty… and the press was no help.  But then I thought about it:  I was told it was a calf injury… which is certainly surmountable with a full 30 days of professional physical therapy.  If we were told it wasn’t actually a calf injury but it affected the Achilles, too, I am positive there’s not a single person that would have expected him to play.  So I don’t want to feel guilty for rooting for a terrific player to come back given the information we were given.
• Did anyone see that massive ice pack they put around KD’s calf when he first came out of the game?  I originally thought, “uh, oh, that can’t be good.”  And then I thought about it… and decided that was smart to keep any swelling down.  Now that I think about it, though, it also froze all the muscles and ligaments… which could have contributed to making the Achilles vulnerable.  I wonder if any physical therapists are rethinking that strategy today?
• Steve Kerr is obviously brilliant.  But, I wonder why he didn’t rest KD longer during the game?  The Warriors seemed like they had things in hand… and, after all, KD hadn’t played for 30 days, you would think he would have wanted to play him sparingly… ?
• Final odd thought:  When he torn his Achilles, he simply let go of the ball… which resulted in an easy layup for Raptors.  For an athlete of the top caliber as KD, you would think he would have at least tried to call a time out… or try to pass the ball to a teammate in some way.  Remember when 49er NaVorro Bowan suffered a hugely painful — gruesome — knee injury against the Seahawks?  As he was writhing in pain, he still had the professional presence of mind to search for the ball — while flat on his back — and secure it.  It was one of the bravest moments I’ve ever seen in sports.  I kinda feel like KD could have… or maybe should have?… done something like that, too.

 

OK, enough odd thoughts.  I sincerely hope Kevin Durant heals fully and quickly, he absolutely deserves it.

And, among the many reasons why I want the Warriors to win, now chief among them is to get a ring for KD!  He absolutely deserves that, too.

The Universe Owes The Warriors

On June 10, 2016, the Golden State Warriors were up 3-1 in the championship series against the Cleveland Cavaliers… a thoroughly dominant position to be in as no team in NBA history has every come back from a 1-3 deficit.

A whole bunch of incredibly improbable things happened… and, unbelievably, SHOCKINGLY, the Warriors lost.

So, I sincerely believe the Universe owes us an improbable win right back.

I’ll take the Universe and the Warriors in 7.

6/10/19 UPDATE:  Warriors 106 Raptors 105!  Now a 2-3 deficit.

6/13/19 UPDATE:  Raptors 114 Warriors 110.  Ugh.  Am quite bummed.  The Universe still owes us one.

Milo Farros 2008-2019

My best friend passed today.

His name was Milo.  And he was an 11-year-old male Doberman, a gift for my daughter from Santa Claus when she was just six-years old.

Some may say a strange gift for a young child… especially judging by the initial fears from parents of Elle’s other six-year-old friends.

But as my wife predicted, everyone came to love Milo.  He was so gentle and child-like around family and friends that we often called him, not a Doberman, but a Doberboy.

On the other hand, with Milo at the foot of Elle’s bed, no child ever slept as safe.

I spent more time with Milo in the last 11 years than I think any other living creature.

He was a good listener, graciously letting me do most of the talking.

Milo was always there for us.  He’d gleefully smile when we’d return home (I kid you not).  He’d run with me.  We’d rough house like boys do.  He was watchful day or night, always vigilant.  He’d put his head on my lap when he knew I needed a hug.

Milo had what is known as “Wobblers” — Cervical Vertebral Instability or CVI.  It’s found in large breeds such as Dobermans.  Instead of the bones in his spine protecting his spinal cord, they abnormally compressed it, causing increasing paralysis.

We first starting seeing signs of Wobblers about 2-3 years ago.  It was about then that we could tell he wasn’t so keen on chasing squirrels around the yard any longer (squirrels, of course, being a major security violation).  We were hoping it was just age.  But sadly it wasn’t.

Even with increasing paralysis, Milo carried himself with the dignity befitting his proud lineage to the very end.

There’s a big hole in my family’s heart tonight.  Please keep a good thought in your’s for Milo our Doberboy.

Thoughts On A Big Birthday

At some point soon I’m going to hit another decade mark… and for the first time that I can remember, it’s kinda bugging me.

I don’t feel old.  I don’t think I act old.  And, yet, when an app asks me what year I was born, it takes me quite a few spins on the digital thumb-dial to get to my birth year.

Ouch.

When I was growing up, I always looked a bit older than I was.

That wasn’t such a bad thing.  I played my first hand of Blackjack in a real casino at the age of 16.  Even though I was underage myself, I was always the guy that got the girls into bars that couldn’t get in themselves.  And I was drinking at the Oasis from freshman year in college on — and since they carded almost everyone, that was quite a feat.

Now, later in life, I’m working hard to flip that.  Definitely helps that a shaved head is a fashion choice these days.  ;)

But regardless of how one looks, hitting a big milestone birthday gives you the inalienable right to share some beer-can wisdom.

Here’s what I’ve learned so far:

*  There is absolutely no downside to being polite to everyone.

*  And more than that, try to be genuinely nice… and, even better, kind… to everyone.  Because everyone deserves that.  The Golden Rule is golden for a reason.

*  And that includes animals, too.

*  And that includes the planet, too.

*  Never ask someone to do something that you wouldn’t do yourself.  Only jerks do that.

*  It may feel like a sprint but it’s really, truly a long-distance race.

*  You can’t do it alone.  And even if you can, it would be lonely.

*  Doing is better than not doing.

*  Don’t quit.

*  Don’t act your age.

*  Don’t judge.  You just never know what someone’s going/gone through.

*  Remember there are two sides to every story.

*  Take the high side.  Closed doors reopen all the time.

*  In the darkest times, make sure you have a goal… any goal.  There always needs to be some light… any light… at the end of the tunnel.

*  From time to time — especially in the darkest times — try a little spirituality.  It really is good for the soul.

*  Always ask yourself:  Am I proud of the way I behaved?  With family and friends?  With strangers?  In social situations?  In sports?  In business dealings?  When no one is looking?  That’s your true compass.  So few people actually ask themselves this… but from an integrity point-of-view — and from a, “is this the kind of person you want to be?!” point-of-view — that may be the most important question in life.

As you can see, I had to drink a lot of beer to gain that much wisdom.  ;)   There are probably some other really great ones… but after a few challenging and battered decades where I thought of throwing in the towel many times, those have served me well for as long as I can remember.

Which, according to my driver’s license, is a fairly long time.  :)

I Love The Concept Of National Emergencies!

Trump has threatened to declare a national emergency to get the rest of his wall built.

The democrats warned if the republicans want to play that game, they could declare gun violence a national emergency, too, when a democrat gets elected next.

Do both parties think these are threats? 

I say this is AWESOME, let’s get them both fixed!

I love more ways to bypass the Washington D.C. political swamp.

(Well, uhm, until we actually have a dictator.)

This Is What I Love About Trump

There is a lot I don’t like about our president.

However, his tweet this morning reveals one of the things I love about the guy… that with new data, he can bypass a bunch of time-wasting politics and thrust a critical issue into the limelight in a moment’s notice:

I am certain that, at some time in the future, President Xi and I, together with President Putin of Russia, will start talking about a meaningful halt to what has become a major and uncontrollable Arms Race. The U.S. spent 716 Billion Dollars this year. Crazy!

What’s the new data?  Maybe someone told Trump the deficit projections… driven in large part by almost $6 TRILLION in military spending since 2001?

I’ve long thought we spend a ridiculous, INSANE amount of money on the military.

We can pretty much bury the entire planet knee deep in nukes… do we really need to spend some 20% of budget on more superfluous weaponry?

Spending half as much… even a third as much… would still make us the biggest military spender in the world.

Good for Trump to bring this issue front & center…

… which is sure to confound both his greatest skeptics AND supporters!  :)

What Is Stronger, Greed Or Fear?

The market is getting rocked by giants swings of volatility.  When it goes up, everything is just the b-e-s-t ever!  And when it goes down, everything is just the worst, worst, worst!

It’s hard not to get caught up in the wash.

Two fundamental emotions drive investing and the stock market:  Greed and Fear.

Greed that you want even more… and fear that you’ll lose everything.

We had an interesting debate the other night:  What’s stronger?

For my money:  Greed.

Because the people involved in the stock market are a self-selecting group… they are, by nature, aggressors.  They want better food… better clothes… better cars… better houses.

So the natural bias of the people that make up the market — over the long run — is up.

That thought gives me a bit of comfort as we watch the market chunk lower.

In many ways, Gordon Gekko did have it right, right?

P.S.  I think this also has to do with ever-increasing population as well… as in, the more people we have, the more things that get bought, benefiting public companies.  But this concept is for a different post.  :)

Stan Lee 1922-2018

Stan Lee (a.k.a. Stanley Martin Lieber) passed today.

I tried to think of the right thought.  I have such terrific memories of diving into brand new comic books… but “thanks for the memories” just didn’t seem appropriate.

I was always entertained… but that seem to miss the significance of Stan Lee’s work.

So here’s what I know about Stan Lee and the teams of talented people he worked with over the years:

They knew how to create, no, craft a character.  Even with incredible superpowers, you could somehow identify with them and their situations… your frailties were their frailties… your fears were their fears… your hopes were their hopes.

My earliest hero was Spiderman… but later in life I branched out to just about every character he crafted…

… because I had something to learn from each.

So, ultimately, I want to thank Stan Lee for being a teacher and the greatest storyteller in my life.

Excelsior!

Apple Is Going Higher, Not Lower

Apple announced earnings today… they beat on top and bottom lines… and even though iPhone unit sales missed by a tad, average sales price crushed expectations.

Sounds good, right?

Not so fast.  Apple is DOWN almost 6.5% in the after market.

Yikes!

Turns out guidance came in a bit light.

And, Apple said it was going to stop reporting on unit sales, which — supposedly — signals to analysts less volume going forward.

Here’s what I think:

WHAT IS EVERYONE CRAZY?!

Apple just reported 40% earnings growth.  That’s right — 40%.  That’s spectacular for any company… but a company Apple’s size?  That’s p-h-e-n-o-m-e-n-a-l.

To put valuation in perspective:  Usually your P/E matches your earnings growth.  So if you are growing at 10%, you have a 10 P/E.  So if you’ve grown earnings by 40%, you should have a P/E of 40.

But that’s not the case for AAPL.  Apple has a trailing 20 P/E… or, even more amazing, just a forward 14 P/E.  Which means there is a case to be made that AAPL is undervalued… it could be trading 100% higher… or even 200% higher in some circles.

Further, with a company like Apple — that is, consistent… steady… predictable — is light guidance really an issue?  Especially given that Apple usually gives lighter guidance… and has been doing so since the days Steve ran the company?

I think not sharing iPhone unit totals is the real issue… and it’s not with investors… but with analysts that are tasked to create projection models.

Fair enough, it will make their job harder.

But, seriously, Apple is consistent… steady… predictable… AND growing earnings at 40%… and, btw, growing revenues at a whopping 20%, too… their job is already pretty straightforward.

So here’s what I also think:  AAPL may initially go lower… but at some point the investment community is going to say, “It’s the #1 product in the world, produced by the #1 brand in the world.  40% earnings growth means they continue to knock the cover off the ball.  Most of the macro economic indicators are still intact.  Uhm, are we daft?!”

That’s when the momentum will shift… and we’ll see AAPL move higher.

And, despite what will seem like a stock-crushing open, I think it could happen sometime tomorrow.

UPDATE:  Well, uhm, maybe next week.  :)

Letting Some Air Out Of The Balloon

There’s a lot of noise in the market.

But there’s usually a lot of noise.

By definition — at any point in time — 50% of people think there’s enough bad in the market to sell their shares to the other 50% who thinks there’s good.

Can’t have a market otherwise.  That’s why I always scoff when someone refers to “easy” trading periods.  It’s never easy.

What helps guide you through the noise is whether your fundamental investment thesis is still intact.

Is mine?  I think the two biggest drivers of corporate profits — which drive the market — are the price of oil and interest rates.  Let’s see where they stand:

* While oil took a little run to the upside, I wouldn’t call it misbehaving.  In fact, it’s shed much of its 2018 gain

* Interest rates are spooking everyone… but 10-year is sneaking back down… and Trump’s on fire about the Fed messing things up — so much so that a few Fed governors have had to reiterate that they won’t, uhm, mess things up (i.e., “will still be accommodative for quite a while”)

* Sentiment is negative.  While that’s not comfortable, as a contrarian I prefer this

So, for me, at least right now, the noise is… just noise… and what we’re seeing is some healthy “letting some air out of the balloon”… which we like… so it doesn’t pop.

 

P.S.  A great example of “noise” was Caterpillar earnings.  They beat top & bottom line.  But everyone was fretting about China and tariffs… and the stock got pounded… even though if you read their commentary, you find CAT itself wasn’t so worried about the effect of China or tariffs on its business.  Here’s some commentary from their 10/23/18 earnings call:

* CATERPILLAR SAYS FEEL GOOD ABOUT EQUIPMENT DEMAND IN CHINA NEXT YEAR

* CATERPILLAR SAYS EXPECT BUSINESS TO CONTINUE TO IMPROVE IN 2019 VERSUS 2018

* CATERPILLAR SAYS CONTINUE TO EXPECT INDUSTRY SALES IN CHINA FOR 10-TON-AND-ABOVE EXCAVATORS TO BE UP ABOUT 40 PERCENT FOR THE FULL YEAR

* CATERPILLAR SAYS EXPECT IMPACT OF 25 PERCENT IMPORT TARIFF ON ADDITIONAL $200 BILLION CHINESE GOODS TO BE ‘QUITE MINOR’

These are all good things, right?!

Microsoft Earnings Are Back To Being Incredibly Relevant

I have to hurry this post because Microsoft is about to announce earnings.

For the first time in many years, Microsoft’s earnings are incredibly relevant again.

As many know, MSFT is in the process of successfully reinventing itself… to be a big-time cloud competitor.

Their earnings after the market closes today are important because the market is in desperate need of some kind of clear signal… either that things are still ok in tech land… or they’re not.

It just so happens MSFT is announcing before Apple, Amazon, Google, and Facebook… which means all eyes will be on their report.

Now, Microsoft has a reasonable stage set.  Adobe reaffirmed guidance last week… which I believe single-handled stopped the market from another 5-10% slide… since everyone was/is feeling like we’ve driven off a cliff… given tariffs… and global tensions… and interest rate hikes… and Trump acting decidedly unpresidential most of the time.

And Netflix killed their earnings, too, which even though it doesn’t seem like it, also helped provide some footing in this decidedly negative market.

But some disturbing things are still happening.  iRobot (IRBT), makers of my favorite electronic device in the world (Roomba!), killed their numbers, too… and the stock was still hammered today… simply because they cited some potential tariff impact… even though they still raised guidance.

What the market wants — craves — now is more assurance… that the consumer is still spending… that interest rates, while increasing, will increase in a slow and measured pace… that oil isn’t going to spike… that tariffs are having a positive effect somewhere in the food chain…

… essentially that the foundation for investment is still sound.

A good report from the once most dominate and influential tech company in the world… that has clawed its way back into relevance… could turn everything on a dime.  Stay tuned!

UPDATE:  Earnings were solid.  Beat on both top and bottom lines.  Stock was up almost 5% at one point in the after-hours market.  (BTW, Tesla TSLA also reported and nailed it… it’s up over 10% in after hours… and ironically they mentioned tariffs and it doesn’t seem to be impacting the pop.)

Now THAT’S Acting Like A Leader, President Trump

I was OVERJOYED by this headline:

Trump says each Cabinet secretary should slash 5% of their budgets after he pledges to cut spending

Remarkably, even one of the slipperiest* figures in politics, Kellyanne Conway, said something COMPLETELY INTELLIGENT:

“He’s asking them to cut the fraud, the waste, the abuse,” White House senior advisor Kellyanne Conway said on Fox Business Network. “Cut the fat, not the essentials.”

I think Trump should have asked for 10% — in business that’s considering an easy and smart cut as it forces you to really examine all of your projects and cut the worst performing one — but 5% is fine to get this party started.

 

*  Sorry for tongue-tying word but that describes her perfectly.

Something I Haven’t Done In 40 Years

We had to be clean shaven in high school.  So when I went off to college, one of the first things I did was grow a mustache.

Longer (as was the style) in the 70’s and 80’s… and shorter for the last few decades… it’s been with me ever since.

Until today.

After 40 years, I’m not sure why I picked October 17, 2018 to shave it off.  Maybe it’s because I was meeting with a bunch of entrepreneurs at Draper University today… and was admiring how all these kids were stepping way outside their comfort zone to take on something new and risky.

And then I thought, I should do something new and risky, too.

For me, that’s not starting a business or investing or such, I do that quite often.

Nah, for me, it had to be something I haven’t done before… or at least something I haven’t done in a looong time… which I believe 40 years qualifies as.

And, so, out came the razor… !

 

P.S.  As you can see, the haircut is the same.  ;)

Please Stop Being An Embarrassment, President Trump

This shouldn’t be news.  On CNBC, no less.  It’s an embarrassment.  Grow up and be presidential, Donnie.

I Hate Blatantly Biased Political TV Ads That Pander To Non-Relevant Fears

A few years ago a proposition went on the ballot to add a $1 tax per pack of cigarettes… with 100% of the tax going to support medical research for smokers.

The logic was simple:  If you choose to smoke, you should also be responsible for the health care costs you will inevitably have.

The tobacco industry fought this by creating an ad that had nothing to do with the issue at hand.  It was like an ad that read, “aw, but don’t we all like puppies and kittens?”

It’s happening again.

The California Teachers Association — one of the largest lobbyist groups in California — has created a shell organization called “Kids Not Profits”… in order to disguise their efforts to torpedo anyone that challenges their dominance…

… a dominance that corresponds with California schools going from one of the top systems in the country to one of the worst.

The ads the Teachers Association are running make it sound like the non-union people trying to fix our school problem are all “greedy billionaires who want to kill puppies and kittens!”

P-l-e-a-s-e!  Come on, people… let’s use some common sense… the last thing anyone interested in making a profit would want to do is get into the education business, especially at the grade school and high school levels.  It’s just not a good money investment.

It is, however, a great people investment… which ultimate corresponds with a great community investment… which is why it’s called philanthropy:

the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.

On the other hand, let’s call a spade a spade:  The Teachers Association DOESN’T protect teachers… it protects the massive layer of administrative bureaucracy above teachers… those same administrators that now control one of the largest educational budgets in the United States… and those same administrators that have — literally — DESTROYED public education in California.

The California Teachers Association should call their new organization “Administrators NOT Teachers or Kids”…

… because all the money goes to the incompetent administrators, leaving bare nothings for kids and teachers.

The Definition Of Stupidity

Apparently California is using tax dollars to advertise against a proposition on the California ballot to repeal a gas tax.

Yes, that’s right:  Using more tax money to make sure we can tax more.

Sorry but that just doesn’t sound right.

Politics.  UGH!  Just fix the problem instead of throwing more money at it!

Facebook (FB): When Bad News Is Really Good News

After trading sideway for a few weeks — while the rest of the market was going up — Facebook (FB) started its end-of-quarter / ramp-to-earnings run last week… hitting a high of almost 172 just a few days ago.

Things tried to knock the stock backwards.  Earlier in the week some key execs left the company and FB open sharply down, only to rally back even stronger.

And on Friday news of a data breech hit, again hitting the stock hard.  While it hasn’t rallied back yet, it did close nicely off its lows.

My take on these seemingly bad news events?

Zuckerberg and Sandberg don’t lose people they don’t want to lose.  If some execs exited, there was probably a good business reason for it.

And, while a data breach is always concerning, it was only a small % of actual Facebook users and dealt with demographic-type of info — available in lots of places — nothing even close to sensitive passwords or credit card-type info.

The breach was so benign, security experts say there is no need to even change your password (about 1:30 into the linked video).  THAT’S about as benign as it gets.

On the flip side, Facebook says they think they jumped on it fast enough to stop anything from even happening… so in a race between companies and hackers, FB’s response time — including disclosing the problem — seems to have been outstanding… exactly the kind of response the government has been looking for.

So, this is the kind of bad news that I think presents a good buying opportunity.

With this said, I do think there’s a good chance FB will see some more weakness based on bad news circulating in the press this weekend.  However, I’m less worried about that downside risk than I am about missing the next leg up… because I believe there’s a better chance big money investors will find FB’s suppressed stock price irresistible going into earnings over the next few weeks.  In fact, the action over the last few weeks suggests they’ve already started to pile in.

Please remember that it was just a scarce few months ago FB was trading at 218 on its way to the 240 level.  At Friday’s close of 164 and change, FB is now trading at crashed levels.  And this is for a company that thoroughly dominates their space… with about the best financials on the planet.

Also, please remember that FB’s earnings last quarter were actually pretty good… they beat MONSTER expectations, which was no easy feat.

What tanked the stock was ultra, ultra conservative guidance… which is the way Wall Street says a big earnings beat could be in the making… which sounds like a good news thing to me.

Apple Support Horror Story: When Two-Step Activation Locks You Out Of Your Own iPhone

[This is an Apple iPhone Tech Support post.  Totally skip it unless two-step activation has locked you out of your iPhone… and if it has, this may be one of the most valuable posts you ever read!]

I’m writing this after about 10 hours of the most horrible customer services experiences I’ve ever had.  EVER.

I’m telling my story in hopes that Apple fix this… and to save others from the horror I went through.

Background:

I lost the ability to make or receive calls.  WIFI still worked so I was able to get text and email, which actually masked the problem for the first day or so.

Verizon said it had to do with upgrading to 10.3.3, that it could be mucking with the digital antennae or something, and that the solutions was to backup, wipe the phone, reinstall, then restore the backup.

So, I called Apple Support.  They concurred with Verizon and started walking me through the process.

What Apple Support did NOT do, however, was ask me if I was using two-step authentication AND whether I had a second trusted device.

Turns out when I turned on two-step authentication, I thought it was only naturally to designate my iPhone as my trusted device.  Sounds reasonable, right?

WRONG!

This turns out to be DEATH.  And incredibly irresponsible of the Apple Support folks that helped me!

Because when I wiped my phone and reinstalled from scratch, it meant I had to reactivate my iPhone with Verizon… but Verizon requires that I enter in my Apple ID and password and, as the second step of the two-step authentication, the six-digit code that Apple would send to my — you guessed it — inactive device!

I went down Apple’s recovery path… and the automated Apple process told me it would take a few days to add a second trusted device… “for my protection.”  When a few days came, it said it would take a few more.  Then a few more.  Then it said a WEEK!

Before I continue, I want to say that these time estimates were a BIG FAT LIE.  It just kept pushing the date out on me.

And, I want to say it doesn’t matter that Apple was doing all of this “for my protection”… I use my phone for work… and it can’t be non-functional for even a few days!

I literally almost gave up and just bought a new phone… because, after TEN (10) hours of Apple Support help, I wasn’t any closer to a solution.  And — please listen to this, Apple — I was damn close to considering an android, too.

I have no idea why I called Apple Support one more time.  Maybe because I was bleary eyed and wasn’t really thinking.  Maybe because I just wanted to yell at someone.  Maybe because I own Apple stock and just couldn’t believe I was really hung out to dry here.  But I did call one more time, and spoke to Ginger L… and — TO MY INCREDIBLE SURPRISE — she actually had heard of a clever work around for this situation.

And, what do you know, IT WORKED!

Bless Ginger L., she should be CEO of Apple!

Apple, PLEASE FIX THIS.  No customer should ever, ever, ever endure what I had to go through.  PLEASE!
The Ginger L. Solution:  How to activate an inactive device when Apple two-step authentication insists on sending the activation code to the inactive device

*  Plug your iPhone into a computer that has iTunes on it.

*  Log into iTunes and back up iPhone to the cloud or your computer.

*  Restore iPhone to a new phone… initialize phone just like it’s a new one (i.e., chose language, what time zone, WIFI, etc.)… BUT — AND THIS IS KEY — do NOT enter your Apple ID, keep choosing options that bypass Apple ID.

*  Activate your account (in my case, I had to call Verizon).

*  Test that your phone can send & receive calls and text messages.

*  From a computer, log into AppleID.Apple.com.

*  Enter Apple ID and password.

*  Apple will try to send you your second-step authorization code to Message but that won’t work yet.  Click the “I didn’t receive my code” link and choose the “Send text message” option.

*  IMPORTANT NOTE:  Respond to any other text messages you see… because once you restore your backup, you will lose those newly downloaded text messages.

*  Enter code and from your computer and follow the links/instructions to turn OFF two-step notification.

*  Plug your iPhone into your computer and from iTunes restore your backup.

*  Activate your iPhone again (again, for me  with a call to Verizon)… which may require you to enter your Apple ID and password… but WON’T require Apple sending you an second-step auth code to an inactive phone!

There, I just saved you 10 hours of customer support misery!