Thursday, July 24, 2014

The Answer to Poor Hedge Fund Results and High Fees and Costs: "Index Funds" says Warren Buffett

Yesterday in the WSJ, a big article appears (behind the pay-wall) on the unhappiness of public pension funds, including Calpers, the big CA public pensions fund, with their hedge fund investments.  Here is the closing paragraph of that article:

Mr. Meiberger [on the board of the San Francisco Employees' Retirement System] said at the [the board's June] meeting that he had sought out Warren Buffett's advice on the matter. The billionaire investor's handwritten response: "I would not go with hedge funds—would prefer index funds."

Wednesday, July 23, 2014

Thursday, July 17, 2014

The Satan Got In Our Way

This Sunday's lesson addresses 1 Thessalonians 2.17-20.

In this passage of this letter to the believers at Thessalonica, Paul writes from Corinth that he wanted to return to them "again and again – but Satan stopped us." (NIV 1984)

What is this about Satan? And what about God's sovereignty?  Juicy problems.

N. T. Wright is not so sure about a being named Satan. His translation of the problem passage is "but the satan got in our way." Note that Wright does not capitalize "satan."

Here is what he writes in pertinent part in his essay on this passage:

Paul doesn't always mention 'the satan', but when he does he seems to be aware that behind at least some of the ordinary frustrations and thwarted plans that are common to the human race we may discern a darker and more malevolent force at work. This force – and it may be going too far to see it as 'personal' – embodies itself from time to time in human beings and organizations that block God's purpose or hold it up for awhile.

-Wright, N. T., Paul for Everyone – Galatians and Thessalonians (Westminster John Knox Press 2004) at p. 105.

 John Stott takes a little more time with this passage in his short "exposition" of Thessalonians.  (He doesn't want to elevate his book to the status of "commentary"), The Message of 1 & 2 Thessalonians.

His translation is the NIV 1984, "But Satan stopped us."  Stott does not stop to consider the question of whether there is a "personal" Satan, that is a being, a sort of person, named Satan.  Instead, Stott addresses the question of whether this being at this time and place frustrates God's will:

 [W]e observe that the apostle blames the devil for the failure of his attempts to return. Satan 'thwarted us' (REB) or 'prevented us' (JBP, JB), he says, using a verb (enkopto, to cut into) which could be applied either to 'breaking up a road to render it impassable' or to an athlete 'cutting in' during a race. The more important question is why Paul attributed this blockage to Satan, while attributing others to God.  One answer could be that God gave Paul spiritual discernment to distinguish between providential and demonic happenings.  Another is that the attribution could be made only with the benefit of hindsight. 'It was probably evident – in retrospect, if not immediately – that the one check worked out for the advancement of the gospel and the other for its hindrance.'. A third and more theological perspective is to say that 'both statements are true.  Although Satan does his part, God still retains supreme authority . . . '. At all events, Paul's purpose is to affirm that his inability to return to them [the believers in Thessalonica] was not due to any indifference on his part, but rather to the malign influence of the devil.  [footnotes omitted]

On the question of God's providence, N. T. Wright does have this important thing to say:

Underneath the opposition of 'the satan' we may sometimes discern the strange providence of God.  This does not rob the 'satanic' opposition of danger or threat, but reminds us that God remains sovereign even over present dark frustrations. 

-Wright at p. 106.


"Neuroplasticity is one of science's most startling discoveries of the past thirty years.
We used to think brain development was a one-way street: you were born with a thousand trillion neural connections, give or take, and what followed was mostly a lifetime of pruning, according to the rules of use it or lose it.  We now know that the brain can retrofit itself, growing new neural connections(and pumping up existing ones) upon exposure to novel circumstances.  That's what adaptation is all about.
True enough, it works best if you are young."
-from Grierson, Bruce, What Makes Olga Run? The Mystery of the 90-Something Track Star and What She Can Teach Us About Living Longer, Happier Lives. (Henry Holt 2014) at p. 48.

Of course, Olga Kotelko, the subject of Grierson's book is not young, but the point he makes is that neuroplasticity is working even into one's 90s  - at least into Olga's 90s - in a marvelous way.  And I turned only 68 yesterday.

Tuesday, July 15, 2014

"Slowly Slowly Catchy Monkey"

It was only after I was well into adulthood that I heard this saying.  It came from a client of the generation ahead of me, and we must have been talking about getting things done.  I have long forgotten the details of the conversation, other than the saying itself and the click of the light bulb turning on in my brain.

Here is blog post that discusses this adage in a helpful way.

The matter of not rushing things has been the subject of previous posts of mine recently (here and here) as I have been reading from the Adages of Erasmus.

Friday, July 11, 2014

Target in a Confused (If Not Deceptive) Manner Addresses Firearms in its Stores

The Target CEO recently made the news by "addressing" the matter of its customers carrying firearms in Target stores.  The pertinent post on Target's blog is here.  The text of that post is as follows:

[The post begins with an editorial introduction.] Every day at Target, in everything we do, we ask ourselves what is right for our guests? We make all of our decisions with that question in mind. Questions have circulated in recent weeks around Target’s policy on the “open carry” of firearms in its stores. Today, interim CEO, John Mulligan, shared the following note with our Target team members. We wanted you to hear this update from us, too.

[Then we have Mulligan's statement.]  The leadership team has been weighing a complex issue, and I want to be sure everyone understands our thoughts and ultimate decision.

As you’ve likely seen in the media, there has been a debate about whether guests in communities that permit “open carry” should be allowed to bring firearms into Target stores. Our approach has always been to follow local laws, and of course, we will continue to do so. But starting today we will also respectfully request that guests not bring firearms to Target – even in communities where it is permitted by law.

We’ve listened carefully to the nuances of this debate and respect the protected rights of everyone involved. In return, we are asking for help in fulfilling our goal to create an atmosphere that is safe and inviting for our guests and team members.

This is a complicated issue, but it boils down to a simple belief: Bringing firearms to Target creates an environment that is at odds with the family-friendly shopping and work experience we strive to create.

Is Mulligan addressing "open-carry" alone or do his remarks include licensed concealed carry?  I am uncomfortable with open-carry practices, but I affirm the right to concealed carry.  I think the pressure for open carry is coming from fringe elements in the right-to-bear-arms population, although obviously a powerful fringe-element.  In my view, open carry is provocative and unnecessary.

Mulligan's statement, however, does not clearly distinguish open-carry and concealed-carry practices.  Is he using the general discomfort with open-carry as a means to taint the practice of concealed-carry?  I think he probably is.  As you read many of the news reports on Mulligan's statement, the distinction between open-carry and concealed-carry is difficult, if not impossible, to see.  I attribute that to a bad-faith attack on all carry forms.

Wednesday, July 02, 2014

ich ben ein ugandan

Ugandans love bananas. In fact, many receive 30 percent of their daily caloric intake from them, eating three to 11 bananas daily, or roughly 500 to 800 pounds annually. The consumption numbers apply roughly to Ugandan's neighbors, as well, though to a lesser extent.

-from " 'Super-bananas' Enter U.S.Market Trials," posted July 1 on the Scientific American website.

The Bankers Club Closes

The Bankers Club, on the 14th floor of One Biscayne Tower, closed last Thursday.  I joined the club in 1977, not long after Smathers & Thompson made me a (junior) partner.  According to firm tradition at the time, when a lawyer made partner, the other partners proposed his membership in the University Club, another, much older downtown club.  But the UC was restricted, that is, they did not admit Jews and they did not admit women.  The nearly new Bankers Club admitted both, and so I turned down the invitation and joined the Bankers Club instead.  It provoked the anger of the senior partner with whom I worked most of the time. He complained that the Jews had their own club, which they did, in another building downtown a couple of blocks away.  He got over it.

Not that Smathers & Thompson itself had any such restrictions.  A friend of mine there, who was also a junior partner at Smathers & Thompson, was Jewish.  He, however, had not been invited to join the University Club. That annoyed me.

A year or two later, the University Club dropped the restriction against Jews.  The club immediately extended my friend an invitation.  To my surprise, he immediately accepted it.  In the meanwhile, I had found the Bankers Club completely satisfactory.

(Years later, I also joined the University Club.  It was much more social - where the Bankers Club was strictly professional.  The UC closed a few years  after I joined, but not before Carol and I attended a social event at the Indian Creek Country Club, itself a very exclusive venue.  It was a very formal occasion, black tie, etc.  We witnessed that night to our dismay and astonishment, as midnight approached, drunken women stumbling around in their long dresses.  It was a heavy drinking crowd.  We did not attend another UC social event. We did not lament its closing.)

I have some great memories of the Bankers Club, the two best memories being the parties we had for my dad, the first to celebrate his 70th birthday and the second his 80th.

The Bankers Club also had wonderful Mother's Day brunches (a rare concession to a non-professional event).  Carol, our children, my father and mother usually attended with my Jewish friend, his mother, his wife, and his children.  Other members brought their families - the brunch was a sumptuous buffet and very well attended.  It was a rare treat to see the downtown professionals with spouses and children.  We all became a bit more human to each other.

Another favorite memory was the luncheon I had at the Bankers Club with the general counsel of Bacardi.  This occurred after Smathers and Thompson merged with Kelley Drye and Warren in 1987.  Bacardi was a client of KDW.  Joining us at the lunch were the former president and chairman of the board, then a senior partner at Kelley Drye, who had a second home on Key Biscayne, and another NY KDW partner who had flown down for the lunch.  I learned that behind Barcardi were extensive family networks, many of which were Miami-based.  Many of those families were serious about estate planning and enjoyed the benefits of various kinds of trusts.  The men with whom I met were a generation ahead of me, and were anxious to transfer a lot of the estate planning trust work from NY to Miami and to a younger, local lawyer.  Was I up to it?  I guess they thought so, because I still work for Barcardi families.  My memories of that luncheon, however, are dominated by the impression these men, lawyers all, made on me.  They were serious, bright, unaffected, and friendly.  I thought they were marvelous, and still do.

After KDW closed its Miami office and when we opened our current firm in 1999, we usually had our Holiday parties at the Bankers Club.  We were well treated and it was enjoyable, although, as the years went by, we began to have those parties at other restaurants, mostly over on the Brickell side of the business district.  The growth in the number of of alternate places to dine - of every variety - spelled the doom for the Bankers Club.  But I did not have the heart to cancel my membership and I kept up the monthly dues, even after the management opened its services up to the public.  What a great help the Bankers Club was to me professionally.  It was a blessing for which I will remain grateful.

Tuesday, July 01, 2014

Unintended Consequences of Well-Meaning Public Policy

Why has the labor market contracted so much and why does it remain depressed? Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways—and although these policies were advertised as employment-expanding, the fact is that they reduced incentives for people to work and for businesses to hire.

-from "A Recovery Stymied by Redistribution" by Casey B. Mulligan, of the University of Chicago, in the WSJ.

To the right is the cover of  his latest book on the topic.

On June 25, Casey Mulligan gave the 2014 Hayek Lecture at the Manhattan Institute for Policy Research from which the WSJ article is adapted.  That lecture is available for viewing.