Thursday, April 23, 2015

What is a Benedictine Oblate?

Our "blogroll," the one that is mainly in our heads, includes The Anchoress written by Elizabeth Scalia.  Her short bio on the home page of the blog states, among other things, she is a "Benedictine Oblate."   What is that? Here is the answer.

Wikipedia's article on oblates defines oblate as follows: 

Currently, oblate has two meanings:
  • Oblates are individuals, either laypersons or clergy, normally living in general society, who, while not professed monks or nuns, have individually affiliated themselves with a monastic community of their choice. They make a formal, private promise (annually renewable or for life, depending on the monastery with which they are affiliated) to follow the Rule of the Order in their private life as closely as their individual circumstances and prior commitments permit. Such oblates do not constitute a separate religious order as such, but are considered an extended part of the monastic community, and as such also often have the letters OblSB[1][2] after their names on documents. They are comparable to the tertiaries associated with the various Orders of friars.
  • "Oblate" is also used in the official name of some religious institutes as an indication of their sense of dedication.
 Are there oblates among Protestants?  The Wikipedia article says that there are Anglican and Methodist oblates.

Saturday, April 11, 2015

Low-Cost Investing in Marketable Securities

This graphic is from the Sunday Business section of the March 15, 2015, issue of the NY Times, a column by Jeff Sommer entitled How Many Mutual Funds Routinely Rout the Market? Zero. The graphic shows the number of active investment managers who beat the market in 2010.  Then it follows that cohort for the next five years.  As a member of the cohort fails to beat the market in subsequent years, it drops of the graphic.  By 2014, only two are left.  By 2015, those two, however, are not looking like they will survive the cut.  So it looks like none will be left.

A client of mine brought a hard copy of the article to our office yesterday for separate conferences we had set up with advisers from Fidelity and Vanguard, respectively.  The client had been considering whether to move from an "active" manager of the very large portfolio for which the client is responsible to a low-cost index approach.  (The client had also brought in a hard copy of another NYT column by Mr. Sommer, this one entitled Measure for Measure, Index Funds Rule.)

The client decided to fire the active manager, a trust company, tentatively giving about half of it to Vanguard and half to Fidelity.

The Vanguard representative made some points that were new and striking to me.  One is that Vanguard has under management over three trillion dollars of assets.  The economy of scale that Vanguard introduces with such a staggering amount has to be matchless, at least with respect to help that can be accessed by retail investors.

Another point that that Vanguard rep made is the following, a point the Vanguard makes on its website:

At Vanguard, there is no third party. The company is owned by its funds, which in turn are owned by their shareholders—including you, if you're a Vanguard investor.  In other words, Vanguard is structured as a "mutual" mutual fund company. It's the only firm in the industry that works this way. This unique structure aligns our interests with those of our clients and provides benefits to investors worldwide. 

A third point he made is that, with respect to its actively managed funds, the management firms that Vanguard employs are third parties.  The client was not interested in "active" management, but I think it is remarkable that, although Vanguard offers actively managed funds, it does not share in the compensation of the subject investment managers.  In fact, it uses its scale to lower the cost of those managers, thus lowering the hurdle that such managers must clear in order to beat the pertinent benchmark or index.

Thursday, April 09, 2015

Republican Florida as the Obamacare Capital

Today's Miami Herald, in an article worth reading in full,  reports that

[w]hen Florida racked up impressive enrollment numbers in 2014 for insurance plans offered under the Affordable Care Act, some healthcare analysts were surprised.

In 2015, the Sunshine State did it again, surpassing enrollment projections and beating out much-larger California and even Texas, a state more populous, more uninsured and with similar Republican opposition to the law.

Florida is one of those states, however, that did not establish its own insurance exchange, and so people have been purchasing their ACA insurance through a federal exchange.  That means that if the Supreme Court in King v. Burwell rules that federal subsidies are only to be paid to state-established exchanges and not to a federal exchange, then there will be a lot of unhappy people in this state.  

It would be too much to hope that the Republicans would have some legislation ready to fix Obamacare in this respect, some legislation that the President would sign (or clearly should sign, if the President refuses to cooperate - I'm thinking that the Republicans might hire that Iranian negotiator to help - not our negotiator, Iran's negotiator).  It would be good to have this effort well underway before the Supreme Court rules, taking the Court off the spot on this one. Then Congress can go to work on reforming the ACA in other respects.  (Forget about abolition.  Just forget about it.)  In 2016 the Republicans may pay the price for failure to "save" the ACA.

Read more here:

Thursday, April 02, 2015

Growth is a Miracle

The two professors who made Duke for me were I. B. ("Bill") Holley of the History Department and Barney Jones in the Religion Department.  Other fine teachers also made college a rich and valuable experience, both those two had, I think, the greatest impact on me.  Dr. Holley now and then expressed his amazement about being where he was in life, that is, as a school teacher.

He said he never expected to live such a comfortable life.  He taught students because that was what he liked to do.  But then, all of a sudden it seemed to him, here he was a tenured professor at Duke, teaching bright kids, living in a beautiful place, being paid far more than he would have ever expected.  All of this by simply doing what he liked to do.  (He did what he liked to do very well, but didn't say so.)

He likened it to what a farmer does.  He goes out, tills his fields, plants, fertilizes ("husbands") what he comes to be in charge of, does something every day, and he works hard and as smart as he can.  Yet he is amazed that the miracle happens, the crops begin to grow as the seed germinates, the rains come and the sunshine and soil do their work.  The crops grow to fruition and upon their harvest the market buys those crops, because other people need them.  They pay the farmer money, from which he can support his family, buy seed and supplies for the next growing season, and perhaps an additional field.  The farmer compares to what has  happened to what he did and then stands amazed.  How could Bill Holley do what he liked to do and then, after a time, find himself in that classroom, expressing his wonder to a class of college seniors and being so well off?  He was humbled by the whole thing.

There was an argument in Washington between the Democrats and the Republicans recently about who is responsible for the prosperity that many Americans enjoy.  (I would say "most" Americans, not just many, if we are going to speak relatively, that is, most Americans when compared to others in other places and at other times.)  The Democrats said to the Republicans, the self-appointed representatives of American individualism, that the national community is responsible for that prosperity.  (What they meant by that is mainly Washington is responsible, that is Washington when it is fortunate enough to be in control of the Democrats.)  With umbrage, Republicans said, "No, I built this," hoping to strike a chord in the heart of every hard-working American.  It was a false argument, one that played into the strategy of polarization that each party employs against the other, much to the detriment of the country.

The miracle of growth takes table-setting, to change the metaphor, by community and individuals both, of course.  But, even then, when the feast comes in from the kitchen, it is God who prepares it and brings it to us for the celebration, all in at his good time.

I'm on the back end of the curve of my career as a lawyer, and it amazes me that writing wills has brought me here, to this place and to this point, with such family, partners, and other friends.  Yes, I have gotten up every day and gone  to school or work, with times off each week for rest.  But as I look at this, I know that my efforts were hardly enough to get me to this place.  It took a lot of people to get me here, one of them Bill Holley, each one of them individually and in community helping to set my table.  But like Dr. Holley, I'm amazed and grateful at this miracle of growth.