10/22:Insights both professionals and public
failed to grasp - "The
current extended US bull market since the major 2008-09
sell-off allows for the retail investor to feel
comfortable with “cheaper” passive investment. Yet prior
to each of the previous busts there were also good reasons
to “love the bubble”. And the subsequent bust was
exacerbated by the retail investors’ reversal of previous
confidence. That was the case for the origination of
portfolio insurance back in the 1980s. Retail
investors enticed into selling “naked put” options
(along with the misguided notion of “dynamic hedging”)
allowed portfolio managers to pay excessive levels for
10/22: Obesity is increasing
1975 obese children were almost unknown outside the rich
world: just 0.3% of people in developing countries aged five
to 19 were classed as obese. That figure has soared to 7%
today. If current trends continue, the number of obese children worldwide will
surpass that of the undernourished by 2022
EFM- the trend will continue
Aging Parents and Pets
When George Honn knocked on his mother’s door to pick her
up for a doctor’s appointment six years ago, she was
startled. “That’s not today,” she told him.
Sadly, George wasn’t as surprised as his mom, Charlotte,
who was 81 at the time and living in Kansas
City, Missouri. Once a talented cook and seamstress,
Charlotte had been slipping for a while, forgetting
appointments and endangering herself and others when she got
behind the wheel. Sometimes, Charlotte didn’t slow the car
at all as she merged into the path of speeding vehicles on a
busy highway. “I’m an old lady. They have to let me in,”
Charlotte told George when he rode beside her. In 2014, a
Charlotte with dementia and banned her from driving.
George and his wife, Nancy, who lived nearly an hour away in
Kansas, checked on Charlotte regularly and got her out
of the house occasionally.
At least Charlotte had her dog, Chester, a young,
20-pound West Highland Terrier mix, to keep her company.
However, as Charlotte’s dementia worsened, she frequently
forgot to let Chester outside to relieve himself.
Charlotte’s apartment smelled of urine, and she fell and
injured herself often.
In 2015, Charlotte moved to an assisted
living community that allowed pets. However, she still
forgot to let Chester outside. The Honns worried that the
assisted living residence would insist that Charlotte
couldn’t keep Chester.
Before they could find Chester a new home, an emergency
made the issue even more pressing. Charlotte fell again,
breaking her ankle, and was admitted to a skilled nursing
facility permanently in late 2015. This time, Chester
couldn’t go with her.
When a Senior Can’t Keep a Pet: A Common Dilemma
Rescue of Missouri is contacted “all the time” by
children of aging parents unable to keep their pets, says
Cheryl Sanford Aston, a volunteer and board member with the
“Typically, the family or a friend will contact us,” says
Sanford Aston. “A lot of times, it’s a crisis situation
where they might say, ‘I have to get rid of the dog
The Honns didn’t want to take in Chester, who was five by
that time and still not properly housetrained. Charlotte’s
grandson took Chester for a while but the dog, stressed by
an unfamiliar environment, chewed up furniture and gnawed
through a wire crate where he was kept when the man left the
The Honns boarded Chester temporarily at a kennel.
Meanwhile, George’s mother Charlotte continued to decline
At times, Charlotte thought
she was living on a boat. Other times, not
understanding the facility’s pet restrictions, she pleaded
for Chester’s return. “He doesn’t need to be rescued,”
Charlotte told them. “He’s got a home here. Bring him back.”
Nancy called animal rescue groups but says all of them
turned her down because they were full. “I was upset because
it wasn’t fair to the dog,” says Nancy. “Something needed to
be done but we had no idea what to do. I didn’t want to put
Planning Ahead for a Parent’s Pet
It’s a good idea to ask your parents to include in estate
planning a guardian for their pet and/or enough money
to fund veterinary care, boarding and expenses related to
finding the animal a new home, says Sanford Aston.
Plan ahead so you’re not making decisions during a crisis.
Pet rehoming options could include:
- Adopt to a family member or friend.
- Sign over the pet to a reputable rescue group.
Make sure the organization is licensed in the state where
it’s located and has standards in place for adopters. A
good rescue will charge an adoption fee, have the adopter
sign a contract promising to return the pet if that person
no longer wants to keep the animal and will follow up at
least once or twice on the adoption. You can search online
to find local animal rescue groups.
- Surrender to an animal shelter. If you
have no choice but to take the pet to an animal shelter,
try to find a facility that is clean, well-managed and has
an excellent reputation. Ask friends about shelters where
they adopted their pets. At the shelter, inquire about its
euthanasia policy and procedure when a pet is not adopted
within a certain time frame.
- Temporarily board the pet while looking
for an adopter. Be sure you tour the boarding facility and
check out where the pet will be kept. Also, inquire about
how much recreation or playtime the pet will receive.
Whatever you do, don’t advertise the pet on Craigslist or
elsewhere as “free to a good home.” Unfortunately, people
seeking free dogs sometimes have nefarious intentions such
as selling the pet to dog fighting rings or reselling the
animal to the first buyer with no screening or follow-up.
If you adopt out the pet out on your own, charge an
adoption fee of at least $60 to $100 to weed out people with
bad motives, follow up a few weeks later and let the person
know they can return the pet if things don’t work out.
“We Just Matched Perfectly”
After finding no rescue group for Chester, Nancy reached
out to an acquaintance who volunteered with animal rescue
organizations. The woman contacted Sanford’s rescue group,
Westie Rescue of Missouri, which accepted Chester into its
program and adopted him to Fortune Campbell, who lives in Columbia,
Missouri, about two hours away from Kansas City.
“He’s doing really well,” say Sanford Aston. Charlotte
still asks about Chester, but the Honns say it would upset
her too much to see him again when she can’t have him back.
Things turned out well for Chester, though.
A few months after Campbell adopted Chester, her husband
passed away. “I had the bed to myself and it was so sad
and depressing,” says Campbell, who lets Chester snuggle
under the covers with her every night. “He’s been a huge
comfort to me,” she says.
Other rescues wouldn’t adopt to Campbell, 78, because she
was “too old,” she says. So, Campbell made sure that before
she adopted Chester, one
of her children promised to take the dog if anything
happened to her.
“He was an older dog who had been with an older lady and we
just matched perfectly,” says Campbell. “He’s very
affectionate. She must have loved him dearly.”
10/22: An inverted
has predicted the last seven recessions
dating back to the 1960's
10/22: A Minsky moment
is a sudden major collapse of asset values which is part of
the credit cycle or business cycle. Such moments
occur because long periods of prosperity and increasing value
of investments lead to increasing speculation using borrowed
is what you need to know.
Zhou Xiaochuan, who is soon to stand down
as governor of the Peoples Bank of China said: “If
we are too optimistic when things go smoothly, tensions
build up, which could lead to a sharp correction, what we
call a ‘Minsky moment’. That’s what we should particularly
It does not, obviously, state that will happen but the mere
comment is a definite warning sign regarding China's
economics. If they go down, a lot of other countries will do
so as well. What about U.S.? Our fundamentals are better but
the market keeps going becauase people want it to (momentum
10/22: Lowest jobless claims
seen our discourse degraded by casual cruelty. At times, it
can seem like the forces pulling us apart are stronger than
the forces binding us together. Argument turns too easily into
animosity. Disagreement escalates into dehumanization.”
cool again to invest’: Americans are giddy about stocks as
Dow tops 23,000 .
EFM- The title of the article really captures the emotional
absurdity of momentum investing. It shows how one guy in
college who is giddy about the market and "
regularly ask him for stock tips.". No idea when the market
will stop but it reminds me of the DOTCOM mess.
prevents price rise to $60.
The so-called “shale band” continues to cap oil prices at
the $60-per-barrel ceiling, according to oil analysts. Any
move above that threshold is widely seen as a likely
catalyst for more shale production. This is why even
the serious tension in the Middle East can seem to push
Brent above $60. “The market is frightened by the shale oil
band,” Olivier Jakob at PetroMatrix, who helped coin the
term “shale band,” told the FT.
“But it’s not just traders — we’ve seen indications from
OPEC and Russian oil companies that even they think going
above $60 a barrel right now would be too much and would
bring on more oil from shale. They don’t want it.”
(Take it anyway you want. Anti Trump, An old grouch. Bad
president anyway, et al. But it is true)
U.S. fund investors regained
an appetite for risk over the last week, rushing into
American and emerging market equities, as the Dow breached
23,000. Stock mutual funds and ETFs overall attracted $5.4B
in the week ended Oct. 18, while emerging markets pulled in
$2.3B, the most cash since March, Initial
jobless claims fell to a 44-year low last week.
EFM- it is true that
current numbers show a fairly strong economy for the U.S.
So maybe there is more time for the market to gain even
more. But this bubble will have to stop somewhere and it
will not be simply a correction
Refugees Are Overwhelming Authorities in Bangladesh
Ethnic cleansing. A very sad situation that will get
worse. And enabled by a Nobel peace prize winner
As long as I could get to the coffee, I wouldn't care
10/20: Pollution kills- a lot more than had been assumed
Pollution around the globe now contributes to an estimated 9
million deaths annually — or roughly one in six —
according to an in-depth new study published Thursday in
the Lancet. That means pollution kills three times more
people each year than HIV/AIDS, tuberculosis and malaria
writing and recognizing fake news.]
government has begun an experiment to train students to recognize false news
reports and conspiracy theories.
news drips drops of poison into our daily web diet, and
we end up infected without even realizing it,” said
a lawmaker who helped spearhead the project.
Horowitz, our Rome bureau chief, explains: “Frustrated by
economic woes, upset by a migrant crisis and fed a steady
diet of partisan media, many Italians subscribe to all
kinds of conspiracy theories. It is what they call
dietrologia, the belief that there is also always
something dietro, or behind, the surface.”
people live lives of quiet desperation
10/20: ABCs of Alzheimers'
A: Accept that some of the hardest
decisions you will ever have to make lie ahead. For
example, when does nursing home care become the best or,
perhaps, the only option?
B: Be a creative problem solver. When I needed Mom to
go to daycare, I persuaded her thatshe would be there to
help others. The result? Her amazing shift from stubborn
refusal topleasurable anticipation.
C: Care for yourself. The stress can affect your
emotions, memory, sleep, and physical health.Make a
conscious effort to eat well and exercise. Fit in a
little time to relax with a book,a warm bath, a pet, or
whatever you enjoy.
D: Do laugh when you can—at yourself or with your loved
one. Mom and I would chuckleover our Shelties’ antics.
E: Expect the unexpected. One day I missed work to take
Mom to the doctor because herback hurt so badly, she
could barely get out of bed. In the exam room, her
opening conversation with the doctor proceeded from “How
are you?” “Fine” to “What’s the reason for your visit?”
“I don’t know.”
F: Forgive yourself—often. You will lose your temper.
You will feel guilty.
G: Go through the ups and downs of living with an
Alzheimer’s patient with as much equanimity as you can
muster. What is “normal” one day may not be the next.
Momstill wanted to wash the dinner dishes—until one
night she almost used drain cleaner.
H: Have patience with the affected person. The
repetitions and the unpredictability will be
I: Investigate respite care while the patient is at
home. It can give you a worry-free overnight or weekend
J: Join a support group. Interacting with other
caregivers in person or online lets you know your
problems are shared.
K: Know that you will lose the person you love many
times before she dies.
L: Learn about hospice. Comfort care near the end of
life is a blessing—for the patient and the caregiver.
M: Make lists—of the day’s tasks, of the patient’s
medications, of things you are grateful for.
N: Notice that many may ask about the sufferer, but not
about you. Don’t be hurt. Few realize that you also need
O: Observe the signs of her Alzheimer’s in the face of
her denial so you can intervene.Leaving ingredients out
of recipes or getting lost while driving requires
P: Put your disbelief aside and read The 36-Hour
Day, but not all at once. Small sips rather than
big gulps of information are not as hard to swallow.
Q: Question the medical professionals who are providing
treatment until you’re sure you understand what they’ve
R: Respect the wishes of your loved one. Getting a
power of attorney and an advanced directive early will
make later decisions easier. When Mom finally was unable
to eat,deciding whether or not to use a feeding tube was
less painful for me.
S: Seek support. Look to your family, of course. But
friends can spend time with the patient or take her to
appointments or let you “vent.” And seeing a
psychologist for depression is not a failure. Taking
pills or talking with a therapist can help you keep your
balance when everything around you seems unstable.
T: Take over care decisions as they become necessary.
These will include managing finances and preplanning a
V: Value the small, ordinary moments: her happy memory
triggered by a photo, her face brightening as she sits
in the beautician’s chair, her childlike love of
At a mall in Hong Kong
113 questions and my answers continued
A technique popularized by Einstein, the thought experiment
is a way to logically carry out a test in one’s own head
that would be very difficult or impossible to perform in
real life. With the thought experiment as a tool, we can
solve problems with intuition and logic that could not be
demonstrated physically, as with Einstein imagining himself
traveling on a beam of light in order to solve the problem
EFM-Very useful and the one thing similar: making your
first talk before a group. Mentally do it over and over.
Appears initially impossible you can do it but use your mind
to piece together how it will unfold. Didn't work for me the
first time- one of my most humbling efforts. But keep
running it through your mind and ultimately you can succeed.
I still do it beforehand so I am prepared, But that is why
we have a mind.
Mr. Market was introduced by the investor Benjamin Graham
in his seminal book The Intelligent Investor to
represent the vicissitudes of the financial markets. As
Graham explains, the markets are a bit like a moody
neighbor, sometimes waking up happy and sometimes waking up
sad – your job as an investor is to take advantage of him in
his bad moods and sell to him in his good moods. This
attitude is contrasted to an efficient-market hypothesis in
which Mr. Market always wakes up in the middle of the bed,
never feeling overly strong in either direction.
EFM- I tell clients , classes, small furry animals, that
the market does whatever it want. IT DOES NOT HAVE TO MAKE
SENSE. As an investor in decades later, it is next to
impossible to figure out what may be going on. If so, you
would find ALL the hedge managers being highly successful.
Further all the Artificial Intelligence (AI) being able to
do the same. Can you buy and sell at certain times to limit
risk. Yes- that is what the Process can do. Perfect? No
because you can have a loss of 12% in any case. And you can
get back in when UBER says things are now better. Should
make extra return as well but I generally don't include
that. Reminds me "don't believe everything you think"
10. Probabilistic Thinking (See also:
The unknowable human world is dominated by probabilistic
outcomes, as distinguished from deterministic ones. Although
we cannot predict the future with great certainty, we are
wise to ascribe odds to more and less probable events. We do
this every day unconsciously as we cross the street and
ascribe low, yet not negligible, odds of being hit by a car.
EFM- I have to do that in my Process. You can define by
math a perfect formula of what risk is over each and every
year. And you would be wrong each and every year (probably).
You have to include in you mind the unknown
probabilities as a potential range of occurrences. You will
still be "wrong" but the range is hopefully close to
As regards retirement, there is NO plan that will carry 30
year with any level of accuracy. You do the best possible
for a range and make changes every year or at least every
five years. YOU MUST HAVE CONTINGENCIES FOR OUTLIERS
11. Default Status
The USCB ecologist/economist Garrett Hardin once said that
“The scientific mind is not closed: it is merely
well-guarded by a conscientious and seldom sleeping
gatekeeper.” The way it does that is with the concept
of the default status: The “resting position” of
common sense, whereby the burden of proof falls on
assertions to the contrary. Given the problem of opportunity
costs and limited time and energy, a default status is
nearly always necessary to avoid wasting time. Examples
include the laws of thermodynamics, the law of
natural selection, and the incentive-caused
EFM- This is true to a point- The “resting position” of
common sense, whereby the burden of proof falls on
assertions to the contrary. But the
resting position for investment research has radically
changed in the last 20 years and is still doing so.
Insurance products look little like the decades previously,
Health care- actually the dying process is far different and
will keep evolving till people truly realize that the mere
extension of life is causing excessive pain and mess for the
patient. Assisted suicide will prevail. You can use common
sense but a lot of people are just plain stupid. In short,
"don't believe everything you think- or read- or hear on the
1. Permutations and Combinations
The mathematics of permutations and combinations leads us
to understand the practical probabilities of the world
around us, how things can be ordered, and how we should
think about things.
EFM- Nope. read Mandelbrot, Bernstein, Taleb. The practical
probabilities of investng has been stood on its head for the
last 20+ years. Part of that is Kahneman and Thaler with the
2. Algebraic Equivalence
The introduction of algebra
allowed us to demonstrate mathematically and abstractly
that two seemingly different things could be the same. By
manipulating symbols, we can demonstrate equivalence or
inequivalence, the use of which led humanity to untold
engineering and technical abilities. Knowing at least the
basics of algebra can allow us to understand a variety of
EFM- right on
Though the human brain has trouble comprehending it, much
of the world is composed of random, non-sequential,
non-ordered events. We are “fooled” by random effects when
we attribute causality to things that are actually
outside of our control. If we don’t course-correct for this
fooled-by-randomness effect – our faulty sense of
pattern-seeking – we will tend to see things as being more
predictable than they are and act accordingly.
EFM- Nassim Taleb has a book, "Fooled by Randomness" And
Mandelbrot has "Thinking Fast and Thinking Slow:" Then there
is: Chaos theory is a branch of mathematics
focused on the behavior of dynamical
systems that are highly sensitive to initial
conditions. 'Chaos' is an interdisciplinary theory
stating that within the apparent randomness of chaotic
complex systems, there are underlying patterns,
loops, repetition, self-similarity,
and reliance on programming at the initial point known as sensitive
dependence on initial conditions. The butterfly
effect describes how a small change in one state of a
deterministic nonlinear system can result in large
differences in a later state, e.g. a butterfly flapping its
wings in Brazil can cause a tornado in Texas.
. Read Mandelbrot, the father of
fractals. Stay with the basic definitions- the math must be
left to experts. r
4. Stochastic Processes (Poisson, Markov, Random
A stochastic process is a random statistical process and
encompasses a wide variety of processes in which the
movement of an individual variable can be impossible to
predict but can be thought through probabilistically. The
wide variety of stochastic methods helps us describe
systems of variables through probabilities without
necessarily being able to determine the position of any
individual variable over time. For example, it’s
not possible to predict stock prices on a day-to-day
basis, but we can describe the probability of various
distributions of their movements over time. Obviously, it
is much more likely that the stock market (a stochastic
process) will be up or down 1% in a day than up or down
10%, even though we can’t predict what tomorrow will
EFM- It is not easy to reflect on the distribution of
returns and what the impact can truly be. That necessity has
been identified by Black Monday in 1987 and thereafter.
Certainly 2000 and 2008 clearly showed why it is now
mandatory to include proper analysis coupled with a gauge of
the outlier effect. In my work on the Risk of Loss is a
method to offset such outliers and smooth out
returns over time- possibly/probably increasing over a buy
and hold. .
10/22: CPI since 2017
10/22: Inflation since 2000
Health care is a wildcard for the future. Trump does not have
a cure. But apparently neither do Democrats nor Republicans.
10/20 IRS Publishes New Mortality Tables, Affecting DB Plan
"The new mortality table will increase the amount of
lump-sum distributions payable by a private sector plan ...
by 3% to 5%, depending on the age of the participant, when
compared to the lump sum using the table for 2017.... For a
retirement age of 65 and a 5.5% interest rate, the lump-sum
equivalent of the maximum dollar limit of $215,000 will
increase by approximately 3.5% (about a $90,000 increase)."
10/18: Insurance products using indexes, participation, cap,
spreads. Info only
Sample return 2003 to 2013 Info primarily for me only
The timing of investment losses matters a lot. Losses
sustained during the Risk Zone can wreck retirement
lifestyle. EFM- true
Gambling against Sequence of Return Risk may seem
like a good wager, but there is no recovery from
losing this bet. RTM- probably quite true
The World Economic Forum identifies 30 threats to
U.S. markets. Investors near retirement cannot ignore
these risks. EFM- true
Every day without a correction
is a day that the risk for a correction increases -
Kristina Hooper, Invesco EFM- true
EFM- Overall commentary however is flat out
wrong. Do you have to take the losses of any recession-
NO. Further, if you cannot take a 10% correction
(corrections are defined as 10% to 15%), then you were
never an investor anyway and have little business being in
Losses for a recession should not exceed
about 12%. The devil in in the details.
10/18: Bookstaber- what is wrong with economics. READ AND PAY
economic systems are too complex to reduce to a
mathematical description, and therefore cannot be
treated with models designed for simple systems. "There
are limits to how far we can carry deductive
processes for understanding or describing human
Put that in all your notes about investing
effect of a group's actions qualitatively differ
from an individual's actions. "You cannot
anticipate the outcome for the whole system on
the basis of the actions of its individual
members because the large system will show
properties its individual members do not have."
ergodic models, social processes cannot
extrapolate the past to predict future actions. "The
dynamics of a financial crisis are not reflected
in the pre-crisis period because financial
markets are constantly innovating, so the future
may look nothing like the past."
every event can be predicted. Since many
crucial events are unanticipated, they "cannot
be put into a probability distribution because
they are outside our list of things that might
occur." Thus, "a mechanistic approach to
economics will fail."
10/18: It is just getting worse
10/17: When the mind slips away
Mom sat in her
battered recliner. Her hands gripped the sides of
her head, and tears flowed steadily downward as another
TIA (Transient Ischemic Attack) rocked her. As the
pain subsided, she whispered, “I don’t know who I am
anymore.” She uttered the same phrase for several
years as the world became a more bewildering and painful
place to navigate.
There were no words or actions
to dispel the reality of being lost in an unfamiliar place
every minute, every day, every month, and every year.
A long, unrelenting battle of being marooned inside
yourself. Her constant companion was also her
greatest enemy – Alzheimer’s.
My dad and I were her primary
and secondary caregivers respectively, and we stepped into
Mom’s world of confusion and bewilderment. We
sometimes questioned our own sanity as we rode the chaotic
waves of advanced dementia. Often, we would grab our
heads, close our eyes, and say, “I just don’t know what to
do anymore.” We kept our tears silent and hidden, so
we could wipe away Mom’s. Those tears collected in a
vast cavern of suppressed emotion as we struggled through
every day. Or struggled through the one minute where
our hearts broke in a thousand pieces as her life fell
into a million shards.
On a Wednesday afternoon in
early May, we suddenly realized, “we can’t do this
anymore.” Two days later, Mom lay in a hospital bed
in a nursing home only 15 minutes away. The
overwhelming guilt of quitting battled with overwhelming
exhaustion. Exhaustion won, and I felt a short-lived
relief knowing Mom was okay.
We thought we would find rest
with Mom in more professional hands, but we didn’t.
We couldn’t sleep. My dad couldn’t eat, and I
could not stop eating. We filled our days with
nursing home visits and the mounds of paperwork associated
with admitting someone into an extended care facility.
We continued our caregiving. We fed her, took
her for rides in her chair, read to her, and made
ourselves well-known to the staff. We asked about
her eating habits, sleep patterns, and bowel movements.
Questions hospice asked us every day when Mom lived
at home. Between the two of us, we visited her every
day. Most of the time, we both visited with her.
Twenty days after Mom’s
admittance, we received a midnight phone call. The
hospice nurse said, “I will meet you at the nursing home.”
My husband made the reluctant drive to Dad’s house
to tell him the love of his life was gone. I walked
into Mom’s room and stopped. “That’s not my mom,” I
said to no one in particular. She was, and she
wasn’t. She would never again hold her head in
agony. Pain and confusion had fled and her face revealed
youthful contours. The spirit that had battled for almost
twenty years against a formidable enemy had finally found
Funeral arrangements, family,
friends, and everything associated with death filled our
days and weeks. Financial matters took two months to
complete when the insurance policy ran into a glitch.
Then, silence. No caregiving, no running to
the nursing home, no one to feed or walk. No body
wash to buy or hospice care visits. Medical
equipment vanished in a day. All gone.
Oddly, the rest and restoration
our bodies craved eluded us in grief. Into the silence,
the vast cavern of tears wended their ways to our eyes.
We couldn’t sleep, eat, or think. We sought
silence when words became too painful to utter. We put on
a survival façade for the world to see. Then,
unexpectedly, these words broke from my lips, “I don’t
know who I am anymore.”
Once, I was the daughter, the
secondary caregiver of a Mom with Alzheimer’s. In
single moment of respiratory failure, I ceased to be Mom’s
daughter and a caregiver. I am at a loss to discover
how to fill the void. I am at a loss to discover
what my purpose is now. Sometimes, I look for other
caregiving opportunities, but the trauma of the last one
keeps me away.
My journey to find identity is
strewn with various projects, but nothing answers the
quest within me. A couple of things I do know.
There is a cavern of tears waiting to be shed, a
healing of emotions to be experienced, and exhaustion to
be overcome. For now, I go through the motions of living.
It is enough.
Which one is the dumb ass
10/17: David Robertson of Arete
writes in his October 13 SA article Market
Overview Q317: Raised On Promises: Too
many investors ignoring risks creates a "tremendous powder
keg of risk in the markets" that is ultimately punctuated by
Is there a way out??
(see above). So why hasn't it been offered? One reason is that
advisors can say they are doing a great job (at least to
themselves) for selecting allocations that will lower the
overall risk/loss by one third. OK how much is that if the
(regular equity loss was 60%).
10/17: Evaluating skilled nursing homes
1) Absolutely no place is
perfect, there are just levels of imperfection. We are all
human and all make mistakes, after all.
2) I don't care how nice a facility looks
when they are giving you a tour, you should really find out
how much their average CNA makes. If it looks nice, and they
give you a good speech, but their employees aren't paid well,
exactly what kind of care do you think they will be giving?
3) You should also really find out how many
CNA's and nurses are normally on staff at each shift (not how
many they'd like, how many there really are.) In other words,
how many patients is the CNA taking care of your family member
expected to take care of during an average shift. The higher
the number, the less time they can give to each patient.
Remember also that CNA's have duties they are responsible for
outside of normal patient care that can take up their time.
4) You should know what the facility’s
turnover rate is. Chances are, if they have serious problems
keeping employees, there is a very good reason. I have quit
more than one facility because of the way it was run and the
obvious lack of care for the patients the facility engendered.
5) You should also find out what their
policies are about sending patients out to the hospital for
care, and how frequently this happens. You want a facility
that will send a patient to the hospital for care when it is
necessary. There are facilities that pressure staff to not
send patients out, even when it is necessary.
6) Try to talk to the CNA's without their
supervisor watching. Find out what they think of the facility.
Ask about the following:
- Are they being treated fairly?
- How is the patient care in general?
- Are there enough nurses?
- What does a normal shift look like?
- Do they often have to work short-handed?
An important question to ask is about the nurses. If the CNA
feels they are able to go their nurse with concerns about a
patient and see the issue addressed in a timely manner. You
want to hear that your aides can talk to their nurses about
potential problems or changes and be taken seriously. CNA's
will see your family member far more than any other staff, and
you want a nurse to listen to them if they think something is
wrong with your family member.
7) You should find out if they try to
assign the same CNA's to the same patients every day they are
working. You want the same people to see your family member
daily. This causes the patient to be more comfortable and
receive better care. If they have the same aides every day,
then the aides know what they like, dislike, have a schedule
and routine with them, and will be able to easier identify
problems or concerns. If the patient has a different aide
every day, there will be less consistency in care and routine.
Some facilities don't like the attachment between patient and
CNA this causes, but as a family member that is a bond you
want. Aides often become attached to their patients and want
to take care of them the best they can.
8) No one wants to tell you this is true,
but it is. Patients who have regular visits from family
(daily, weekly, etc.) usually get better care and are a higher
priority for their CNA's. Basically, if staff (even the bad
stuff) knows someone is coming to check on their work and
there will be serious repercussions for it not being done,
they will make it a priority to have it done.
9) Even good facilities have bad employees.
There are at least 3 shifts of people who will take care of
your family member daily, sometimes even more when people
leave and assignments change. Not everything that happens is
one person's fault, and good people won't be there all the
10) Please remember that whether they are
at home with you or in a facility, accidents will happen. If
accidents are too frequent then you should be concerned, but
please don't think that just because they are in a facility
that no accident will ever happen. Facilities do lots of
things to keep patients safe, but most person specific safety
measures (alarms, mats, seat belts, etc.) won't be done until
an accident has already happened once. Because unless they
have a precedent for it happening the facility can't do
anything to prevent it.
Shared by Sharon at caregiver.com: this was written by
my daughter w ho was the primary caregiver for my mom who was
living with Alzheimer's
10/17Sad News: Your 401(k) Won't Give You a Decent
"The rise of the 401(k) would not be much of a problem if
these accounts provided an effective way to husband assets
for retirement periods that are growing longer, or if Social
Security and employer pensions were as secure as they used
to be.... Social Security's full retirement age is
increasing to as high as 67 (for those born in 1960 or later)
from the traditional 65. The change means that those subject
to the maximum retirement age who nevertheless retire at 65
will receive 86.7% of their full benefits. In other words,
most new retirees are facing a benefit cut, one way or
The lowering of SS taken too early is 6/9% per month. You
can see just how quickly
the monthly payment can drop and potentially railroad your
1016: Harvey Weinstein
Why do people like him walk the earth for so long without
being taken down? Nothing really different from many
others where their power may be omnipotent- or so it seems.
Those (whistle blowers) going after wrongs may be treated
poorly, ostracized socially and professionally, criticized for
risking the boat and more. Worth it? I have mixed feelings
from doing it. It will leave you in a very, very small group
of similar people who recognized what they did was right but
that might be all.
The modern scientific enterprise operates under the principle
of falsification: A method is termed scientific if it can be
stated in such a way that a certain defined result would cause
it to be proved false. Pseudo-knowledge and pseudo-science
operate and propagate by being unfalsifiable
– as with
astrology, we are unable to prove them either correct or
incorrect because the conditions under which they would be
shown false are never stated.
EFM- In the insurance business it may be next to impossible
get get the info from a company to prove much of
anything. Further, there are few that have the ability
to actually do it and few would care. The agents would not
have the background to know one way or the other even if they
did try to comprehend (doubtful). And they would hate to give
up the commissions that everyone else was making. As
regards investments, few have made the effort to review the
mathematical underpinnings of previous theories- myself
included at times. More recently, a few analysts steeped in
major mathematics (Michael Edesess, PhD. Math) have not only
questioned many of theories used by advisors (MPT is a
fine example) but completely derided the fallacy of the
certain theories/applications (use of smooth Gaussian
graphs/standard deviation and the admittance of the emotional
An idea introduced by Warren
Buffett and Charles Munger in relation to investing: each
individual tends to have an area or areas in which they
really, truly know their stuff, their area of special
competence. Areas not inside that circle are problematic
because not only are we ignorant about them, but we may
also be ignorant of our own ignorance. Thus, when we're
making decisions, it becomes important to define and attend to
our special circle, so as to act accordingly.
EFM- this goes much further than
the statements above. It might be possible to get really,
really good in a specific area, but who is going to know? In
terms of financial planning some think they are
conversant in investments- but still have missed the
importance of correlation in portfolio application.
But the real problem (that I faced
years ago) was that one might be good in an area but are
woefully short of the insight that investments would play with
estate and retirement planning, certainly with insurance (an
absolute minefield of terms and uses), One CANNOT simply turn
over the ability to know what to do with what? simply calling
their brother in law who has been 'top of the market' for
years and goes on lots of trips? Will such an agent know of
life settlement? Who is going to grasp the nuances of a
reverse mortgage. Another brother in law? This is why
financial planning is one of the most difficult disciplines
imaginable because of the necessity of knowing outlying areas
of planning beyond where a planner thinks he is truly capable.
Most of the time it is being conveniently stupid- not
bothering to upgrade knowledge in other disciplines. Referrals
are the wrong way to see out excellence. But that is
not the way the industry works.
The Principle of Parsimony
Named after the friar William of
Ockham, Occam’s Razor is a heuristic by which we select among
competing explanations. Ockham stated that we should prefer
the simplest explanation with the least moving parts: it is
easier to falsify (see: Falsification), easier to understand,
and more likely, on average, to be correct. This principle is
not an iron law but a tendency and a mindset: If all else is
equal, it’s more likely that the simple solution suffices. Of
course, we also keep in mind Einstein’s famous idea (even if
apocryphal) that “an idea should be made as simple as
possible, but no simpler.”
EFM- MPT is simple- so it is used
as an acceptable format for thousands of advisors.
Unfortunately, MPT has been a failed theory since it does not
include human behavior. Simple is way overrated.
Harder to trace in its origin,
Hanlon’s Razor states that we should not attribute to malice
that which is more easily explained by stupidity. In a complex
world, this principle helps us avoid extreme paranoia and
ideology, often very hard to escape from, by not generally
assuming that bad results are the fault of a bad actor,
although they can be. More likely, a mistake has been made.
EFM- I agree. Outright fraud is not
generally displayed. Stupidity is the problem. See also Circle
In all human systems and most
complex systems, the second layer of effects often dwarfs the
first layer, yet often goes unconsidered. In other words,
we must consider that effects have effects. Second-order
thinking is best illustrated by the idea of standing on your
tiptoes at a parade: Once one person does it, everyone will do
it in order to see, thus negating the first tiptoer. Now,
however, the whole parade audience suffers on their toes
rather than standing firmly on their whole feet.
EFM- This seems to parallel
Kahneman with his recent book Thinking Fast and Thinking Slow
though the issue to me seems to be that the first thought is
easy- tiptoeing- but a very few will think beforehand and
bring a stepping stool and therefore do much better. The first
element is simple heuristics- that which is easier to use-
while the other element can be a brains buster. It's when you
realize the first order of thinking will not give a benefit
and further thought is necessary. I find this difficult but
absolutely necessary when you are confronted with what one
sees as difficult and time consuming.
Map Is Not the Territory
The map of reality is not reality
itself. If any map were to represent its actual territory with
perfect fidelity, it would be the size of the territory
itself. Thus, no need for a map! This model tells us that
there will always be an imperfect relationship between reality
and the models we use to represent and understand it. This
imperfection is a necessity in order to simplify. It is all we
can do to accept this and act accordingly.
EFM- This reminds me of the smooth
Gaussian curve which has been used for decades to address
standard deviation as risk. So very simple because almost
everything will fall in three standard deviations- until it
doesn't. Outliers are common place and occur with a regularity
that confounds the simple methods of determining risk. I don't
quite follow the comment that imperfection will make things
simplify (it may just be me unable to see what is being
addressed). The imperfection may make the decisionmaking
process very difficult since some of it has yet to be defined
simply. See Mandelbrot and his book "The (Mis)behavior
of Markets". Amazing insight that must be read. Also Peter
Bernstein and 'Against the Gods. The Remarkable Story of
Risk." Both are mandatory reading.
Munger explained his novel
approach to gaining practical wisdom:
Well, the first rule is that you
can't really know anything if you just remember isolated
facts and try and bang 'em back. If the facts don't hang
together on a latticework of theory, you don't have them in
a usable form.
You've got to have models in your
head. And you've got to array your experience both vicarious
and direct on this latticework of models. You may have
noticed students who just try to remember and pound back
what is remembered. Well, they fail in school and in life.
You've got to hang experience on a latticework of models in
What are the models? Well, the
first rule is that you've got to have multiple models
because if you just have one or two that you're using, the
nature of human psychology is such that you'll torture
reality so that it fits your models, or at least you'll
think it does. …
And the models have to come
from multiple disciplines because all the wisdom
of the world is not to be found in one little academic
department. That's why poetry professors, by and large, are
so unwise in a worldly sense. They don't have enough models
in their heads. So you've got to have models across a fair
array of disciplines.
You may say, “My God, this is
already getting way too tough.” But, fortunately, it isn't
that tough because 80 or 90 important models will
carry about 90% of the freight in making you a worldly
wise person. And, of those, only a mere handful really
carry very heavy freight.
EFM- One of the best things I
ever learned took a long time- Don't believe everything
you think. Maybe you can find the nuggets early enough in
life but not from my experience. I did challenge a lot of
investment "rules" in the 90s and found out the concern
was warranted. (MPT, valuation of securities,
behavior of investors, most of life insurance was a crap
game, real estate exchanges were not what they appeared)
and on and on. Finally a lot of stuff was discredited and
made me fell better. But considering all the interrelated
elements of financial planning, there is a lot more
re-education that is needed up and down the line.. Will it
succeed? The discipline in the licensing is a joke.
The commentary states that there
are certain principles that one might hold dear- "The main
laws of physics. The main ideas driving chemistry. The big,
useful tools of mathematics. The guiding principles of
biology. The hugely useful concepts from human psychology.
The central principles of systems thinking. The working
concepts behind business and markets." I do not necessarily
agree. There are some novel elements appearing in physics
that stretch the mind (time and gravity). Big mathematics
that controlled how economies work have fallen along with
business and markets because there are great tail risks that
cannot be accounted for. Interest rates below zero fails
credulity. Central principles of thinking? Look at what
Kahneman and Thaler have done. How the earth works? Well so
far the world is falling apart now. Biology? Throw in
robotics and we might be doomed in a few decades as a new
'form of life' controls everything. As Fox Mulder would say,
TRUST NO ONE
More to come
Of course out of three brothers helping her, this is the
only one left
About 28% of seniors polled by Nationwide claimed that
their lives worsened after they retired,
How to invest for lifetime income and
Clients who have a sizeable retirement savings may want to
annuitize a portion of these funds to create a guaranteed
income stream enough to cover their needs in the golden years,
according to this article on CNNMoney. A small portion of
their savings may be socked away in a cash reserve fund, and
the remainder of the money may be invested in a diversified
portfolio with a 40% to 60% asset allocation
EFM, . - May work for some recognizing that annuities pay
close to nothing. If you have a lot of money, that can work.
As to 60% in bond funds- that is a joke now. Nothing in
annuity returns and next to nothing in bond funds- certainly
as rates rise.
Do Not Underperform their Investments
EFM- It is also the reason why this silly graph by Carl Richards
is categorically wrong.
10/15: Trump's tax
Education in Risk Management Can Offer a Leg Up, according
to a recent New York Times article. Among the hot areas now
are positions related to minimizing risk, as firms try to
mitigate the chances of another financial crisis. Risk in
general is a relatively new focus, and the openings range
from business, credit and operational risk to product and
technology risk. Today nearly everyone in the
financial services industry has risk management listed in
their job description. Yet, when trying to grasp the
concepts, many people are intimidated by the mathematics in
most texts and risk courses.
EFM- mathematics are necessary but that is not how you
finish the concept of basic risk of loss dealing with mutual
funds and recessions. .
10/13 If you have cataracts, just get the surgery. Relatively
uninvasive and quick. Immediate results. Done by laser, no
sutures, no pain for 8 in group.
10/13: I am having cataract surgery today
Delaying Treatment of
Advanced Forms of the Common Eye Disease Can Increase Risk of
Permanent Blindness and Injury.
The American Academy of
Ophthalmology urges seniors and their caregivers to be aware
of the dangers of ignoring the symptoms of cataracts, a
leading cause of visual impairment that will affect more than
half of all Americans by the time they are 80 years old.
Delaying diagnosis and treatment of age-related cataracts can
increase seniors' risk of permanent blindness and can lead to
both physical and psychological damage.
Cataracts are caused by the
clouding of the lens of the eye and are most common among
older adults as the condition develops as the eye ages. Many
seniors cope with cataracts — accepting vision loss as an
inevitable part of the aging process rather than seeking
medical treatment. Due to the incapacitation caused by blurred
vision, leaving cataracts undiagnosed and untreated can lead
to physical danger such as injuries from falls or running into
unseen objects, as well as psychological harm like depression
and social isolation. In addition, the longer advanced forms
of cataracts are left untreated, the more difficult it can be
to successfully repair the damage caused to the eye.
Adults age 65 and older should have
regular eye exams to monitor for the development of cataracts,
in addition to other common eye conditions and diseases, such
as age-related macular degeneration (AMD) and glaucoma. People
with diabetes, a family history of cataracts, and those who
smoke tobacco are at an increased risk of developing
cataracts. Common symptoms such as dull, blurry vision, colors
appearing less vibrant, and halos around lights may begin to
be noticeable as cataracts develop. This cataract simulator
demonstrates how vision is affected by cataracts.
Cataracts are nearly always
treatable with surgery, but it may not be necessary until
performing daily activities becomes difficult. If daily life
isn't disturbed, a change in a person's eyeglass prescription
may be all that is necessary until visual impairment becomes
more severe. If completing everyday tasks is challenging,
cataract surgery should be discussed with an ophthalmologist —
a medical doctor specializing in the diagnosis, medical and
surgical treatment of eye diseases and conditions.
"Seniors who find themselves giving
up normal tasks like reading, exercising or driving due to
cataract symptoms should know that they do no not need to
suffer in silence," said Rebecca Taylor, M.D., spokesperson
for the American Academy of Ophthalmology. "Cataract surgery
can help these individuals regain their sight and their
independence. It is one of the most common and safest
procedures performed in medicine, so seniors should not resist
seeking help. Getting treatment can vastly improve your
quality of life."
For people without regular access
to eye care or for whom cost is a concern, EyeCare America, a
public service program of the Foundation of the American
Academy of Ophthalmology, offers eye exams and care at no
out-of-pocket cost to qualifying seniors age 65 and older
through its corps of nearly 7,000 volunteer ophthalmologists
across the U.S. To learn more about EyeCare America or to find
out if you or a loved one qualifies for the program, visit
www.eyecareamerica.org. EyeCare America is co-sponsored by the
Knights Templar Eye Foundation, Inc., with additional support
from Alcon and Genentech
to academic research in 2012, financial literacy education
has changed behavior 0.1% of the time
EFM- it really is never going to do much better
Of roughly 310,000 financial advisers in the U.S., less than
10% are legally obligated to put your interests first at all
times on all of your accounts.
Tony Robbins says this, "Don’t get me wrong, this is not an
indictment on the good people that work in the industry. I
have lots of friends and clients in the financial industry, so
I’m speaking with firsthand knowledge when I tell you that
they — and the vast majority of their colleagues — are people
of real integrity. They have good hearts and good intentions.
The trouble is, they work in a system that’s beyond their
control — a system that has tremendously powerful financial
incentives to focus on maximizing profits above all else."
I find the sophomoric and superficial exaltations about
'agoods hearts and intentions' to be the real cruz of clients
losses. Financial planning, done properly, is one of the most
demanding disciplines one could think of. To marry several
different subject areas together is very, very hard (taxes,
estate, investments, retirement, insurance, annuities,
behavioral et al). Integrity has nothing to do with knowing
how to use a financial calculator, life settlement, inverted
yield curve...... My point is that you are not going to find
many entities with real life knowledge and expertise- though
if no one else does not care then????? The industry has not
mandated criteria strong enough to work well. So I will say
this again- does your adviser know of the inverted yield curve
when a recession is eminent? What did they do in 2000 and
2008? Generally it was nothing at all.
So much for caring.