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Tuesday, July 28, 2015

Trees Grow to Outer Space

Well, trees don't grow to outer space.  Isn't that strange?  Why not?  Well, if you've ever tried sucking a soda up a 50 foot straw you'll see why; there is too much mass to escape the inexorable pull of gravity.  The only way giant Sequoias reach record heights is if they break off or get struck by lightening, thereby allowing water to pool in the cavity.  We find nothing odd about the fact that trees only grow to limited heights.
Conversely, we expect all things human to barrel forward and upward forever.  A good example is the economy.  In particular, one measure of it:  The stock market.  Although not a physical thing like a tree the markets are, nevertheless, subject to forces beyond our control, and "rules" beyond our perception.
Jeremy Grantham, founder of GMO funds (Grantham Mayo van Otterloo, nothing to do with genes) describes a case in point.  I quote:

What the past 25 years has done in the form of an overly inflated P/E ratio requires a 57% decline to revert or “normalize” the market’s key ratio and revert to the historic average that was present prior to Greenspan.

Grantham points out that 80% of executive comp. is stock options vs. 20% 30 years ago.  What awful incentives.  It's easier and less risky "for management to use corporate cash for stock buybacks".  They get the greatest reward for creating nothing!  Why spend money on R&D, plant and equipment when you can boost your own stock- and your own pay -by buying it up with stockholder cash?  I believe this profligate behavior will soon come back to bite us all.

Saturday, July 18, 2015

The Affordable Care Act will destroy businesses

Will the Affordable Care Act destroy businesses?  Has it destroyed businesses?

Well, no.  In exchange for putting up with some new reporting requirements, most small employers should see lower premiums, healthier & happier employees and better bottom lines.  To learn more, see the following webinars conducted by IRS:
[webinars have been conducted already.]
Your Constructive Comments are Welcome!

Monday, July 6, 2015


I've always been a fan of Paul Hawken due to his gentle but indefatigable spirit, in addition to his brilliant creativity.  You may know him from Smith & Hawken yard and garden products.  Or the Rocky Mountain Institute.  Or his fact-filled encouraging environmental thesis, "Natural Capitalism"  He spoke years ago at my alma mater, Willamette University, about the thousands of organizations working around the globe for healing purposes and how they would eventually triumph over the "stealers".
So when I found his commencement address to U of P's class of 2009, I was excited and wanted to share it with you.  My favorite quote from the address:

When asked if I am pessimistic or optimistic about the future, my answer is always the same: If you look at the science about what is happening on earth and aren’t pessimistic, you don’t understand the data. But if you meet the people who are working to restore this earth and the lives of the poor, and you aren’t optimistic, you haven’t got a pulse.

It is not only possible to invest in and conduct business in ways that heal one another and our surroundings, it is the only truly profitable way.

Your Constructive Comments are Welcome!