Wednesday, December 5, 2012

Save The Ninjas!

The last masters of ninjutsu won't be naming successors. Maybe because, as explained by grandmaster Jinichi Kawakami, "you cannot make a living being a ninja."

Tuesday, December 4, 2012

Hunger for Cold Days

While peacefully minding my own business trying to make sense of Blogger's new interface, I noticed that one of my most recently-viewed posts was in praise of Jim Butcher.  Butcher – whose character Harry Dresden stands in the blog sidebar among my fictional favorites – has just released his new book Cold Days, about which I've salivated since finishing Ghost Story (which I later defended against ill-aimed attack). So folks are searching for stuff on Butcher and a few of them stumbled onto me.

So it's time to come clean:  I bought Cold Days for a relative whom I've infected with the Butcher-reading bug, but I don't have a copy myself.  I've been busy.  I'll read it over the holiday break.

But a friend (whom I also addicted to Jim butcher) sent me the following review I can share in its entirety:
Just finished Cold Days. :) One word... WOW! No spoilers... but it's massively twisted! I'm about to read it again to see if I missed catching anything :)
So, there you have it.  It's a read.  But I can't say much about it yet from personal experience.

On the other hand, I see folks complaining that Jim Butcher "should" have used Ghost Story to give Harry Dresden a "power reset" to keep him from being "overpowered".  Yawn.  These folks haven't been paying attention.  The series is building to an apocalyptic trilogy, and since Jim Butcher is no longer hiding that a major background element is Odin and his einherjar, and they are taking an increasingly obvious position in the scenery of the books, it's pretty clear that this apocalypse is what the Vikings anticipated in ragnarok.  And who knows, perhaps also in Revalation – Butcher's world is, after all, full of Christian background, too (what with the angels and fallen angels).  What does this mean, now?  Well, it should be clear that the problems facing the world are outrageously high-stakes and well beyond even Harry's escalating powers.  Moreover, after the last book, Harry is (or should be!) acutely aware of the serious, imminent, and far-reaching peril of using the powers he's acquiring.  Increasing power doesn't make the conflict easy for Harry;  and that's the real fear in "overpowered" protagonists, they will just turn on the Big Power and obliterate enemies without giving the reader reason to feel concern (or care) about the problem.  Instead, increasing power means increasing consequences for everything he does, even when he does things right.  And with the whole world coming to an end – and presumably, big decisions to be made as that occurs – Harry will need all the power he can get if he's to nudge things in the right direction.

So it is that the books are not yet cooled from the printer, and the armchair quarterbacks are already out with their opinions on what "should have been" done with Butcher's main character.  Bogus, so very bogus.  Butcher is one of a very few writers who's proven he can be trusted with extremely long multi-book story arcs, and I for one am not inclined to sit still listening to nitwits opine that Harry Dresden would make a better protagonist suffering from dementia in a body cast and eating all his meals through a straw.  (Because it's cooler when they are more helpless!)  No, no.  It's cooler to read Jim Butcher's outstanding stories just the way he writes them.*



* and fixes them.  I've noticed he's taken steps to wallpaper over some of the few actual missteps he's written into the scenery in earlier books.  Other authors can't be bothered, but Butcher cares.  Props!

Google And The Platform War

Just published today at Seeking Alpha, there are two new Jaded Consumer articles:

Understanding Google's Position In The Platform War (Part 1)
Understanding Google's Position In The Platform War (Part 2)

Each is an Editor's Pick!

They address both Google's platform strategy (Part 1) and Google's competitors (Part 2), and make some predictions about future device competition. Given that Google, Apple, and Microsoft are all competing to offer cloud services, it should be evident that the future will move from the device to service providers' server farms, and these articles explain why.

Enjoy!

Monday, November 19, 2012

Thursday, November 15, 2012

Republic of Texas? Not So Fast.

A CNN article (full of vitriolic comments in both directions) informs us that the WhiteHouse.gov online petition platform includes a petition regarding the secession of Texas from the United States. Presumably, its authors desire signatures.  The question is, what they expect the President to do with it.

The admission of Texas to the Union wasn't immediate;  one treaty signed between Texas and the United States and submitted to the Senate on April 22, 1844, was rejected by the Senate on June 8 the same year.  When congress passed resolutions providing for the annexation of Texas, Texas agreed as expressed in its Ordinance of July 4, 1845.  The Ordinance agrees that in addition to Texas, four additional states may be made from its territory (presumably, to give its citizens more representation in the Senate).  By the end of 1845, Texas had the right to send two Representatives to Congress notwithstanding its not having participated in the prior census.

The Constitution of the United States provides in Art. IV §3 that new States may be admitted by Congress.  The petition purporting to request the President "permit" Texas to withdraw from the Union would appear a nullity, as the President hasn't any power to grant or revoke the status of a State because that power was never conferred on the President (and neither has a state: see Texas v. White).

The petition has, however, enough signatures that by the terms of the Petition portal the President should give it a response.  Perhaps the President will gently explain that while he has no power to grant the petition, he loves Texas (not to mention the 3.53 million Texans who cast votes for him earlier this month despite the state's drift to the right) and believes it and the Union are stronger together.  The President is, after all, a politician.  He should say things like that.  Besides, it might help take a little of the sting out of the President's decision to give retired Space Shuttles to California, the District of Columbia, New York (which isn't that far from the national flight museum in D.C.), and Florida while jilting the Johnson Space Center where Mission Control worked.  The JSC in south Texas is, after all, why the first word spoken from the surface of the Moon back to the planet Earth was "Houston".

But, no.  Not even a trainer.

Texans can take heart, though:  at least the I.R.S. still reads their mail. And if they aren't satisfied with that, they can always write a Congressman.  Not theirs, necessarily;  any of them could potentially introduce an appropriate bill . . . .

UPDATE: Second petition supports keeping Austin US if Texas secedes.  Does anyone care about the law on either?

'Catch Me If You Can' Crook Caught

If you liked Catch Me If You Can, and wondered how that would play out in the age of electronic identification, here's your chance:  a teen busted for impersonating an ER doc was busted again while on bond – for impersonating a police officer.

Some kids just don't learn very quickly.

Monday, November 12, 2012

Aliased Filmmaker gets 1 Year for Parole Violation

Mark Bassekey Youssef was remanded to a year of incarceration and sentenced to serve four years of supervised release following his use of the alias 'Sam Bacile' in violation of the terms of his probation sentence in a bank fraud case.  Youssef used the alias while tricking actors into making a film that was overdubbed into the anti-Islamic piece infamous for its connection to the recent September 11 anniversary attacks and protests against United States diplomatic missions in the Middle East.  The probation had been conditioned on the fraudster's use of his own name to the exclusion of aliases.  The alias was likely immaterial to actors' willingness to participate in the project, however;  those who gave interviews said they would not have participated in the project if its actual post-dubbing dialog had been revealed to the actors.

Neither punishments nor charges have been brought in connection with the film's dialog or the deceptions involved in recruiting a cast.

Those that murdered Americans in Benghazi had motives other than the film.

Wednesday, November 7, 2012

Perspective on US Elections

Over breakfast I discussed the election result with two children, aged 8 and 5.  The most critical thing I wanted to leave them with wasn't who won – if the victor turns out to matter to them in ten years, they'll have better perspective to study that then – but what US elections really mean.  So I asked them how many people they thought were on the news for having been shot over the attempted change in power.  The changing Senate seats, the changing House seats, the disputed Oval Office.  How many died over it last night, did they think?

Many people live in countries in which deaths occur every week over efforts to change power.  Unpredictable political violence places bystanders at risk even when officials are targeted.  However, political violence is frequently directed at non-government victims, like people shopping in a market.

In the US, we enjoy a tradition of peacefully exchanging power on a plan directed by an election schedule, which occurs like clockwork and is advertised on billboards, mailings, television, and social media.  These ballot-driven coups may not produce much change, but they produce all the change a majority demands.  It may not lead to wise policy (a look at federal budgets over the last few decades may suggest neither party has a monopoly on willingness to spend) but it's civilized (at least if you turn down the volume so the candidates' snide remarks about each other are less audible).

And that's the lesson I thought the kids needed to get:  we can get along, and disagree, and dispute power, and still never raise a fist.

The fist, we save for bullies.

Thursday, November 1, 2012

Note To Internet: Anonymity Is Dead

Online anonymity isn't what it once was for liars and creeps.  If you want to be a creep or a liar, it's a lot safer to do it at home, alone, in the dark. 

 Just, you know, so you know.

Bogus Bullying Advice

Remember when airlines used to train everyone that in the event of a hijacking, you should cooperate fully and do everything the hijackers demanded?  Because the professionals knew how to handle it properly?  And do you recall how well that worked out?  And how ignoring that imbecilic advice was the only effective alternative to even worse disasters?  And think:  if intolerance of evildoers' assertions of authority to oppress were more widespread on those flights, how might the scores onboard have succeeded in stomping their attackers at the first sign of their insurrection?  But I get ahead of my story.

Now – today, in 2012 – CNN is running an article explaining that the solution to bullying isn't self-defense, but for bullies to stop bullying.  That we wait for authorities to better teach bullies the error of bullying.  I'll wait while you digest that one.  Obviously, the kids who can be reached with the "don't bully" message aren't by their teens still intimidating underclassmen out of lunch money or homework services.  Oh, better training might improve detection and response, and there could in theory be great gains to be made by authorities (if they can be bothered to direct scarce funding at this, rather than curriculum development or administrators' salaries).  But the idea of stopping bullying at school with a new policy announcement is like halting crime with a new statute.

Please.

Bullies pick victims based on their vulnerability.  They pick the time of an attack to ensure rescue is improbable.  They pick the means of attack to ensure maximum control, and minimum risk.  While it's possible that an incompetent bully might actually get caught, evidence sufficient to support a meaningful sanction is simply implausible to amass.  Certainly not by a terrified, isolated victim who's been cut off from support by blackmail or threats against a victim's person.  What makes bullying possible is the certainty of non-retaliation.

The math on the commandeered 9/11 flights shows that certainty there is no risk of self-defense is the only rational way fewer than a half-dozen bullies can assume control of even so isolated a community as an assembly of passengers.  Look at the sheer numbers involved in each vehcle.  Anyone who's seen an angry mob on the move knows full well that a handful of people with boxcutters or less haven't a prayer against a mobilized mass.  Now, move this to a school.  Teaching children to cry quietly until rescued by officials is not just offensive, it is absurd.  Despite aspirational slogans like "To Protect And Serve", officials out in the real world have no duty to protect citizens.*  They may have a duty to write a report (which they may neglect out of convenience;  I've seen cops talk complaining witnesses out of filing reports by convincing them it will affect their insurability or insurance rates), but that didn't do much good for Joshua DeShaney or his distraught mother.

Doing the right thing is not without consequences.  Allowing evil to continue simply because it's easier to teach compliance than spine is no virtue.

CNN's article – by an author earning an income from the current excitement about bullying – goes so far as to equate self-defense with bullying itself.  Earth to Carrie Goldman:  nobody outside your distant orbit is likely to accept, after thinking about it, that using force to obtain freedom is a moral equivalent or a practical equivalent to using force as part of a planned scheme to elevate one's social or financial standing by repeatedly injuring victims selected for the certainty of a clean escape.  Goldman says that educating children on the rules and methods of appropriate self-defense that a parent will support is doomed because "It teaches kids to out-bully each other, rather than to focus on restoration and restitution."  Her very premise is flawed because it equates bullying with self-defense, and suggests that self-defense depends for its success on becoming a successful bully.  Nothing could be further from the truth.

No one suggests that self-defense won't lead to sanctions – the isolation obtained by the successful bully may make self-defense claims hard to prove – but the safety of the bully depends on the certainty that self-defense is absent.  Parents who support their children's efforts to protect themselves will help their children send the right message to would-be bullies:  this one is a bad victim.  Bullies who don't get the message without a round of self-defense will get it soon enough . . . and there's always a real victim to pursue someplace else.  Parents need to be supported in teaching their children not to be victims.  Whether the schools eve get their heads on straight may be a matter of hope, but parents' education of their children in their own survival is a matter of necessity.

Parents must teach their children they are worth fighting for, that they are worth defending from villainy, and that they will be supported by their parents no matter what idiocy may be accepted by absent authorities.  Parents have to believe it for their children to believe it.  Sabotaging this important work – by urging parents to teach children to be pliant victims instead of agents of their own personal protection and that of their larger communities – suggests that even thousands of murders can be shushed by a schmuck chasing a buck.

There are a lot of things worth doing in response to bullying – and schools' inaction – but preventing students' own assertion of self-determination by dismissing self-defense in favor of advancing further victim-culture is just not part of the equation.

*:  A careful look at the facts of DeShaney v. Winnebago City Social Services Dept. is instructive.  The only reason the victim's mother didn't protect the boy crippled by the ongoing attacks was her voluntary compliance with a government official's order requiring the boy to be turned over and over into the custody of his attacker.  Her pleas for Social Services to take action resulted in a number of reports that fully substantiated her claims the boy was being horribly abused, but no action that prevented his eventually being beating to the point of permanent brain damage.  The Supreme Court held the government had no duty to rescue the boy even from a known attacker, and had no need to change any of its practices in the future.

Tuesday, October 23, 2012

Why DRM Is A Bad Deal

Amazon illustrates why buying entertainment data crippled by DRM is inappropriate for anyone expecting more than a temporary rental.  Google made a similar illustration when it closed a DRM video business in 2007, which involved killing the back-end systems that make it possible for users to read the DRM content.  The only upside was that Google refunded its victims customers.  Given the likelihood of customers getting financially-worthwhile relief from a DRM vendor under the arbitration provisions governing the clickwrap agreements facing most of the buyers of DRM on the planet, there's little reason to believe future DRM vendors will issue refunds when they close – or reason to suspect they will be solvent when they do.

Friday, October 19, 2012

Vader Out of Star Wars Money, Sells Voice to TomTom

TomTom has taken advantage of Vader's inability to live within his means to hire high-profile voice talent for its navigation systems.  Be sure to listen to the voice clips on the right.

In a related move, Yoda is raising funds to rebuild the new Jedi school and was filmed recording navigation messages for TomTom devices. Note clever use of Jedi mind trick to avoid unwanted direction from weak-minded recording technicians.

Thursday, October 18, 2012

Apple's iPhone Sales Rep Can't Tell You The Price Of An iPhone

The joys of carrier relationships – or perhaps the downside of hiring short-term undertrained sales support during a product purchasing blitz – is that getting an intelligible answer about the price of an iPhone has become challenging.

First, I went online to test availability and typed a bunch of information in about my account so Apple's online store could work out my pricing.  I saw Exhibit 1.

Exhibit 1:

Puzzled why a $399 phone would actually cost $435, I called the number on the screen for clarification.  The explanation was that AT&T didn't really subsidize the phone to the extent that it would be driven down to the price Apple advertised ($399) and that the "upgrade fee" priced the phone where AT&T and Apple were actually coming out on the deal where they expected.  This explanation might be complete hogwash, but it was what I got from the guy answering a line dedicated to iPhone sales (to which I was transferred after speaking with a front-line phone responder and then tech support personnel).

Since the salesman was blaming this extra $36 on AT&T, I asked if he should happen to know what carrier might actually sell the iPhone 5 for the listed price.  Without hesitation, he said Sprint.  He said, if I were upgrading with Sprint, I'd get the listed price.  Since I didn't have prior service with Sprint, of course, I would not be upgrading with Sprint.  When I asked about new service with Sprint and a 2-year contract, Apple's iPhone sales rep said that new service would face the unsubsidized iPhone 5 charge of a gazillion billion dollars.  Since I was sure this was, in fact, the unlocked price rather than the new-service price with a 2-year contract, I called B.S. but he was adamant.

Eventually when I explained the difference between unlocked purchases and purchases with a 2-year contract, Apple's iPhone-only sales rep said that new service with a 2-year contract from Sprint (not AT&T or Verizon) would sell for the listed price ... if I met Sprint's terms of qualification.

So, what are those terms of qualification?

He couldn't tell me.


Wednesday, October 17, 2012

The Element of Intent

This story underscores both how critical the element of intent is in criminal charges, and how valuable to the public common sense is on the part of government personnel.  For those of you who haven't seen little window-box cultivations by teens who think their parents won't notice, this monster is a huge, huge marijuana plant shrubbery:

Bedford police posted this photo of the bush on Twitter, described as the





















The oblivious owners – an elderly couple who spotted this cannabis as a potted plant for sale from a car's trunk – have tended it for years to grow it to this size.  Although the weed itself has been sentenced to death, no charges are being filed against its hapless keepers.

Sunday, October 7, 2012

Supporters to Obama: Lay Off The Weed

Of course, the first debate isn't the election.  But look at it yourself yourself if you haven't developed a strong feeling about the debaters' performance.  Some well-known folks who support Obama have already recorded their impression:

Bill Maher, donor of $1m to a pro-Obama Super-PAC, said of Obama's debate performance that "It looks like he took my million and spent it all on weed."

Ice T – though perhaps not having donated so much to the cause – expressed a similar sentiment:  "No weed before the next debate homie...."

Maybe the weed flack is unfair.  It's a crop that doesn't depend on illegal migrant labor to harvest, and on that basis might be a place for both parties to reach some agreement.  Alas.

Until early November, we'll here more from both candidates.

Friday, October 5, 2012

RIMM Still Suffering Despite Subscriber Increase

A new Seeking Alpha article answers the question whether Research In Motion's upward movement after its recent subscriber news means that the company's prospects look any better.  Short answer:  No.

Thursday, October 4, 2012

In Defense of Butcher's Ghost Story

I've been re-reading recent Jim Butcher titles not only in preparation for the author's soon-to-be-released novel Cold Days, but because I'm studying them as examples of their craft.  While hunting for information on Jim Butcher (and about Jim Butcher's work) I was led by a search engine to The Mad Hatter's blog post The Dresden Files Has Jumped The Shark.  And what a post!

Since Jim Butcher has demonstrated a certain sensitivity to harsh criticism of his work – and why shouldn't he? – I thought it worth noting that The Dresden Files hasn't 'jumped the shark' and that Jim Butcher is executing perfectly the craft for which he's been made by throngs of readers into an international bestseller.

To Jump The Shark
So, what does this mean, exactly?  It means that a show that's lost ratings is trying to save itself by gathering attention through a stupid stunt having no purpose but to attract eyeballs.  The phrase comes from the then-waning but long-running Happy Days, which tried to bolster viewership by having The Fonz water-ski up a ramp to jump over a shark-infested enclosure in his trademark leather jacket:

You know.  In the hope people would watch it.  Not because it really did anything for the characters or the show.  For love of money, Happy Days jumped the shark.

Harry Dresden in Ghost Story
According to The Mad Hatter, "Ghost Story amounts to what is a pointless time waste that will have nearly no bearing on the series."

Nothing happened?  Toward the end of my short post on Ghost Story I drop a paragraph full of questions raised by the book.  The new slew of questions show just how much has changed because of Dresden's behavior in Ghost Story.  I'll not re-hash that here.  But think on it a bit.  If Ghost Story changes characters' positions, creates conflicts, and sets up new problems, it has changed the Dresdenverse.

Despite reciting theme of Ghost Story in his post, the over-arching theme of the book seems lost on The Mad Hatter.  So, some perspective.  Previously when Harry had a near-death experience, he was being murdered in his dreams by the shade of a sorcerer he'd sent to prison (and who killed himself).  Harry's plan in that book was to have a co-captive ally give him CPR while Harry – with backup from the Ghost of Harry – sucker-punched the dead sorcerer in the spirit world as he was murdered.  CPR brought Harry back from the dream-induced death – erasing, in the process, a short-lived haunting ghost of Harry Dresden.  In the near-death experience of Ghost Story, things are quite different.  Harry isn't fighting to survive and going into battle with a plan:  he's arranged his own killing in order to save himself from having to make good on a promise to serve Mab.  To make sure the suicide sticks, Harry had his own memory wiped of his plot so he can't take steps to second-guess himself or derail the killing he's set in motion.  In the process, Harry screws up his own Happy Ending with his love interest and longtime ally Karin Murphy.

But why not die after the date?  Harry's screwed up everything.

This is the main point:  Harry must accept (read: suffer) the consequences of his own decisions.  (Including the suffering he inflicts, en passant, upon innocent others.)  Life without Karin Murphy as a love interest is but the first awful consequence of his scheme to escape his just desserts.  Harry's sudden absence leaves Chicago open to monsters who are no longer afraid of the now-seemingly-undefended turf, and they waste no time imperiling people and places Harry calls his.  Harry's selfish solution to his predicament – that is, his decision to cheat on his deal with Mab – has particularly injured his apprentice Molly, who can neither seek support from Harry's allies (who if successful in catching Harry's killer would learn her role in his suicide/murder) nor really survive on her own in a Chicago gone mad with magic monsters.  He's broken Molly's heart, and learns just how badly he's betrayed her only once he's no longer alive to make amends.  As a sort of long-term whammy, Harry learns that his effort several books ago to make Bob "never" allow his evil side in control again turns out to have consequences, too:  Bob interprets Harry's instruction to separate "Evil Bob" from himself, exiling Evil Bob the skull (so Bob can't put him in charge, even under the control of another), so Evil Bob is beyond Harry's reach to limit with whatever governors are offered by the skull that houses Bob.  Harry's decisions have destroyed his love life, injured his allies, freed and/or created new enemies . . . all critical developments in Harry's life that change the position of the characters.

Mostly for the worse.

The lesson that one must suffer the consequences of one's own actions – made explicit near the end, as Harry is delivered back to Mab by the angel Uriel – is not the only thing at work in the book.  Death itself changes Harry – or, rather, the experience of being dead forces him to grow.  Nice, eh?

So ... no bearing on the series?

Unable to effect change through direct action, the dead Harry is forced to learn more about his enemies before acting.  The fact that Harry had no power to immediately obliterate the gunmen at Murphy's house meant that he had to follow them ... learning as he did that they had problems of their own that needed solving.  Harry's biggest change may be this:  he learned that he could get a lot more done by thinking and talking than he could by laying waste to enemies at the first sign of conflict.

The result?  Harry has a new ally, Fitz (and maybe Fitz' gang).  He has a new and very powerful enemy in Evil Bob.  Harry has hacked off his longtime ally Karrin Murphy, whom he kept in the dark while he aided those who shot up her house (and guests, and neighbors).  Perhaps worst, he's destroyed the life of his apprentice, Molly Carpenter.  Harry has some serious problems to fix – overhanging issues that will have direct bearing on his relationship with all the characters in Ghost Story, and his own driving motivations for the entire future of the series.  Jim Butcher's Ghost Story doesn't just mature the character, and add new characters, it adds whole new problems to fix.

And they are doozies.

Conclusion
IO9 has it right:  Butcher's stories – including Ghost Story – are "bone deep" satisfying.  Does the climax of Ghost Story hit you the same way as the climax of Changes?  Ha!  How could it?  In Changes, Harry was selling his soul (he thought) for the power to commit a genocide (as it turned out).  And was murdered just before his first date with the leading lady his readers had been dying for him to date (ba-da-bump!).  Just awful!  How can you write a worse fate than that?  So no, Ghost Story doesn't raise the stakes or excitement from Changes, but if you find a book that does you are commanded to post its title in the comments because I need to read it.  I'm betting it's a rough hunt for books with such bang.

But wait:  without Ghost Story, would you understand just what the stakes were in Changes?  Ghost Story is not just the denouement of Changes:  it is its other half, revealing what Harry hid from himself, and what he hadn't taken the time to see.  Without Ghost Story, Changes was an exciting adventure in which, having lost his earlier love to the vampire war, he was robbed of new girl in the last act.  In Ghost Story, Changes is re-cast as a tragedy in the classic sense:  Harry's noble virtue is also his fatal flaw, the instrument of his destruction.  (And this isn't fixed at the end:  his relationship with Karrin Murphy can't just be dusted off and picked up from here.  Harry's screwed it royally.)  Without the reveals in Ghost Story, readers would never appreciate the bite of Changes.  TheMad Hatter says this could be coughed up as back-story in another book, but I disagree.  Imagine Changes being re-cast in the light depicted above not by Harry, learning it the hard way, but by some laughing villain in a book about another problem:  nowhere near as satisfying as seeing Harry put it together while trying to save his apprentice from a miserable death only possible because he'd abandoned her through suicide to the tender mercies of the Wardens, the Winter faeries, and the new crop of monsters in Chicago.

Ghost Story is a worthy successor to The Dresden Files' legacy of solid novels enjoyable not just at first pass but on re-read.  Ghost Story isn't a cheap stunt.  It's not a shark-jump.  Ghost Story offers something that is hard to imagine offering otherwise:  experience to give a hot-headed Harry the perspective to speak carefully and act with deliberation as required to survive and succeed in his new role as the knight of the Queen of Air and Darkness when the curtain opens on Cold Days.

(And it could add whole other new problems, and motivate whole new classes of solutions I'll not speculate on lest Jim Butcher stumble here.  Hi, Jim!)

Thursday, September 20, 2012

Putting the Jab in Hijab

Women's Lib comes to Iran. Apparently in the small towns, women aren't expected to take a stand on issues like their required attire, and one "man of the cloth" hit the mat in the street when he didn't take a girl's hint he should keep his opinion to himself.

Go get 'em, tigress.

Saturday, September 15, 2012

High-Compliance Exercise program

The world's largest woman revealed that the secret to her loss of a hundred pounds in the last year was an exercise program to which she was able to remain committed all year long. Her ex-husband, apparently extremely attracted to her shape, reunited with her – enabling her to "sexercise" 6-7 times per day. She says each encounter burns 500 Calories, which means her program burns 3000-3500 Calories per day beyond those involved in her ordinary activities.

Of his amorous efforts, she summarized: “He took charge as I couldn’t move much, but he was so attentive.”

Of course, the government will not be supporting fitness programs based on this finding despite the high-compliance nature of the exercise program. After all, this is the country where the Surgeon General was forced to resign for advocating masturbation as a way to survive adolescence free from pregnancy or STDs. Goodness knows we can't have an outcome like that.

More on US Deaths in Libya

The not-a-movie-protest attack that killed U.S. ambassador Chris Stevens killed a total of four Americans, including "information management officer" Sean Smith and two former-Navy United States military veterans who were specialists in asymmetrical warfare and security. Both these last two were also experienced snipers. A Daily Mail article names one of the men. The sister of Glen Doherty, 42, said he was working on a security detail when the consulate in Benghazi was attacked.

What the reports have not yet explained about the deaths of the men is that both of the veterans, who were expressly present to provide security to the Ambassador, had been given express orders not to carry long arms.

Threat Preparedness
In case the significance of the order against long arms might escape the reader, the author proposes a mental stroll through some well-known information available to anyone who with access to a newspaper. Think about the Middle East, where attacks on U.S. citizens is a widely-known threat, and attacks on U.S. government personnel have been expressly threatened for years by anti-U.S. hate groups who have demonstrated international reach. What specifically are the highest-likelihood threats to U.S. government personnel?

The answer comes straight from the news of the last more-than-a-decade: (1) AK-47 rifles, (2) rocket-propelled grenades (RPGs), and (3) improvised explosive devices (IED) used to immobilize Americans for ambush on disorganized survivors using AK-47s and/or RPGs. These threats are far from secret. Personnel returning from the Middle East have described to this author that fully-automatic AK-47 military rifles and their ammunition is, in fact, as common in that part of the world as matchbooks are common in ours.

So it is no great surprise that Americans traveling in diplomatic group or located in an overtly-marked American consulate building should be attacked by gunfire from rifles and RPG fire.

The Equipment
While the effective range of an RPG varies greatly with the skill of the operator, the widespread availability of RPGs and the longstanding nature of conflict involving RPGs in the Middle East makes the availability of adequately-skilled RPG users a likely threat. The formation of vehicle-hunting teams armed with numerous RPGs has been taught by veterans of the Soviet invasion of Afghanistan to enemy fighters in modern conflicts, complete with effective RPG tactics. The risk of RPGs has been known for decades, as target-specific RPG munitions modifications were involved in the 1993 attacks that downed U.S. helicopters in Somalia. Although "[c]lose combat is a direct-fire brawl in which the RPG excels", "Soviets tried to stay at least 300 meters away . . . out of AK-47 . . . and RPG-7 moving target range." But the consulate is not a moving target, and RPGs can reach over nine hundred yards. Suffice it to say that the effective range of anticipated threat from RPG attacks on a fixed position such as a consulate building lies in the hundreds fo yards.

Although Soviet policy regarded 300 meters beyond range of AK-47s against moving targets, a team providing suppressive fire on a building under attack by RPGs so as to prevent escape is not necessarily worried about moving targets, and can content itself laying fire into a beaten zone at known exits. In a manual published on the training soldiers in the use of the M-1 Garand during the Second World War (the author gave away the manual with the rifle, or a quote would appear here), users were instructed to zero the sight firing at the range of three hundred yards. The U.S. Army publication FM-23-5 (1958) instructs soldiers on page 260 on the amount of lead to give a walking man at a range of three hundred yards. In fact, that page of the manual has an illustration with a little dot on it and an arrow that says "400 YDS OR LESS AIM HERE". The manual makes clear evident that an expected objective of training given to regular soldiers included accurate fire at a range of three hundred yards against a walking man – that is, a moving target much smaller than a vehicle, and much more challenging than a building entry. The 30.06 round fired by the M1-Grand and the 7.62mm Soviet round fired by the AK-47 are certainly different species of thirty caliber ammunition, but the more recently-introduced 7.62mm Soviet round is certainly capable of performing within the operational envelope of American rifles of the WWII era. The effective range of our current enemies' rifles exceeds several hundred yards.

What this means is that the expected enemy threat against the Ambassador involved attack by weapons having effective range measured in hundreds of yards. In the face of this threat, the State Department ordered two U.S.-trained snipers – with significant experience countering AK-47s and RPGs in live operations – to bear handguns. Handguns have a barrel length measured in inches instead of feet, and an effective range of tens of feet instead of hundreds of yards. Even if one generously considers the extreme effective range of a handgun against an enemy to be "tens of yards", one might conclude (generously) that the greatest outer limit of battlefield handgun accuracy is an order of magnitude less than the minimum plausible effective range of the rifles borne by the most common expected adversary.

You can hit an unmoving and unobscured paper target at a hundred yards with some handguns, but this author has significant doubt about the relative effectiveness of handguns at more than a few tens of yards against targets using cover and obscured by night or smoke. The sights available on rifles dramatically alter the obscurity penetration and aim of the weapons, even ignoring their dramatic differences in performance characteristics. To send sniper-trained Americans to provide security using handguns when the expected enemy's weapons are all effective threats at several hundred yards' range is a serious handicap.

Americans were sent by design into a rifle battle bearing pistols.

How They Died
Unlike the Ambassador, who reasonably kept cover but was eventually overcome by environmental factors (warning: graphic photo) when his cover (a rented villa) was ignited by RPG fire, the American security personnel did not die of smoke inhalation. Running out of ammunition for their handguns, they fought their way to AK-47s to acquire usable weapons. In doing so they necessarily sacrificed the cover of a building, and exposed their positions to the enemy by assaulting positions known to their attackers (because elements of the attackers' own team were located at the assault target).  As a consequence of their effort to protect the Ambassador, made necessary by their being deprived of longarms at the outset of the battle, they operated at a marked disadvantage.

They were ultimately unable to create an escape corridor for the Ambassador because they had been forbidden weapons suited to the task, and first had to expose themselves in a two-person assault against twenty militants armed with rifles, before they themselves could acquire the weapons required to perform their objective. The State department's own employees may not have died from gunshots, but their superiors' orders didn't work out any better for the Ambassador than for his security detachment.

Other Orders
The Daily Mail article mis-identifies Doherty as a "Marine." While inaccurate, this is understandable in light of the well-known fact that it is Marines who are tasked with providing security to U.S. embassies and consulates abroad. The use of Marines for this task is easy to understand: if you want someone to tolerate oppressively boring tasks like guard duty and stand against overwhelming odds in the event of assault until their mission is accomplished or every man is dead, who else will you ask? Special forces operators are not guard-duty material. Lesser soldiers may not be reliable to hold their ground when boredom erupts into Hell on Earth. As an example of a duty that's oppressively boring and yet utterly critical in the event of disaster, consider my friend the Marine who was tasked with providing physical security to nuclear weapons. In some jobs, you just can't have someone break and run.

So, where were the Marines in all this? Marines could have made quite a bit of difference, and moreover are equipped with rifles. (If they are lucky, they are permitted to carry loaded rifles. This may sound obvious, but the Unites States has a track record of getting this exactly wrong. Ever wonder how the explosives-laden truck that blew up the barracks in Lebanon made it all the long, snaking way through the vehicle-control devices without being shot? Right. Orders that Marines tasked with guard duty should employ unloaded rifles. The time required to get an off-site chain of command to authorize the withdrawing of an ammunition magazine and the loading and charging of a rifle was simply so long the bomb arrived before the orders permitting self-defense. This fact should also suggest something extremely dangerous about the dedication of Marines to their orders.) Unfortunately for the Ambassador and his non-uniformed security detail, the Marines ordinarily detailed to provide security to Ambassador Stevens had been ordered elsewhere at the time.

Protecting the Ambassador just wasn't a priority for the State Department on September 12.

Conclusion
The orders affecting security at the scene of the attack – that Ambassador Stevens should be without any Marine security at the consulate in Benghazi, and that his security detachment should be forbidden long arms while providing security in Libya – have a character that suggests they originated outside an organization having a deep understanding of security matters. Someone with operational sense must be given the authority to exercise it. At present, that is not the case at all in the State Department.

Form over substance only fools people until threats appear. Now, it appears the Emperor went on parade naked, and was shot at range by aimed fire. Even children could have seen that coming.

[UPDATE: It turns out the Benghazi location, where the Ambassador was being protected by two (2) security personnel who had been ordered not to use longarms, was also operating under a security waiver that exempted it from having to maintain the security features and personnel complement ordinarily required at United States diplomatic facilities.  Whoops.]

Wednesday, September 12, 2012

Crummy Film Incites Islamists To Murder

(Or did it?)

Americans are fond of quoting the English writer Evelyn Beatrice Hall who, writing under the pseudonym Stephen G. Tallentyre, summarized a viewpoint of Voltaire in the famous line: "I disapprove what you say, but I will defend to the death your right to say it."

And now, Americans are dying again. Is it over free speech, or something else?

Sam Bacile, a self-described Israeli Jew whose $5m film was apparently shown at full length exactly once to a mostly-empty theater in Hollywood, reportedly said "Islam is a cancer, period" when interviewed about the film and the subsequent attacks in Egypt and in Libya. At the time of this writing, Sam Bacile is reportedly in hiding. With respect to the American deaths in the Middle East, he responded "I feel the security system is no good. America should do something about it."

Steve Klein, who consulted on the film, said he'd predicted to Bacile that "you're going to be the next Theo van Gogh." In the wake of the cartoon controversy, great prescience seems unnecessary to have reached Klein's conclusion.

So, what about it?

A film whose purpose is to denounce the world's largest and fastest-growing religion appears to be the very sort of speech in which the First Amendment was designed to keep the government from involving itself as an arbiter of truth or propriety. The fact that we treasure the right to speak freely need not mean we necessarily celebrate crummy film. (Surely YouTube has clips from which the quality of the thing will speak for itself.) In Egypt, where attacks began yesterday, the U.S. embassy said it "condemns the continuing efforts by misguided individuals to hurt the religious feelings of Muslims - as we condemn efforts to offend believers of all religions."

But is this about the film, really?

From the campaign trail, Romney (in a prepared statement) seized on an opportunity to say something related to foreign policy after seemingly neglecting it at the recent Republican Convention:
I'm outraged by the attacks on American diplomatic missions in Libya and Egypt and by the death of an American consulate worker in Benghazi. It's disgraceful that the Obama administration's first response was not to condemn attacks on our diplomatic missions, but to sympathize with those who waged the attacks
Maybe the folks at the Embassy were trying to save their skins by saying something politically correct rather than offering to spill their scarce blood in defense of bad film they'd never seen. Clearly caught flat-footed by events – which were incited by non-government actors, and perpetrated by foreigners, leaving the current administration without a lot of basis for predicting things unless it had advanced intelligence of effort to incite attack – the Obama campaign predictably returned a counter-attack:
We are shocked that, at a time when the United States of America is confronting the tragic death of one of our diplomatic officers in Libya, Governor Romney would choose to launch a political attack.
Really? Shocked? During campaign season?

But back to the topic: a deliberately inflammatory movie was made by people intending to discredit a religion well-known for its inclusion of adherents willing to kill over suspected slights to the religion. Consider the recent failed attempt to have a mentally disabled Christian girl executed for blasphemy by planting burned Koran pages in her possession, and the ensuing death threats aimed at the girl's entire family after the falsity of the charges led to her release; the entire family fled their home for fear of being burned alive within. And they were victims of a false-charge plot. So, what should we think about people who deliberately provoke trigger-happy murderers from the safety of our borders?

In this country, we're allowed to think anything we like about them.

The real question is, what should we do about them.

Something? Nothing?

If makers of the film had screamed falsely about a terrorist bomb on a crowded train platform to incite a fatal stampede, we'd have them for a homicide. But in this country, publishing that major prophets are frauds is simply not an offense. Whether there's any truth in the claim isn't the government's concern. Even the genuineness of publisher's beliefs aren't subject to investigation. They are permitted to say anything they like on politico-religious topics, and it's the job of viewers to accord each publication its proper weight.

In this case, the film played to a mostly empty theater – once. It's fairly clear nobody is being persuaded by anything the film has to say. Rather, the film's most zealous audience is one that never saw the thing at all – they just heard through the grapevine that the film insulted their (presumably cherished) religious figures. There's no risk the film will confuse the public about an important religious truth. There's only a risk the film will incite people who don't believe in the value of free speech.

And that's why the United States must take a clear and firm line on the issue. The United States did not participate in or approve of the publication of this or any other film advocating for or against any religious view. The United States' law that prevents prosecution for films that incite a strong religious response is the very sale law that protects genuine religious adherents from persecution for espousing their most sacred beliefs. The United States condemns in the strongest possible terms murders motivated by hatred of the exercise of nonviolent free speech.

The makers of the movie – funded by supporters sharing a common faith of their own – surely knew they were stirring a hornet's nest. Murderers willing to serve time may pursue the film's authors for years – Salman Rusdie has survived over two decades of death threats – but no-one will be able to guarantee his safety. But there can be absolutely nothing to be gained by trying to accommodate murderers and would-be murders by turning over to their care a taxpaying resident of the United States – and even less to be gained by pretending to agree with their grievances.

And what are those grievances? The disabled Christian girl in whose garbage bag burned Koran pages were planted was guilty of being part of a Christian community that annoyed its majority-Muslim neighbors with the sound of Sunday hymns. The ambassador murdered in Libya was guilty of supporting the revolutionaries that toppled Ghadafi and installed the current government. The actual targets of the supposedly religious violence aren't even the source of the claimed offense: they are political symbols.

And when enemies of free speech carry on a political dispute with violence, they carry on a war. The deep questions for the United States revolve around the targets of this war, its proponents, and the extent to which the United States is willing to be drawn into waging it. The last time the United States was drawn into declaring a murder to be an act of war and responding in kind, it boosted the prestige and the recruiting power of the very enemy it sought to suppress. (Of course, is a real invasion any better than propaganda? Consider the justification given by bin Laden for his fatwa against Americans.) Or did it?

What response is merited now?

Well, it doesn't look like the Libya attack was a reprisal for free speech but a calculated attack by an al Quaida affiliate in response to an al Zawahiri plea for retaliatory murder following earlier militant killings in Libya. The unarmed flag-snatching invasion of the U.S. embassy in Egypt is a stark contrast to the RPG-supported militant attack in Libya. The Egyptian protests may really be inspired by fury the U.S. "permitted" someone to make an anti-Islamic video. So the two events, being dramatically different, may merit wholly different responses.

In Libya, the local government agrees the murders were crimes and has pledged to take the steps needed to obtain justice. What is there left to do but provide support to the local sovereign as it keeps the peace? (Okay, maybe a lot of support, including from the air. But hunting militants isn't a change of policy, is it?)

In Egypt, the ruling party has "called for" further protests at the U.S. embassy, after prayers Friday. Interestingly, the call isn't for blood in the streets, but for Islamists to show up with signs and chants. Egypt can have free speech, too – a departure from the Mubaruk era in which protesters would never have been permitted near the embassy. It's interesting that Egypt's government hasn't made any big plea for respect for the U.S. tradition of nonviolent free speech, or an effort to urge the population to distinguish between the U.S. and those people who exercise their freedoms within its borders. Egypt's ruling Muslim Brotherhood party will get points for "sticking it to the man" by organizing a march past the embassy, even as it protects the embassy with troops. Have we considered moving the flagpole so the next group of climbers won't easily replace it with their own banner?

The conclusion seems straightforward: from a policy standpoint, we do nothing different than we did before. From an operational standpoint, we continue to refine procedures to accomplish the same things with less risk to personnel.

But from a political standpoint, we have the interesting conundrum of how to paint events publicly so we don't shower our most successful enemies in attention that will improve their future capabilities, or seem weak when confronted by enemies of the idea we should defend even worthless works' right to publication by willing publishers, or seem so hawkish we drive people into the arms of our enemies. Traditionally, we've been awful at propaganda. The rest of the conflict with the Islamofascists will be interesting to watch.

UPDATE: Not that the attacks needed a crummy film to motivate them, but it seems the producer deceived the actors about the nature of the film and the word "Muhammed" was dubbed in during post-production. The film's name in production was apparently Desert Warriors. At least one actor has declared she'll sue. On the set, Mr. Bacile claimed to be Egyptian. Was someone trying to incite violence by making a film they knew would get people hurt? If so, that First Amendment won't be much help . . . .

Tuesday, September 11, 2012

Service: iCloud > MobileMe? Maybe not ...

Apple's "system status" page reflects protracted iCloud mail outages. This is reminiscent of MobileMe, which was the paid-for successor to dot-Mac. MobileMe's poor reliability became a joke. Apple gave out upgrade coupons in apology to aggrieved users, but kept screwing up with MobileMe. Steve Jobs directed an engineer to give real updates to users and to apologize for the muckup, which included permanently-lost emails. Apple ended up giving successive service extensions to paid users. As a parting shot, MobileMe managed to screw up a perfectly-good morning one day when I tried subscribing to MobileMe to take advantage of cross-device synching.

Note to Apple: Eddie Cue is great, but you need an enterprise service team to (a) make this crap reliable, and (b) put Apple in a position to compete for enterprise business. Consider: how useful is Apple's maps when Apple's back-end has reliability issues? You want to sell mobile devices to even the discriminating customers, right?

Smarten up, guys.

Non-Participation Shrinks Ranks of Job-Seekers

The "unemployment" rate – calculated by dividing unemployment benefits claims by the size of the population thought to be seeking work – has long been regarded as an understated metric for true unemployment. Today, a non-participation measurement suggests that fewer than 70% of working-age males in the United States are even trying to work. About seven million non-participants of either gender – who are not part of the "unemployed" measured in the unemployment rate – desire work. A recent chart showing the graduation of the "unemployed" into the ranks of the "not even bothering to look" shows a sharp rise since the end of 2008.

While some working-age people are non-participants because they are full-time students, some unemployed people conclude that if they can't get work with their current credentials they need to go back to school.

The overall workforce participation rate is currently 63.5%, the lowest since 1981. The male participation rate (now 69.8%) is the lowest on record.


Monday, September 10, 2012

Normalcy Returning to American Capital

Seeking Alpha just published a new Jaded Consumer article, Normalcy Returning to American Capital. Like the last Apple article, it is an Editor's Pick. Of 53 Jaded Consumer articles at Seeking Alpha, twelve have been designated Editor's Picks.

But to the article itself: the idea that American Capital is going under, to the destruction of investors' capital, looks fairly flimsy at this point. Yet, the NAV discount remains at about a third of the company's "fair value". In other words, when you buy $1.00 of stock, management invests a net of about $1.50 on your behalf.

Even reasonable returns start to look exciting when you multiply them like that. And the possibility that the NAV discount could narrow in the next several years as the loss carryforward is burned off and the incentive to avoid RIC status declines . . . well, after the runup from my post-crash purchase at $1.80, I'm still long.

Editor's Picks Galore

I just noticed that my last article on Apple (Pricing Policy, Pricing Power, and Profit) was selected by Seeking Alpha as an Editor's Pick. Of my 52 articles published by Seeking Alpna, eleven have enjoyed that distinction.

Hope you like 'em :-)

Saturday, September 8, 2012

Executive Excesses Extended

One of the themes of the last election was that the overreach of executive power under the President had to stop, and one place it was going to be halted in a definite and high-profile way would be the permanent closure of the detainment center used by the President for the indefinite detainment of untried captives.

So imagine my surprise as we approach the next election, and see an article about how the President not only still operates "gitmo" as a facility for indefinite trial-free detainment, but has attempted to impose new rules to restrict access to lawyers in a position to ascertain whether the law might afford some relief for any violation of the law that may have occurred.

If American freedoms mean anything, they mean the freedoms enshrined in our written law. This is at least the very minimum freedom Americans have fought and died to protect for two centuries. Equal justice under the law is a principle we must be committed to uphold if we are to cling to any notion that America values the rights about which its citizens are so fond of speaking.

As with trial-free executions (on the say-so not of the jury guaranteed by the Sixth Amendment, but the say-so of government-employed bureaucrats), the current administration seems not to understand this at all. If some lawyer wants to provide counsel to some punk captured on a battlefield in Afghanistan, what business is it of the government to keep claims from being adjudicated by the courts? Without courts, no mechanism exists to ensure our rights – whatever they may be – are given whatever protection the law turns out to require.

Monday, September 3, 2012

Apple's Pricing Strategy

On Seeking Alpha, The Jaded Consumer has a new article – an Editor's Pick – called Apple: Pricing Policy, Pricing Power, and Profit. The article lays out the case that average sales price (ASP) declines don't prove Apple's goose is cooked, they prove Apple meant what it said about thinking about corporate profits above per-unit sales.

Feel free to comment, and let the world know what's right (and wrong!) with the thesis.

The article was inspired by some "Sell Now!" arguments I'd seen. I wanted to make clear that the reason to sell – if any – was not Apple's ASP decline.

Monday, August 27, 2012

Cost and Quality

Partners at the IP firm hired by Apple to fight Samsung billed at a median rate of $582 per hour, whereas partners at the firm hired by Samsung billed an average of $821 per hour. So, who got the better deal? Based on the verdict, I'd say Apple did.

Getting more for less is always the better play. So, how does Samsung get talked into paying more for less? Marketing.

Tuesday, August 14, 2012

Federal Prisons Poach Manufacturing Jobs

Factory owners tired of laying off good workers are getting angry at the continued favoritism of Unicor – the federal prison system's manufacturing contractor – in competition for federal contracts. To get a government contract, Unicor generally need not bear private industry bids – just be similar in price and quality.

This favoritism might be good for keeping prisoners employed, but it's lousy for employers who want to keep their employees employed. Paying $9 per hour plus benefits is a lot more expensive than the 23¢ (or up to $1.15) paid hourly by Unicor to inmates who aren't free to look for other work. Unicor's $900,000,000 in 2011 revenue was earned, in many cases, from contracts won against small-businesses who try to employ free people who are not (yet) felons.
Unicor – communicating through a paid spokesperson, funded for by you and me – defends its preferential contracting against private competition.

Of course, if we keep laying off the people who want to work, we can get them retrained by Unicor once they're convicted, and they can learn to do manufacturing work the private sector is having trouble getting work doing.

Sunday, August 12, 2012

Army Promotion Yields First Gay General Officer

Army reserve officer Tammy Smith, promoted to Brigadier General on August 10, said of her sexuality that "I don't think I need to be focused on that. What is relevant is upholding Army values and the responsibility this carries." Her wife, Tracy Hepner, co-founded the Military Partners and Families Coalition and is an advocate for benefits for same-sex partners of military personnel, and their families.

Interviewed anonymously just prior to the repeal of the Don't Ask Don't Tell policy, she expressed relief she and her partner would be free to go for drinks without fear for her career.

Friday, August 10, 2012

More Growth at American Capital Ltd.

I've got a new article on ACAS up at Seeking Alpha. It looks at the last-announced quarter. I was honestly shocked that with my recent travels and ill health, someone hadn't beaten me to a SA story on ACAS' quarterly results. The fact that nobody bothered may suggest the stock remains underfollowed, which is itself an interesting observation.

I also have gotten a consistent patter of comments at SA, urging that management pay dividends instead of only repurchasing shares below NAV. I think this sort of reasoning has got to take center stage in its own article. But, later.

UPDATE: "More Growth at American Capital Ltd." was designated as a Seeking Alpha Editors' Pick – and so was "One Year of American Capital Mortgage Corp." This makes ten of fifty articles as Editor's Picks.

Thursday, August 9, 2012

MTGE: One Year On

A year after its introduction, American Capital Mortgage Investment Corp. (MTGE articles here) proves ACAS can manage a mortgage fund. Investors in American Capital Agency Corp. (AGNC articles here) won't find this surprising.

The real story is at the manager, ACAS. More on ACAS soon.

Friday, August 3, 2012

Zipcar Collapse Sinks Fool Portfolio

The Motley Fool's "Million Dollar Portfolio", which at present sits below its namesake threshold, is now not even beating the S&P 500 since the inception of the service. With the recent meltdown at Zipcar following the company's lackluster results and unexciting forecast, the service not only has a negative return but a return lower than the S&P 500 (excluding the dividends paid on the S&P 500, but not excluding dividends paid to the portfolio):

The two numbers for returns since inception are, respectively, the portfolio's total return (including both transaction fees and dividends paid) and the total return of the S&P 500 (excluding all dividends). As depicted in the image, this puts the dividend-excluded S&P 500 return 2.5% ahead of the Motley Fool-analyst-driven real-money portfolio over the life of the portfolio. While the portfolio's survival of the 2008 crash certainly impacts its overall return, this should not work against the portfolio's ability to generate a return that is better than that of the S&P 500. After all, the entire thesis of the Million Dollar Portfolio is that by carefully picking winners and systematically excluding losers, returns should crush those of the S&P 500.

And, yet ...
... not.

The MDP currently has a couple dozen holdings, which is rather easier to follow than the 100+ recommendations maintained by the Motley Fool's flagship newsletter Stock Advisor. Note that at the time that last link was published, MDP was actually ahead of the S&P despite being down. No longer.

The idea that investors get market-beating portfolio allocation instructions when they subscribe to MDP is just false. The possibility that MDP has concentrated its investment in diamonds in the rough that will be discovered later seems unlikely, as its dozens of companies should afford it plenty of opportunity to diversify. But, that's not what's going on. A few comments by the fund managers in the comments seem to suggest the managers aren't trying to implement Buffett's first two rules of investing (reminiscent of Hippocrates' admonition, first and above all to do no harm) but to make bets with other people's money (the $1m portfolio is a marketing tool, not the managers' own money) based on their impression of the risk-reward ratio. In other words, they're willing to put your money in peril on the chance of riding to the moon (which would attract more subscribers, ka-ching!). This is exactly what is hated in quarterly-results-focused fund managers, no?

Rather than assuming away regulatory risks (like at Bridgepoint (BPI)) and ignoring the direct competition available from everyone interested in entering a market with no intellectual property or trade secret barriers to entry (like at Zipcar (ZIP)), people entrusted to give the price-specific and allocation-specific investment instructions routinely handed out by the Motley Fool to members of the Million Dollar Portfolio subscription should be spending the time needed to understand businesses well enough to know them well enough to appreciate when they are screaming buys. Berkshire Hathaway's purchases of American Express, Coke, and preferred shares of Goldman Sachs (with warrants) and General Electric (with warrants) were made at times the market had turned on otherwise good businesses. Those companies aren't a buy at any price (something that Stock Advisor seems to ignore when it makes a recommendation, and especially afterward), but they were a buy at the right price. They were a buy because established income from known businesses had proven it.

They weren't newly-public news items like Zipcar, or privatization cheerleader heartthrobs like Bridgepoint. (Remember Prison Realty Trust, formerly trading under the ticker PZN before it was acquired by Corrections Corp. of America (CXW), when "everybody knew" private prisons were a "no-brainer"? Is for-profit mass-education a story much different than for-profit inmate warehousing?) Far from being solid investments, Zipcar hasn't made an annual profit yet and Bridgepoint is a commodity competitor in a market in which the governors of nineteen states have decided to drive down prices.

By focusing on imagined risks and hoped-for rewards, the Million Dollar Portfolio seems to view itself as pursuing "risk-adjusted" returns rather than focusing on businesses that produce solid returns. This may be how the portfolio has been seduced away from Warren Buffett's First Rule of Investing, and his Second.

Friday, July 27, 2012

Why Apple's a Buy After Earnings

I recently published at Seeking Alpha Why To Buy Apple's Post-Earnings Drop, which should continue to be relevant for a while as people take time to figure out that Apple's recession-resistant business is still cranking out products it can sell like hotcakes.

In other news, the abysmal showing of Motley Fool Million Dollar Portfolio constituents Zipcar and now Bridgepoint Education appear primarily responsible for the decline of my post-crash returns. As calculated by the Motley Fool scorecard ...

... my post-crash purchases are now only doubling the performance of the S&P 500. The service's eponymous million-dollar portfolio has just returned to a $1m value, which since its inception means it's about broken even: the +0.2% return claimed by the service beats the dividends-excluded S&P 500 return of -0.9%, but why would one exclude dividends? One of my best ideas last year – buying American Capital Mortgage Investment under $17 – has turned into a dividend play. (When I entered the position, it was a value play: it was trading well under its NAV, which then was about 20. Now trading a bit above NAV, the story is about NAV growth and after-tax returns.)

Since the Motley Fool's Million-Dollar Portfolio hasn't met its stated aim of crushing the S&P 500, the remaining question is whether it's succeeded in steering me toward gains with which I can crush the S&P 500. After all, I gave up mirroring the portfolio when it decided to allocate more of the portfolio to Microsoft than to Apple – a curious decision during this decade – and incidents like Bridgepoint underscored that I really needed to stick with businesses whose risks and rewards I rally appreciated. Peter Lynch and Warren Buffett both had that one right.

So, I'll be cancelling my subscription for a refund in the not-too-distant future – like I've cancelled every other Fool subscription I ever tried. You might considering doing the same.

Monday, July 23, 2012

NYT Has It Wrong On Drone Ethics

I just saw an article suggesting that drone strikes were per se immoral because they allowed attack without risk. The crux of the paper's argument is a comparison of drone strikes to a tale told by Plato about a murder committed by a man who wanted to murder his king in order to marry the king's wife, whom he'd seduced, and then install himself as monarch. The comparison struck me as intensely strained: the motive of greed and the act of murder certainly engender the disgust described by the article, yes. But is self-defense killing part of either? I think the article completely misses the boat. We're not bombing suspected enemies to better seduce their wives or daughters, but to reduce the murders being carried out on our own doorstep by a variety of shoe bombers, underwear bombers, or unstable psychiatrists – all inspired by firebrand speeches exhorting listeners to murder strangers based on their citizenship rather than their imminent danger (or even their beliefs; they'll take any scalp they can get, if it's got the right passport).

There may be problems with some of the killings approved by the current administration, but the problems with those cases won't go away if drones are replaced with human assailants.

To the extent our methods are illegal and wrong, on the other hand, at least it's not unclear whose responsible. One gem from that last link is a quote from former CIA director Hayden:
“I have lived the life of someone taking action on the basis of secret O.L.C. memos, and it ain’t a good life. Democracies do not make war on the basis of legal memos locked in a D.O.J. safe.”
We definitely need to know with whom we're at war and why. The "record" (if there is such a thing today) of the incumbent will be subject to a referendum in November, and playing games with the moral basis of our decisions to kill will not aid the electorate in deciding who has the right of it. Democracies may need to keep secret things like troop locations and tactical matters, but the basis of our political leaders' warmaking arguments is plainly a matter of public interest rather than of operational security.

Sunday, July 22, 2012

ACAS Refinances!

Remember when I wrote that American Capital was going to want to refinance its bankruptcy-avoidance debt package to regain flexibility? Well, that deal appears imminent.

Read more at Seeking Alpha.

Seeking Alpha pays me more than Blogger (which pays clicks instead of impressions, and hasn't cut me a check literally in years), making the publication of financial analysis much more attractive.

Already, the Seeking Alpha article has attracted a critic who says share count is not shrinking, but due to insider selling is growing. Without going into the detailed history of issuance and buyback at ACAS, I'll simply post a chart for the relative period:

ACAS Shares Outstanding Chart

ACAS Shares Outstanding data by YCharts


To show how this works in more relevant terms, let's see it as a percentage:
ACAS Shares Outstanding Chart

ACAS Shares Outstanding data by YCharts


In less than a year, management has shrunk share count by over 5%. That means that every dime of earnings per share before the buybacks is worth 10.56¢ after the buybacks. And each buyback steepens the concentration. The last buyback of over 9m shares retired a higher percentage of ACAS' outstanding shares than the first >9m share repurchase.

Friday, July 13, 2012

Draught?

According to CNN, we're having a drought.

According to yesterday's photo of a local front lawn, we're flooded:

It's been wet as heck on the Third Coast. Moreover, the triple-digit days of earlier in the year have been beaten back by the steady rain. Last night, the pool was chilly for underwater hockey. What are these guys at CNN missing?

Thursday, July 12, 2012

Scottish Girl's Cafereria Blog Feeds Kids – But Not In Scotland

Martha was banned from taking pictures of her school's cafeteria food after their appearance on her blog – Never Seconds – embarrassed local officials, who claimed the pictures caused catering employees "to fear their jobs." If I served dreck like that to kids, I'd fear to work, too. Or did he mean they feared for their jobs?

Martha's blog has raised funds for a charity that feeds school kids abroad, but who'll look after the local kids? Not the politicians who tried to bar her from talking about her lunch.

At any rate, now that officials' censorship of a human (killing dogs in kangaroo court is okay) has been exposed and the rights of children to speak the truth has proven a bigger topic than lunch quality, Martha's blog ban has been lifted (link has photo of a lunch).

Lennox: A Triumph of Power Over Reason

Lennox the dog, "a historically unaggressive bolldog-Labarador mix", was killed by the Belfast City Council despite that the dog had never bitten anyone, the dog had been well-behaved since being impounded two years ago, and the Council had received offers from solvent foreigners to remove the dog from the Council's jurisdiction to a country where the dog could live lawfully. Lennox, whose only apparent crime was its breeding, was according to CNN "described by the Belfast City Council as a 'dangerous, illegal pit-bull terrier type' [and] put to death."

After trial, the dog claimed to be innocent on the first paragraph of his blog. While the dog's death sentence was on appeal, an international support following formed, complete with support videos. From the United States, genuine foreign-jurisdiction adoption offers were made available as an alternative to local execution.


Apparently the glee of some authorities when defying international protests of aggrieved onlookers is just too great to allow something as trivial as reason to govern whether to gas someone's family pet.

Government like that probably helps domestic sales of Irish whiskey.

Wednesday, July 11, 2012

Java Malware for Platform Equality

Now Linux and MacOS get the same benefit as the latest offerings from Microsoft: full support for the latest malware. All you need is an up-to-date Java virtual machine.

Welcome to the future.

Well, at least until code signing becomes standard.

May Trojan Bears Microsoft's Digital Signature

The importance of key management – and the consequent foolishness of relying on digital signatures as a substitute for comprehensive security – is emphasized by Microsoft's Root Authority certificate being used to sign code in the Flame worm.

Taco Bell: Now Serving Good Humor, Too

The Alaskan town of Bethel (pop: 6,000) was terribly disappointed when flyers promoting a soon-to-open Taco Bell turned out to be a hoax. Bethel – accessible only by air or river – was over 300 miles from the nearest Taco Bell and short on fast food.

Bummer!

Executives at Taco Bell, however, took pity. Story and video here.

Tuesday, July 10, 2012

BPI: Implosion or Buy Op?

At Seeking Alpha I wrote an article on Bridgepoint Education Inc. (BPI), inspired by the news that it suffered an unfavorable accreditation decision from the regulator of a new region into which it has expanded operations. Before getting into the specifics of Bridgepoint's accreditation issue, some perspective is warranted on the company as a whole:

BPI Revenue Chart

BPI Revenue data by YCharts

The irritating double-Y-axis is a necessary evil, as showing the results with a single Y-axis by depicting the company's metrics' percent change causes the earnings yield growth to flatten toward insignificance the sales metric:

BPI Revenue Chart

BPI Revenue data by YCharts

For some reason, YCharts gives a different duration when the earnings yield is excluded from the graph. As you can see, the sales have grown consistently and are now over 500% ahead of what they were in 2008:
BPI Revenue Chart

BPI Revenue data by YCharts

So the real question is: do you believe the folks at BPI are dufuses who don't know their business, or are they experiencing what happens to a lot of other enterprises in heavily-regulated environments, and getting a "we're the boss, and we want you trying harder" letter from regulators who want to be taken seriously by everyone who's watching the exchange?

From the panic selling, you'd think the market was giving up on BPI as possessing the competence to remain accredited in the only business it knows:
BPI Chart

BPI data by YCharts


Time will tell.