General Mattis-“It’s Fun to Shoot People”

A buddy of mine recently sent me a link a to story regarding Marine General James Mattis who, during a speaking engagement back in 2005, claimed it was fun to shoot people and fun being shot at (and missed). I had never seen the story and my buddy was inquiring as to whether or not I had ever met this “bad ass” Marine during my time in the Corps. The answer was no. I served from 1967-1970 and General Mattis joined the Corps in 1972.

I don’t recall ever enjoying being shot at, watching my colleagues die or seeing them maimed for life. Though I felt no guilt about the killing of NVA soldiers, their death was not something to be celebrated.

The General’s comments made it seem as if combat is like a big bar brawl, calling himself a “brawler”. To me this sounded like the boast of a man who had never seen combat up close and personal. So I went to Wikipedia to review his career.

He joined the Corps too late to see combat in Vietnam and by the time of the Gulf War he was already a Senior Officer. And, as anyone who has ever served in the Marine Corps will tell you, senior officers rarely get shot at or actually kill anyone. It’s the field officers, (Captains and Lieutenants) and the enlisted men (from the Gunnery Sergeant on down) who do the actual fighting.

I will always be proud of my service as a Marine and the views of men like James Mattis are not representative of the brave Marines I served with in Vietnam. I wonder what his views would be if he had actually experienced lethal combat.

But thinking about his time of service, it occurred to me that those Marines who had served in Vietnam (and survived) were retired by now. It is doubtful that today’s senior officers in the Marine Corps, just by historical circumstance, have ever seen combat “up close and personal”.

This observation is in no way intended to question their leadership ability, intelligence or courage. I would like to believe, that unlike General Mattis, they understand that combat is not a game (and it is certainly not fun.) Instead it is a duty that requires sacrifice and courage in the service of our country.

The Marines with whom I served had more courage than most people could ever imagine and many of them made the ultimate sacrifice. In my opinion, General Mattis demonstrated nothing but disrespect for them, their wives, mothers and children, who had to greet a Marine at the door delivering the news about their sacrifice.


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The Growing Wealth Gap

Income inequality and the gap between rich and poor are going to be “hot topics” as we move toward the mid-term elections in November and the discussion will become even more heated in 2016 when we elect our next president.  I believe these are serious issues and we need to find solutions.  Unfortunately, most of the proposed solutions we hear are geared to advance political careers with little thought given to the overall impact on our economy.

But before I speak about solutions I would like to point out what has caused a huge increase in the wealth gap over the past 5 years.  The rich, at their end of the spectrum, have investment capital.  The poor, at the other end, have very little if any investment capital.  With the Stock Market (as measured by the S&P 500) up over 125% during this period, it is obvious why the wealth gap grew dramatically.  However, during the prior 2 years the Market lost 50% of its value, and of course this narrowed the wealth gap.  (A market crash that narrows the wealth gap is not a solution to the problem.)

Capitalism will always favor those who have capital to invest, and unless we come up with a solution that encourages or even demands participation in the capitalist system, the wealth gap will only continue to grow.  I also believe that far too many politicians who claim to be advocates for the poor have an ulterior motive.  They benefit from having a constituency that is dependent on the government for their subsistence and that will always vote to keep them in office.

So how do we go about dramatically increasing participation in the capitalist system, with all the inherent benefits, currently enjoyed by those who have the means to participate?

Believe it or not, government can provide the answer.  Here’s how.  Every employer and employee (roughly 93% of the working age population) would be required to contribute to an investment account run by the government.  This capital would be invested in broadly based, low or no cost, passive index type market portfolios.  Employees would not have control over the investment decisions eliminating all the “emotional” mistakes that have severely damaged many retirement plans.

Wall Street would be against such a program because it would take away their ability to earn fees on what would be a very large pool of capital.  (But perhaps those on Wall Street, who believe they can “beat the market,” would be allowed to participate if they guaranteed that any underperformance would be made up out of their own capital.)   Something tells me there would be few, if any, money managers who would accept such a condition.

The amounts contributed, the allocation to equities relative to participant age etc. etc., would have to be determined but I believe that would not be very difficult.  Basically it would be a program that “enfranchises” most workers, allowing them to participate and benefit from our capitalist system.

A simple idea but it has to be a better way to go than simply redistributing income and/or wealth.

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“March Madness”

I love it, all basketball fans love it, and we will all be spending a lot more time on the sofa watching (or hanging out at our local “sports bar”).  College sports has become one of the “crown jewels” of the entertainment industry, creating incredible amounts of wealth for those with the power to direct that wealth into their own pockets.  I am certain the NCAA and the “Big Five” major conferences are having a great time counting their money, but they have to be looking over their collective shoulders at the increasing threats to the monopolistic and exploitive system generating all that wealth.

As a reader of this blog you know I have written about this scandal for the past couple of years.   Public awareness of the injustice of the system is growing rapidly and a “full court press” (no pun intended) on the NCAA and the major conferences is emerging.

In no particular order, here is a short list of current developments that will hopefully put an end to what can only be described as “disgraceful” and a real black eye for our American system of “higher education.”


  1. Northwestern University football players have filed with the National Labor Relations Board to organize as a union.
  2. Ed O’Bannon’s class action lawsuit against the NCAA for the profitable use of player images, without their permission, (and with no compensation being paid), will go to trial June 9.
  3. Pac 12 Commissioner, Larry Scott, came out against the “One and Done” rules stating that the amount of time a scholarship athlete must stay in college should be increased to return to the objective of actually offering an education to those playing the game.  But he also stated that young athletes should not be required to attend college.  They should be allowed to pursue a career in professional sports whether it is in the NBA, the NBA Development League, the NFL, MLB, overseas or anywhere else opportunities arise.  You know, the sort of options and freedom all the rest of us have.
  4. Four college athletes have filed suit against the NCAA and the Big Five conferences alleging that they have created a “cartel” which prevents players from negotiating with individual schools to get the best possible deal in exchange for playing ball.  The prices are all “fixed” and relative to the amount of money being made off the players, the compensation is miniscule, especially for star athletes who bring in the big bucks.

As the NCAA, as we know it today, slowly sinks, maybe the NCAA orchestra will be playing “Nearer, My God, to The” and Kevin Spacey will be cast as Jeffery Immelt in the mini-series, “House of Shame.”

One last note on the hypocrisy embedded in the NCAA rules.  If a player gets a free meal, he or she can be declared ineligible and the school punished.  But if a university, in order to make certain an athlete is eligible, gives athletes credit and a passing grade for fake classes, the NCAA does not consider that a problem.

Huh????  That’s right.  The University of North Carolina admits it was happening for several years but evidently that’s okay with the NCAA.


Filed under Life, Sports

CEO Primer

Question:  What do you do as a CEO when GAAP (generally accepted accounting principles) doesn’t give you the results you need to impress investors?

Answer:  Make up your own standards and report the results both ways.

Question:  What do you do, when you fail to make a profit over the past four years, to keep shareholders happy?

Answer:  Make promises about the profits to come in the future.  The true believers will hang in there until you can unload your shares at a price based on those promises rather than past results.

Question:  How do you support a high price for your stock when investors begin to question the reliability of your promised profitability?

Answer:  You create rumors about a potential takeover from a buyer with very deep pockets.  It reminds me of realtors always claiming there is another offer coming in.

Question:  How do you gain credibility with investors in our wealth and celebrity obsessed culture?

Answer:  Always make certain that the media puts the word “billionaire” before your name in every report about your company.

Question:  How do you learn to develop “celebrity” status in the business world?

Answer:  You watch the “Iron Man” movies and learn from Tony Stark.

I must admit having a little fun writing this but I am also having flashbacks to the late 90’s when we had a plethora of tech related companies trading at huge “multiples” (whoops can’t say that, because there was no P/E when there was no “E”).  I should say “trading at ludicrously high prices.”

The “bigger fool” theory of investing is back and I just want you to keep this in mind and stay diversified.

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“Confirmation Bias”

Back in January when I was (once again) on my “soap box” preaching the value of investment discipline, I shared with you a quote from Leo Tolstoy describing how human beings engage in destructive behavior, even in the face of overwhelming evidence that the behavior will be destructive.

Just this weekend I read an article explaining why human beings behave this way.  The article was not about investing but an analysis of why Health Secretary Kathleen Sebelius launched the website for Obama Care knowing full well it was not ready.

Psychologists call such blinkered thinking, “motivated reasoning.”  Human beings are primarily emotional, not rational, so we engage in “confirmation bias”:  We start off with what we want to be true, look for evidence that supports our hopes, and screen out that which does not.  There are an infinite number of high profile examples illustrating the disastrous effects of such reasoning.  The decision Bush made to invade Iraq.  John Kennedy Jr. knowingly flying a single engine aircraft into a foul storm etc., etc.

I have been stating for years that we all, investors and investment advisors alike, have an opinion (forecast) about where the market is headed.  And we listen to those “experts” who support our view of the future while ignoring those who disagree.  Acting on that forecast usually ends up being destructive to our financial health.  Recognizing this, (by looking at our past experiences), should be enough to convince us that emotions have no place in the investment decision process.

As an investor you need to get your emotions out of your investment strategy.  The emotions of fear and greed are very powerful enemies of the successful investor.  If you remain rational, you will see that the evidence supporting a disciplined investment strategy is overwhelming.  But I fear that most investors (and way too many advisors) still have a long way to go before they become rational.  If you can, (and that includes getting you ego out of the process) you will be successful, if not, you will be a “loser.”

If you are an advisor you have an enormous responsibility.  Keeping your clients disciplined is always the biggest challenge you will ever face.  But if you succeed, your value to them is “priceless.”


Filed under Advisors, Investments, Investors

Keeping Your Perspective

It’s been a great year for investors but with the market at an “all time high” shouldn’t we wait for the inevitable “correction” before putting more money into the market?  Or worse yet, perhaps investors should get all of their money out of the market.  Are we seeing another bubble that is about to burst?  After all we have reached the dreaded “Triple Top.”  (If you look at a chart of the S&P 500 you will see what I am talking about.  “Chartist” believe they can predict the future by looking at the past, wouldn’t that be nice.)

The year-to-date return from the S&P 500 is a little over 25%.  Wow, perhaps investors should tread carefully.  But if investors look at this with a long-term perspective they will not find this alarming.  The historical annual return for the S&P 500 (as far back as we have data-1926) is a little over 10%.  The annual return over the past 13 years is a little over 1%.  The lowest return for a 13-year period since the great depression.

Market indices such as the S&P reflect the increases and decreases in wealth generated by the global economy.  If you believe that the global economy has come to a perpetual halt, then an investment in the equities market makes no sense for you.  Find a cave and prepare for the “end.”  Or—if you believe there is a future and you can “time” the market, you are a fool!  But if you are a disciplined investor  with a long term perspective you are on the right path.

Advisors, and investors alike, need to always keep things in perspective; something the media and the peddlers of financial products fail to do.  The media needs for investors to watch their “Cramers” and to read their daily forecast to make money. The financial services industry needs investors to change course frequently for the same reason.  A proper perspective for investors is always “long term.”  All the “noise” created by the media and the financial services industry may be interesting for speculators, just as a tip sheet may be interesting for those playing the ponies.   But by keeping a proper perspective you will be able to see clearly through all the “noise” and you will have a successful investment experience.


Warren Buffet was interviewed this past weekend and it is always comforting to hear the “Sage of Omaha” give the same message over and over again.  “Stay disciplined, diversify with passive funds, and keep costs low.”  (Here is the link should you care to read it: .)  What is sad is that no matter how often people hear this “message,” most people still “don’t get it.”  If you are an investor and you do “get it,” you will have success.  If you are an advisor, you need to help those who don’t.  They need you!


Filed under Advisors, Investments, Investors

“Game On”

What game?  Johnny Manziel’s Texas A&M Aggies vs. Alabama on September 14th.  Returning Heisman Trophy winner vs. the defending National Champion, what a fabulous draw for CBS and the SEC.  Now that the Manziel autograph “scandal” has been dealt with we can all relax, grab a beer and watch some great football in Prime Time in a couple of weeks.

Was there ever any doubt that the NCAA would stand in the way of this unique match-up?  CBS is paying the SEC over a half billion dollars for the rights to broadcast Prime Time SEC Football over the next 10 years, and you better believe they intend to make a profit.  College Football is one of the biggest media draws in the entertainment industry today and no one wants the NCAA, with their archaic rules, to screw it up.

The time has come for the Major Conferences and Universities that want to be in the entertainment industry to withdraw from the NCAA.  The NCAA is an impediment to the players, the fans, the coaches and the Universities who want to see a great “product” on the field.  The NCAA was never intended to be the overseer of a huge entertainment business. The Major Conferences already negotiate their own Media contracts.

As we have seen, over the past few years, the revenue generating capabilities of each school (business) determines how the conferences organize themselves to maximize their profit.  Thus we see Texas A&M in the Southeastern Conference, Boise State in the Big East etc. etc.  It’s a business and they should have the freedom to take the actions they deem necessary to maximize their profits.  All the parties, except one, have this freedom, and of course that is the players.

In a world without the NCAA each Conference would be free to establish their own rules, and the players would decide which school best meets their needs.  If the player’s primary goal were to get an education, he would perhaps choose a school that guaranteed a scholarship for 4 or 5 years.  If the goal were to develop the skills necessary for a career in professional sports they could choose a school with a great coach.  Each Conference would establish its own rules recognizing the vested interest of all concerned, including the players.

In summary, the players deserve a “seat at the table” and a share of the benefits being created.  The current situation is not sustainable and it’s time for a change.

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