Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective

Archive for the 'Off Topic' Category


Creative Commons License photo figure credit: Derek Purdy

This past Friday I used some comp time at work to take advantage of some non-weekend skiing at Killington Mountain in Vermont.  My host for the day was an old friend who sold a company during the Dot-Com boom and has been, for the most part, living off of the interest and dividends provided by his investment of the proceeds of the sale.  We talked about a lot of things while riding the ski lift, from parenting philosophy to Wall Street bailouts to the whereabouts of our mutual friends.

My friend challenged me in many ways, not the least of which was in trying to keep up with him on the slopes.  But as the memories of freshly groomed courderoy fade away, I’ve been chewing on a number of the things I learned or relearned in our ski lift discussions.  Please excuse the fact that some of these are broad, and some are narrow, but that’s how the conversation went.

  1. Citigroup is not going back to $45 - Throughout most of the 2000s, Citigroup’s stock price was in the $40 to $50 range.  It closed at $1.03 on Friday.  There are two important lessons here: A. You should not own individual stocks unless you own enough and varied stock to be able to weather problems in one particular market segment, like banking or energy — in other words you should be diversified enough to mitigate non-systemic losses.  B. Even if you believe that the market will bounce back, it will have to do so without Citigroup, GM, and any number of other well established, large companies whose stock is now all but worthless.  Money invested in Citi at $45 is gone.
  2. Koreans make bad pilots – There’s a book out now by Malcolm Gladwell called Outliers.  In it, there is a story about the problems that Korea Air had keeping their planes in the sky in the 80s and 90s.  Apparently the problem stemmed from a cultural requirement for co-pilots and other crew members to respect their elders by not questioning their authority and decisions in the cockpit.  It seems to me that a lot of the financial mess we’re in today stems from people not asking enough questions when they didn’t understand the terms of a deal, be it a mortgage or a credit default swap.
  3. This is not the first time the government has bailed out a “too big to fail” company – Do you remember a company called Long-Term Capital Management?  I didn’t either.  But I learned that this was a hedge fund that failed “spectacularly” in 1998 and was bailed out by a consortium of banks.  This fund was “too big to fail” in that its quick liquidation would have led to a collapse of financial markets.  You can’t sell large stock positions all at once since it causes the price to fall sharply, and you certainly can’t do so for many stocks all at once since it causes entire markets to fall sharply.  My ski buddy wonders why we put ourselves into a position again in which unregulated entities were allowed to become too big to fail.
  4. When you can’t find value in something that you need, you can always go for cheap – I was eyeing the sushi bar at lunch time, but a $15+ dollar lunch was not worth it to me.  Instead I went with a $4 hot dog.  This is similar to why I choose index funds instead of managed mutual funds.
  5. Giving up a little can be worth a lot – A season pass at Killington cost $999.  A season pass with 14 blackout days costs $650.  By giving up less than 10% of the available days during the ski season — which also happen to be the days with the longest lift lines — you save 35% on the pass.  This works the opposite way as well.  I’m reminded of the fact that most of the gains in the stock market happen on VERY few days.  If you had invested $10,000 in 1996 in an S&P 500 Index Fund, you’d have $17,280 in 2008.  If you had missed the 10 best days during that period, you would have just $10,748.  If you had missed the 20 best days, you’d have lost money and be left with just $7,360.  (Source)
  6. The government should not have let Lehman Brothers fail – It was distasteful to the American people that the government bailed out Bear Sterns, so it let Lehman Brothers fail to appease the taxpayer rather than do what was right with respect to fiscal policy.  In all likelyhood this has cost the taxpayers far more than it would have otherwise in the form of bailout after bailout.  The failure of Lehman Brothers began a downward spiral which seemingly has not yet found it’s floor.
  7. Don’t take the experts at their word without doing your due diligence – The “ski index” for Killington on Friday was a 1 out of 10, with 1 being the worst.  I decided to make the 3+ hour drive and see for myself.  At the very worst case it would be a long way to go for a couple of beers.  My friend says that he would have given the day a 4.5 overall (5 in the morning, 4 in the afternoon).  I would give it a 7, since my bias is towards smaller, less challenging mountains with generally worse conditions.  Check out this clip from The Daily Show which features a great quote from Jon Stewart: “If I’d only followed CNBC’s advice I’d have a million dollars today…provided I’d started with $100 million.” (Thanks to David at My Two Dollars for posting the link earlier this week.)

I had a great time skiing, and a great time chatting on Friday.  I like to think they were both somehow good for my soul.  I like to hear your opinion on any of these points.  Leave a Comment below.

Dear Daughter #2

photo figure credit: MITBeta

I already outlined a number of lessons learned since the recent birth of daughter #2, and I’d like to share a few more before I get back to more “hard core” personal finance topics.

Having been a parent for 2 years already, I thought I knew a lot about parenting.  I was right — I know a lot about how to take care of a newborn baby.  However, as it turns out I don’t know all that much about raising a 2 year old big sister.  So the next lesson that I would like to share is:

  • Big sister is harder work than the baby

Newborn babies are relatively easy to deal with.  They eat, they sleep, they poop, they burp, not necessarily in that order, but they do a lot of each.  When they cry it’s almost always because of one of those things.  You don’t have to convince them to do any of the above.  You don’t have to tell them why they are doing any of those things.  You don’t have to entertain them or worry that they’re pulling the dog’s tail.

Toddlers, on the other hand, are a different story.  I’ve had many people tell me that having 2 kids is more than double the work of one and that the older child is going to have jealousy issues with the younger one.  Boy, were those both understatements.  Actually, the two of them together haven’t been too bad in terms of work load (maybe ScrapperMom will disagree with me here…), but we totally underestimated how much jealousy there would be by big sister of little sister.

Even after getting Dear Daughter #1 excited about the imminent arrival of DD#2, it has still taken 3 weeks of daily convincing that having a little sister is a good thing.  #1 has had issues with: Mommy holding baby, baby sitting in “DD#1’s chair”, baby eating, baby going into the car seat, etc., etc.  We have finally worked through most of these issues, but in retrospect, I wish there was more we could have done to soften the blow to DD#1. I am very grateful for the thoughtful people who have brought gifts for baby AND big sister.  I would encourage those of you who might be about to have a second child to think long and hard about how it will affect your first child and try to take steps to avoid some of these issues, if that’s even possible.

Another lesson learned:

  • Overconfidence can be a problem

In Part I of this series, I detailed the case of the missing car seat bracket.  The full story is that I couldn’t remember how to put the seat in, and left it for the night before we needed to use it.  I’ve put that car seat in several times, and figured it would be easy, but it’s been over a year since the last time and I was a bit rusty.  This meant that it took me far longer to put in (even once I found the missing bracket) than I expected.

Another example is that when I went to give DD#2 her first bath it didn’t even occur to me that this could be difficult.  I got out the infant bathtub, checked that the sprayer worked, filled the reservoir with warm water, stripped baby girl naked, and then listened to her wail for 5 minutes (it seemed like 20).  I had forgotten that newborns generally can be bathed with just a cloth, and that until their cords fall off, that area should be kept dry.  For the next couple of days I was paranoid that I might have caused an infection at the cord base. To top it all off, when the bath was done we couldn’t even come up with an infant sized towel to wrap her in and wound up using receiving blankets instead. The second bath went a lot more smoothly.

The last lesson that I’ll share in this series is:

  • Don’t overdo it

On the 4th day of DD#2’s life, we completed the following marathon: went for a short visit to ScrappeMom’s cousin who lives almost across the street from the pediatrician’s office, took the girls to see the pediatrician, went to Grammy’s house, went to a wake, went out to dinner, back to Grammy’s to collect DD#1, and then back home.  This was too much to do, even though we weren’t exhausted when we got home.  We had a couple of other days like this, but not as bad, since the arrival of DD#2, but we have finally figured out how to take it a little easier.

I hope these lessons are of value to some reader out there, even if only for the comic value in our follies.  This weekend I will get back to the personal finance talk and to answering some outstanding questions posed by readers.  As always, we’d like to hear your feedback and you can leave your Comments below.

Daughter 2Just a quick note to let you all know that Daughter #2 was born on Saturday, January 10, 2009 at home.  She came into the world at 2:52pm weighing 6lbs. even and measuring 18.5″ in length.  She was 9 days early, but mom, baby, and big sister are all doing great.  ScrapperMom had a great birth experience thanks to the help of 3 great midwives and the support of our families.

I’ve learned a lot of lessons about having a second child, some financial, others not so much.  But I hope to share many of these lessons soon when time allows.

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Val photo figure credit: ScrapperMom

Yesterday evening, ScrapperMom and I had to let our first “baby” Val pass on to Doggie Heaven.  Valkyrie was an 8 year old Great Dane that we bought together shortly before we were married.  We loved taking Val to the dog parks in the Seattle area when she was a puppy.  Later, Val got a tour of the country, visiting Yellowstone, the Badlands,  Mount Rushmore, and Madison, Wisconsin among other great destinations while moving back east.

Val took training classes off and on, and eventually earned her Canine Good Citizen award. She loved going for rides in the car and taking walks in all kinds of parks.  When we bought a house we added another puppy to the mix.  Orion and Val eventually became good buddies.  Val loved to go under stuff, and tables were her favorite.  She also loved laying in the sun, and would follow it as it moved across the floor or the yard.  She was universally described as “sweet” and loved having company.

When she was just 3, Val was tentatively diagnosed with Wobbler’s Disease, which is a degenerative instability of the cervical (neck) vertebrae.  The disease started out with Val dragging her rear foot on the ground while walking, and over the next 5 years progressed to the point where she could no longer stand up.  When she did stand up, she often fell.

Yesterday was a day that I dreaded since the day we first considered buying a dog — we knew inevitably that we would lose her someday.  However, the decision we made in the presence of our vet yesterday was an easy one to make.  Val was clearly in pain most of the time, having taken a turn for the worst this past weekend, and really had no quality of life left.  There were no wags left in her tail.

We will miss her dearly, and hope that she has found green fields for running and beds of clouds for sleeping in Doggie Heaven.  We desperately hope to meet her again when our own turns come.  We love you, Val, you were a good dog.  Goodbye.

Here are the lyrics to a song that sort of captures my feelings.  And please visit:

Val — A Life in Photos

OLD BLACK CAT by Ian Anderson

My old black cat passed away this morning
He never knew what a hard day was.
Woke up late and danced on tin roofs.
If questioned “Why?” answered, “Just because.”

He never spoke much, preferring silence:
Eight lost lives was all he had.
Occasionally sneaked some Sunday dinner.
He wasn’t good and he wasn’t bad.

My old black cat wasn’t much of a looker.
You could pass him by ? just a quiet shadow.
Got pushed around by all the other little guys.
Didn’t seem to mind much ? just the way life goes.

Padded about in furry slippers.
Didn’t make any special friends.
He played it cool with wide-eyed innocence,
Receiving gladly what the good Lord sends.

Forgot to give his Christmas present.
Black cat collar, nice and new.
Thought he’d make it through to New Year.
I guess this song will have to do.

My old black cat…
Old black cat…

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