Something Like A Mortgage Payment

I couldn’t wait. The authorities may all expect me to act at the very last moment, but that would delay my sense of relief. Why would I do that after more than a year of struggle? For the first time since Autumn 2011, I mailed a check to my mortgage company. I hope they like it. And, while I am celebrating the event, I also know that this isn’t actually a mortgage payment. That won’t happen for months, and there’s no guarantee it will happen then, either.

Welcome to another episode in my housing chronicle. The news makes the mortgage crisis sound onerous, and yet has to simplify each story to fit inside a few minutes or phrases. My story has been playing out in more than a year of episodes; and it isn’t over yet. Thank you to all who waded with me through the tougher times. Here’s another part of the story that’s on the nicer side.

The offer I described weeks ago finally arrived. It was just like they said. After reviewing my finances, and I’ve given them months of bank records to work from, they calculated that I could make a modified mortgage payment that is about half of my original payment. This sounds good. Yes, the principal has gone up by the amount that I haven’t paid, and by the penalties, and that seems appropriate. But the interest rate will possibly be down to 2% for a few years, and then take more years to ramp back up to an index based on a Fed rate. It may take a decade before it returns to what I signed up for when I bought this house over seven years ago.

Home For Sale

Small house for sale

The details that are less likely to become a news story involve months of uncertainty. The payment I just made is the first of three, or four, trial payments. If the mortgage servicer decides I made the payments in an appropriate fashion, they may, may, decide to offer me a modified mortgage that will probably, but not necessarily, be approximately the trial payment. Evidently I’ll know they approve of my actions when I receive a FedEx package of refinance paperwork. If they approve what I return to them, then they may offer the modified mortgage, or not. If they make the offer, I’ve been cautioned that I should continue to be extra-vigilant for months as if I am on an unspoken probationary period. I am potentially more than half a year from stepping past this process.

Well, that’s easy, right?

Welcome to my slapstick afternoon.

I am a nomad. My office can be anywhere because most of my work is online. But, since last May I’ve worked in a co-working space in downtown Langley. Langley is nice place to work. My workspace, the post office, the library, and the bank are all within view of each other.

Click for our Langley video

Click for our Langley video

Small towns are great that way. They are actually efficient places to work, as long as the money comes from somewhere else. Langley is also quaint, which I mention for two reasons: 1) because a friend hates that description, and 2) because lately it has been far from quaint. The street in Langley that leads to all of those places is a major re-construction site. (But hey, they’re working towards an impressive goal.)

We don’t have “Don’t Cross” signs because some things are obvious. On most days, a dozen heavy earthmovers can be quickly driving up and down the street – er – arena of dirt, mud, gravel, dust, and ditches. Simply crossing the street requires good shoes, alert senses, and nimble steps. Simply running errands isn’t simple. DSCN4972
Sending in a check isn’t simple, either. I was strongly advised to make it a cashier’s check for the exact amount, get copies of everything, and then mail it by Certified Mail with a Return receipt. Okay. Bank, cashier’s check. Library, printer. Post Office, trusted mail. Except that I got to work, collected everything I needed, and realized I left the number at home. I didn’t know what to make the check out for. Rummage. Quickly contact my official counselor. Wait for a reply. And then wander out to the parking lot where one scrap of paper happened to have the right amount written, which was confirmed when I got back to the office and saw the email reply. Catch breath. Drop in on the Post Office to check on the advice I was given, and make sure I was going to do things right. Scurry to the library to print a cover letter. Go farther to the bank. Proclaim my ignorance of cashiers checks and such. And realize I brought the wrong checkbook. Wind my way back to the office. Sidle past the caution tape and the ditch. Find the checkbook. Kick myself in the butt. Try again. And succeed. At kicking myself in the butt. And then rerun the errands. It only took about two hours. I needed to take a break after that, and luckily Langley has lots of places for good tea and such.

Better organized people have fewer problems. Maybe. At least if we ever make this into a movie there’ll be plenty of material for comic relief.

Despite the doubts and cautions, my situation is improving. I know that’s not the case for others. While the news talks about fewer foreclosures, I can see an empty foreclosed house from my backyard. I am relieved to still be in my house, even with my dammed plans. Their house has a blue tarp on the roof. The curtains are pulled back to reveal the sad sight of empty rooms. They left the neighborhood before I ever heard their story. Maybe they just aren’t as open and willing to expose the process as I am. Maybe I’ve been too busy in my own struggle to notice theirs until it was too late.

My house may be mine again. As my business and fortunes improve, the house can be improved too. The trial payment isn’t a mortgage payment, merely a demonstration that sells the idea that I am financially healthy enough to carry a modified mortgage. For me, the trial payment buys me things far more valuable: hopes, dreams, and opportunities.

Sunset nearly due west over Scatchet Head as we approach the Equinox - a Cultus Bay Stonehenge moment

Sunset nearly due west over Scatchet Head as we approach the Equinox – a Cultus Bay Stonehenge moment

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Geron Ouch And Yet

Great ideas rarely run smooth. Geron, a biotech with disruptive ideas that could redefine medicine and health, is probably years from proving itself, except that it suddenly looked like it would, just as suddenly looks like it won’t, and yet no one can predict the future.

How’s your risk tolerance? Mine’s been exercised so much I think I’d qualify for the investor’s Olympics. Few should attempt what I do. I’ve even had doubts myself. The buzzword version of my style is small cap startup LTBH. Want details? I wrote a book about that. Dream. Invest. Live. The short version in words is long term buy and hold in small companies with big ideas that may not be worth much when they start but could be worth incredible amounts when they succeed. Patience and acceptance are required. Research is a good idea too.

This seems to be a critical year for the markets and me. For several years the markets were scared, then timid, then began their confident climb (that may have been fueled by quantitative easing, and marginal managerial relaxation.) Profits are up. Corporate cash is accumulating. Big investors were buying big positions in big companies. The small companies languished for lack of financing and their customers’ adherence to convention. Things are changing.

Geron had some stellar news that almost tripled the stock. It’s new drug looked like it treated blood disorders and possibly even returned damaged bone marrow back to health in some cases. Then, the FDA gave them a call, a verbal communication, to place a hold on Geron’s clinical trials. The livers of some patients were experiencing abnormalities that might be chronic if exposed to the drug for a long time. “Verbal”, “some”, “abnormalities”, “might be”, “if” are the cautionary words being used that could soften a harsher truth or could be an overreaction from an overly-cautious regulatory agency dealing with technologies that are revolutionary. Dendreon has similar clinical and corporate upsets during its tests of disruptive (though eventually clinically successful) technology. Geron’s stock dropped 60%.

Those quick with math will already know what I’m about to show. GERN tripled, up over 200%, then dropped just as much by falling about 60%. At the end of June 2013, GERN’s market cap was $196,000,000. With the autumn news it jumped to close 2013 at $611,000,000. Last week it dropped back to $236,000,000. Yes. After GERN’s bad news, the stock is up 20% in less than a year. Rather than try to read anything into the specific numbers and percentages, I take the action as proof that the market’s error band is enormous. Especially with startups there is rarely a consensus of a stock’s value – despite strong declarative statements. Check around. There will always be an opposing, yet equally confident opinion.

Because this is such a critical year for the economy, my stocks, and me I decided to add a quarterly review to my semi-annual reviews. (Some of the data I’ve referred to can be found in my mid-2013 and end-2013 reports.) The news from GERN, MVIS, AMSC, and RSOL convinced me to do a quick check.

  • AMSC (market cap was $0.106B is $0.142B) up 34%
  • GERN (market cap was $0.611B is $0.236B) down 61%
  • GIG (market cap was $0.033B is $0.038B) up 15%
  • MVIS (market cap was $0.042B is $0.075B) up 79%
  • RSOL (market cap was $0.110B is $0.1151B) up 37%

Even with a “down 61%” a portfolio can do well with so many other large “ups”.

  • AMSC had good news about its court case in China, which is far from resolved, and if resolved in AMSC’s favor could be a very good catalyst.
  • GERN had bad news, which may just be cautions that are eventually outweighed by impressive positives.
  • GIG really had nothing to report – except that their disruptive technology may be pushed to even more impressive levels.
  • MVIS had – something – to report. And while there is great debate about what they actually said, the optimistic picture continues to be very optimistic.
  • RSOL even changed their trading symbol to RGSE as they became a player in the solar energy industry consolidation, which is also an expanding market.

None of my stocks have released the key story that propels them to my valuations (present value of future revenues discounted for risk), and yet they’ve seen impressive increases. We’re still a far way from my second semi-retirement, but it is closer.

My portfolio has been in a rough phase. GERN just hit a rough phase. My dreams of relaxed and easy retirement hit a rough phase. And yet -

How about you? Could you handle the occasional very rough “Ouch”? Listen to your answer to that. You may have just told yourself something about how you do or do not want to invest.

Ouch. Ah, it’ll get better.

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A Day Off

This blog is about finding balance in life. It is based on the book, Dream. Invest. Live. Dream. Invest. Live. Dreaming and Living are essential. Investing is merely a powerful enabler.

As many know I’ve been working hard as I recover from my financial upset, but even with my Rule of 7, I recognize the need for balance.

Everyone deserves time for their self. So, I’m taking the day off to tend to me.

In the meantime, there are plenty of posts to read, dozens of which are popular months or years after I posted them. Saturday’s post was my 400th in this WordPress version of this blog. (There are 220 orphaned posts in an earlier incarnation.) Drewslist, MVIS, DNDN, nose prints on windows, and cobwebs in cars are all popular. Enjoy. And take some time for your self, too.

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Differing Without Begging About MVIS

I do not beg to differ. I just differ. No begging required. Investing in stocks only works because people have different opinions. Argumentative types fight the very thing that makes the markets work. I enjoy the fact that I don’t have to defend my choices to the rest of the investors. Every stock includes drama. Story stocks do so even more so. MicroVision always manages to create a cacophony. But, isn’t that usually the case with disruptive ideas? In any case, real or virtual ear plugs have their place. But listening is far more valuable.

MicroVision, oh MicroVision. How long have we known each other? Let me check my records. January 2000. Ah, those were the days. The stock (MVIS) dropped in late 1998 and late 1999. The rest of the market looked like a bubble, but MVIS had a fresh idea that might propel it higher as others fell. Oops. It dropped. I bought. I listened to the promising words. It dropped. I bought. Repeat that pattern for years. Then came the change. A CEO that was excellent on rhetoric but not on disclosure and performance was replaced with a CEO who seemed competent, honest and open. The hurdles were revealed. A new plan was in place. I bought. And bought. And bought. Friends bought. And the stock continued to fall. That got embarrassing and MVIS became a topic to avoid. But hey, there was good news. The revealed hurdles were being cleared. Green lasers were a key. Then their cost was key. Then their production volumes were key. The hurdles are all behind us now, right?

I invest in stocks in dramatic companies. Sometimes they don’t seem dramatic at the time. Maybe never. Few folks know f5 Networks. I bought FFIV as it fell during the bubble. Bought more. Bought more. And some of those share that I bought were less than $5 before the stock split. Those shares became the downpayment for my house. The stock continued to rise. On Friday it closed at over $114. (If I’d held those shares I could buy my home for cash. So it goes.) Other stocks seem dramatic along their entire history. America Online started out as AMER. It and the stock were in the news almost every day for years. By the time I sold my shares, AMER became AOL and my profits rose over 2,400%. (Details in my book, Dream. Invest. Live.Dream. Invest. Live. I wish I’d bought more. As it was, AOL funded a bicycle ride across AmericaJust Keep Pedaling, and a lot more.

MVIS is dramatic, and it is too easy to become too dramatic about it. I can’t recall company with such a small market cap inspiring such impassioned debates, unless they were involved in stem cell treatments (e.g. ASTM). I run counter to conventional wisdom by thinking that emotion can benefit investing; but I agree with conventional wisdom that too much of a good thing is not necessarily good.

Time is a great dampener of emotions. Many investors were eager for last week’s MicroVision conference call. It was listened to, parsed, analyzed, and transcribed. After a quick check to make sure nothing truly dramatic was involved, I stepped away before listening to it. Life presented far more appealing options in the meantime.

We hear what we want to hear. Welcome to being human. For anyone interested in investing (and if you aren’t, I’m amazed you’ve read this far), conference calls and stockholder meetings (aka CCs and ASMs) are free views into management’s management of the company. If you own shares, you own a slice of the company. They work for you. They have to tell you what’s happening – heavily filtered by a competitive screen, or regulations and legalese.

I heard good and bad reviews of MVIS’s call. Then I applied a simple trick. I listened to the replay and took notes. You are welcome to gasp at my sophisticated tools. (How’s your sarcasm detector?)

Did you already click on the link, or are you waiting for my insights? If you are a MVIS shareholder, think about your answer. The call takes less than 34 minutes. Considering the amount of time you can save by improving your financial condition, listening has a very favorable cost/benefit ration. Aren’t we really investing to find more free time?

The managers on the call did a fine job. I can see why some shareholders are enthusiastic. I must differ. While I am not required to defend my position, allow me to point out some disquieting aspects of the call, as well as why I’ll retain some optimism.

A comment was made at last year’s ASM (check my post of more extensive notes.) “What will success for management look like a year from now? “We need a company to bring a product to market” ” We also heard that they were working with five major OEMs and that they expected to announce one or two more deals soon. In this conference call (aka CC) they pointed out the two deals. One was with a Fortune Global 100 company and the other dealt with car components. I’m reasonably sure that I’m not the only shareholder that read “deal” as “product”. Oops. Evidently, development deals are sufficient for management. In the call they mentioned they will be prepared for high volume production in 2H14, for the holiday season, but probably not the North American holiday season. That bizarre bit of wordsmithing sounds more like a dodge than information. They also offered in the Q&A that about half of the original potential customers remain. That suggests at least half of the original possible revenue streams have been reset by months or years.

The good news is that MicroVision is set to produce hundreds of thousand of units for the second half of 2014. Good. But that they may have to take on the risk of enabling that production. Not as good. They can ramp up within three to four months. Great. But that sounds like 2015 at the earliest. Really? I’ve been sitting here since 2000. Ugh. Patience, lad.

A few other notes were notable to a wordsmith. Sony (SNE) was usually named by pronoun, “They” did this or that, just like in the press release. If Sony is locking down mentioning MicroVision, it is not an enthusiastic endorsement. The CEO started with “Y’all know”, which suggests an expectation of the same investors instead of new interest. The company won’t provide financial guidance, but they do look forward to continuing their momentum; but they didn’t put those two together to realize that extrapolating a negative number does not provide a good result.

And yet, I am optimistic; though not as much so as before.

MicroVision only “needs a company to bring a (successful) product to market”. Present value based on present revenue doesn’t justify MVIS’ price. Present value based on EO14 possible revenue is still far less than the stellar hundreds of dollars per share estimates. If MicroVision optimistically made $10 on 500,000 units and the market gave MVIS a P/E of 20, the price is still only $3.14 (based on 31,840,000 shares). (And yes, check my math. We’re all in this together.) That sounds dire. But, multiply that by 10. According to one caller, Sony is guiding for more than 10,000,000 green laser units. Sony isn’t the only customer. The pre-split market cap listing criterion would put the share price at $40. If, if, MicroVision succeeds with more than one customer and multiple products per customer then the multipliers become significant.

The message I really heard though was from the notes I took. Except for the financial report (which I am glad they provided), there were very few quantifiable statements. If I edited out the letters and only looked at the numbers the file contains years and lumens. The CEO closed with the fact that the company had “strong measurable progress”, but we shareholders weren’t provided with that data. The data we received was of losses. I no longer expect sudden relief from any financial woes via a near-term MVIS share price, except via the irrationality of the markets.

I listened and I find myself differing with many of the declared views. The pessimists are too pessimistic. The optimists are too optimistic, for me for now. That’s okay. That’s the way the market works. I also remember one time when I disagreed with everyone else and was wrong. I attended an FFIV shareholders’ meeting. I listened to the CEO’s product strategy, and decided that the company had reached the peak of its growth. I sold enough shares then to sustain me for years now. Evidently, I missed one key phrase that made all the difference. Listening to everything, not just the parts that fit a nice narrative, is most important. So, I won’t beg your pardon as I go back and listen to the community again before deciding to do anything.

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Maybe A Mortgage Modification

Pardon me as I take a sip as I try to decide where to begin. Ah, a homemade herbed vodka martini. Today I get to celebrate, or at least breath a big sigh of relief. Skip any more suspense. I get to keep my house. It has been almost a year and a half since I had to stop making payments, but we (the mortgage servicer and I) have finally agreed upon payments that I can begin making again. But of course avoiding foreclosure is more complicated and less certain than today’s event and I didn’t do it alone.

Looking forward to days on the deck again

Looking forward to days on the deck again

For those tuning in late, or tuning back in after months of less-than-obviously-positive news, I suggest reading the back posts tagged with mortgage or foreclosure starting with Mesmerizing Mortgage Mediation Meeting. Yes, this story is bizarre enough for the movies. Jon Steward and Stephen Colbert could have a fun time with this tale, and mine is simpler than most.

Last week I teased with a hint of good news that I couldn’t pass along because I’d heard it fourth hand. Considering that Facebook has proved that there are less than 4 degrees of separation between all of us, the news wasn’t exactly direct. And yet, it was correct. My mortgage counselor (paid for by Washington State) had heard from the mortgage servicer’s attorney (one professional to another) that the mortgage servicer (which is not the same as the mortgage holder, which is Fannie Mae) had approved me for a trial period for a mortgage modification. Did you follow that? Imagine trying to keep track of that in real time during a phone call. The offer sounded good, but it was a phone call from an email from a reading of a package that no one had a public copy of. Imagine my enthusiasm and reluctance. I went home, took the night off, drank some champagne, ate a lot of popcorn, and wandered around my house, – my home – and began planning again.

This week I had the audacity to answer my home phone. I haven’t done that much for months. The first episodes with the mortgage servicer convinced me to go so far as to work from another location, preferably use my cell phone because caller-ID let me identify client calls, and tend to only pick up home phone messages after I got back from work. But, this time I worked from home and they called and I answered. They wanted to know what I thought of the package. I figured that “this call is recorded for quality assurance” so I made sure I kept my answer to only what I knew, which wasn’t much. What I did know was that there was a mediation meeting planned for Thursday that included the mortgage servicer, their attorney, the mediator, my counselor, and me. I suggested that if I received the package before then, maybe we could reach an agreement and not have the meeting. They’d dropped this very important document into the regular mail. No Express delivery. No FedEx. They wanted to fax it. I don’t have a fax. I suggested they fax it to my counselor who would scan it and then email it to me. That was how we left it.

Today we had a technological breakthrough. The package was emailed to everyone! Yay! It was emailed within hours of the deadline to call off the meeting. The terms looked good.

I am not surprised when people think that everything is resolved in one event. Avoiding foreclosure because of a modified mortgage sounds like working from a pile of paperwork as thick as any home purchase. That comes later. The “package” was basically a single page that said if I pay said amount by said dates for the next three months, I’ll be eligible to be considered for a modified mortgage at approximately those payments. That’s when the big package arrives. In the meantime, I have to make payments by April, May, and June that are about half of my initial mortgage. Ah. That is just about what I would have to pay in rent for a smaller place. Of course, Yes.

This process is not simple, emotionless, controllable (except with sufficient funds), or uncommon. The only way I’ve been able to navigate my way through has been from a State supported non-profit (Parkview Services) and the long-suffering yet effective coordination with my counselor who they appointed, Ivy Willis. (She’s getting a raise, right guys?) I was lucky enough to make the one call to the one phone number that I had the courage to find in the paperwork that led me to working with free (to me except through taxes) professionals. If I’d tried to field every phone call, try to decipher and answer every letter, and handle the logistics of taxes and insurance I’d probably be much less healthy physically and mentally. Even with such support, friends have suggested that I am experiencing some of the symptoms or PTSD (post traumatic stress disorder). I am not surprised to hear the impact this experience can have on people who try to do this without help.

After the last of the phone calls and emails this afternoon I got back to work. Every hour spent handling the negotiations is an hour spent not making the money necessary to pay the mortgage. I poured a cup of tea and served myself a macaroon made by a friend who owns and runs a chocolate shop (Chocolate covered macaroons are marvelous, but I don’t eat enough of them to justify her keeping them in stock. Even the naked ones are good. But thoughts of good food make me digress.) While I stood at my makeshift standing work desk I felt muscles relax. As each relaxed it became obvious how much tension I’ve constrained for years, probably ever since my financial Triple Whammy in August 2011.

I have to thank the people who’ve listened to my tale. Those who, when they asked, “How are you doing?”, actually cared about the answer and listened without judgment. I also thank (gee, this is sounding like the Oscars) the clients who stepped up and were happy to give me more work (particularly New Road Map and HCLE). It has been gratifying. (Hmm, I just realized that I also have to thank myself. I couldn’t have done it without me.) I also thank my fellow taxpayers, and the people who worked at enacting and enforcing such legislation. A lot of people are involved, but there are a lot of us that need the help.

There are chapters of insights and revelations, but I’ll save those for introspection and maybe for subsequent posts. There are months of “trial period” and tentative arrangements within which to pass along anecdotes that may aid others.

For now, it is time to stir the chicken and vegetable soup I’ve made from homemade stock and broth, and then sit quietly absorbing the event, and the moment, and where I stand in the process of returning to not just sustaining, but thriving. And then I’ll have some popcorn – and maybe plan a party. Oh, this really could be good. Thanks for staying tuned.

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Cautious Positive Suspense

“That’s excellent news! High five!”, a neighboring friend and worker in a co-working space. Me, “Oh yeah. High five.” He used exclamation points. I used periods. He’d just overheard the second of two positive calls, both of which were worth celebrating, neither of which was confirmed or committed. He saw the possibility as a certainty. I watched myself cautiously consider the positive probabilities. After too many months of delayed gratification, I might finally have news to share, but not yet. But there is a potential for a very nice party, or two, or three.

Suspense? Yes. I’ll leave you in suspense. It is too embarrassing to raise the flag only to have to take it back down again. But blog about it I must. Part of the process of recovery is financial. Part of the process of recovery is emotional. The financial part will resolve itself via bank statements. The emotional part doesn’t wait that long. I’m chronicling both parts of the process.

Pardon the ambiguity, but that’s been a powerful characteristic of my financial journey. Lots of great possibilities, but for a long time there has been very little actualities. Except for lottery winners, the return to the positive takes time and involves too many unknowns.

I dearly want to tell you, and yet I won’t – yet.

What I will tell you is what happened. My view of the world changed. All of the worries and possible calamities remain, but I found myself diving into myself. I became a bit more self-centered and also began considering how I will reach out.

The self-centered part
I’m frugal. Yes, I had some cheap champagne. And the next day I took advantage of sunshine to wash the windows, mop the floor, and dust the bookshelves. I went shopping. And I bought food I haven’t bought in a while: parmesan, garlic, wine, and some pantry stockers like tomato sauce. I might even get around to ordering up some replacement parts for the truck, and taking it in for its oil change a bit earlier than usual.

The reaching out part
The home phone rang. I rarely pick it up because the mortgage servicer’s phone calls can upset me for hours or days. One “caller unknown” call had already gone by, so hours later I picked up the next. It wasn’t the mortgage company. It was a call center calling for donations for people having trouble with their heating bills. In the time it took for me to listen and say no, I already began reviewing how many charities I’d necessarily neglected for the last few years. As the money returns, it will be nice to help out yet again. (And I already know where and how the money will be disbursed. No reason to call.)

Both the pieces of potential good news could be delivered at any time, though business hours are most likely. But I am eager enough that I’ve been working from home, watching for the FedEx and US mail trucks because the one bit of news should be delivered on paper. (And my thanks to the responsive FedEx folks on twitter and to my local mail carrier for fielding my queries.) The other bit of good news should be in my portfolio; so, of course I am checking for press releases on a regular basis. Private emails have suggested great news, but it won’t matter until the rest of the world, or at least the investment community, knows.

In addition to the emails, every one of my stocks has been profiled in the financial news within the last two weeks. This hasn’t happened in years. Maybe the big money is finally steering away from the mega-corps and is looking for the next big things. Maybe I’ll have more than two bits of good news to celebrate.

I also hear that I am on the short list for jobs that I haven’t even applied for. Thank you. Let’s talk.

But for now, my story is pronouns and allusions. I can dream and plan, but I also have to persevere and persist. Keep working the way I’ve been working. Continue to live the new embodiment of my frugal life. But find those emotions, those exclamation points, that I’ve become so unfamiliar with. Reintroduce myself to that part of myself. And cautiously, get ready for a party.

Remnants of a previous party. Maybe I'll eventually get a dishwasher.

Remnants of a previous party. Maybe I’ll eventually get a dishwasher.

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Costs Up Benefits Down

I’m insured. Obamacare says so! Oops. No, I’m not. Oh wait, maybe I am again. Hours on the phone and I’ve noticed two consequences: their music is better, and I’m spending more money than I expected. Another thing has been apparent the entire time. For someone in my economic condition, insurance is an expense, not a benefit. But such disparities with the headlines are kept quiet, even by the people paying the bills. There are stories behind the optimism and the headlines.

You must get that feeling occasionally. Intuition tells you to do something. Intuition told me to call my new health insurer. It was a good thing that I did when I did. A day later and they wouldn’t have been my insurer, and there was nothing they could do about it.

It was February 24th and I hadn’t seen a bill for a premium (what a misplaced word) payment, and nothing had been automatically withdrawn from my bank account. Rather than let it slide and hope for the best, I called my insurer. About 20 minutes later I got through to find out that they have nothing to do with my payments or bills. Everything comes through Washington (the state) Health Planner. Click me over and wait for another 80 minutes. The last time I did that was more than a month ago. The music has improved a lot and they no longer interrupt it with useless advice and instructions. It was easy to forget I was on hold. Doing this without a wireless phone would be anchoring myself to a radius around a wall outlet. Because I had a hands-free, wireless home phone I was able to wander around and get the mail, load the laundry, and basically take care of a few chores while waiting.

Every time I’ve talked to Washington State’s customer service reps I’ve been pleased and impressed. The fact that I have to do so repeatedly is not a good sign, but hopefully we’re improving my situation with every call. This time, somehow, without any obvious action by anyone, I’d been dropped from the billing cycle, which also meant my coverage was going to be dropped – the next day. I knew the situation wasn’t normal when the rep had to put me on hold at least three times while he checked with various experts. A day later, no luck. It looked like we’d catch it just in time; but, he had so many options to legally relay that I was starting to worry about my phone’s battery. Finally, right after he came back again, a new option showed up on his screen. I asked the expedient question. If I take that option and pay with a debit card immediately, does that clear everything up? Yes. Are any of the options even remotely as simple? No. Then, let’s do that.

My health insurance has gone from a bit over $300 to almost $600, but then had a tax rebate applied that got it back to only $10 over my old bill. But not the first payment, which was the full amount, because I answered a question too precisely. The second payment, which was done over the phone, went well, but it was setting up for auto-pay, which I don’t like. The third payment was supposed to be via a paper bill mailed to me, but it never showed. I had to pay the full amount yet again, though April’s payment should be okay. Okay? So far, two months out of three have been at a price that would possibly threaten my ability to pay a modified mortgage.

So, what’s the worry? Why post about it? The applause about millions becoming insured misses the point that many of those millions can’t take advantage of the insurance. Yes; they are covered. But, only if they can afford to pay their portion of the doctor’s bills, the clinic’s bills, the prescription bills. Many of them weren’t covered because they didn’t have the money. Now, many of them are probably covered because they’ve been ordered to. I’m covered, and I’m glad; but I also know that I can’t afford to use the benefits from my second largest monthly expense. For me, health insurance is an expense which has a benefit with a value of zero. The cost/benefit analysis puts a zero in the denominator, which makes math and mathematicians blow up. I pay the bill and watch the money go away.

Our economy is improving. GDP is up, but much of it is consumption not production. Unemployment is down, but people have traded high-paying benefit-delivering full-time jobs for low-pay benefit-less part-time jobs. Housing is improving, but it appears that many of the houses have been bought by corporations to turn into rentals with business models that are as unsustainable as the previous mortgages. We are improving, yet there’s a bit of an illusion happening.

Undoubtedly some people are getting good jobs and returning to a mainstream lifestyle. The numbers we are dealing with are so large that probability ensures success for some; but probability ensure the opposite too. I see the headlines about successful programs and wonder if the numbers are being made to look better regardless of the need.

Quiet stories continue. A friend who is very aware of the complexity of my situation gingerly asked about how I was doing, and was courageous enough to listen to the long reply. My situation simplified within these posts, is more complicated in reality, yet is simpler and more secure than many around me. I am on the edge, as my fatigued mind and body acknowledge.

I’ve been working hard to keep my house. More than a year after stopping making mortgage payments, I may finally be making enough to meet a mortgage modification – maybe. I won’t know until March 6th at the next mediator’s meeting. My house is for sale because that is one way to meet my obligation. Maybe I’ll meet that obligation with higher wages. Maybe I’ll win the lottery.

Last week I realized that, very quietly, a neighbor who I assumed was successful and stable evidently moved out and had their house go into foreclosure. Everything looked fine. Their house looks much nicer than mine, has a nicer view, and is much bigger (not a plus for me, but for some). Some financial support failed, and I have no idea what happened or where they’ve gone.

I’ve always been skeptical of the news and the media, but it wasn’t until I backed into this financial realm that I realized how far the statistics are from measuring reality, and many lives quietly step aside rather than challenge that narrative. Sad to say, for many, the benefits are in the headlines, but the costs are all they see.

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Questioning When To Sell

Celebrate the lucky friend who bought his first stock within the last couple of months, and then watched it double in a day, and who knows that it can be worth a lot more. Is it already time to sell his MVIS, or buy more, or what? What’s happening here? Welcome to investing. Answers are always easy, in retrospect. Decisions are always made in ignorance – almost.

If you’re reading this anytime after market open on February 24, 2014 you already know what happened to MVIS. As I type it is Sunday night after a busy work weekend. My business has been so swamped that my Saturday morning posts were moved to Saturday night and kept sliding until Sunday. Maybe I should raise my rates. (Yes, Peter and others, I’m considering it.) During a break this afternoon I talked to a friend, a novice investor. His question: “What should I do? Sell? Or should I buy more?” The words of my reply were probably no more useful than the shrug that preceded them. I wasn’t dodging the question. I was just being honest. No one knows, but a lot of people will be happy to accept your money in return for strong declarative statements that deliver the voice of authority. We humans like thinking there’s an answer, even when we know there isn’t one.

I am not a novice investor. I may be an amateur, but I have almost 40 years of experience investing in stocks. A lot of examples have rolled past my eyes.

Let’s start with conventional wisdom. If you make more than 10% after taxes and commissions you can sell and proclaim yourself above average. On average, the stock markets return something in that range, sometimes higher, sometimes lower. If you made 10% in a day, and did that once per year, you’d double your money every seven years and not spend much time investing. The trick is picking the right day and stock, and then thinking you can do that every year forever.

A typical conservative approach. Sell when you’ve made 20% (or whatever percentage works for you). Buy back after a pull-back. Reasonable. Do it right and ratchet your investments up. Do that with MVIS last week and miss out on the next 80%, but profit is profit and congratulate yourself on the 20%. The trick is doing it consistently, and decided how long to wait for that rise. Days are easy. Decades may be too long.

A less conservative approach. Wait for the stock to drop 20% and then sell. That may mean selling right after buying if your stock is caught in a downdraft. But is also may mean selling after a stock has risen hundreds of percent. I sold AOL after it dropped 50%, but first it rose from about $1 to about $80. I sold at about $40. (It is Sunday night and I don’t want to look up the exact numbers. See my book for details.) Dream. Invest. Live. The trick is finally making that decision to sell. The difference between selling AOL after a 50% drop versus a 20% drop was two or three years living expenses.

Greed. Hang on forever and fall into that motto of; “Bulls make money. Bears make money. Pigs get slaughtered.” Which sounds like a great line until you find out what happens to most male cattle in this world.

Investing isn’t just about making more, then more, then more. (Cautionary tales in good movies: Dick Tracy with Madonna singing “More”, and Key Largo with Humphrey Bogart’s character revealing Edward G. Robinson’s character obsession with More.)

Personal finance is personal. What do you need? What do you want? Why are you investing?

The younger the investor, the more time they have, the more chances they can take, the more they can benefit from patience. I’ve heard advice for twenty-somethings that ranged from; “Be risky because it might work and if it doesn’t you can recover.” to “Be as conservative as possible because compound interest will do amazing things for anyone with enough time.” Both pieces of advice are correct. Youth have more options, they usually don’t know it.

Investors with less time or money are more likely to ignore the conservative approach. Financial disaster is too close to ignore. Money issues aren’t abstractions. Making money anyway possible is an every day concern. It is easy to put everything on one investment, which is really just a bet. Lottery tickets sell. The other 8,000 stocks are easy to ignore in such circumstances; yet, diversification is the cheapest risk reducer available.

Most folks live between those two extremes. They have time, but not as many years as they would like. They have an income, but maybe not as much as they’d be comfortable with.

There is no one answer. I think the best answer is within each person. Buying and selling stocks is about arithmetic. Is the stock overpriced or underpriced? Find a way you think is appropriate for estimating a stock or company’s value and run those numbers. Growth, value, momentum, income all have criteria to work from. Investing is about enabling a life you want to live. How much money do you need for what and when? If you are chasing a 10% or 20% return, you’re chasing math. Why are you investing? To retire early? To make enough money to redefine a lifestyle? To pay off a specific debt? Now thyself is the most powerful investing advice.

A lot of advice can sound abstract, theoretical, and philosophical. Get real. With stocks that have extreme debates over their possible valuations, like $0 < $MVIS < $1200, draw a chart. Take your number of shares and multiply them by 0, the current price and several prices on the way through the high value, and then a few more. Daydream, but do it for real. If the stock goes to zero, what do you do? If the stock rises, it will take a lot of time to rise. What will you do when it is up 100%, or has only reached 50% of its estimate, or has exceeded your highest estimate? Do you already have enough for personal “success” if the business and the stock succeed?

In personal finance, numbers aren’t as important as actions. I’ve ridden enough waves that I know that I’ll sell about 20% when I can pay off a major financial goal (credit card debt, or mortgage, or retirement, or ?). After that, I’ll let it ride but I’ll be watching for when I’ve made a profit, made 100%, 200%, 300%, 400%. If I haven’t sold by 400%, then I’ll sell 20%-25%. And, eventually I may sell off 80% and leave the last 20% to ride. (I’ve almost been there more times than I can readily count, and each time I was distracted by life, not finance.)

If nothing else, it is fun to imagine such trades. I’ve also seen the other side, when phenomenal misfortune means every investment dropped simultaneously and stayed down for years. But, within the last month, AMSC, GERN, and MVIS have all shown signs of recoveries large enough for me to ponder when and what to sell. It is refreshing to be able to ask such questions again, even when I know the answer is, Not yet.

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Almost News For MicroVision

Good morning! This wake up call is brought to you by a very happy fellow shareholder. I got a call before 7am. Good thing I was already up, sort of. The network of friendly MVIS shareholders, which for years has closely resembled a crisis support group, kicked off emails and phone calls as MVIS jumped 40%, crested up over 100%, and ended the day just about a 98% gain. There must be great news, right? That is the way the stock market is supposed to work. Well, there was news and there wasn’t. Welcome to the world of investing in tiny disruptive companies.

(Here’s my MVIS primer.)

MicroVision's first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

MicroVision’s first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

Other investors may not be surprised that I tend to wake up at about 6:30, just about when the market opens. Almost every day I wake up, check my stocks, see that nothing special is happening, and then roll over for another half hour or so. Handy things, these iPads. I can check in on the world in less time than it takes to put on a robe and sit down at a computer. Today I woke up, noticed about a 20% jump, didn’t see any news on Yahoo or on the company’s site, and shrugged it off to the volatility of small cap stocks. Minutes later the phone rings. The stock is up 40%, and fellow shareholder and blogger Peter Jungmann, has found the news. Sony is working with MicroVision. Finally, we have a name to go with one of the five possibly major OEMs that management has alluded to. Sony, definitely a good name. As good as the news was, I rolled back over because I wasn’t planning to do anything about it – except watch the stock throughout the day.

By the end of the day, the stock had settled to its 98% gain. I’ll celebrate that. Sony’s news was a public vindication of MicroVision’s technology. I also confused a few other stockholders. There really wasn’t any news. Yes, Sony is working with MicroVision, but nothing was announced that would change the valuation of the company. No specific product launch date, expected shipment volumes, or financial details were mentioned. Sony didn’t even mention MicroVision in the body of the press release. MicroVision was called out in a footnote. MicroVision hadn’t made an announcement. MicroVision hadn’t even retweeted Sony’s announcement. Slashgear, Engadget, and several investors had passed the word along; but MicroVision was acting as if nothing was happening. The company is either very coy or oblivious.

There was no news, but the stock doubled, and traded more shares than exist. Lots of investors weren’t trading, but evidently lots of other investors, speculators, and traders were shuffling shares fast enough to totally change the ownership of the company, though the actual shareholder list is probably almost exactly the same.

One of my investing mottos is, “What’s the company worth?” Regardless of the percentages and trading volumes, comparing the company’s worth to the market’s estimate via the market cap is my main criterion for major celebration, and action. (Details in my book.) Dream. Invest. Live.

According to the market and the price it put on MVIS, MicroVision is finally worth more than $50,000,000; which puts it back above a key measure for being listed on the open market. Good. MVIS had other listing problems before, which is why it had a 1-for-8 reverse split awhile ago. The company struggled to keep the stock above $5 a share, failed, conducted the reverse split, and watched the market cap slide below the $50,000,000 limit and the shares approach $1 per share. In pre-split terms, today’s price rise was only about $0.165 per share. Taking the stock back to the same market cap that equates to the pre-split $5 would put it post-split at $40. Today, the stock rose $1.32. If MVIS continues this trend for 28 more trading days, MVIS would finally be back to $40, aka the pre-split $5. That’s hard to imagine, but that’s the math.

Maintain these conflicting notions:
There really wasn’t news. The relative price appreciation was actually small.
This is really good news.

This is really good news because, despite any quantitative news, the stock moved enough to hit the NASDAQ Most Actives list. If such small news can produce such large action, then when the real news hits there may be much larger action. And this is just the news from one OEM. My interpretation of management’s inferences is that at least three other major OEMs could also announce similar and better news.

As I’ve posted in the past,
One investor estimates MVIS’ worth as $1,200 – $1,500, and considers it to be conservative. My estimate is more modest, but $600 – $1,000 . . .
Such valuations don’t happen overnight. The largest single gain I’ve experienced was 240% in a day. The largest I’ve seen in the market is more like 640% in a day. It will take a lot of days to rise from $1 to $1,000. A lot can happen in those days.

But, what’s the company worth? Present value based on present revenues doesn’t justify today’s price. Present value based on future revenues can justify phenomenal prices, especially with the appropriately long list of optimistic assumptions. It could happen. Many things could happen. Something undoubtedly will. Until then, we shareholders are in for a long anticipated ride; especially, if MicroVision even announces news.

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Balanced Optimism

They liked my house! They didn’t buy it, but they liked it. 8199 Cultus Drive, Clinton WA 98236 At least they liked it more than one of the other houses in the neighborhood. Friends frequently comment on my upbeat attitude in the midst of financial mayhem. Maybe I should hit the lecture circuit telling folks how to stay optimistic regardless of the situation. I’d be happy to; but, I suspect I’d deliver a bit too much truth at the same time. We want our stories simple and clear. Ambiguity doesn’t sell well, even if it is the nature of reality. Maybe I’ve passed F. Scott Fitzgerald’s test, “the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” I don’t know if it is a sign of intelligence, but it is a characteristic I see in the hard workers who are barely getting by. They simultaneously see the positive and negative potentials and persevere.

Hard work has become incredibly common. I can’t think of anyone who has more free time, who is socializing more than they did before, except for those that are millionaires or have impressive incomes. Shop owners, lumberjacks, consultants, and construction workers are working as many hours as possible, but few expect their work will ever enable retirement. That part of the American Dream has faded for many. On average, one in six Americans you see are in poverty. Half of America is living paycheck-to-paycheck. The applauded health care initiative has insured millions, but for many it is an added expense which has benefits they can’t afford to use. Paycheck-to-paycheck doesn’t leave room for co-pays, deductibles, prescriptions, tests, or procedures.

The Old American Dream lives on; but, it’s incarnation in Cadillac’s Super Bowl ad came across as incredibly insensitive. “Americans work harder than Europeans because we want the best things in life.” That’s true for a shrinking few. The rest are working to somehow maintain the necessities of life. Cadillacs aren’t on the shopping list.

Can you hear the Wagnerian music swelling as indignation rises? Pardon me as I produce a well-used pin that pops that ballooning emotion.

If I concentrated on the injustice and inequity I’d live a much shorter life. I like myself more than that. I don’t ignore the issues, as regular readers know, but I actively search for balancing forces.

My Litany of Optimism continues. Some folks call it Counting Your Blessings, which is a fine way to focus on the present. I do that too. But I also must set goals for re-attaining a healthy dose of ease in my life. Working seven days a week is not healthy, yet as with many others, that’s what is necessary – for now.

Every other Tuesday night is dance practice. Swing, waltz, latin, maybe a bit of country – some volunteer produces a playlist. Someone else hosts the event at one of the community-owned local dance halls.  We all contribute a few dollars and for two hours we practice or play. I look forward to it, and wish it happened more often – but I don’t have the time to volunteer so I won’t complain. (Besides, I did my stint a few years ago.)

I got there early so I took a detour and dropped in on some friends who have a fine art print shop nearby. They’ve been nice enough to host an annual show and include my art. (Thanks.)  Let me check. Yep. Their hours are 10am to 5pm – except for the fact that they are likely to show up early, stay late, and work weekends. When I got there, it was more than an hour past closing and they had hours of work to do. Sounds successful; except that, like so many small businesses, they’re scrambling as they wait for checks to come in for work that’s already delivered. Paying people, like themselves, waits. They love their work, but like so many people I know they’ve also had to give up too much of their lives, in my opinion. (They do impressive work, which I’ve much appreciated.)

They exemplify that balance between loving their work and needing to work less. Others find balance by creating art, because it is fulfilling and the cheapest entertainment. Dancing provides a big dose of my balance. When I dance I smile. No analysis required. More dancing highly recommended. At least for a couple of hours, I get to move to the music instead of thinking through every thing I do.

But dancing isn’t the solution for every day, though it does sound appealing. (Imagine the shape I’d be in then.) For most days I find the balance by reminding myself of the possible positives.

Hard work alone is no longer the answer, but it can lead to raises and better offers. Investments exist within a more skewed environment due to unregulated markets, but a contrarian always has reason to hope. My mortgage issues could be solved by a significant modification or a rising market or a full-price buyer. Sales of my books and photos could resurge. My clients could become more frequent and pay for upgraded services. I hear I’m on a lot of short lists for nice jobs, so maybe I’ll get an unsolicited call for a job that is better than I imagine and pays me to do something I’d be willing to do for free because it is so fun.

I know I am not alone. The American Dream may have faded to the point that its appearance in ads seems like farce; but, I am encouraged that of all the hardworking people I know, dreams based on their desires and values are replacing old stereotypes. Cadillacs in three car garages are being replaced with plans for small houses with big gardens and eventually more time for each other and for each self. The present is being balanced by the future because that’s where the optimism lives.

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