Silly Sea Salt

It is hard to get much more basic than salt. It’s cheap, but it’s vital. And I’m curious. Of all the DIY projects and frugal endeavours, making my own salt seems silly. Why make something that is so cheap some cities throw it on roads to melt ice (and corrode their cars and taint their downstream neighbors’ water supply)? Frugality is an appreciation of the resources like time, money, and materials. Logically, if I want more salt, even fancy flavored sea salt, I can get it quicker and cheaper and cleaner at the store. Life doesn’t have to have every moment justified. The old saying goes “the unexamined life is not worth living”, but I think the corollary is that “the life that is examined too much is not being lived.” I made sea salt, and had a weird sort of fun doing it.

Preppers wonder about how to make the vital ingredients for living. I do some preparation, mostly because I live beside a tsunami zone, over an earthquake fault, and in the neighborhood of several volcanoes. (My Incomplete Emergency Kit) One of the advantages of living on Whidbey Island is that, for some of the worst case scenarios, I’d have to fend off the land and sea. In the right season that means having to get by on crab, clams, and salmon. Not something to complain about. That got me thinking about what else was around. Around is the key word. I live on an island. It has saltwater all around it. Granted much of it has various types of agricultural, residential, and industrial runoffs, but that didn’t stifle my curiosity. How hard would it be to make a mineral that is vital for life?

Easy and hard was the answer.

Yes, I could’ve watched dozens of videos of how others did it, but that wouldn’t be as much fun. Besides, the few I saw emphasized complicated rigs using lots of energy. Keep it simple. Take saltwater. Subtract the water. The remainder is salt. Simple enough.

My deck gets hot. It faces west, out across Cultus Bay, the southern end of Admiralty Inlet, with a backdrop of the Olympic Mountains. Whoever built this house was wise enough to include a wall of windows. The architectural choices are great for the views, but can turn the deck into an oven. Sounds like a perfect location for drying things out. But, how to evaporate the water best?

First Try
Some cookie sheets are wide, long, and shallow thanks to a small lip around the edge. Maximize the surface area and maximize the evaporation. I suspected I should keep the bugs out, so I placed a cooling rack over the cookie sheet and covered it with cheese cloth. Don’t bump it because such a shallow pan sloshes easily. Also find a way to keep the wind from flipping it. It worked. The evaporation was quick and gratifying – and the salt was spread out so thin that it was harder to harvest, and the salt air rusted the cooling rack. Rust, not a good flavor, even for someone from Pittsburgh.

Second Try
One experimental technique is to investigate the extremes, then work to the middle. Instead of a cookie sheet that is vulnerable to wind, I tried a mason jar with cheese cloth for a lid. It was stable, could pull in light from all sides, and minimized the area for bugs and birds to cause problems. It worked, slowly, very slowly. Months later I had a jar with a salt-encrusted bottom that didn’t want to give up the product.

Third Try
Head to the thrift shop for something in the middle, a large pie pan. It is deeper than the cookie sheet, but still has a lot of surface area. Instead of a cooling rack supporting cheese cloth, I stretched plastic screen door mesh over the top, wrapped it around the bottom, taped it tight, and poured the water through the mesh. Ta da! In a few weeks, I had about a half cup of sea salt. And, I couldn’t use it. Within two days of putting it on the deck in the sunshine, a bird pooped on the mesh. I may be willing to deal with runoff, but runoff is diluted. Concentrated bird poop is too concentrated for me.

Fourth Try
Get silly. I set up the pie pan again, but this time I found an old window pane to act as a roof over the setup, and bracketed both sides with wire mesh to dissuade and critters from dropping in. My poor little pie pan looked like it was in prison. And, it worked. Two weeks in August was all it took to make salt that had a bit of a slurry to it as the last water evaporated away. I find it easier to harvest while it is still somewhat moist. I transfer it to a window sill for finishing.

More Tries
Of course there will be more tries. Nothing much happens at the start, but after enough water has evaporated a relatively quick crystallization happens. Instead of the tiny crystals in slat shaker, big squares start floating around in the brine. Cool. I’ve seen some simple rigs that use greenhouses and such. I may play a bit with those. There’s always a better way. I’d also like to get more scientific about it. As I understand it, seawater is about 5% salt. Can a pound of water create 0.05 pounds of salt? If a 5 gallon bucket holds about 30 pounds of saltwater, that could produce 1.5 pounds of salt. Impressive. After the process is improved, I may find the right rate for production to meet consumption, and also what additives like iodine are necessary. I don’t make margaritas, so my needs aren’t great.

It is a silly exercise. When I showed it to my neighbors I felt like it was the grown-up version of the high school science fair. And, I grinned like the kid whose baking soda volcano finally worked right.

It is a silly exercise, except that it isn’t. We take many things for granted. Too few folks know how their food and energy are created and delivered, or how their waste is disposed. For the price of a 5 gallon bucket, a walk to the beach (actually out to the channel to catch the cleaner incoming tide), a pie pan, and some reusable mesh, I learned a lot about something simple. I can’t justify making sea salt using frugal criteria, and I thought I was doing it just for the fun of it, but it turned out to be valuable, and fun, and yes, maybe a little silly. If I get good at this, maybe I should start making those margaritas.

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My 40 Year Mortgage

Another interview! Not for a job, but for someone else’s article. (Someone out there must need a writer who can write about engineering in English.) The folks at wanted to write about 40 year mortgages and were having a tough time finding homeowners who had one and were willing to talk about it. They stumbled across my blog and gave me a call. Evidently, I’m a member of the 1%, not in terms of wealth but because only about 1% of homeowners hold such long mortgages in the US. Yet again, I’m not normal. I’m okay with that for several uncommon reasons.

I didn’t shop for a 40 year mortgage. It was a consequence of my Mortgage Modification a few years ago. Thanks to a government program (HAMP), an understanding official at Fannie Mae (“With a resume like that you just need time to get a good job.), and an odd path through mediation (a long story), my mortgage switched from a >6% 30 year mortgage to a 40 year mortgage at 2% that someday will ramp up to something under 5%. My total monthly payments dropped by about half (for now) and I get to stay in the only house I’ve considered home.

The downside as they state in the article, is another decade of interest payments. That’s more money heading out the door. Most people prefer going the other way, paying off mortgages in 15 or 20 years to decrease the total cost of the mortgage. A 40 year mortgage can come across as one of those deals where it sounds sweet for the homeowner, but the bank’s the one making the money on the deal.

Run the numbers. There’s probably an online calculator to make the comparison for your situation. I didn’t need to. I didn’t have any other option except to sell while the market was low, and then be penniless and homeless. I certainly hope your situation is more flexible.

It is easy to be seduced by the precision of the mathematics. I enjoy math so much that I watch documentaries about it and subscribe to Numberphile on YouTube (where tau versus pi is a passionate debate). Here’s the trick with the numbers. Check the assumptions behind them and the equations that use them.

Inflation bounces up and down, but take an average over a long enough period and see a general rise. That’s the nature of our economy. It relies on about 2%-3% growth, which roughly translates into inflation. Look back 40 years and find inflation has been about 3.5% per year. If the mortgage rate is less than inflation, then my interest payments are becoming a smaller fraction of my monthly expenses every month. My housing expenses may continue to rise with insurance and taxes, but the cost of borrowing the money gets smaller. Something that cost $1 in 1977 would cost $4 now. A 3/4 cut in a mortgage payment can happen by keeping the number of dollars the same while inflation rises four-fold. Even my eventual increased interest rate has a good chance of staying below long term inflation. Wait 40 years and that interest payment may be as small as the price of a nice dinner.

Housing is getting more expensive, especially in the Seattle area. With my 40 year mortgage, I get to live in a home for less than it would cost to rent. The downside is those increased insurance and tax payments. A house is an asset, which means it can also be an investment that I happen to live in. Good investments rise faster than inflation. An increase in my monthly interest payment increases my expenses by a few hundred dollars per month, but my house, my asset, my net worth can easily increase by several hundred or even a few thousand dollars a month. As the real estate market recovers, my house’s value is rising about $3,000 per month. Spend a few hundred to get a few thousand? Sounds like a deal – just be careful with liquid versus illiquid assets.

Housing may be getting more expensive, but for many it is no longer the greatest monthly expense. Health insurance costs are rising. I am aging. Combine the two and compound an expense that becomes prominent. As I’ve written before, health insurance can cost so much that I can’t afford health care. If I spent money on my health rather than on insurance, I’d be able to visit a different doctor every month. Oh, what a luxury. That’s more on my mind as a greater inefficiency than interest payments.

That aging thing happens. Will I be alive in 40 years? Maybe. Maybe not. If I’m alive and still in this house, great! That’s a celebration! If I’m not alive, I’m probably not worrying about my mortgage payments.

Concentrating on the expenses in the last 10 years of a 40 year mortgage only makes sense if I stay in the house more than 30 years. In 40 years I’ve had almost a dozen addresses because of careers, relationships, and opportunities. Half of all homeowners move again in about 10 years. Very few take out one mortgage and pay it off.

The Economy et al
Forty years ago we were in the Cold War, recovering from a political scandal, just out of Vietnam, just coming off the gold standard, and about to hit stagnation and high inflation and interest rates. The personal computer was a toy for geeks, the Internet was largely unknown, cable TV was a luxury, and coal and oil were king and queen. The Space Shuttle was replacing the Apollo Program. Want to guess how things will be in 40 years considering the singularities that may occur in automation, quantum computing, nanotechnology, Bitcoin, augmented reality, electric cars, cheap solar power, medical advances, and the inevitable unknown unknowns (or unk unks as we called them at Boeing)? Throw in climate change, political change, societal change. Toss in some chaos theory. Toss in some good and bad luck. The range extends from utopia to apocalypse.

Personal finance is personal, and even the finance part doesn’t exist purely within the realm of mathematics. Personal finance is about financing a person’s life, and that life exists within a far more complex environment that shouldn’t be ignored. As they quoted me at the close of the article; “I’m happy with the present and willing to accept what’s lined up for the future“. (Nicely done, Marilyn.)

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Triple Whammy Sixth Anniversary

Not long ago, this twisted, melted piece of plastic was a pulley. A simple, little thing; just a pulley. A simple, little thing broke. In the vast possibilities of bad luck, it broke in one of the best ways, though only after causing a struggle. That was true of my truck. It may be true of other pieces of my life. It’s true for everyone, because every life depends on many simple, little things not failing. This one seems to resonate as a mirror, the other end of an era of troubled times.

The view from Mount Townsend, oh so many years ago…

Finally, I’m taking a day off every week. Friends and clients tell me I look more relaxed. I can believe it. It’s prime hiking season. The snows melted out of the sub-alpine country. Wildflowers (and bugs) are enjoying their short growing season. I long for the high mountains. One night isn’t enough. I decided to splice two weeks together to get two nights off more than a mile above the record breaking heat. The goal: Mount Townsend, site of one of the best panoramas in the Puget Sound region.  From the ridge it’s possible to see out to the Pacific, and around 270 degrees of Vancouver, Everett, my house, Seattle; including a string of volcanoes: Mt. Baker, Glacier Peak, Mt. Rainier, Mt. St. Helens, and Mt Adams, as I recall.Load up the pack, remember to take the camera and tripod, load up the truck – and forget the abandoned attempt to hike into Anderson Lake where the truck acted like something was wrong, but was actually fine. A Low Fuel light came on even though there was ten gallons of gas left.

Drive up the island, ride across to the Olympic peninsula on the ferry, drive down to the Quilcene Ranger Station, take their thoughtfully prepared map, and start the drive up one of the nicest approach roads (paved!, mostly) for a 14 mile climb to a trailhead that would lead to a few thousand feet of climbing to wildflowers and cool air. (Smoke from Canadian forest fires would probably have blocked the view, alas.) Even paved approach roads are bumpy and noisy, but eventually one noise seemed determined to be heard. Grump. Stop the truck in the middle of a one lane road, but keep it running in case it didn’t want to restart, look under the hood and find – an engine that seemed to be working fine without being smelly or smoky. And yet, Chuck the Truck is 17 years old. Things break. I executed an 8-point turn which included dropping into 4WD to get back out of the ditch, and headed back down to the highway. The responsible side of me was trying to convince the over-worked side of me that it was the prudent choice. But, just a week or two earlier had been that trip that I shouldn’t have abandoned.

Here’s where the good bad luck started to happen.

Roll about seven miles back to the highway and resign myself to driving home. Nope. A quarter mile along US 101 the noise came back; then I heard, felt, and saw a series of somethings that convinced me to get off the road. Evidently, the engine was still running but power steering was gone. The best place to park took a U-turn and left the truck straddling a shallow, grassy ditch. Maneuvering a 4,800 pound truck without power steering in a tight space without knowing what’s wrong meant quitting before I started falling behind. On go the flashing emergency lights. Up goes the hood. A quick look showed the serpentine belt had tried to serpentine itself around the engine block. Grrr. Out comes the phone, and thank you AAA.

The friendly neighbor came out to keep me company. He didn’t have to stay long because the tow truck just happened to be finishing up a call about five minutes away, much better than the possible two hour wait I first heard about. I’d picked a repair shop at random (Gary’s Auto Service, on Martin Road), and he knew the guy. A call to the shop held the good news that he’d have the replacement part by the time we got there, about an hour to get hooked up and driven to the shop. That’s where we found the melted pulley. So much for a quick fix. Belts must be tight. The belt has a tensioner. The tensioner has a pulley. Something in there decided to stop turning, melting a bit of the belt, melting the pulley, and then throwing the belt off the other pulleys. It was late afternoon. I was already trying to figure out which combination of buses, ferries, and bicycle rides would get me home and back to the shop again. He decided to make another call. It was late, but they could get him that part, too. Probably less than an hour later, the truck was running again. When I asked for the price, he quoted something so low that it was obvious he wasn’t the sort to take advantage of the situation. I knew the truck needed a new battery, and I was happy to suggest he get that business, too. I was one of the last vehicles to squeeze onto a ferry (after a one boat wait) and got home at sunset.

Imagine the difference if the truck broke down at the trailhead, 14 miles in, more than thousands of feet up, and at the end of the day.

This happened near the sixth anniversary of my Triple Whammy, the summer when several simple and unrelated things broke in my financial engine. Each was unexpected. Diversity in my portfolio wasn’t enough to protect against a cascade of little things suddenly stopping big engines. The repair hasn’t been as quick as the good fortune that I had with my truck. And yet, I am hopeful.

The last time something similar happened was with my Jeep Cherokee Classic on the way down from Johnson Ridge in 2009. The Great Recession was in full worry mode. My portfolio was hit, but was recovering nicely, potentially. One the drive back from the trailhead, a rock somehow managed to wedge itself into the brakes. I couldn’t tell until I hit the highway, but there it was obvious something was terrible. The Jeep wobbled and bucked if I drove more than 15 mph, not good on a 55 mph two lane highway with few shoulders. The brake fluid boiled in the lines. A complete brake job went onto my credit card, reluctantly. Until then, I almost always paid off my balance every month. It and the problem with the dishwasher (see earlier post) were milestones that signified the beginning of an era. I’ve carried a balance ever since.

Getting the dishwasher fixed (though I am chasing a couple of leaks) felt like a mirroring of the failure of the first one, as if there was a symmetry at the beginning and end of an era. The similarities with the Jeep and the truck seem like a mirror as well because, while they were both bad, I have greater confidence that I’ll be able to pay down this repair (and the rest of the balance, too.)

Simple, little things break. Bad luck happens.

Simple, little things can be gifts. Good luck happens.

Luck plays a larger role than most people and organizations will publicly admit. My problem with my Jeep would cost me two full weeks of business revenue (not profit), and the recurring interest charges escalate that. My problem with my truck will cost me about four days of business revenue. The difference is significant for anyone who has to be careful with their bills. The same sort of things can happen to businesses, organizations, and governments. Realizing that makes me feel less alone, and makes me less likely to judge someone or some group. Maybe they just had some bad luck that tangled their engine, temporarily. Maybe they just need some good luck, and the opportunity to take advantage of it.

I think I’ll skip hiking for a while, though – unless someone else wants to drive.

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Practicing Patience

Pardon me while I sweat. Better get some fluids before I dive much further into typing. It’s 81F in the house. A fine day for whacking weeds for Whidbey Camano Land Trust. Kyle, the Stewardship Assistant, invited me as Site Steward to join him in an afternoon of repelling the invasive species. Today was a day to use the noisy, gas-powered equipment that is a little too aggressive to use in larger work parties. It was a day to sweat, get some work done, and be reminded of the power of patience – unintentionally.

Earlier this week I had an interview. It would be great if it was for a job, but it was for a reporter who is writing an article about 40 year mortgages. She stumbled across my blog and some of my earlier posts. She asked good questions for her article and inspired me to ask myself good questions about my progress towards financial security. She has a deadline. I can take more time considering my answers to my questions.

I’m almost at the six year anniversary of my Triple Whammy. The traditional gifts are candy and iron. I’m sure my naturopath has an opinion about candy. Iron powered by petroleum was what I got to play with today. Call it a different kind of sweet crude and call is close enough.

I’m also at the three year anniversary of being able to keep my house. The fight with foreclosure was successful, though the specific date depends on your preferred perspective.

Like many people recovering from the Great Recession (which I consider the Second Depression), some things are better, some things are the same, age dictates that some things are a bit worse. Add them up and life is better. Compare the sum to what’s sustainable, and call up my Litany Of Optimism and Backup Plans. Want details? Click on those links. Both the Litany and the Plans are extensive.

If the Litany and Plans are so extensive, why isn’t the sum more than sustainable? Welcome to my daily debate. Welcome to the debate that many must maintain for themselves.

Many of my managerial, consulting, and coaching friends have analyzed my situation. The general consensus, great potential that is unrealized, yet.

It is the ‘yet’ that is the key. For anyone that is pursuing a personal strategy there is a question that can’t be resolved in advance. If the strategy sounds good but the results haven’t succeeded, does that mean it’s time to try something else, or it’s time to keep trying? Is persisting something to give up or continue?, I have an understanding of my potential. There are many things I can do, but my passion is for people and ideas. I enjoy listening to creative and entrepreneurial people, and helping them pursue their projects. I enjoy consulting more than climbing a peak or dancing to a big band. Getting the business started is the hard part, not just helping others succeed, but spreading the word about their successes while being necessarily discreet. In the meantime, I get to enjoy a second skill, writing. Its inspiration is people and ideas, but the goal is communication instead of strategizing. Those are my potentials, passions, and skills. Everyone has a set. I watch many of my friends pursuing theirs.

Emotionally, it can be difficult when the pursuit doesn’t flow. In modern society, the easiest way to make the process flow is to lubricate it with cash. At least for me, having an extra million made it easier to start new careers back when I didn’t need to. Now, there isn’t as much out there smoothing the way. Some days it seems every step is fighting friction. It’s tiring.

I’m tired as I type, but that’s because of the weed whacking. A couple of hours of that, a long walk there and back, and being a bit out of shape means it feels good to sit down. Luckily, the weed whacking happened in a place that provided a lesson.

We worked at Hammons Preserve, a nine acre farm that was made part of the Land Trust by the farmer. I’ve been Site Steward there for over eight years. The general goal is to keep some pasture as meadow, some wetlands as wetlands, and allow the rest to revert to forest. (Want details? Contact One of the first tasks was to take out several loads of the sort of trash that accumulates around a farm. The site was left with a shallow slope and an opportunity. In came the weed barriers and native plantings. For over seven years I’ve taken photos from the same spot, an irregular time lapse photo essay of the efforts of volunteers, nature, and time. Today, I took the same photo, as usual. It didn’t look much different from the last time. It looks much different from the first time.

As the native species were planted, the biggest thing in the view was a burnt stump. Without the trash, and as the plants grew, a stream began to flow from the stump, almost as if it had a pump installed by a landscape architect. More plantings, more weed whacking, more cursing the deer for eating the saplings, and eventually the plants established themselves. Then, the stump was obscured by willows and grasses. Now, flowers upfront grab the attention.

Nature is patient. Nature persists and perseveres. The Land Trust may help, but time and Nature do most of the work. The Land Trust decided on a direction, gave it some momentum, and now that portion of the land is naturally far more sustainable than it was before.

I’m tired. My fingers are telling me that it’s time to rest. They’ve had enough repetitive activity. I sit here encouraged by the power of patience and perseverance. I don’t know that I’ve picked the right direction, but it feels right. I probably just have to practice patience.

And, maybe mix myself a tonic with ice cubes, a lime, and some other select fluids. That sounds sweet.

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Dishwasher Celebration

Ah, the sweet sound of a machine doing the dishes. It’s been over five years since my tiny dishwasher turned itself into a complicated dish drying rack. The motor wore itself down until all it could do was make a grinding noise. It was one of those little household events that should’ve been innocuous, but instead sits as a milestone for the financial situation I’ve been in since then. Thanks to a local variation on craigslist, I have a new, old dishwasher. Pardon me as I load it up for a second time today, just because I can. Let the celebrations begin! And, let something simple provide insights into personal choices.

I can use my past strainer again! I forgot about that.

Simple things have pervasive effects. Sure, I can wash dishes by hand, but being a consciously frugal person made me reflect on the ways it changed my life. Dishwashers are labor saving devices, but not by much for me. Washing dishes by hand takes time, but time how long it takes to load, arrange, and basically manage the labor saving device and find that that difference isn’t as great. A dishwasher isn’t instantaneous, doesn’t pick up the dishes, can’t feel for leftover dirt, and won’t put anything away. A dishwasher doesn’t take care of everything, either. Knives, wine glasses, bulky pots, and wooden utensils are going to get the old-fashioned treatment.

The biggest impact I saw was the way I cooked. A Cuisinart (another garage sale find) or a mandolin (the thing with the slicing blades, not the musical instrument) may cut finer, faster, and safer; but cleaning those complicated blades by hands takes care. Accidents happen. Instead, I’ve almost always used regular kitchen knives. They’re a caution, too, but at least they’re easier to handle and clean. One consequence, I gave up on making my own (healthier) potato chips for a while.

Health, or at least sanitation, is also different. I’ve wondered how many upset stomachs weren’t from the food but from something I didn’t clean well enough. There’s no way to know. There is, however, some security in knowing that the machine is going to do roughly the same level of effort every time. At least some minimums are established.

Environmentally there’s a difference, but it has more to do with the person than the machine. One isn’t always better than the other.

Little things get overlooked and accumulate. It is easy to get used to that stain or to quit using something that’s too hard to use. Getting a hand stuck in a tea pot or a commuter mug may make a great video or an entry in the police blotter, but the possibility is one more reason to not look past the lid, or put something on the shelf for a while. Finally, small pleasures like using my favorite mug are back.

The reason for the second cycle today is to clean some of those things that I take for granted: that tea pot, the dish rack, a second try at the commuter mug (which didn’t get clean in the first cycle.)

Emotions aren’t ruled by logic, even while they use logic to rationalize feelings. Back when the dishwasher broke, the numbers already told me that I was in financial difficulty, but the realization that I couldn’t afford to fix something as simple as a basic appliance felt like a critical failure. I like being a responsible person, and here was something that I couldn’t respond to. It became the first in a long series of deferred maintenance and MacGyver’ed repairs. Hearing the dishwasher throw water and soap at things I want cleaned feels like one of the first steps in the end of an era. A bit of luck, a bit of money spent for installation, and a bit of “normalcy” returns to my life.

It all happened thanks to drewslist, the local and better variation on craigslist. I’ve described it before, but basically it is a small town email (and now online!) service that lets people post jobs, events, housing, classes, carpools – about a dozen categories. One of my favorites is “For Sale, Wanted & Free”, particularly the Free part. Remodel projects, downsizing, relocations all free up and create a flow of used stuff that may otherwise go to the landfill. Skinny, compact dishwashers rarely come up, but here one was for free. Yay!. And it works. Yay!! All I had to do was pick it up and install it.

The frugal and resourceful part of me would like to say I’d installed it myself. I tried. Unfortunately, the two dishwashers had completely different electrical and plumbing attachments. Listening to the old dishwasher throw sparks as I pulled it out didn’t help my confidence. Helping at a Hearts and Hammers event (a local variation on Habitat for Humanity) provided great evidence of the power of a leaking dishwasher. New kitchen floor and joists, anyone? I paid for two pros from Bayview Appliance to install it and carry the old one away. The good news, it works. The not so good news, I’ll have to devote about three days of my business revenue to pay for their one hour of effort.

Frugal living runs into such quandaries and comparisons. Is washing dishes by hand good enough, or does it come with missed opportunities? Even when something is free, is it cheaper to make it work by spending time, or by spending money? If the appliance works great, then spend time. But the risk of something going wrong can cost ten times the price of a new appliance. We can only guess at risk. There are no guarantees, except possibly when someone is paid to do the work.

Small things are more important in a frugal and minimalist life. The downs and ups I experience may not register with someone who could replace an entire kitchen because they didn’t like the color of the sink. Personal experiences, like personal finance, are personal. If it feels like a celebration, celebrate. Don’t care if no one else cares. A frugal life is one based on respecting individual needs and wants, and not living according to what some marketer puts into an ad.

I can already see one or two reasons why the previous owner upgraded. A few items still had dirt after the first cycle. The inside has a patina thanks to twelve years of use with well water that has lots of minerals. I can also see why I’m happy and relieved to yet again be able to do something as simple as delegate one more task to one more machine. It’s one reason I’ve been able to write this post. Ah, to dream of putting the next messy roasting pan into the magic box and letting it deal with my style of long, slow cooking.

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Merritt Lake Revisited

Ah, hiking. Let me count the bug bites. It’s July, the season when Washington State’s high country begins to melt away uncovering meadows of wildflowers, clear vistas of higher snow-topped mountains, and swarms of mosquitoes that get busy perpetuating the species. The mosquitoes and the wildflowers have something in common: a few short months between losing the snow and its return. I felt a similar urgency. A gap in my work schedule opened wide enough to easily fit in a two night hike, a long-delayed return to Merritt Lake, a lake on the high, dry side of the Cascades, and on the edge of wilderness. I needed some time to return to reality.

I go to wilderness to find peacefulness. There’s a statement, the wild world is more peaceful than our tamed world. I’ve been celebrating being able to take a day off every week (My Rule Of 7 – One Day Off). That may only be half the length of a typical weekend, but it is much more precious because it’s been absent for a few years. As relaxing as it is to put work aside for a day, chores have a way to soak up the available time. One way to get me to relax is to get me into the mountains, the higher the better. (I’m talking about altitude here.) Spend hours deciding what to pack, drive a couple of hours, sweat for a few more, and temporarily recreate the basics of living in a wild setting.

Hiking, especially backpacking, is reminder of the basics. Everything has to fit in a pack that can be carried on a back. The necessities of housing are reduced to thin nylon, a few aluminum poles, and at least one zippered door. Pay a bit extra and carry a bit extra weight for a second door. Breezes and an alternate exist are valuable. Heating and cooling become sleeping bag and clothing choices. Campfires may be quaint, but they usually aren’t allowed and are inefficient and dangerous. The days of living off the land are largely behind us, which means packing food for every meal, every snack, plus a little extra just in case. Water, the necessity that’s delivered in luxurious and overlooked fashion at home, becomes something simultaneously in inexhaustible supply at a mountain lake while also being something that has to be decontaminated before use. To keep that contamination to a minimum for all, pack everything needed for a latrine, and be glad if there’s a house-less outhouse at the destination. (Imagine a box over a hole.) Add in a first aid kit, something to read, maybe a camera, maybe a pad for a sleeping bag, fill out the Ten Essentials (check with your local hiking club or The Mountaineers) and see if it all fits in one pack. See if your boots fit. Now, try walking with all of that. Sounds silly, and yet being voluntarily reminded of the basics and being paid by enjoying a place where nature is wild is priceless – if you enjoy that sort of thing.

Imagine how much better it feels to come home to a house, a wardrobe, a refrigerator, a full pantry, running water, flush toilets, garbage disposal, and a full collection of books, movies, and music.

I go to the mountains because they are real. Much of our modern life is layers of abstractions, duties and rituals driving expectations of socially-acceptable norms. Those duties and rituals can be tracked back to basic necessities, but does it really matter is someone wears white after some holiday, or whether a car is washed, or whether the lawn is mowed to a specified height? Time in the mountains is layered in cycles: insects live in days, some plants live for weeks, other for decades or centuries, rocks move slowly for millennia and then abruptly fall under the acceleration of gravity when one last pebble breaks free from its tenuous situation. Nature is always there and is simultaneously constant and constantly changing.

I started developing my perspective on Nature as I accidentally fell into writing a series of Twelve Month studies: Twelve Months at Barclay Lake, Twelve Months at Lake Valhalla, and Twelve Months at Merritt Lake. One place can feel like twelve places when it is met throughout the year. In the last few years, I’ve managed return hikes to Barclay Lake and Lake Valhalla, but sheepishly I’ll admit that I was avoiding Merritt Lake. Merritt Lake is the steepest and longest climb, the longest drive, and sometimes the toughest road. It is also a good base camp for views into the mountains, walks through those wildflower meadows, and less likely to draw a crowd. I finally returned.

My legs, knees, and hips were reminding me that the last time I was hiked to the lake was several years ago, back before I overdosed on work. Switchbacks rule for the first half of the hike. Climbing back and forth across the hillside, gradually reaching a ridge and boulder field that lead to the forest surrounding the lake. At the outlet of the lake is a broad and relatively flat open area of Day Use, and a cleared area under the forest canopy for tents and such. There’s even a toilet, though last I saw it was about to fall into the hole it sat over. The opposite side of the lake is the hard rock ridge that touches sub-alpine territory where the trees struggle for height, the snows linger longer, and those vistas open up. I knew I’d moved to the right place in 1980 when I went to a party in Seattle that happened to include a lot of serious climbers (before I was even hiking), and saw that rather than being macho about their ascents, they were more likely to describe the wildflowers and beauty they encountered on the way up and down. I’m glad the lake wasn’t any higher, and was also glad I knew how much farther I had to go.

I wrote the Twelve Month series particularly because most people won’t or can’t go on such hikes. I call myself a chicken adventurer. To my adventurous friends, I’m a big of a chicken. I steer away from avalanche slopes and stay back from the edges of cliffs. They, however, seek those places to climb up, ski down, or jump from (with a parachute.) To others, I’m an adventurer because I still go out there, whether that’s bicycling across America, walking across Scotland, or following trails to places where we aren’t the top of the food chain. Simple acts create uncommon opportunities. I waited in the dark through a rock fall that went on long enough to reach a lake (Barclay Lake), and maybe me. I woke up to a meteor exploding, and later that trip found myself hanging upside down from my snowshoes. (Lake Valhalla). I woke a cougar, not that I saw it, but its roar and its pawprint in the trail dust made me glad it wasn’t hungry when it met me. (Merritt Lake) Nature is a topic in so many debates, yet too few get the chance to visit it. I hope my books help fill that gap.

I’m back again. While I’ve been typing, the gear is drying out, the laundry is done, uneaten food has been put away (to be eaten soon because it was just stored in my pack for two days.) I felt more normal up there, confined to my tent by so many bugs that opening and closing the flap would let in a couple dozen. There were fewer expectations. Pent up remnants of previous conversations and concerns had a chance to drift through unencumbered and be released. My thoughts are clearer. My head is more relaxed. The trip cost more than simply staying at home, but I gained a familiar benefit. Escaping to Nature is a return to reality, a reality that our abstraction of a civilization sits within, whether it remembers that or not.

Now, where to go next? Maybe some place with fewer bugs.

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My Overly Simplistic MVIS Valuation

I was inspired by a friend, and as so often happens, the thing I created isn’t as fancy, isn’t as detailed, but may be useful in its own way. I know it has already helped me, and only partly because of the numbers it produced.

About a month ago, Peter Jungmann posted a program that would estimate the value of MVIS shares based on a few simple inputs. Trying to calculate the “correct” value for a stock is simultaneously something worth doing, and something that is impossible to do perfectly. And yet, investors should try. And yet, few do. That’s why I’m impressed by anyone who tries, more impressed by anyone who publishes their results, and most impressed with anyone who makes their method available to others to test and improve.

Speculators may only care about the price movement of a stock, but investors are more likely to be investing in the company. Hopefully, the success of the company is reflected in the stock, which tends to be the case. There are, however, no guarantees.

I knew about Peter’s post, but hadn’t found the time to play with it. Besides, just knowing he’d posted it inspired me to revise my estimates. Being an independent sort, I wanted to calculate my estimate and then compare it to his.

I’m an advocate of simple living, but hopefully not too simple. I’ve seen the pages of data that are published in the annual report. I study them for the stockholders meeting, but I need very little for my valuation estimate. Basically, a company makes money from selling goods or services or both. If they can’t make a profit, then there’s no reason to buy the stock. For simple companies, if they sell a product, they ideally make money on each product sold. If the price of the product exceeds its share of the total expenses of the company, then the company makes money.

Sophisticated models can dive into costs of materials, labor, facilities, management, taxes, ad nauseum. Sophisticated models can also dive into details of sales, royalties, licenses, and more nauseous (though profitable) details. Pay me enough and I’ll happily dive into seven-dimensional analyses of a business model. It’s like the work I did on flight simulators for Boeing. Geek out!

My simpler approach is to estimate the size of the market, the company’s market share, the profit per piece, the number of shares in the company, and the premium the investing community will apply to the stock. The first three items are company measures, objective measures whether the company is public or not. The last two deal with the fact that the company is a corporation, with only the last measure acknowledging the public stock markets. The model is overly simplistic, but it is also more likely to be used which means it can be more useful.

For MicroVision there are few factual numbers.

The company has already sold components for products as diverse as smartphones, head up displays, and bar code scanners. Rather than model all of them, I use smartphones as a proxy for the market size MicroVision can sell to. Personally, I don’t think projectors embedded in smartphones is MicroVision’s most disruptive potential. I suspect MicroVision can enable a display revolution analogous to the switch from CRTs to flat panel displays, and the switch from laptops and tablets to smartphones. In the meantime, though, there are about 1.5 billion smartphones sold per year. If the company achieved a 1% market share, that would be 15 million units. Fifteen million units far exceeds any of MicroVision’s previous sales volumes. If each unit resulted in $1 of profit, that would simply be $15M in profit. That would barely exceed the company’s 2016 gross revenues. It was an impressive year for MicroVision, but $15M in revenues isn’t as impressive as $15 in profit.

There is one main number for the stock, the number of shares. That’s been changing dramatically since I’ve owned the company (A Study In Dilution MVIS). For a bit of conservatism, I assumed 75 million shares.

Multiple the size of the market x the market share x the profit per piece / the number of shares and get an estimate of the increase in the value of each share. Every investor gets to decide if that number is significant or not. If the current share price is less than their estimate, they’re more likely to buy and drive up the price. If the current share price is above their estimate, they’re more likely to sell and drive down the price. Every trade on the market is an investor buying and an investor selling. Disagreement is the basis of the stock market. There are many ways of estimating the premium. Some prefer price/earnings. (Small Cap Price To Earnings Reality) I prefer price/sales. Earnings have two problems: bookkeeping can artificially adjust them, and they are near zero at one of the most important times in a company’s and stock’s history. Sales are simpler to measure. (Want details? Read and maybe even buy my book, Dream. Invest. Live.)

It is a simple calculation, but I used a spreadsheet so I could play games with the numbers. What if this? What if that? The answer was ridiculously simple, which is fine because it made it easier to understand. It is easy to swing the answer by a factor of 100 by assuming 1% market share and $1 per piece, or assuming 10% market share and $10 per piece. A 1% market share and $10 per piece is effectively the same as a 10% market share and $1 per piece. The third variable that swings the numbers around is the premium. Multiple another multiple and a price to sales of 10 could swing it by a thousand instead of only a hundred. No wonder so many MVIS investors disagree on the proper price of the stock. Until these inputs are from real reports, there will be great unresolvable debates. It may seem flippant to suggest people come up with their own numbers, but that is the responsibility of the investor. Personal financing is personal.

At this point my independent spirit decided to look at Peter’s analysis. Of course, it was more complete, included expenses and taxes as separate items, and used price/earnings instead of price/sales. At least we came up with nearly the same answers, but only if we used the same assumptions.

The more sophisticated methods are more valuable, but mainly for understanding levels of detail that exceed my needs. I invest simply. I invest in companies that, if they succeed, are more than capable of meeting my investing goals. Investing in a stock that will hit a target to within a few percent is like buying a car with a range of 401 miles for a 400 mile trip. It might work, but don’t get stuck in traffic. This is one of the few times I aim for more than enough.

Thanks to so many posts about MicroVision, and too many files to sort through, I can’t find my estimate from 2007. Back then (and I cringe because I can’t find the reference, and hope someone will kindly provide it) there were estimates of MVIS hitting ~ $125 before the reverse split. Multiple that my 8 and get $1,000. Unfortunately, in those ten years the stock has been diluted by a factor of ten. But, the number of displays in the world has also grown beyond expectations. I look forward to comparing the previous estimates with the current estimates.

As for my estimate, it’s time for me to fix some of the variables, at least for my purposes. Eventually, I think MicroVision could exceed a market share of 10%, but they’re too unknown and have an unknown manufacturing capacity for me to feel comfortable assuming more than about 5% for the next year or two. I suspect competition and an unfavorable negotiating position will keep profits to about $3 per piece for a similar time. They may make more in the short term, but at low volumes. I prefer to assume price/sales of 6 for technology companies that are gaining attention, though market psychology could drive that much higher or much lower. Put that all together and I get a MVIS estimate of $18. That’s more than 7 times above today’s closing price of $2.49, a very nice return; and yet far below $1,000, or $100, or a nice personal re-retirement number of $300.

This is individual investing. This is MicroVision and MVIS. This is a crazy world, lately. Anything could happen. Stay tuned.

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Timing Luck And A Bit Of Diabetes

According to the doctor, I’m “completely normal now”. Well, at least my cholesterol and triglycerides are. The other good news is that at least one of the measures of diabetes has crossed back into what she called pre-diabetes levels and what I call post-diabetes levels. She liked the rewording. Timing is important. I suspect the timing of my previous visit was important because we caught something when it was easier to change. I’ve seen a lot of fortuitous timing lately, much of it for my friends. It’s a reminder that hard work and due diligence are important, but timing and luck help, too. The frequent question is, do they help enough.

My diabetes diagnosis caused a major freakout moment. So much for eating right and exercising regularly – except that for the last few years, and particularly this last winter, proper diet and exercise dropped off the schedule in an effort to make enough money to pay all of my bills. Some nice timing and a bit of luck brought a surge of work and opportunities, and money. A frugal diet heavily loaded with rice, pasta, and potatoes; plus few free hours and dismal weather; plus heightened stress probably combined to pop my blood sugar numbers into the eye-popping range. The visit to the doctor came after the surge, and after the surge came more free time. Unfortunately, the extra free time came from opportunities falling through – but with very nice compliments and rejections. It is nice to see that diet and exercise can be powerful. Now, it’s time to emphasize meditation, again. While my timing and response may have been good, I suspect there’s more work to do. There’s another blood sugar number that evidently isn’t pre- or post-diabetic. We’ll talk about that at our next visit. (Nice job, Molly Fox.)

One of those opportunities worked out well for a few of my friends. One friend needed funding. Another friend didn’t have it, but maybe knew someone who did, and maybe even knew a potential client. Introductions, handshakes, a few meetings, and add another dose of energy to their multi-million dollar venture. Now, I wonder which of my other friends is in a similar situation. There’s probably room for more. (I’d join in, but I don’t have the six-figure entry fee.) I’d been trying to introduce those two for several years, but the timing was lucky when it needed to be. Until then, a bit of secrecy and discretion will be exercised. Aren’t pronouns great for ambiguous writing?

Some timings seem obvious, and then luck disagrees. I’m a fan of the US’s form of government. It isn’t perfect, but then none are. Rather than simply wave the flag or march in a parade, I decided to read the Declaration of Independence aloud. Just because I could, I decided to record it, too. I made the recording on July 2nd without realizing it was the day the document was generally approved. I actually picked the right anniversary without knowing it. Luck, however, decided that I should redo it on the 4th. Computer problems, connection problems, platform problems kept me busy for two days. Then, starting over on the 4th, everything came together. The recording uploaded without an error, and I received a few compliments. Reading such a document aloud gives weight to every word. Eyes skim.

Just as I was wrangling with recorders and recordings, a friend and fellow blogger, Steve Smolinsky, suggested people read the document, and others. Nice timing. I Liked his post, added a link to my recording, and wondered if the timing was truly coincidental. Maybe, maybe not. I enjoyed the synchronicity.

(By the way, I agree. Whether you read it aloud or just with your eyes, it is a radical and revolutionary document. Some parts echo today. Some parts are great reminders of how far our global society has come.)

As much as I am a fan of the Declaration of Independence (though would like to edit it, as would many) I’m not a fan of the unofficial fireworks that many use to celebrate it. (I’m also curious how many people just think of the 4th of July as a day to hang out a flag, feast, and make things go boom without knowing the history. But, I digress, hence the parentheses. But, hey, it’s my blog.) Every year I dread the barrage because I see it as incendiaries fired out of control. While preparing my property’s defenses (positioning a couple of ladders, watering the roof, getting my safety gear in place), I lucked upon an explosion of color in the sky lit by the biggest fire in the neighborhood, a rose with the Sun shining through the heart of the flower. I needed that then and there.

Timing and luck affect personal finance, too. American society can be somewhat hypocritical. “All men are created equal”, but we know that every individual is born into a life that largely determines how they’ll live. Moving on up is a great ideology, but it isn’t reality. An afternoon bicycle ride (part of my fight against disease and for my health) took me past extremes. Houses where generations have lived by working with what’s on their land. Houses where someone bought the right stock at the right time. And, of course, the great mix that is the reality of the middle.

I’m hearing more people ask about destiny versus control. Is all this turmoil something we can control, or is our situation a destiny created by our history? Such questions seem to be passing from academic to pragmatic. A few of us are even gathering to discuss the unanswerable questions because it helps to literally give voice to the concerns. Considering an idea isn’t as powerful as reading about it which isn’t as powerful as speaking it aloud with others.

Was the American Revolution inevitable? Would it have happened if those men hadn’t signed a piece of parchment?

As in many things, I sit in the middle. Some things like where someone is born strongly affect their lives purely on luck. Some things are in our control. Diet and exercise, and spending habits on a personal level. Hopefully, voting and holding office on a grander scale. The human condition has always had a mix of “assume tomorrow will be like today” and “the only constant is change.”

I’ll keep working, working at finding better work, working out, and working on relaxing in the middle of unsettling times. I’ll also realize that many things are out of my control, and that can be a good thing. I’ll also keep buying lottery tickets – until I win a big enough jackpot, that is. Hey, I could get lucky. It’s about time.

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Semi Annual Exercise Mid 2017

Thank you, Peter Lynch for inspiring this exercise. For at least twelve years, I’ve regularly reviewed my investments through this one simple exercise. Every six months, I describe the companies I’m invested in, and their stocks (somewhat) succinctly. Peter Lynch describes a similar, though less rigorous, technique in one of his books. I’ve forgotten which one. Basically, if I can’t describe some reason to invest in the company, I shouldn’t own the stock. For some investors, every six months isn’t frequent enough because they trade rather than invest. For me, the exercise involves a lot of copy and paste because I typically own stocks for years, and lately, decades. Even in my case, though, the stories change. The last six months had the greatest change in the stories, increases in the potential values of some of the companies, but not much increase in my portfolio.

For the details of my investments, I post the semi-annual review of each of my stocks on various discussion boards. (See links below.) I could post the entire collection here, but 1) it would be very long, 2) the more public the conversation the more valuable it becomes, and 3) reading my posts on those boards introduces you to individuals who have different perspectives, strategies, and experiences. Collectively, those communities are more powerful than large financial institutions because the motivations and incentives are those of similar individual investors rather than that of profit-minded corporations.

For those who prefer skimming through the stories, here are the synopses of the synopses/reviews.

To me AMSC is still American Superconductor. Central to their identity is their initial strategy to make superconducting cables. A rough analogy is that their cables can do for electricity what fiber optics did for communications. Considering the need for energy efficiency and infrastructure improvements, they could be well positioned. I’ve been waiting since 2003. In the last six months, the stock is down almost 40% because the company had disappointing earnings. That puts them down about 90% since I bought the stock. The company has diversified into wind power and other electrical grid enhancements. Maybe the disappointment is merely a delay. If so, they’ll be close to break even soon which is typically a positive event for a stock (and the company.) Ah, but dilution.

Asterias may have a few treatments in clinical trials, but I’m most interested in the one that regrows damaged nerve cells. The data are looking objectively encouraging. The public may care more about the subjective improvement in some patients who regain use of their arms. I think it is a guess as to whether the FDA will require a longer approval process because of the unique nature of the treatment, or will be encouraged by the general public to expedite a compassionate approval for compassionate reasons – assuming the treatment is safe, effective, and affordable. That variability is one of the reasons I prefer to invest by Long Term Buy and Hold (LTBH), because guessing the timing of such events is removed if the stock is already in the portfolio. Until then, I don’t expect the stock to do much.

Geron is the home of Asterias’ technology. I’ve owned GERN since 1999. I liked their courageous approach to medical technologies. They were willing to develop stem cell treatments, cloning, cell mortality, and others; but they’ve had to sell off and spin off divisions to keep the company alive. Now, they’re down to one: telomerase control. Control telomerase, and control when cells die (auto-immune diseases) and when cells don’t die (cancer). So, they may be in clinical trials for hematological disorders, but a success for one ailment can mean much greater success for many ailments. Just like Asterias, biotechs are risky, risky technologies are riskier, but the potential rewards are also greater financially and compassionately. Ah, but dilution.

GigOptix,GigPeak, now something else, left my portfolio because they were bought out. Buyouts have never been good for my portfolio. Typically, the stock bumps up about 20% while the management makes millions. In GIG’s case, I watched a company with high potential celebrate becoming profitable, and before the stock could rise to my valuation, it was bought out. Big profits in a small and growing company produce great potential stock appreciation. Big profits in a bigger company get lost. I waited thirteen years for that celebration, then lost to a rich company that made management an offer they couldn’t refuse. I was right about the technology, had the perseverance, and watched it sail away without me. Sigh. My answer? Buy their competitor. See NPTN below. (Bye To My Gig Buys)

MicroVision, oh, MicroVision. Their display technology is incredible. The company’s potential is incredible. The stock price is flat. And management’s communication style has lacked credibility (until now?). MicroVision has the potential to change the display market the way laptop and tablet displays changed the market for CRTs. Remember CRTs? Those big bulky boxes that were shoved into corners as blank-faced anchors in offices and family rooms? Now, displays fit in pockets and are carried everywhere. MicroVision can create a CRT-sized display that weighs less than a laptop display, uses less power, can create a bright image (for similar image sizes), and can project onto any surface without having to worry about focusing. The images can be interactive, responding to touch as if they were tablet screens. Flip the technology and instead of a display, create a sensor. The list of applications is also incredible. Incredible describes the company and the stock because in-credible can also be read as not-believable. That doesn’t mean it can’t happen; but it hasn’t. I first bought the stock in 1999. Almost every year has been a repeat of “great things are going to happen in the next year or so”. Maybe this is the year. But, not yet. Ah, but dilution.

NeoPhotonics is my answer to GigPeak. The product they provide is one that’s in demand today. Faster Internet speeds are assumed. To make that happen, network providers need faster switches. Fiber optics are fast enough, but at some point the information in the light has to be changed to information in electricity. They can do that. (Though I admit I preferred GigPeak’s solution.) They, too, had an earnings disappointment. Ironies abound. I bought NPTN near its peak (get the irony? GigPeak?) and have watched it fall ~30%. Long Term Buy and Hold means not overreacting. They, too, are dancing along profitability. If they can demonstrate steady growth and profits similar to their revenue growth, then the drop may seem slight in retrospect. While my portfolio is depressed, however, it is easy for doubts to rise and confidence to fall.

Sigh. Such a good idea. Invest in solar power, renewable energy, and sustainability by buying stock in one of the oldest solar power companies, Real Goods. For a while, they were my largest holding. Yet, somehow, as solar is doing so well that it is undermining coal power, and while the company was making tens of millions of dollars in revenue, the stock fell by more than 99% and is now private, no longer a publicly traded corporation. Great idea somehow executed poorly. One solace in such situations is the tax loss benefits, but the stock was in my IRA, so I lost out on that, too. Investing does not come with guarantees. (My Real Goods Is Gone)

Ah, But Dilution
For reasons that could create a great and long digression, you may have noticed a common thread. I own stocks in small companies that have innovative technologies. (Want details? Read my book, Dream. Invest. Live. Maybe even buy it.) Small companies that take a long time to mature frequently dilute their stock (Want details? Read my post about A Study In Dilution MVIS.) Long Term Buy and Hold meets Dilution and the potential for the holdings is diminished. The potential for AMSC, GERN, and MVIS may continue to be great; unfortunately, their stocks may not appreciate as much. In MVIS’ case, since 2011, the market cap of the company has gone up four-fold while the stock has stayed relatively flat. The companies can succeed regardless of the stock; but if the stock has been diluted by a factor of four, then the stock’s success is only a quarter of what it could have been.

In large companies, Long Term Buy and Hold may never meet Dilution, in which case the potential passes through to the stock directly. My situation is impacted by dilution in several of my investments. In each case, I expected the potential to have already been realized, for the small company to have become a large company, and for dilution to be insignificant. After a decade, that isn’t the case. The result for my portfolio of small companies is a lower potential for my portfolio. I consider Long Term Buy and Hold to be a valid strategy, but applying it through a Great Recession meant investing in companies that couldn’t launch products in a dismal market and couldn’t raise money any other way.

The good news is that my portfolio had more than enough potential. Even with dilution, it may yet help me re-retire; but it’s just going to have to work harder at it and benefit from overdue good luck.

So stands the portfolio at the end of June 2017, the end of the first half of a year that I thought was going to be far more profitable when I looked at it five years ago. Six months remain. It may yet please and surprise me.

Here are the links to the discussion boards I use. Feel free to comment here or there, and to pass along links to others. The bigger the discussion, the better the chance of valuable insights (as long as the trolls and flamers are moderated appropriately.)

Investor Village

The Motley Fool
Economy and Markets

Silicon Investor


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Getting Ready To Review My Portfolio

How did the end of June get here so quickly? It’s all the way up to 75F (gasp! – and yeah, I know that isn’t hot), the neighborhood is filling with screaming grandkids (whatever happened to laughter?), and it would be an excellent time to be in the mountains (on the snow and past the mosquito zone). But, it is also the time to get the yard and house work done. Oh yeah, and one more thing, my semi-annual portfolio exercise, an exercise I’ve been practicing for over a decade. Practice makes perfect? Not really, but practice provides an opportunity to improve. For those who are interested in the process, maybe to do something similar themselves, here’s a glimpse of the work that I put into that series of posts that get published here and on several stock discussion boards. Pardon me as I leave the door open so I can see the great weather while I type.

Aachoo! Sniffle. Yeah. It’s that season, too.

For those who are new to my process, here’s the Intro I try to post with every review.
INTRO Here’s my semi-annual exercise to see if I remember why I own the stocks I own, and so I can check back and see if their stories have changed. I post in case it helps others too.
The idea was inspired by Peter Lynch. If I can’t describe the company behind the stock, then I’m not investing but blindly gambling. Keep it short, as if I am describing it to someone at a party, with a bit of license to make it useful to me, too. One of the benefits of the exercise is retrospective. Look back over several years (I buy and hold for the long term, frequently over a decade) and see how the story changes, but it will.

That sounds simple enough. At its simplest, I could record my descriptions and thoughts in under an hour. Audio’s harder to reference and share, and misses some opportunities to include simple analyses. Instead, I type. Each company and stock gets a few hundred words. That sounds like a lot when I remember my reaction in high school to the dreaded 500 word essay, but now I can write each on in about 15-30 minutes. The shorter times are for simple stories that haven’t changed much. The longer times are where the writer’s license comes in as I research facts. (Someday facts will be back in style, honest.)

The reviews tend to break into three or four paragraphs. The first is the essence of the exercise, a few sentences about the company. Another may describe their financial situation: income, expense, assets, liabilities, and their trends. Another may describe the stock, how it has been behaving and how it measures against those financials. If I get real uppity, I include a paragraph of commentary. Sometimes the numbers look good, the story looks good, but something makes me uncertain about the stock. Then, because I post these reviews for others to see, I include a disclosure paragraph that mentions how long I’ve held the stock and whether I am likely to sell, hold, or buy. A recent addition to the exercise has been to compare the market cap from the previous semi-annual portfolio review. It is humbling to see how often facts and data about the company differ from the performance of my stock in my portfolio. (See my post for A Study In Dilution – MVIS, its video, and Corporations Meet Owners MVIS 2017.)

Step 1) Find the previous review, copy it, and strip out the old information except for the market cap and the disclosure.
Step 2) Write the descriptions based on memory, and be prepared to be humbled in the editing. For this process review, I’ll assume nothing radical changed.
Step 3) Find the new market cap, maybe even a bit early, to see if the trend in the company’s growth agrees with my portfolio’s growth.
Step 4) If I’m ahead of myself, take a break (from this and get to work on something else, because there’s always something else.)
Step 5) Drumroll #1 – After close of business on the last day of June or December, finalize and publish the reviews.
Step 6) Check back as other investors read the reviews. Some people live for their stocks and analyze them to amazing detail. I usually learn something new from such devoted investors as they correct my words and numbers.
And just for my situation;
Step 5) Drumroll #2 – Before publishing the reviews, write a blog post that summarizes the process and my conclusions. That part is just another writing assignment. The tricky part is getting all of the links correct. I try to include links to each of the discussion boards, and within the reviews I try to include a link back to the blog and other pertinent posts. That’s a mad dash of uploading reviews, noting the links and editing to make sure everything connects. It’s a mad dash because some boards are so active that I get responses before I’ve finished posting the usual half-dozen reviews across up to four boards. And then, share the package out via Facebook, Twitter, LinkedIn, and Google+. (I count Reddit as one of the boards.)

Just to make the day more exciting, the semi-annual review happens on the end of the month – which is also the end of the business month (#HappyInvoiceDay!), quarter, and in December the end of the year. Even without the semi-annual review, that’s a busy day.

And here I am caught by surprise that #HappyInvoiceDay and the semi-annual review are due in a week. Whew. With that, I think I’ll have a bit of dinner, rest, then see if I can handle Step 1 this evening – unless of course, I decide that sunny, warm days in Western Washington are so rare that I should sit on the deck and enjoy this one for a while.

Stay tuned.

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