Intellectual Capital

A company in California, Prime Roots, has a new product, Hickory Koji-Bacon, the main ingredients of which are koji culture, coconut oil and yeast. Call me old fashioned, but bacon is made from a slaughtered animal, usually a pig. “Vegetarian bacon” is an oxymoron. Somebody made up the phrase to accomplish a marketing goal. There is a new category of mutual funds, aimed at investors who want to be socially responsible with their money. These funds do the reverse of Prime Roots, selling people old fashioned pork bacon while calling it broccoli. One of the top performing ESG funds in … Read More

On Saturday, an expected 40,000 people will gather in an Omaha, Nebraska arena to attend the annual shareholders’ meeting for Berkshire Hathaway. The actual business meeting will last about 4 minutes, followed by hours of Q&A featuring the wit and wisdom of Berkshire’s 92-year-old Chairman, Warren Buffett. Over the decades, much of Buffett’s advice has predictably been about investing. But his common sense, unemotional, logic about the nature of human behavior – not his unmatched 70-year investment track record – is why he has become an icon. Buffett is a voracious reader, understanding that risk comes from a lack of … Read More

There is a reason they call it commencement. Now is when your work really commences. Don’t believe the people who tell you that college was the best time of your life. Maybe it was the most important, but it’s a sad person whose life peaks at 21. Focus. The cat who chases two squirrels doesn’t catch either of them. Decide what you want and what you are willing to give for it. Set a deadline. Create an action plan and write it all down. Making a bunch of money isn’t the best goal in the world, but it’s not the … Read More

Don’t assume that because someone is in a position of authority that they necessarily have outstanding decision-making or risk-assessment skills. In that sense, the Anheuser-Busch executive(s) responsible for the Bud Light trans campaign and the Tennessee House Republicans responsible for the petty, brief expulsion of two duly elected Democrats from their elected offices are all the same type of people. They all took a risk without any reasonable prospect of upside. They were “playing” business and political versions of Russian roulette, where the best possible outcome was that they would essentially “break even,” while the downside of failure would be … Read More

About the time I graduated from college and got my first job at which I didn’t sweat or risk actual physical injury, I promised that I would never be upset about paying taxes. If I paid taxes, it meant that I had income – and I was tired of being poor. What a naïve young’un I was. In celebration of the April 18 due date of your federal tax return, here are some statistics about who pays taxes, along with how much they earn and pay. In 2020 (the most recent year for which detailed figures are available), Americans filed … Read More

As someone who was told I could protect myself from being vaporized by a USSR nuclear attack by hiding under my elementary school desk, I’ve grown fairly immune to warnings of the imminent end of humanity. That’s why I easily dismissed a scholar’s recent warning that superhuman artificial intelligence would (not could) destroy all life on earth.  Then I saw how easily millions of people were fooled by a fake photo of Pope Francis appearing to wear a $6,000 Balenciaga puffer coat and realized it might not take superhuman intelligence to destroy humans. People are willingly doing it to themselves … Read More

If we’ve learned nothing else surrounding the failure of Silicon Valley Bank (SVB) it is that there are a lot of people who know little-to-nothing about risk, including highly paid professionals who are supposed to know better. Instead, they have been lulled to sleep by 40 years of almost constantly declining interest rates. I don’t know if they assumed rates would never increase, could never increase, or if they thought they were smart enough to predict when rates would increase and mitigate their risk only then. Whatever the explanation, there are a lot of supposed experts who have been exposed. … Read More

If you want your child to believe that you will punish him for not making his bed, you have to punish him when he doesn’t make his bed. Every time. If you threaten punishment and never follow through, you just encourage him to not make his bed. And if you only occasionally follow through, you are encouraging him to evaluate probabilities, risk and reward – but you aren’t likely to get the behavior you seek. That is the U.S. banking regulatory system. I’m guessing there are some bank regulators and federal officials whose kids never made their beds. And as … Read More

Don’t take the media’s explanation that the failure of Silicon Valley Bank (SVB) was due to poor management decisions isolated to this one institution. This second largest bank failure in U.S. history is a prime example of the law of unintended consequences, and it has every banking institution in the U.S. scrambling to reevaluate their balance sheets. First, the most important fact: if you have less than the FDIC insurance limits deposited in a single bank, you don’t need to worry about ever having access to your money. Insured deposits include checking accounts, savings accounts, money market deposit accounts and … Read More

A friend of mine, almost 70 years old and disgustingly fit, orders a piece of chocolate cake almost every time we have dinner. He never finishes his entrée or dessert, explaining that he knows what he must sacrifice in order to enjoy a daily taste of chocolate cake and still remain fit. “It’s all about my priorities,” he explains. I thought about that while chatting with another friend of mine last week, a young man in his 20s. He works 36 hours a week in a medical profession and explained that he is suffering from professional burnout. My young friend’s … Read More