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The NFL seems more interested in the Super Bowl halftime show than the game. I have heard numerous ads about the show, and they are over-hyped. Not just hyped, but over-hyped. They are ads about just the halftime show, with no mention of the actual game.

So they got Rick Springfield to perform. “Watch as history is made!” Just because he has never performed in a Super Bowl show before, that makes it history? I’ve never performed in a Super Bowl halftime show either. If I performed, that would make history also. There are billions of people who fall into that group. I am not as impressed as the NFL would like me to be.

I think the reason they promote the show more than the game is that people who are going to watch the game are already going to watch the game. The NFL has them captive, so they don’t need to market it so much. They already know who is going to be playing the football game.  But there are probably people, fans of Bruce Dickinson or whoever he is, who would not normally watch the game but would tune in for the music.

Last year (Superbowl 42) there were 97 millions viewers for the game and 148 million for the halftime show. The show doesn’t need to be promoted – the game does. And the game lasts longer than the halftime show, so there are more ads to be sold for the game than for the show.

I, as usual, plan on skipping the halftime show. Not that I want to protest the music – just that it’s not football and therefore not as entertaining to me. I have other things I would rather do. Maybe I’ll check it occasionally to see if there are any good commercials.

“So I will silence the sound of your songs, and the sound of your harps will be heard no more. ”
– Ezekiel 26:13

We bought a washing machine from an appliance warehouse store. The salesman was of the pushy type. And he was a salesman, paid on commission, not a helpful clerk. I suppose my definition of pushy would be when he asks us more questions than we ask him. And they were “Why don’t you…?” questions, too. That just put me in a defensive mode.

I don’t haggle or negotiate very well. Just tell me the price and let me buy it and get out of there. So I chased the kids around the store while my wife dealt with the salesman. She did a good job of haggling with him, and he ended up giving us a washer for a good price. How good a price was it? He told us that he wouldn’t be making any commission on the sale.

You could think either “Yeah right, that’s just one of your salesman tricks” or “You poor thing, not to be making any money today.” One response that we didn’t give was “If you’re not going to be making any money, then it wouldn’t bother you if we just walked away without buying it.”

We were wondering why he would even bother selling us something if he’s not making any money on it. Does he still have a minimum quota of number of items to sell? But it was only the 9th of the month – nowhere near the end of the month when you would expect quotas to be due.

I don’t like buying things from salesmen working on commission. That’s why the internet is great – price compare and purchase things with no pressure from salesmen.

I get a quarterly publication from a brokerage company. The issue before the presidential election had a little article thingy with the title “Will Investors Win or Lose on Nov. 4?” Now that’s just a blatant argument-starting, trying-to-be-controversial headline. It implies that one side of the election will cause investors to lose money and the other side will cause gains.

But the text just under the headline shows that investors have come out ahead under both parties. So the headline should have been “Which Political Party Has Been Better For Stock Market Returns?”

The article went back 6 presidents under each party (Democrats and Republicans). It started in 1933 under FDR (coincidentally, that was just after the crash of 1929 was done and the market was headed up). The results were that $10,000 invested only under Democrat presidents would grow to $315,000 whereas $10,000 invested only under Republican presidents would grow to only $74,000. The Democrats had 40 years of presidencies and the Republicans had 36. Even if I removed 4 years of Democratic presidency, I wouldn’t expect the numbers to be much closer.  And other studies have the same results.

Those 76 years of data might be enough for a reasonably large sample, but I thought I would conduct my own investigation and go back farther. I started with the 1900 elections and checked the S&P500 (or equivalent) every 2 years, coinciding with the congressional and presidential election cycles. I had to get the 1898 stock prices too, so that I could get returns for that first election.

My results show that yes, the market has gone up more under Democrats than under Republicans. There have been papers published about this correlation, and some researchers and journalists are wondering why investors don’t notice this and invest accordingly. “Invest accordingly” would mean put money in the market under a Democrat president and take it out under a Republican.

The main answer is that the market still goes up under both. Investors know that leaving their money in the stock market long term (regardless of which party is in the White House) is the best policy. If investing were as simple as putting your money on a political party, it would have been figured out a long time ago.

I don’t know the exact method that the article writers used. Mine was rather simple and I expect it has some flaws. I started with $10,000 and had it go up or down by whatever percent the market did from the start to the end of a given term. I didn’t use exact days of the president’s terms, as did the article. My data was the price of the market, every 2 years, at the transition from one year to the next (close of December/beginning of January). But my numbers did approximate the article’s numbers, so my method was good enough for generalizations.

The article had the market returns as 5 times better under Democrats ($305,000 gain versus $60,000 gain). My results showed about 3 times better returns for the Democrats, but mine were $200,000 versus $70,000 (rounded).  The article did not include inflation as a factor.

Say that the market doubled under a president. Go ahead, say it. So you started with $10,000 and ended with $20,000. That means you made $10,000 and you are $10,000 richer and can buy more stuff than you could before, right? But what if inflation totaled 100% under that president’s term, so that the cost of everything also doubled under his watch? Although your money doubled, your value didn’t. All you did was stay even. So if one president had the market go up 8% but inflation was also at 8%, should he be considered better for investors than a president who had the market increase only 6% but kept inflation to 3%? I contend not.

I factored inflation into the mix, using numbers provided conveniently by Robert Shiller, and found that returns evened out significantly. The results changed to $23,000 for the Democrats and $21,000 for the Republicans. That still had the Democrats ahead officially (1.8% annual return vs. 1.2%), but realistically there is not much difference. At least not enough on which to build an investing strategy.

The article also did not include Congress as a factor. The President of the United States of America has some power, but Congress has a lot to do with monetary policy as well. I factored Congress into the mix, using the records of the Senate and House of Representatives. Because Congress has two divisions, the results got complicated: 3 entities and 2 parties means 8 categories.

I tried to simplify things, but I still wound up with a bunch of categories.  I have listed the results of what $10,000 would become under those terms, along with the annualized rate of return.  I used just the years that the money would be in the market, not the time of the whole study, as that seemed better for comparison.  So each category has a different time base for the annualized rates (President: Rep. 62 years and Dem. 48, House: Rep. 44 years and Dem. 66, Senate: Rep. 50 years and Dem. 60).

“n” means “not adjusted” and “i” means “adjusted for inflation”

Single Indicators:

• President Only:
  Democrat: $202,000 (6.5%) n / $23,000 (1.8%) i
  Republican: $79,000 (3.4%) n / $21,000 (1.2%) i
• House Only:
  Dem: $342,000 (5.5%) n / $24,000 (1.3%) i
  Rep: $47,000 (3.6%) n / $20,000 (1.6%) i
• Senate Only:
  Dem: $143,000 (4.5%) n / $6,100 (-0.85%) i
  Rep: $112,000 (5.0%) n / $51,000 (3.3%) i

Compound Indicators:

• All Three Matching:
  Dem: $106,000 (5.8%) n / $22,000 (1.9%) i
  Rep: $16,000 (4.0%) n / $11,700 (1.5%) i
• President Opposite Congress:
  Dem. Pres, Rep. Con.: $25,000 (9.6%) n / $16,500 (5.1%) i
  Rep. Pres, Dem. Con.: $17,800 (2.7%) n / $6,900 (-1.7%) i
• Mixed Bag (split Congress):
  D. House, R. others: $19,300 (8.6%) n / $14,300 (4.6%) i
  R. House, D. others: $8,100 (-10.6%) n / $5,700 (-24.7%) i

The best single indicator, accounting for inflation, is the Senate.  The President and the House of Representatives are almost a wash when it comes to returns after inflation.  But the Senate – the difference there is quite obvious.  A negative return for the Democrats versus a strong positive return for the Republicans.  I say strong positive because it is about twice the return rate that you’d get if you played the presidency.

And you could play around with the compound indicators some more.  I wouldn’t put too much stock in the Mixed Bag category, since the second one (-25%!) was only two years.  It may have no correlation to anything at all, but it’s a fact that the worst combination for the stock market was a Democratic president with a Republican House and Democratic Senate.  You’re not going to be able to prove cause and effect, but you could sure make a headline out of it.

If you ever need something to do, you could waste a whole day just playing around with market returns to come up with statistics that benefit your particular party or cause. Or read someone else’s investigation of the issue. There are even futures markets for presidential elections (that’s a link to the old blog. The new one, but without that post, is here).

In conclusion, don’t trust dramatic headlines and don’t invest based solely on presidential political party. Now you can consider yourself a more enlightened investor.

“But you shall remember the LORD your God, for it is He who is giving you power to make wealth, that He may confirm His covenant which He swore to your fathers, as {it is} this day.”
– Deuteronomy 8:18

It’s Christmas time, and although some things change on radio stations, some things remain the same – like advertisements.

There are plenty of stores and businesses advertising their wares.  But I heard one ad recently that had me wondering why that company was running that ad.

It was for the company that owns the electrical transmission lines – the big wires on the tall metal structures.  This is not the electric company.  I, as a normal consumer, can’t buy their services.  But they are advertising over the airwaves to thousands of people who are meaningless to them.  When I heard their ad, I was curious to know why they were spending money to tell me that it is they who own the high-voltage wires.

At least they improved on the JLTV ads – this company told me what they wanted me to do.  When I see the Christmas lights on their towers, I am to remember them.  That’s what the ad said.  I am to think of them, think of them fondly, when I see their towers.  Maybe not those exact words, but that’s the concept.

I have noticed one tower that had Christmas lights on it, and I did remember who it was who told me it is their tower.  But what effect did my thought at that moment have on their bottom line?

I can imagine that meeting: “Boss, I have a great idea: we’ll run ads and tell people to think of us.  If we get enough people, even though they have nothing to do with our business, that will improve our cash flow and profits through the power of positive thinking!”

I’m sure there is some reason, such as an unfinished quote or a bid on some new business.  But since I don’t know what that is, I will just make fun of the ad.  Or maybe they want you to buy their stock. If so, that’s a very subliminal way to do that.

“Yet the chief cupbearer did not remember Joseph, but forgot him.”
– Genesis 40:23

My earlier post had been about how sports seasons need to be distinct seasons and not last the whole year.  This post applies that same idea to holidays, mainly Christmas.

What prompted this was the local radio station‘s switching to the all-Christmas-music format on November 1st.  At least they waited until after Halloween.  But I’m still boycotting them temporarily.  Until Thanksgiving, I am skipping right past them (and any other Christmas-music stations) during my normal station-flipping during my drive home each day.

My favorite line from The Incredibles is something like “When everyone’s special, the no one is.” For the record, that line appears twice, but in two different forms.  The first one is by Dash, who says, in response to being told that everyone is special, “Which is another way of saying no one is. ”  The second one is by Syndrome, who says “And when everyone’s super, no one will be.”

That line, combined with the example of Marie Antoinette, gives a good idea of why seasons need to be short.  The longer they’re drawn-out, the more diluted they become.  Marie Antoinette, for those who don’t know, is attributed with having everything she wanted, so she was quite bored (“nothing tastes“).  Life was not enjoyable for her, because nothing was special.

Keep Christmas (and other holidays) special: don’t start anything Christmas-y  until after Thanksgiving.  I know some of you may think this post violates that principle.  I’m not saying don’t mention Christmas until then, just don’t promote it or start celebrating until then.

“But if we hope for what we do not see, with perseverance we wait eagerly for it.”
– Romans 8:25

T. Boone Pickens’ plan needs funding.  What better way to fund all that capital than with new oil wells here in America?  But that’s not what he wants.  He wants my support to build windmills.

Why does he need support?  He’s already a billionaire who can afford to build windmills on his own.  If wind power is that much of a better deal than oil, then it should be a good business on its own and not need support from people.  How many other businesses need my support or a national advertising campaign before anything happens?

If he needs the government to do something first, that just means that my tax dollars are going to go to some billionaire.  Anytime the government has to get involved, I get suspicious.  Why does he need my support?  To get Congress or the new President to act?  Why do they need to act?  So that his plan get political preference and he can make even more money?  I don’t mind if he tries to make money, but your business should be able to work without getting the government to pass some law in your favor.

If he wants to build windmills, fine.  But why disrupt the entire transportation industry at great cost?  And to change the fuel from one non-renewable fossil fuel to another non-renewable fossil fuel?  And cause the prices for everyone else who depends on natural gas to increase?  Supply and demand says that if there is a large increase in demand (all the cars) without a large increase in supply (wind power is going to replace how many natural gas-fired power plants?), then prices for natural gas are going to increase.  That will cause problems for homes and businesses who use natural gas.  But since he owns natural gas businesses, an increase in prices is exactly what he wants.

Electric cars would be better than Compressed Natural Gas (CNG) cars, since the infrastructure is already there and cars are either being manufactured or planned on being manufactured in decent volumes.  Instead of diverting all the extra CNG to cars, have the extra wind power go to recharging plug-in electric vehicles.  Why doesn’t Mr. Pickens want to do that?  Because he already bought a bunch of CNG refueling stations, gas stations that sell CNG.  He has placed his bets and is now trying to tilt the game in his favor.

Just build some windmills and skip the ad campaign and government lobbying.

“The east wind carries him away, and he is gone, For it whirls him away from his place.”
– Job 27:21

In the business world, there is an old saying that there are three options for whatever you’re buying: price, quality, or speed – and you can choose only two.

A good example of this has been any retail item.  You can buy a certain item at a retail store, and you have chosen speed and quality.  You can buy the same item from a mail order or internet retailer and have it shipped to you, and you have chosen quality and price.  The store item is available immediately but for a higher price than the mailed item.  The mailed item will take a couple of days for shipping but will cost less.

The same concept applies to any business program, in particular regarding employees working on a project.  If a project needs to be done quickly, you’ll have to pay more by either paying employees overtime or hiring more people.  If it needs to be done quickly but you don’t pay more, then people will cut corners and do only certain items, sacrificing quality.  And if the project needs to have high quality and low price, then it will take a long time.

There are some articles that indicate that by improving quality, or by improving speed, you can reduce costs.  That is true, but it is true for a long-range purpose not individual projects.  Let’s say you bid on a project and you say that it will cost X and take two weeks to complete.  If the customer says that two weeks isn’t fast enough and he wants one week, you’re not going to be able to improve your processes enough to meet that demand.  What those other articles are talking about is long-term process improvement such that your initial quotes are improving.  But if you quote something accurately, changing one part of the “quality-speed-cost triangle” will affect one or both of the other parts.

If you are a manager, please pay attention to that concept.  Don’t demand immediate results from too few employees and then be surprised if problems appear later because of poor quality.

“each man’s work will become evident; for the day will show it because it is to be revealed with fire, and the fire itself will test the quality of each man’s work.”
– 1 Corinthians 3:13

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