One Last Time, Maybe

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In my work, I receive a lot of email. Three hundred, four hundred or more everyday.

And I receive a lot of unsolicited emails from vendors. Upwards of 100 or more on some days. Google is doing a pretty good job directing them into spam. I still have to check though, just in case there is something there that requires my attention.

Every so often I see a subject line that gives me hope. Hope that I might receive less email in a day. Like the one above.

Captioned “Connecting One Last Time” and complete with a forward of a chain of half a dozen similar emails was this dire warning: “I will plan on reconnecting in a month, unless you let you know…”

Hmmm. Unless I let myself know that I am ready to evaluate their services sooner.

I plan to let myself be kept in the dark on this one.

Universal Postal Union

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Came across this little tidbit in the Globe and Mail today:

Canada Post is promising relief for Canadian retailers who say the postal service is unfairly subsidizing their Chinese competitors.

The federal Crown corporation says it has been forced to provide discounts on certain types of mail from China under a long-standing international arrangement, but it has recently negotiated price hikes that will start next year.

The change is welcome news to Canadian-based retailers, who have questioned why they pay much higher costs to mail products to Canadian customers than companies based in China.

International mail rates are set by a United Nations agency called the Universal Postal Union, which sets prices based on factors such as national income.

And, from Linn’s Stamp:

This is a story about incredible international mail rates, one that a senior Amazon.com executive swore was true to Congress last summer.

A small company in Marion, N.C., wants to send a 3.5-ounce package to Fairfax, Va. ”” 340 miles away ”” and it”™ll cost “at least $1.94,” said Paul Misener, the Amazon executive.

But that same parcel could be shipped by a Chinese company from Shanghai ”” more than 7,000 miles away ”” to the Washington, D.C., suburb for $1.22, Misener said.

Similarly, shipping a 1-pound parcel to New York City from Greenville, S.C., would cost almost $6 via the United States Postal Service, but only $3.66 from Beijing to New York.

That might sound like an international horror story but it was just one of a number of examples that Misener, Amazon”™s vice president for global policy, and others laid out before a House Postal Service subcommittee last summer as it probed the arcane world of “terminal dues” and international mail rates.

Okay, now you know that I am a bit of a closet philatelist.

I had not heard about the Universal Postal Union before. It is an agency of the United Nations that coordinates postal policies among member nations, in addition to the worldwide postal system.

And, as part of its mandate, it sets international mail rates. Preferential mail rates for some countries as it turns out.

I had always wondered why it was cheaper to receive packages from China than from the United States.

When Your Boss Is An Algorithm

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UberEats

A friend passed me this story which reads in part:

This protest outside the UberEats office in south London on August 26 is one of the first industrial disputes to hit the city”™s so-called gig economy. It is a strange clash. These are workers without a workplace, striking against a company that does not employ them. They are managed not by people but by an algorithm that communicates with them via their smartphones. And what they are rebelling against is an app update.

I have made the observation that future society could be divided into three classes:
  1. Those that own and control capital (owners of the algorithms)
  2. Those that tend to and build the algorithms for the capitalists (technocrats)
  3. Those that compete for lousy wages to serve the capitalists and the technocrats (the other 99%)

That might be a very frightening society.

Ten Insane Things

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I came across this post on the ten insane things that Wall Street believes in:

1. Falling gas and home heating prices are a bad thing
2. Layoffs are great news, the more the better
3. Billionaires from Greenwich, CT can understand the customers of JC Penney, Olive Garden, K-Mart and Sears
4. A company is plagued by the fact that it holds over $100 billion in cash
5. Some companies have to earn a specific profit ”“ to the penny ”“ every quarter but others shouldn”™t dare even think about profits
6. Wars, weather, fashion trends and elections can be reliably predicted
7. It”™s reasonable for the value of a business to fluctuate by 5 to 10 percent within every eight hour period
8. It”™s possible to guess the amount of people who will get or lose a job each month in a nation of 300 million
9. The person who leads a company is worth 400 times more than the average person who works there
10. A company selling 10 million cars a year is worth $50 billion, but another company selling 40,000 cars a year is worth $30 billion because its growing faster

The last point is obviously about Tesla. Tesla’s market capitalization is almost $32 billion today. Put another way, Tesla’s market cap is over $600,000 for every car it made last year. General Motors $48 billion market value is equivalent to about $4,800 for every vehicle it sold last year.

Why You Suck At Investing

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InvestorPsych

Bloomberg asks the question: are you as stupid as your financial advisor thinks?

Investors need to be saved from themselves. That”™s the conventional wisdom, and there”™s some truth to it. Individual investors can have comically bad timing. They buy when stock prices are high. They panic and sell when markets plunge. They invest with the hot mutual fund managers just as the managers’ luck runs out. And what’s their reward? They supposedly underperform the very mutual funds they invest in by some four percentage points a year, or more, according to an annual study by the research firm Dalbar.

Lance Roberts of Real Investments Advice provided his perspective in his post on Dalbar, 2016: Yes, You Still Suck At Investing (Tips For Advisors):

  • In 2015, the average equity mutual fund investor underperformed the S&P 500 by a margin of 3.66%. While the broader market made incremental gains of 1.38%, the average equity investor suffered a more-than-incremental loss of -2.28%.
  • In 2015, the average fixed income mutual fund investor underperformed the Barclays Aggregate Bond Index by a margin of 3.66%. The broader bond market realized a slight return of 0.55% while the average fixed income fund investor lost -3.11%.
  • In 2015, the 20-year annualized S&P return was 8.19% while the 20-year annualized return for the average equity mutual fund investor was only 4.67%, a gap of 3.52%.

He also points out that:

The biggest reason for underperformance by investors who do participate in the financial markets over time is psychology. Behavioral biases that lead to poor investment decision-making is the single largest contributor to underperformance over time.

Too many investors follow the crowd and too many investors fear losing capital. What was a bit surprising to me is that there are not too many investors. Very few people participate in the stock market. Here’s why:

Unfortunately, between weak economic growth, stagnant incomes, rising costs of living and two major “bear” markets; nearly 80% of Americans simply are not able to participate as shown by numerous studies and statistical facts over the last few years:

  • According to the Pew Research Center, the median income of middle-class households declined by 4 percent from 2000 to 2014.
  • The Pew Research Center has also found that median wealth for middle-class households dropped by an astounding 28 percent between 2001 and 2013.
  • There are still 900,000 fewer middle-class jobs in America than there were when the last recession began, but the population has grown significantly larger since that time.
  • According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.
  • An astounding 48.8 percent of all 25-year-old Americans still live at home with their parents.
  • According to the U.S. Census Bureau, 49 percent of all Americans now live in a home that receives money from the government each month, and nearly 47 million Americans are living in poverty right now.
  • In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.
  • The median net worth of families in the United States was $137, 955 in 2007. Today, it is just $82,756.

The Self-driving Car

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Cars

From I, Cringely:

… cars could be upgraded to self-driving through aftermarket upgrades, which is how they did it in 1995. Truly autonomous cars, though, you have to build those babies from scratch.

So everyone is going to need a new car.

Mandatory replacement is a glorious thing for manufacturers. It”™s like that box of baking soda in the back of your refrigerator that you are supposed to throw away every 30 days. The golden era of the record business was when vinyl gave way to CDs and we all paid again to buy the same stuff we already owned. It happened again when we converted our VHS tape libraries to DVDs and to some extent when we gave up physical media for iTunes.

It”™s a glorious thing, the prospect of selling 200 million brand new cars and trucks over a 2-3 year period. And it”™s coming, it”™s absolutely coming.

The Slow Death of Retail

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Delivered

Henry’s sent me a letter, not an email mind you but a personally addressed envelope. Inside the envelope was a gift certificate for $25 off my next order with Henry’s. And they thanked me for being such a loyal customer but I would have to shop differently from now on.

I would have to buy online.

Why?

Because they were closing the local store where I live.

I am a camera enthusiast. I have purchased a lot of gear from Henry’s over the years. Although I generally know what I want to buy, it has been helpful for me to connect with the shop, physically handle and try out the gear, ask questions and generally enjoy a bit of an experience with buying new photography equipment. The employees were great and when it came time for trading up, they handled that part of the process in a painless fashion.

The website experience? Not great. And since I can buy camera equipment from any one of a number of online sellers, the site with the lowest price and the best reputation for fulfillment will prevail. There really isn’t much of a customer experience with online retailers of camera equipment. It has become, for the most part, an order and ship business.

I could tell that Henry’s was about to close. They had very little stock in the shop and they did not have much in the way of customers dropping by anymore.

My sense is that the local Best Buy is next. Last time I was in the store, there was very little in the way of stock and very little in the way of customers.

My experiences with buying online are so-so. The last item I ordered online took almost two weeks from the time I placed the order until it finally arrived at the house earlier today. And that was after having paid for expedited shipping. I called the online retailer and they did credit me the cost for expedited shipment.

I understand the business model that online retailers are exploiting: lower cost of operations, lower price for customers, with some degree of convenience.

All that said, I will miss not having a Henry’s nearby.

Brexit

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RWC_0768

Scott Barlow, writing about Brexit in the Globe and Mail, captured the essence of the discussion that I had with Lorraine this morning:

For what it”™s worth, my central thought this morning is this: Brexit, Donald Trump and rise of nationalism in the west is the result of the economic elites abrogating their responsibility to spread the wealth from globalization and technology and it”™s made people angry and frustrated enough to look for scapegoats in the form of immigrants and vote against their own economic interest just to punish those in charge.