Venture Capital

"After 20 years of observing a simple rule:
If its just an idea, its worth $15,000
If it has a creditable management team in place, $150,000
If it has sold something for real money to real customers,it might be worth $750,000”
David Beer, MK Angel Network Organizer

Centric venturer

http://besttripchoices.com

i am a Centric venturer. this site was featured on wall street journal 11/27/2007

"You could enjoy a cruise in the Greek Isles, a car trip through gold mining ghost towns in California, or a shopping spree in New York City equally well."

first is on my to do list, i don't know about the next two.

"Cruising has experienced strong growth in recent years, thanks to the fact that you believe that the experience is not as confining as in the past. You have decided that it is affordable and more interesting than you ever thought. And, very important, it's so easy and comfortable because your hotel room goes with you wherever you are and you don't have to pack and unpack every day. You may also own a time share, the concept of owning one or two weeks of vacation time in a condo in a resort area. Time shares tend to offer excuses for travel and most of these owners venture forth regularly"

i do like cruising, done it twice (tahiti & mediterranean). greece-turkey cruise would be the next one i want to do.

401k vs IRA

"an IRA is always better for your beneficiaries because it lets them stretch distributions from your account over their own life expectations."

US health care

from Cigna's analyst meeting:

Company said that the US system is 2x as expensive as others for the following reasons:
1. Hospitals $150-200B - US hospitals are smaller, more conveniently located, and have 50-55% occupancy (vs 95% occupancy).
2. Obesity, smoking $150-200B. Other countries are becoming more like US in obesity.
3. more CAT scans, MRIs, stents, etc

GM vs Toyota
$1800 vs $200
health care related costs per auto

Ji's election guide

full credit goes to my fellow pegleg and health care guru ji

http://spreadsheets.google.com/pub?key=p-azLm_LoI42dO80ICFBbMQ

Credit card rewards

CardWeb.com, Credit-reviews.com and creditcardgoodies.com that rate the programs and provide venues for cardholders to seek and give counsel.

The Good German

I watched the movie just after finishing the novel by Joseph Kanon.

The movie was a flop commercially (just over a $1m US box office despite $32m budget).

1. Black & white - Let's face it. Americans just won't turn out for a black & white movie. However, the other Clooney-Soderbergh black & white movie "Good Night, and Good Luck" grossed $31m with only a $7.5m budget and Clooney was just a supporting character, not even on the cover of the poster.

2. Not exactly a happy ending.

Anyway, let me just note some differences between the movie and the book without giving anything away (this assumes that anybody actually reads my blog, which may be optimistic).

Characters in the movie:

Jake Geismer (George Clooney) has some good action sequences in the book which I thought would be used in the movie. Jake gets away from the Russians at Adlon. Later, he has another action sequence in the parade, first on foot, then in a car. In the movie, Clooney character is a bit passive.

Tully (Tobey Maguire) - let's just say that this character has no dialogue in the book.

Lena Brandt - Lena character is almost saintly in the book, taking care of children in the hospital. In the movie, Cate Blanchett is more of a composite character, not quite saintly.

Emil Brandt is the mathematician who makes some key calculations on paper (900 calories per day). In the movie, he's just Bettman's favorite secretary.

Franz Bettmann - this one I don't quite understand. For everyone else, the movie uses the book character names. The book equivalent is von Braun who is only referred to and does not make an appearance.

Bernie Teitel is a Jew in the novel. He left Germany with his family during the 1930s and is very committed to bringing justice to the Nazi criminals.

Gunther is just a goon in the movie with no lines. In the book, he is a very important character. He was a decorated WW I veteran who became a policeman afterwards. His wife was a Jew who was fingered by the greifer. He testifies against Renate. He also helps Jake and Emil in the book, making a big sacrifice.

Congressman Breimer represents Utica, NY, home of the American Dye company which has a special relationship with a German company.

Lieutenant Schaeffer has a very substantial role in the book. I don't think he even has a line in the movie.

Danny - just a friendly bartender in the movie but in the novel, he's not exactly a boy scout.

General Sikorsky - Russian intelligence officer has several meetings with Jake and comes to a bad end in the book.

Colonel Muller signs some important pilsersigns in the book for Rosen and Erich.

Characters not in the movie:

Liz - American photographer who has an unfortunate accident. Lieutenant Schaeffer was dating her.

Renate - Greifer - a Jew who points out other Jews out to the Nazis. She has a talk with Jake right after her trial and asks for a big favor in return. She also helps Jake out with some crucial information.

Erich - Renate's son.

Dr. Rosen - business associate of Danny's, helps Lena.

Professor Brandt - Emil's father who was holding on to something.

Brian - a British reporter who helps out Jake at Adlon

Real Estate article

cut & paste from investmentnews.com

When initially structuring or re-balancing a portfolio, always start with
real estate, because it is the most illiquid of investments.
For example, if a portfolio is heavily overweighted in leveraged real
estate, the client owns too much real estate in relation to other
investments, and the real estate is heavily mortgaged. Then it is critical
to reduce the risk of the remainder of the investments and provide extra
liquidity until the real estate overhang can be corrected.
Sometimes a client’s real estate is a loafing asset, which means it
doesn’t have enough of a mortgage.
The mortgage is referred to as leverage. In real estate investing,
leverage means the amount of loans made with the home or other real estate
pledged as collateral.
Since the real estate will appreciate the same amount regardless of
whether it is fully leveraged, often it is advisable to remortgage, which
would allow the homeowner to pull out cash to better diversify other
investments.
This particularly is true of the
single-family home used as a primary residence. In addition, the positive
financial leverage created by a fixed-rate home mortgage gives Americans
the most advantageous after-tax investment vehicle in the world.
The function of real estate is to protect against inflation and provide
personal enjoyment. Positive financial leverage is created when you borrow
money at one rate of interest and invest that money at a higher rate of
interest.
The fixed-rate home mortgage is one of the best examples of positive
financial leverage. We tend to take it for granted, but, in fact, no other
country in the world allows its citizens to borrow large sums of money
(relative to income) at a fixed rate of interest over such a long period.
Inflation is the loss of purchasing power through a general rise in
prices. During periods of inflation, a debtor repays loans with dollars
that are worth less in purchasing power than the dollars originally
borrowed.
Locking in a fixed-rate mortgage protects the purchasing power of your
housing dollars, creating a buffer against inflation.
A study conducted in 1978 found that not only is real estate a hedge
against inflation but leveraged private residential real estate is the
only investment that offers complete protection against inflation. That is
because when there is inflation, the interest yield on investments
increases while the rate of fixed-rate mortgages remains the same.
Not only are you achieving “positive leverage” because your money is
earning more than the funds you have invested are costing you, but you
also are repaying the mortgage in cheaper dollars.
Inflation either can be anticipated or unanticipated. Investments that
offer protection against anticipated inflation, such as debt instruments
whose yields adjust for the anticipated inflation rate, offer no
protection against unanticipated inflation.
Private residential real estate, however, protects against both.
Beware, however, of financial sales representatives who suggest borrowing
money on your house to invest in life insurance or annuities. The
commissions you pay more than wipe out any advantage you could derive from
the mortgage.
There are three key steps to properly allocating real estate assets under
functional asset allocation: First is having the appropriate percentage of
assets invested in real estate, second is having those real estate assets
properly leveraged and third is properly buttressing real estate debt with
liquidity.
In looking at the appropriate percentage of assets to invest in real
estate, we first must define our terms. Most of the people who visit our
offices are familiar with what is meant by the term net worth — total
assets minus liabilities.
However, when determining asset allocation percentages, net worth becomes
an inaccurate measure, because net worth includes assets that are either
not readily marketable or aren’t true investments. So instead of net
worth, we focus on marketable assets when determining appropriate asset
balance in a portfolio.
Net marketable assets include only the equity in investments. Total
marketable assets represent the fair market value of all the investments
included without netting out associated debt.
Functional asset allocation calls for 25% to 40% of total marketable
assets to be held in real estate. For those who are real estate
professionals or who own commercial property, this percentage may be
increased to 30% to 60% of total marketable assets.
Functional asset allocation calls for 50% to 80% leverage on real estate
assets. So if your home were worth $200,000, a mortgage of $100,000 (50%)
to $160,000 (80%) would be appropriate.
Bert Whitehead is the founder of the Alliance of Cambridge Advisors in
Franklin, Mich. This article was excerpted from his book “Why Smart People
Do Stupid Things with Money: Overcoming Financial Dysfunction” (Sterling
Publishing, 2007).

Wedgwood

from Creating Modern Capitalism

Josiah Wedgwood was born in 1730, the thirteenth and last child of Mary and Thomas Wedgwood. The British Statesman William Gladstone said in 1863, looking back over the early years of the First Industrial Revolution, "Wedgwood was the greatest man who ever, in any age, or in any country...applied himself to the important work of uniting art with industry."
When he was 9, his father died. Cash became short, and Josiah left school.
Smallpox broke out, infecting the 12 year old Josiah. The disease left Josiah's face pockmarked and his right knee weak and unreliable. Often he could not walk without crutches or a cane. Pain dogged him. Later in 1768, his right knee collapsed and it was amputated, without anesthetic, while Josiah remained conscious.
In 1759, Wedgwood established himself as an independent potter. He was 28. He seems to have been short of money. He was six months late paying rent for the pottery works, and almost a quarter of the total rent was paid in goods.
Wedgwood was Charles Darwin's grandfather. The Wedgwood family fortune then helped underwrite Darwin's famous voyage aborad the Beagle, which was a critical part of his research for The Origin of Species.

Korean War

The Korean War lifted the Japanese economy out of its doldrums and paved the way for an era of unprecedented growth. The outbreak in 1950 of the Korean War ... sharply increased the demand for Japanese products. "Special procurement" expenditures by United Nations (mainly US) forces accounted for 47% of the value of all Japanese exports between 1950 and 1953.
p. 471, Creating Modern Capitalism

The Japanese automakers were rescued by the Korean War, which led the United States to place large orders for Japanese-made trucks. The very first exports by Toyota Motor Sales (TMS) were 1,000 trucks for the U.S. military in 1950. To companies on the brink of bankruptcy, the Korean war was "a gift from the gods," in Eiji Toyoda's words.
p. 417-419, Creating Modern Capitalism

How ironic...

Universal life

Some quotes from an article:

UL is very inflexible. Premiums are locked in, so the client can’t take advantage of lower premiums that may become available. “And since there is little or no cash value, the cash value can’t be used to pay missed premiums.

First-year universal life commissions are 60% to 70% — compared with 90% for term life, with which it competes and is comparably priced. But universal life often is better for the client, because it has some cash value accumulation and can be written for longer terms, such as to age 100 or beyond. Most insurers won’t write term life once a client reaches a certain age.

Universal life premiums are especially attractive for clients age 45 and younger who are non-smokers. “They expect to live more than 30 years, so [a] 30-year term is not attractive to them, even if the premiums are somewhat less

Whole-life insurance accumulates a higher cash value because the premiums are about 40% to 60% higher. But universal life often accumulates at least enough cash value to reimburse policyholders for the premiums paid in.

The knock on universal life used to be that it was a good investment when interest rates were high, but decreasing interest rates could cause death benefits to be reduced dramatically. The interest-rate risk, in effect, was shifted from the insurer to the client. But now that many policies guarantee the death benefits, that no longer is a problem

Universal life has become more attractive to clients due to product innovations such as the guaranteed death benefits and survivorship features. The survivorship features help clients avoid probate expenses, because both spouses are covered.

Universal life is a good choice for advisers with clients who have money-market or bank accounts that are to be passed on to heirs. Transferring those assets into a universal life policy allows clients to pass them on to heirs as tax-free death benefits. Many clients buy universal life for other estate planning purposes, such as to pay estate taxes at the time of death.

Disability

Some select quotes from an article on investmentnews.com, dated June 25, 2007:

Among the misperceptions about disability insurance is that the coverage is not essential, because workers’ compensation and Social Security will pay disability-related lost wages. The truth is, only about 10% of disabilities are job-related and therefore covered by work comp. Also, Social Security benefits often pay only 20% to 30% of a salary, compared with the 70% or more that usually is required to maintain the client’s lifestyle. Only about 40% of Social Security applicants qualify for benefits, because the application process is so arduous. The “disability test” of Social Security is the “inability to perform any work for wage or profit” — compared with private disability insurance plans — which often pay if the clients can’t perform their own job

Another disability myth is that individual coverage is not needed if clients have group coverage through their employment. Group coverage generally replaces only 60% of a salary, and since the benefits not paid for by the client are taxable, they, in fact, can walk away with less then half their prior earnings.

there is a way to continue 401(k) contributions — up to $45,000 a year — when they’re disabled. They can do that by paying the money into a trust. Although the buildup of assets in the trust is taxable, there is no requirement to start taking distributions at age 70½.

Many clients who own small businesses are unaware they can use disability insurance to buy out a partner who no longer can work due to an injury or illness, he said. The policy pays the fair market value of the disabled partner’s interest in the business to the healthy partners.

Group insurance rates — which don’t differentiate between the sexes — are especially attractive to women, because they become disabled more frequently than men.

from other articles:

becoming disabled did happen to more than 800,000 people in 2006.

according to the Insurance Information Institute (III), at age 35, people have a 45 percent chance of being disabled for 90 days or longer before their 65th birthday. And among those people, there's a 70 percent chance of being disabled for another two years.

Clients who think that they are covered adequately because they have disability insurance through work are mistaken. The 60% of income paid by many group policies often is inadequate to maintain the client’s lifestyle. That’s especially true of employees who are used to getting hefty bonuses.

Also, many employers’ standard operating procedure is to fire employees who go out on disability, and no law stops them from doing that.

After losing their jobs, disabled employees have even more household expenses, because they have to pay Consolidated Omnibus Budget Reconciliation Act premiums to maintain health coverage. After that coverage expires — in 18 to 36 months — they have to buy individual health insurance. That can run $1,500 or more a month.

can buy directly from private insurance carriers. The Gaurdian, Mass Mutual and Northwestern Mutual offer various, personalized plans.

How much will it cost?
That depends largely on the type of disability insurance. If it is a group plan, the III's survey in 2004 found the average annual premium to be roughly $218 per year.
"Typically a rule of thumb is a half a percent of payroll"

For individual plans, the cost is significantly higher and is based on a person's age, health and lifestyle.

12 Angry Men

I came across my old notes from Managing Organizations class while I was cleaning up. I found these notes on the movie "12 Angry Men" (Henry Fonda version). I guess I just wanna keep an electronic version of my notes in case I ever watch this movie again with an instructional purpose. As you can see, I'm one of those people who have trouble throwing stuff out.

Architect (Henry Fonda)
Man from Slums (Jack Klugman)
Stock broker with glasses (E G Marshall)
Messenger Service owner (Lee J. Cobb)
Bank Teller (glasses)
House painter (white shirt, no tie)
Salesman (baseball fan)
The old man
Garage owner (with a cold)
Watchmaker (mustache)
Ad man (glasses)
The Foreman (Asst. Coach)

What influence tactics did Fonda use?
* Procedural - written ballot, bank teller, house painter, ad man, foreman, stock broker
* Interpersonal - old man, prejudiced JK, watchmaker, salesman, garage owner, Cobb

What were Fonda's sources of power?
How did his tactics change over time & why?
Who else had power & why? Did this change? If so, why?
List the critical events as they unfolded. Why are these events critical? What purpose did they serve?
Knife, ballot, El noisy, diagram, "I'll kill him", movie title, knife over/under, garage owner tirade, glasses

Flags of Our Fathers (and a few others)

I just finished reading the book after having watched the movie on a recent flight.

I found a few details from the book interesting.

There is a recurring scene where Doc Bradley is looking for his buddy Iggy. The movie doesn't tell us what happened to Iggy. The book actually tells us in more detail what happened to Iggy.
p. 238 "On March 8, the Marines of Easy Company found Iggy. He had been grabbed, probably from behind, and pulled into a cave full of Japanese soldiers. As the company medic, it was my father's job to deal with what remained of Iggy's body after three days of brutal torture."
p. 344 "A few days later someone yelled that they'd found him. They called me over because I was a corpsman. The Japanese had pulled him underground and tortured him. His fingernails...his tongue...It was terrible. I've tried so hard to forget all this."
"Langley told me it looked to him as though Ralph Ignatowski had endured just about every variety of physical cruelty imaginable. "Both of his arms were fractured," Langley said. "They just hung there like arms on a broken doll. He had been bayoneted repeatedly. The back of his head had been smashed in." Those were the relatively benign wounds.
My father remembered the worst thing.
p. 346 "They tortured my buddy. The Japanese stuffed his pen!s in his mouth."

Iggy was not an isolated incident.

p. 65 Nanking - up to 350,000 Chinese civilians died - more civilians dying in one city in one month than died in entire countries during the entire war.
In six years of combat France lost 108,000 civilians; Belgians 101,000; the Netherlands 242,000. The Japanese in Nanking killed even more than the atomic bombs later would. (Hiroshima had 140,000 dead, Nagasaki 70,000). The Japanese "loot all, kill all, burn all" scorched-earth policy in North China would eventually reduce the population from forty four million to twenty-five million.
The US Army had encountered the Japanese army's ways in the Philippines and Burma. Stories of buddies found trussed like pigs, disemboweled with their severed genitals in their mouths circulated, as did horrifying accounts of boys staked in the hot sun, forced to endure the voracious bugs who savored the honey rubbed into the prisoner's eyes and mouth."

The Germans were different.
p. 65 "Gentlemen's agreements suspended hostilities for the day at five o'clock each afternoon, and each side held its fire for medics to care for the wounded."

"Letters from Iwo Jima" - Japanese army gets a balanced portrayal.
As referenced in the book, Japanese soldiers are instructed specifically to target corpsmen since American soldiers will try to save the corpsmen. This is never actually shown in the movie.
There is one scene where Japanese soldiers bayonetts one American soldier several times, presumably to death. On the other hand, Baron Nishi, an Olympic Gold Medalist, treats one wounded American soldier humanely. Despite protests from others, he orders the medic to administer morphine to the dying American prisoner. He also talks to the prisoner about his American movie star friends.
We also see an American act of brutality - American soldiers kill two Japanese prisoners despite receiving an order to guard them.
On the whole, the viewers are left with the impression that there are equal amounts of brutality on both sides. Here is a quote from one reviewer - "the film's true intent comes across the second time a Yank is nabbed by the doomed members of the Imperial Army, when the injured grunt movingly establishes an unlikely bond with his aristocratic Japanese interrogator. There were compelling reasons why the war was fought, but the unusual focus of "Letters" is the humanity of the Japanese soldiers who longed for home just like anyone else, knowing they would never leave the tiny strip of land alive." (Variety)

"Letters from Iwo Jima" vs "Flags of Our Fathers"
"Letters" is a better movie (for those of us who can get over the subtitles). "Flags" gets bogged down with Ira's alcoholism.

"Sands of Iwo Jima" starring John Wayne - I watched it to see the three actual flagraisers do it again at the end of this movie.

"Tora! Tora! Tora!" (1970)
An old movie which also shows both American and Japanese sides. This movie sidesteps the issues altogether. It was the crazy Japanese Army (not portrayed in the movie) who wanted the war with USA. The Japanese Navy (portrayed in the movie) accepts the war as a given and carries out the tactically brilliant attack on Pearl Harbor. If the Japanese embassy staff in DC had better typing skills, Americans would have been notified before the attacks started.

Miscellaneous:
Ira Hayes inspired a book and 2 movies. One starring Tony Curtis, the other Lee Marvin - and a song by Johnny Cash would all later mythologize Ira's death.

Book link - http://www.amazon.com/exec/obidos/ASIN/0553384155/soohwankim