Tag Archives: Self-Directed 401k

Brexit Volatility

1981_09_15 Official Navy Lt Photo Guam

GO NAVY! BEAT ARMY!

The Economy: BREXIT!?! … or did it? Our poor Cousins across The Pond continue to spasm in the wake of last week’s vote. The end of the world scenario has been replaced by confusion, second guessing and dismissal by the Brits themselves. Talking heads are reveling in mindless chatter. The EU’s reaction has gone from “OMG No!!” to “Ok, if this is what you want, then get out now. We don’t want you hanging around.” Nature abhors a vacuum so the vacuous nonsense we’re hearing will eventually end. The consensus is that Brexit is an additional headwind for a global economy that’s already struggling with deflation. As with all things in life, there will be winners and losers. Because of this, we continue to emphasize that your personal experience is paramount. If Brexit is another headwind, then you must ask yourself which side of these headwinds am I on … With the Wind or Against the Wind?

Food for Thought: Preserving capital should now be your primary concern at this point in the economic cycle. Stock market indices are mixed as we end the first half of 2016; some up some down … and despite all the noise, multiple attempts to move to new highs have repeatedly failed. Investors should be leery of this repeated failure to move above year-old highs. Ask yourself, “What do I hope to achieve in a 7-year old, long-in-the-tooth, bull market. Clint Eastwood famously asked, “ … you’ve gotta ask yourself one question: “Do I feel lucky?”

God Bless America. Land of the Free; Home of the Brave! We have the best and brightest future at the dawn of the American Century. Have a Great 4th of July!

BREXIT

The Economy: Fed Chair Yellen appeared before Congress this week; Tuesday before the Senate, Wednesday before the House. Hostility towards Yellen was palpable with House members reducing her to confusion and gestures of helplessness. Global distain for authority in general and Central Bankers in particular was evident in spades. But the Mother of All Events was the Brexit vote on Thursday. Pollsters and pundits got it all wrong with their incessant predictions of a landslide win for “Remain.” Flashing the Longbowman’s “V” the Brits moved to reestablish their national sovereignty and leave the EU. Financial markets crashed in shock and awe on Friday. (Only fools are going to buy this dip.) The uncertainty of Brexit was quickly on display. Though the process is supposed to take 2-years, British politicians began to call to immediately disregard many EU laws; particularly those on immigration and banking. Political parties throughout Europe began to call for Exit Referendums in their own countries. This is the death knell for the EU. Great Britain is the second largest economy in the EU. Saying the EU will survive is akin to saying that a marriage is still intact after one of the spouses has left after leaving an “I’m thru with U” note nailed to the front door. It’s gonna get messy.

Food for Thought: For over 70-years global bureaucrats and central bankers have pushed the secular, one-world agenda characterized by multiculturalism, globalization and the tyranny of the minority. These mostly unelected officials, while deriding the Divine Right of Kings, have ruled with the arrogance of dictators. They have ignored the social contract based on the consent of the governed. Brexit signals the beginning of the end of their failed reign. Despite the near universal, and very vocal, support of “Remain” by global politicians and despite the total support by the mainstream media for “Remain” the Brits revolted against the overlords and their propagandists. Political ramifications were immediate with British Prime Minister Cameron resigning. The ripples are beginning to roil outwards from ground zero with economic changes in the wind. If a slowing global economy, negative interest rates and the failure of global monetary policy weren’t enough, Brexit adds to the uncertainty that has so paralyzed Janet nd the Seven Dwarfs. However, we see opportunity in chaos. Contact us for how to protect your assets in the coming roller coaster ride.

Stem Cell Therapy: A Journey, Part 2

Stem Cell Therapy: A Journey, #2

After watching the stock markets implode on quadruple witching, We left my La Jolla office to drive to The Stem Cell Treatment Center on Directors Place, one block north of Mira Mesa Boulevard. Directors Place is located on the new frontage road on the east side of I805.

“We” is my wife and myself. Though stem cell therapy is considered an outpatient procedure and you are told you can drive yourself to and from the appointment, I wanted to make sure I had a backup driver.

My appointment was for 1PM. $8,000 cash. $4000 per hip. As of the date of my treatment, Stem Cell Therapy was not approved by the FDA. So it is called “experimental medicine” and is not covered by medical insurance. A hip replacement, which is approved by the FDA costs a minimum of $35,000 per hip. It is massively invasive and results in cutting the largest bone in your body and replacing it with a manufactured ball and socket. Welcome to life as a Borg.

We drove up the hill from the beach on Camino Del Oro and got on La Jolla Village Drive East. It was a judgment call to go La Jolla Village Drive or to get on I5 north and go east on Sorrento Valley Road. To my chagrin, I chose the former.

It took us 30 minutes to drive the 4 miles from my office in La Jolla to the doctor’s office. We hit every single stoplight during Christmas lunchtime rush hour. Count ‘em 17 stoplights.

The German logic embedded in the BMW navigation system proved to be maddening as we approached the stem cell center. The Prussian My-Way-Or-The-Highway algos didn’t allow me to input the exact address so I had to rely on memory to guide me in to the doctor’s office.

We parked the car, entered the lobby of the surgical building; then went up to the third floor Suite 360. Nobody was in the office except for the nurse receptionist Kathy who I had swapped emails with but had never met.

Medicine is like the Navy; Hurry up and wait. I throttled my impatience and chatted with Kathy. At 10 minutes after 1PM the entire plastics and orthopedic crews showed up. They had been shopping at Costco. They were good naturedly honest about it. They apologized for the traffic; the only legitimate late excuse in Southern California, and all was forgiven. “Andale!”

The stem cell treatment was to be performed in three parts. First was harvesting adipose tissue (fat cells) through liposuction of love handles on the upper butt area. Part two was to centrifuge the extracted 50 mL of fat to get the stem cells. Step three was to inject three vials of 1) stem cells, 2) growth factor and 3) Hyaluronic Acid. Think of the three as, the cells, their food and the molecular lattice structure for the cells to grow on.

Still waiting, I decided to take a coffee break; maybe it would counteract some of my growing impatience. It seemed to work because I was in better spirits when I got back to the waiting room. Bob the Physician’s Assistant introduced himself and told me to saddle-up for lipo.

At this point, I was the only patient in the 3000 square-foot surgical suite. Later my wife told me that after I disappeared behind Oz’s curtain for the liposuction, there was a steady stream of Baby Boomer cash buyers who came through the complex.

I followed Bob back to the treatment room where the liposuction would be performed. I left my Kindle, IPhone, wallet and car keys with My wife in the waiting room.

It turned out that Bob had been a Navy Corpsman. As an Asian American he’d spent his Navy time in Iraq and Afghanistan.

“Glad I missed Vietnam,” he said. “It was easier to be around the camel jockeys than it would have to be around the gooks.” After getting out of the Navy a few years ago, he tried pharmaceutical sales before coming back to the surgical suite.

Bob began to place me on the lipo gurney when the Plastic Surgeon, Craig, came into the treatment room. Craig explained that he was the Plastics Guy and was only going to do the lipo. When I asked where his medical offices were, he told me that he was an active duty Navy Captain stationed at the Navy Regional Medical Center in Balboa Park.

He said that in a war zone he did wound reconstruction but that most of what he did now was breast cancer reconstruction of the kind done on Angelina Jolie. I mentioned the Boat School and Craig laughed saying, “I was born and raised in Annapolis. My grandfather and uncle were Ring Knockers. I’m 47. It’s taken me 19 years to make Captain. Time to transition.”

“Amen Brother,” I replied. “I did 4-Westpacs when Hong Kong, Olongapo and Singapore were full of the wildest women on the planet.” “I love you, no shit. Buy me a drink!” Bob chimed in. The three of us erupted in laughter

With the testosterone at the appropriate level, I took off my old topsiders and laid face-down in my navy blue sweats on the gurney. Bob asked me to pull the top of my sweats to mid chest and pull down the bottom of my sweats to the bottom of my butt cheeks.

I had met Craig last week at the pre-op conference. As we chatted while Bob prepped me for the liposuction, Craig told me that in order to comply with all regulations, he would take a leave day to perform the lipo on a specific patient group. This was why the stem cell treatments were scheduled for all patients only twice a month on Fridays. The scheduling allowed Craig to take a leave day, perform a couple of dozen liposuctions, make more money in a day then he made in a year as a Navy captain and then go back to his work at Navy regional medical center Balboa Park.

As a Bob draped my butt, Dr. Craig explained what was going to be happening during the liposuction.

He said the most painful part of the procedure was going to be the process where numbing solution was injected into the fat to be removed. He then proceeded to numb the skin in a dozen different places on both sides of my upper butt just below my belt-line.

Next was injecting the numbing solution into the fat … and he was right. The injection of the numbing solution was painful. My body jerked involuntarily in spite of my trying to remain relaxed. I was aware that the jocular talk had tapered off as I focused on the task at hand; trying to play the Terminator without flinching..

My mother was a Registered Nurse. Early on I realized that medical personal never use the word “pain.” Instead, the euphemism “discomfort” is substituted.

I can imagine the field hospital scene at the Battle of Gettysburg. A young soldier whose leg has been shattered by gunfire, is brought into the surgical tent. The drunken butcher who is going to amputate the leg, asks 9-men to hold the patient down because there are no anesthetics. Even the whiskey has run out. As the doctor picks up the bloody saw and positions himself to hack off the offending limb, the terrified patient looks up and whimpers, “Doc, is it gonna hurt?” … and the doctor says, “Son, you’ll just have some discomfort.” …. as piercing screams fill the air … fade to black.

So there was some discomfort; uncomfortable but not unbearable as the area was numbed. Then two small vertical incisions, about ¼ inch in length, were made on each side at the top of my butt cgurney and the lipo began.

Liposuction consists of ramming a hollow tube, called a cannula, back and forth through your fat. The dislodged fat residue is then sucked out of the area. There is nothing delicate about this process of having a foreign object jammed in and out of your body. The motion is the same as that you would use when shooting pool. But unlike shooting pool, the doctor is putting his back into this effort. This “rammin’ and jammin’” was done in silence as the banter gave way to the very physical task at hand.

There is discomfort. But anesthetics do a remarkable job. The occasional pain spike caused my body to jump but Craig was responsive saying, “We won’t go there again” as he rammed and jammed in another direction. He worked a fan shaped area on both sides of my upper butt. When he was done with the left side, he immediately went to work on the right side. In a few short minutes he was done.

He then asked if I was interested in seeing the 50 ml cylinder of extracted fat cells. I was interested. It looked like a cigar size syringe full of pink Smoothie from 7/11..

After 20 minutes of which included prep, the lipo and post lipo wrapping, I was back on my feet and in the waiting room.

Kathy, the reception area nurse, told me that it would take an hour for them to centrifuge the fat cells and extract the stem cells. She recommended that I leave the office and kill an hour with a cup of coffee. She gave me a $20 Starbucks Gift Card and recommended that I drive down the hill to the Scranton Road Shopping Center on the North East corner of I 805 and Mira Mesa Boulevard. Kathy recommended that we be back in the office at 3:30. So at 2:30 PM we left, drove down the hill and got some Christmas cookies and hot chocolate at Starbucks.

The shopping center is adjacent to the infamous red “Dog Dick’ sculpture that is in front of the San Diego Tech Center building. The sculpture was erected in the mid 1980’s. It used to be easily seen from I805. Now you have to be on Scranton Road to see it. But there it is. “Dog Dick” reigns supreme in its turgid 100 feet of .fire-engine-red glory; pointing at the sky awaiting the Mother of all Bitches.

After sitting out in front of Starbucks enjoying the 70 degree weather, we drove back to the surgical center.

We arrived back in the surgical office at 3:30PM. I was met in the waiting room by the orthopedic surgeon, Dr. Pete, who was going to perform the stem cell injections. My wife again sat in the waiting room while I was ushered into the treatment room which was located across from the nurses station. After a quick introduction, Pete disappeared after turning me over to Bob for prep.

When I entered the treatment room, I noticed that there was an intravenous drip (IV drip) set up next to the treatment gurney. Bob commented that my stem cell count was about 85 million cells which was the upper end of the norm. Bob asked me to lay on my back on the gurney. The IV drip contained saline solution. Bob told me that treatment now included a systemic injection of a portion of the stem cells through an IV drip back into the patient’s body. He said that this had reduced or eliminated a variety of aches and pains in patients that had received it. This was good news. Self-medication continues to recede. “Fire when ready Gridley!”

As Bob searched for an appropriate vein in my left arm, I told him that my veins rolled. As a blood donor I’d gotten in the habit of telling the help because my rolling veins had been problematic. On more than one occasion I’d had to stop some dullard who confused vivisection with medical care, as they continuously tried to harpoon my rolling veins. Eventually I began to address all medical technicians as Doctor Moreau whenever I sat down and began to roll up my sleeve to give blood. Many times the technician would disdainfully tell me, “I’m not a Doctor.”

Duh!

But Bob was the real McCoy. His aim was true and in no time my own stem cells were coursing back into my body on the IV drip. When the injection was done, Bob removed the needle from my left arm, and put a bandage on the spot. Then the door opened and Pete came in.

While Bob prepared the sonogram transducer with KY and positioned the screen, Pete explained the injection procedure. He showed me the three vials and explained that the largest containing the stem cells would be injected first, followed by a smaller volume of growth factor and a third volume of hyaluronic acid aka “rooster comb.”

The procedure was similar to the cortisone injections that I’d previously had. With me lying on my side, the Doc selected a spot directly above my hip joint. Then an aerosol can of numbing solution was sprayed on the point of entry for the 4-inch hollow needle. The Doc drove the needle straight down into the hip joint while Bob sprayed the impact zone with the local anesthesia. Once the needle had been guided into the joint using the sonogram, the stem cells were injected with Dr. Pete looking at the sonogram display and injecting the cells into specific areas of the hip joint. On my left hip this was a slow and painful process as he moved the needle around within the joint. I could feel the stem cell solution going into my joint and the resulting pressure of having the area around the hip joint expanded by fluid. The stem cells were followed by the growth factor and then the hyaluronic acid.

The process for my right hip went much faster. Pete again drove the needle straight down into my hip joint. He then injected the entire stem cell solution quickly without having to work the needle. Next, as he injected the growth factor and hyaluronic acid, he explained that my left hip had been “dry.” Injecting the left hip had been more painful and had gone more slowly because there was little natural lubricant in the left hip joint.

My right hip, however, was full of fluid because it was more inflamed. This is consistent with what I had experienced since my last Cortisone shot 90 days ago. I went into that Cortisone shot with my left hip more painful than my right. I came out with my right hip more painful. It has subsequently remained more painful. Uh …. I mean there had been more discomfort!

The stem cell injection procedure from beginning to end took half an hour from the moment that I walked in and lay down on the gurney until I got back up and was escorted out of the room by Bob.

When I left the treatment room, Pete, Craig and Bob were all standing at the nurses station. I stopped for a moment to thank them. They asked what I did for a living. When I said that I owned a wealth management firm, they began talking about the venture-capital opportunities available in the stem cell space in San Diego.

My wife and I left the Stem Cell Center at 4:15PM with a Vicodin script. We drove straight to Ralphs Pharmacy to get it filled. Sorry Charlie, Pete had mis-dated the script 12/19 instead of 12/18 so the pharmacy wouldn’t fill the script. The pharmacist wouldn’t give the script back to us so we were stuck with having to come back after midnight to pick it up.

I just laughed. Thank you God for all my blessings!

Cognitive Biases by Mark Dow

1. We overestimate our abilities, our uniqueness, and our objectivity, even more so when under emotional strain. We have all seen the studies: 90% of people say they are above average drivers. Rarely do people think those around them work harder or better than they do. And so on…

2. We systematically understate the role of ‘random’. We crave order, and we are willing to torture the facts to get there. But sometime things just happen, and sometimes problems don’t have solutions. No fundamental cause, no guilty party, no concrete answers. Moreover, on the up side, when random does break our way it’s appropriated as skill. The investment world is shockingly bad at separating outcome and process—yes, even those who drone on and on to prospects about their processes.

3. People will find a way to believe what they are incented to believe. As the saying goes, “The most dangerous place to stand is in between someone and what they want to believe”. In my experience, it’s hard to overestimate the power of this statement. Starting with the conclusion and reverse-engineering the supporting arguments is central to the human condition and, surprisingly, serves and important role in our evolution.

4. When presented with points 1, 2, and 3, almost everyone recognizes their validity, but believes at some level that he/she is exempt. The typical reaction is “Yeah, for sure, of course that’s how [other] people act”. It is always easier to see others’ mistakes than one’s own. And this is one of the reasons we have a very hard time changing our cognitive biases. All of us.

Memorial Day in La Jolla

The Economy: Hundreds of millions of dogs and burgers will be inhaled and millions of gallons of brewskies will be quaffed by Dudes and Dudettes in the Grand American Tradition this weekend. GDP will spike. Presidential candidates may go for a smile. We’ll doff our caps or curtsey for those that gave the ultimate sacrifice while continuing another Great American Tradition of thumbing our noses at authority. The weekend spike in GDP caused by the national hedonistic orgy will be offset on Tuesday by a GDP dip as productivity-crushing hangovers reduce economic activity to near-zero. The economy will gradually recover until the evening of Thursday June 2nd, when relief partying for the coming weekend will create an economic stall that will persist until the following Monday, June 6th. Have a Great Holiday. We’ll catch you on the rebound.

Food for Thought:  On Memorial Day: Memorial Day is the holiday for remembering the people who died while serving in our armed forces. The holiday originated as Decoration Day after the American Civil War. The name of the holiday gradually morphed from Decoration Day to Memorial Day after World War II. In 1968 Congress passed legislation which moved four holidays, including Memorial Day, from their traditional dates to a specific Monday in order to create three-day weekends. The change moved Memorial Day to the last Monday in May. Memorial Day is not to be confused with Veterans Day which is celebrated November 11th; the anniversary of the end of World War I. Memorial Day is a day honoring the men and women who died while serving, whereas Veterans Day honors all U.S. military veterans. Memorial Day marks the unofficial beginning of summer. On Memorial Day, the flag of the United States is flown at half-mast (or half-staff for you Army and Air Farce types …Go Navy Beat Army!).

Donald Trump

The Economy: Another quiet week highlighted by the release of the Fed Minutes. As usual, the Minutes caused a hissy fit in global financial markets. Why? Well, why not? It was more of the same Elmer Fudd stuttering opacity that financial markets have become addicted to. For the rest of the world it’s much ado about nothing. The Fed emphasized that their decision on interest rates was data dependent. … as it has been since the Fed was founded in 1913. Duh! Economic numbers may move one tenth or one hundredth of a percent. In response, financial markets go haywire. Out of a US population of 320 million, a reported employment change of 15,000 will create massive gyrations in financial markets; over a .0047% change. When was the last time you based a decision on a .0047% change in anything? Recently? Ok you must be a quant or an engineer. For the rest of the planet, it’s statistically insignificant; not even a rounding error. As a result of this, we see the financial markets as being disconnected from the economy. Massive and misguided Central Bank manipulation, global fiscal irresponsibility, political gridlock by elected and appointed Peter Principled Lilliputians has failed to halt US economic growth. It’s a testament to the resilience of the American people. Every day is a holiday; every meal is a banquet.

Food for Thought: We are always conducting informal surveys to keep the mainstream media noise and click-bait in perspective. We continue to find the average Joe (or Josephine) well grounded. The basic American character of “Question Authority” remains intact. The prevailing outlook is local optimism tempered with frustration with the national and international scenes. America remains the clear choice to pursue personal and professional dreams. No other country or culture comes close. So spare us the incessant jabbering about the imminent demise of the American Goliath or the American way of life. The isolationist/interventionist dichotomy of the American political will has been a constant since George Washington warned of the “peril of foreign entanglements” in 1796. Rather than seeing the 20th century as the American Century, we see the 21st century as the true American Century. The 19th was only the prelude. We see the US increasing its global dominance. American innovation technological prowess will continue to reign supreme. In the global community, the US remains the headstrong, determined adolescent that will muscle its way to the head of the line. For Joe and Josephine American, “My Country right or wrong; still My Country” still rings true.

Higher Oil Prices are Good for You!

The Economy:  Economic numbers have disappointed this week. Housing disappointed. Manufacturing disappointed. The Fed met and as expected, maintained the status quo; no change to interest rates for the foreseeable future. Lower for longer or never forever. With respect to oil, for decades the mantra was that low oil prices were good for the USA. In the past 6-months policy wonks have championed the idea that low oil prices are bad for the ol’ USA. Oil prices are up almost 50% in the past few weeks. That must be a good thing as we spend more on everything petroleum. So who’s on First? Oil is up 50% and that’s now a good thing. So, oil moving back up to $140 must be a great thing. Confused? You should be. The mindless noise is deafening. Here’s a sample of recent headlines from the chattering media class courtesy of the “Daily Reckoning” website:
4/5: Dollar Rises as Investors Anticipate U.S. Data
4/6: Dollar Falls on Fed Minutes
4/13: Dollar Climbs Before Data Forecast
4/15: Dollar Falls on Lackluster U.S. Data
4/21: Dollar Rises After Solid U.S. Data
4/25: Dollar Sinks After Q1 Growth Takes Another Hit
You got that?

Food for Thought: We’re midway through the first quarter earnings reporting season. Stock buybacks and dumbed-down earnings expectations have given us earnings that again are beating those reduced expectations. Lower the bar enough and any caveman can stumble over it. Financial markets are lovin’ it. But for many investors this seems to be the stock market rally to hate. Beware. We believe that the US economy is fundamentally sound but until the Fed decides to stop supporting asset bubbles, we’re leery. Protecting your assets should be at the forefront of your decision making.

Oil Production Caps

The Economy: The Fed Beige Book was released today. It confirmed the “New Normal” of our slow growth economy. The Fed found the consumer healthy and spending. Ironically, the Commerce Department released the Retail Sales numbers today. Their numbers showed a decline in consumer spending with a sharp drop in automobile sales. Right Hand; Left Hand. Oil ministers meet this weekend in an attempt to prop-up the price of oil with a production cap. Iran is considered to be the linchpin in this effort but their oil minister will not be attending. Like a wedding with a runaway bride, the meeting is DOA without Iran. The Fed minutes and Yellen’s recent comments have been parsed for read-the-tea-leaves guidance to monetary policy. “Global” and “uncertain” were repeatedly used by Yellen to describe issues facing the Fed. One pundit noted that the Fed has never publically used the term “uncertain.” So again, the end of the world is nigh. We continue to temper our concerns for slow-growth megatrends. Demographics and student loans may be problematic but we don’t think entitlement laden Americans are anywhere near rioting in the streets as some talking heads have opined. After all, this Sunday is Opening Day at the San Diego Yacht Club.

Food for Thought: The Department of Labor (DOL) has released its proposed “fiduciary” rules. The proposed rules have significant impact on 401ks. Many 401ks and deferred compensation plans haven’t been reviewed since they were implemented. Now is a good time to get that review process going. Contact us if you would like help with this issue.

Annuities

The Economy: Data released this week shows a US economy that is continuing to slowly expand. Consumption, GDP and employment appear to be growing. The Beige Book, which is the Fed’s summary and analysis of economic activity, confirmed a mixed picture of slow growth. Manufacturing is flat and productivity growth is questionable. Confusing? Yep. The question is: Can the US avoid the fallout from the confirmed slowdown in China, The EU, Russia, Brazil and Venezuela … to name a few. Think Global Act Local. It’s hard to feel your pain in San Diego, the land of eternal sunshine. Here we have booming tourism, real estate, biotech and massive defense spending as the US reorients its focus from NATO to our “Strategic Competitor” China. (Shoutout to Glenn for the PC euphemism. Back in the day when men were iron and ships were wood, they were called enemies).

Food for Thought: Annuities can be an effective part of your investment and retirement planning. Their features and benefits continue to evolve with the changing economic environment. Like any investment, they must be reviewed periodically to confirm they are still relevant to your goals. Contact us if you’d like help in evaluating these complex instruments.

Proverbs 2:1

You’re never too old to learn.

You can’t teach an old dog new tricks.

A word to the wise is sufficient.

Talk is cheap.

Do unto others as you would have others do unto you.

Nice guys finish last.

The squeaky wheel gets the oil.

Silence is golden.

A stitch in time saves nine.

If it ain’t broke, don’t fix it.