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May I Ask Who’s Calling?

June 19, 2018

My friend Allen Appel writes a monthly column for his “adult active community” newspaper in a tongue in cheek humorous manner. I frequently laugh out loud when reading them. This column is particularly on point so am including it here. A previous column is posted at


After surviving a barrage of annoying phone calls I went online and had my number added to the National Do Not Call Registry. This makes it illegal for telemarketers other than charities, political groups, debt collectors and survey takers to call me. If I receive an unwanted call from a telemarketer I’m supposed to report it to the Federal Trade Commission. I did that for a while but it had no effect; the FTC is a tiger when it comes to imposing restrictions but a pussycat when in comes to enforcing them.

There’s one call I used to receive daily. It was a robocall where the voice of a female whose name changed periodically claimed to be calling for the Service Center, wherever and whatever that was. If I’d like to reduce the interest rate on my credit cards, she said, I should press 1. In an early version I had the option of pressing 4 to have my number removed from their automatic-call list, which I always did. It was as effective as having my number included in the National Do Not Call Registry.

Over time this call evolved. The voice developed a British accent and claimed that actions taken by the Federal Reserve would result in doubled credit-card interest rates, but I could reduce mine to zero. The option to press 4 had been eliminated, so I could no longer cling to the hope that they’d stop calling me. I usually hung up but, occasionally, I’d press 1 when I felt vengeful and wanted to see if I could annoy them as much as they annoyed me. Most often I got an electronic voice that told me I was somewhere between number 6 and number 16 in the queue to talk to a representative. The urge for revenge wasn’t strong enough to keep me on hold listening to bad music that long, so I hung up.

On one occasion I did get connected immediately. The representative began by asking me which credit cards I had. Instead of answering her question I posed my own. “What’s the name of your company?” I asked. She hung up. I guess my security clearance wasn’t high enough to be trusted with top secret information.

Why, you may ask, do I bother answering these calls? Don’t I have caller ID? Can’t I see that these calls all originate from the same numbers?

No, I can’t because, apparently, they don’t. These scammers employ a technique known as spoofing. The ID and number that display on my phone are bogus. Each day it appears that the call is coming from someone else, somewhere else.

Callers that eschew spoofing hide behind nom-de-phones such as “Out of Area,” “Unavailable,” “Private Caller” and “Unknown Caller.” When I let my answering machine take these calls and invite them to leave messages they decline.

Occasionally, however, when I’m feeling feisty, I’ll pick up the phone, ready to give someone an earful, If it isn’t a recording it is almost always someone with an accent so thick it clogs my ears.

On one particular call the voice said, “This is the Service Center.” The voice wasn’t female and the accent wasn’t British so I surmised it was a different Service Center than the one promising lower credit card rates.

“Which service center?” I asked. There was a brief pause, then he responded, “Microsoft.” Fat chance. “You have a problem on your computer,” he said. “What kind of problem am I having?” I asked, as innocently as I could. “It’s a virus,” he said. “It got into your on-line banking and could steal all your money.” “I don’t understand how that’s possible,” I said. “I have Norton anti-virus software. It blocks viruses from getting into my computer.” “This is a new virus,” he said. “Norton doesn’t have a fix for it yet. Do you want me to get rid of it for you?” “Sure,” I said, “Go right ahead.” “Key this in,” he said, dictating an instruction, “and then click on the Download button.” I knew that if I did it would be like inviting a fox into the chicken coop. “Why is all that necessary?” I asked. “That lets us get control of your computer so we can find the virus and remove it.” “If I don’t do that you can’t find the virus?” I asked. “That’s right,” he said. “Then how,” I asked, “can you tell that I have one?” While he hemmed and hawed I hung up.

Another time I got a call where a local number displayed on the Caller ID. The guy said he was calling from the medical office. I asked which medical office. He thought a moment and said “Medicare.” That made no sense but I didn’t challenge him; I wanted to see where he was going with this. He told me that records showed I had pain in my lower back and upper legs. That was news to me. He must have gotten my number from our active adult community’s Resident Directory and assumed that active people over 55 all experience pain in their lower back and upper legs. This guy was giving me a pain in the area between my lower back and upper legs. I told him I wasn’t in any pain. He insisted that, according to Medicare, I was. Now my curiosity was aroused and I wanted to keep him on the line long enough to figure out what his scam was. My wife, however, had picked up the extension when the phone rang and listened in on the conversation. She has no patience with scammers and threatened to call the police. That put an end to the call and I never found out how he intended to defraud me.

Sometime later my phone rang and the Caller ID indicated that the call was from Indiana. “May I speak to Wilma,” he said. Now they were targeting my wife. The voice and accent were familiar. It was either Medicare Man or his clone. “Who is this?” I asked. “Sam, at the orthopedic office,” he replied. I couldn’t imagine my wife taking a trip from New Jersey to Indiana to see an orthopedist without even asking me to drive her to the airport. I was suddenly inspired by a Dr. Seuss story with which I used to amuse my kids and, improvising a bit, said:

“I do not like you, Mr. Sam,
You cannot fool me with your scam.”

He hung up.

Sometimes I wish Alexander Graham Bell had stayed in Scotland.

Keep the Quarterly Earnings Reports

June 14, 2018

All of a sudden there is a movement to stop quarterly earnings reports because that is “the cause of market volatility.” Bull Doody! The cause of volatility are the traders and many of the so-called “professionals” who need to have “action” to justify their being.

Traders trade and whatever volatility they cause has long been built into the market, so let’s skip them. As to professionals, they are supposed to be a group that does not act precipitously to news of a fleeting nature. Therefore, based on this definition advisors that sharply react to earnings reports, and beat and guidance messages cannot be “professionals.” Essentially much of the activity is now based on the accompanying noise rather than the actual earnings. After all, what is a penny here or there? We don’t even bother to bend down to pick up a nickel anymore, let alone a penny.

Ditching the earnings reports will not negate the guidance and analysts estimates as well as the ton of nonofficial information that is used to “drive the market” such as consumer demand, retail sales, employment statistics, commodity prices, supplier orders and even orders of shipping cartons. Also, I think that anyone that uses one quarter’s earnings to make major buying or selling decisions is being pretty foolish and I certainly do not want them managing my money or telling me what to do. Investing should be a long term endeavor and a good or bad quarter should not alter or sidetrack a thought out strategy and plan.

Quarterly earnings provide a degree of accountability, transparency and a somewhat reliable update on how things are progressing and are usually accompanied with some sort of explanation of unexpected results. Further, these are reconciled in the annual report so the veracity and reliability of the quarterly information can be reviewed by investors. Almost all of the other information is not held to account except with an occasional oops by the “expert” that presented their non-sage advice.

Ditching the earnings report is similar to not weighing yourself when on a diet. It is a form or measurement. Day to day weight changes or quarter to quarter earnings changes are not as important as the trends indicated over a period of time, with heads-ups in between to better monitor the results.

Keep the earnings reports. Let’s get rid of the charades perpetuated by some professionals trying to justify their raison d’être.

Note: Many advisors are true professionals and I am not condemning the entire profession, just those that over react to quarterly reports.

No Mortgage Management Method

June 12, 2018

Mortgages are encumbrances on your future earnings somewhat restricting your liberty by requiring you to divert a portion of your future earnings to the lender.

Less widely considered are the mortgages we create by putting ourselves in a position to have to do something in the future. This is no less than a financial lien on our earnings that is created by a mortgage. Some of the ways such mortgages are generated and ways to avoid them are illustrated here.

Mortgage creation
Some of the ways mortgages are created:

  • Assuming responsibilities that cannot be easily or appropriately handled or that you have no realistic possibility to complete timely or that is above or below your “pay grade”
  • Setting unrealistic deadlines to deliver client projects
  • Overloading staff that are being counted on to provided projects on time Not concentrating on your MIT (most important thing)
  • Passing over the MIT for various easy to complete but unimportant tasks
  • Neglecting to train staff properly
  • Not carefully explaining what needs to be accomplished
  • Not fully understanding your role or what you need to do
  • Making mistakes caused by rushing your work
  • Inadequate preparation or planning
  • Insufficient equipment or support
  • ____________________________ (Everybody has their own ways of creating mortgages for themselves)

Ways to avoid mortgages
Do not do anything described in previous paragraph.

Watch the TIOs, DINs, MITs
My 3 catchphrases are TIO, DIN and MIT: Touch it Once; Do it Now; Most Important Thing.

TIO: Failure to dispose of something the first time you touch it creates a mortgage comprised of extra future touches or handling. It doesn’t just refer to physical handling; it can be a delayed or tentative decision; the need to get back to someone; something you will need to look at a later time; or have to touch at a later time for any other reason. [Just by keeping it untouched for any reason means it will have to be touched at some time later.] All of these create mortgages on your time and energy. I am not talking about work projects that take time and require being supervised or supervising someone and the necessary interactions to get the project completed properly and on time. I am referring to the myriad interruptions, questions and requests we get continuously and things push aside so we can think about it later. Touching something once without doing something with it or about it, or failing to assign or pass it on to someone in a better position to respond or even assigning it to yourself with a definite time it will be worked on and then communicating that to the person needing your response will create a mortgage. Putting it in a pile, on a list or leaving it highlighted in your in box creates the mortgage.

DIN: If it is something that is necessary for you to do, doing it right away will get it done and out. Putting it aside, unless it is scheduled for an appropriate time, just increases your mortgage. Realistically, most things cannot be done on demand but you can set aside a period such as an hour a day to deal with incoming mail, emails and requests and make your decisions then or you can simply decide not to do it at all. Many delayed decisions are actually a decision to ignore. If that is the case, face reality and let the person know it will not be done or that you are not the right person it should have been sent to. Having to touch something more than once creates a future responsibility or obligation and that is the mortgage.

MIT: Your time should be spent only on important things allocated between urgent and nonurgent projects. Nothing else should consume your time. “Consume” can be described as something that eats up, devours, or masticates your time. Further you can only have one MIT. More than one doesn’t fit into what “most” means. Decide what your MIT is and then work on that possibly to the exclusion of everything else. To be effective everything you need to do cannot and should not always be urgent, so you should start to allocate your time to work on your important projects which may not be urgent. If it is that important and urgent, either make it your MIT or maybe it is not as important as you think. Keep in mind that you need to apportion your time to work on other important projects forestalling them from creeping into the urgent category and then becoming an MIT. Anything that is not important should be treated as such and as also not being worthy of your time and as something that would increase your mortgage debt if you assumed a responsibility for it.

Important but not MIT: A comment about work other than your MIT. Not everything you do can be an MIT at that moment, but if it is in the important category, then proper scheduling can have that done in a more or less routine manner and while it would never jump to the MIT classification, it will get done without the crises of urgency which moves many important projects into MIT status.

Sound management requires effective appreciation of your time and realistic capabilities. Mortgage mitigation, elimination, or eradication needs to be a major goal of self-management. You cannot get out of mortgage debt by continuing to assume new mortgages. So, start today – handle your existing debt anyway you want, but do not add any new mortgages to the list. TIO, DIN, MIT!

No more Christmas windows at Lord & Taylor

June 7, 2018

lord and taylorI can’t imagine that there is a New Yorker that hasn’t seen the Lord & Taylor Christmas windows at least once. My wife and I see it every year. I also trust that most Christmas season tourists also stop by the short lines to view the imaginative, attractive and elegant windows. Never again! The flagship store will be closing with no plans to relocate in Manhattan.

I do a considerable amount of consulting with clients about how much their business is worth and what the value drivers are. On some basis it all comes down to the value being mostly determined by cash flow. Clients kick, yell and scream because many times the value based on cash flow doesn’t reflect the replacement cost, brand value, customer base, market share or years of hard work building the company. I commiserate with them understanding their positions and feelings, but it is cash flow, cash flow and cash flow that matters. There are some exceptions such as “franchise” value, strategic value, ego value or the value from a cult-like following of the company’s CEO, but, by and large, the predictability of cash flow is the primary factor.

Lord & Taylor had a premier reputation, strong brand, longevity, a great Fifth Avenue location and was highly recognizable, yet the Fifth Avenue store is closing and not relocating. What happened? It ran out of cash flow. Further, the real estate value far exceeded any value that could be attributable to the store. There are the typical reasons and rationalizations and fault assignment, but regardless of why, the cash flow could not support the business. We can still shop in the Lord & Taylor locations in the malls, and Walmart will have a Lord & Taylor webstore, but the Fifth Avenue store will be no more.

A lesson here is that cash flow is paramount, necessary and the primary basis for any valuation. In Lord & Taylor’s case the proceeds from the sale of the real estate will provide a windfall of cash and a far greater cash flow than the retailer could generate from its business operation and so it is being liquidated.

BTW, I will be presenting a 50 minute program analyzing the market values of Johnson & Johnson and and will discuss how cash flow interacts with the stock price that determines (or should determine) market cap. I also will “project” the value of This program will be the final program in an eight hour continuing education program for accountants presented by the Withum Partners’ Network [that’s how my blog got its name]. You are welcome to attend as my guest. It starts at 3:40 and will end at 4:30 and will be held at the Hilton by our office at One Tower Center Boulevard in East Brunswick on Tuesday June 26 and at our NYC office at 1411 Broadway, 9th Floor on Wednesday June 27. Further I will be presenting a 55 year career retrospective providing insights to colleagues from 4:50 to 6:30 that you are also welcome to attend, also for free. Just email Ashley in NJ or Jessica in NY to register and a security pass will be provided at the front desk of each building.

Investing Temptation

June 5, 2018

Investing in index funds is boring. So is investing in mutual funds. Buying individual stocks is exciting; and that is where the temptation sets in.

There are three stocks I want to buy because I think they will go up “a lot.” They are all good companies and coincidentally they are all listed in the Dow Jones Industrial Average, and they all pay a higher dividend than the average, so what could go wrong?

  • Actually, nothing could go wrong and I could be right, but then what is my exit strategy? Will I sell them when I think each one reaches its peak, or will I hold them in perpetuity? If I plan on selling as soon as they go up, then I become a trader. Note that very few investors have the discipline to sell on the way up, and many then freeze on the way down – so it becomes another “permanent” investment for me.
  • If for some stupid unexpected illogical reason one goes down, will I sit with it? If my original assessment was correct, then the downturn is an aberration and I should keep holding it because it will go back up and then I can watch it continue going up according to my expectations.
  • If I am right, what are the chances it will continue to outperform the market if I hold it for a long period? Probably not too great. Most stocks tend to revert to the mean. That is, they settle in to their sector’s average over a ten year period. I haven’t calculated this, and perhaps that’s a good project for one of my interns this summer, but I do look at the ten year market averages that many companies include in their annual reports and many seem to settle in to the ten year average.
  • If I choose three stocks that I really like, is it possible that all three will perform to my expectations? Maybe and maybe not. I do know statistically that five stocks as a group will not perform significantly different than the average of the entire group they were chosen from. If one misses and the other two hit, then how much better will the average of these three be from the group’s average? Probably not significantly different.
  • If I start picking individual stocks, then what is my benefit? How much richer will I become and what changes will result in my life because of this? Unless I put all or a significant portion of my money in these three stocks [which I will not do], I don’t see how the gains will result in any changes in my life style while the losses might cause changes. If I put a small portion in these stocks, they any ups or downs really won’t affect me, but I know from past history that the stocks that go down will upset me. Why should I subject myself to that?

My reality check is that the purpose of my investments is to secure my and my family’s future – not to have fun. Anything that puts my future security at risk is a no-no. I am a grown man and have figured out many ways of having fun without placing my future at risk. Why would I do anything that moves me away from this?

For me, I will stay with the index funds as boring as they are because they will make my life as exciting as I want it to be.

The 10 Commandments Contemporary Update

May 31, 2018

At Synagogues on the Sabbath it is typical for the Rabbi to present a sermon or an explanation of the Torah reading. May 19 was the day before the Jewish holiday of Shavuot when we celebrate receiving The Ten Commandments and I asked my rabbi if I could include what he said in my blog. His words are not limited or restricted to Jews and I think it is a message for everyone to pay attention to, so here it is. It was written and presented by Rabbi Joel Mishkin of Congregation Beth Ohr in Old Bridge, New Jersey.

There is a long standing debate about the precise date of the events that we will read about tomorrow morning in the Torah portion designated for the Festival of Shavuot. Most biblical scholars believe the Exodus happened somewhere around the year 1300 BCE, give or take a couple of hundred years. If they are correct it would mean that our ancestors were standing at Sinai some 3,300 years ago when Moses walked up to the top of the mountain, and God proclaimed the words of the 10 commandments.

So it is amazing to me that 3,300 years after the words were spoken, they still remain relevant in our lives. We understand that if we can follow at least these 10 laws, we will be on the track to living a moral and ethical life. And what is more, the 10 commandments are understood as a sort of foundational guide for the basis of a civilized society.

All that being said, and with all due respect, the list of laws we read this morning is 3,300 years old. Since the commandments came into being the world has changed dramatically, and the Israelites who first followed the commandments as their moral code would not even recognize the world we live in today. So this morning I would like to offer a contemporary version of the 10 commandments. This is not meant to replace the originals, but rather to help us think about how the words that Moses recorded so long ago can continue to bring meaning and guidance into our lives.

  1. The first of the commandments – I am the Lord your God – is understood by Maimonides as a commandment about belief – we must believe in God – is therefore the first of the 10. I would like to understand that in today’s terms to mean that we need to have a spiritual dimension in our lives. We are beings that exist on three levels. There is a physical level of our existence. We must eat, we must sleep, we must keep our bodies healthy in order to live. We are physical creatures living in a physical world. But we also are intellectual beings. We think, we create, we ponder, we are curious about the world around us, we problem solve – this is our intellect at work. But Judaism teaches that mind and body alone are not sufficient to live a fully human life – you also must have a soul. And without those three parts working together – body, mind, and soul – we are not complete. Commandment #1 – the spiritual dimension of life.
  2. The second commandment is do not have other gods before Me. This is commonly understood as the prohibition of idol worship, long considered one of the gravest sins a Jew could commit. In our culture today we might rarely if ever be tempted to worship an actual idol. That being said there are many metaphoric idols that can creep into our lives. Money and power come to mind right away. Ego might be another. Work can become an idol. So can material goods. The list could go on and on. So commandment #2 – be aware of the idols in contemporary life, and remember it is just as much of a sin to worship them as to worship an actual idol.
  3. The third commandment – do not take God’s name in vain. I’ll understand that to mean that certain things in our lives should be sacred, and they should not be wasted. Trust would be one of those. Our relationships another. Our reputations as well. Our God given talents. When we squander these things , when we use them for vain purposes, we are less holy, we diminish ourselves, and we diminish God, in Whose image we are created.
  4. Number four – remember the Sabbath day! We need time to think and be, without the constant distractions and interruptions that have become so prevalent in modern life. If we can carve out 24 hours a week to be screen free – no phones, no computers – we will be healthier, happier, and holier, and will have a deeper sense of peace about ourselves and our lives.
  5. Commandment #5 – honor your father and mother. In a world where we are living longer and longer lives, this commandment can be the basis for the moral conversation we need to have about aging with dignity. It is a complicated conversation that touches on topics as wide ranging as medical care, assisted suicide, and how ‘quality of life’ is defined. But the idea of honoring our elders can be a touchstone as we tackle these difficult issues.
  6. Commandment #6 – do not murder. For contemporary times I would like to expand this commandment beyond the scope of the individual, and understand it as applying to entire communities. There are cities all around the country with unbelievably high murder rates. The sixth commandment reminds us that if we live in one of these communities, even if we don’t kill someone ourselves, we should feel a sense of responsibility for what is happening, and should work to make our communities safer and less violent.
  7. Commandment #7 – do not commit adultery. In a time when marriage is being challenged on multiple fronts, and when marriage rates in America are the lowest they’ve ever been, the Torah reminds us that a committed, long term relationship with a single person is a meaningful and even more importantly sacred way to live a life.
  8. Number eight – do not steal. We have grown accustomed to having virtually everything we want. But there is a difference between what you want, and what you need. If we can remember that distinction, if we can remember what it is we truly need – health, people to share our lives with, safety, a place to live and food to eat – than we would not be tempted to take what does not belong to us.
  9. The ninth commandment is – do not testify falsely. Which I will understand in this contemporary 10 commandments to be a message about truth. Sometimes it seems like truth itself is under siege today – the phrase ‘alternate facts’ or ‘fake news’ comes immediately to mind. There are times when we may not know exactly what happened, or when facts are not entirely clear. But often the truth can be determined and known. The ninth commandment reminds us that truth is still a sacred value, and that when we honestly examine our lives, ourselves, and our world, the truth can often be discovered.
  10. And finally, commandment #10 – do not covet, do not be envious. Commentators have long noted that envy is one of the most destructive emotions, and can lead to the breaking of a series of other commandments, for a person who is envious might lie, steal, commit adultery, and even murder. In today’s world the best antidote to envy is gratitude, and in Judaism gratitude comes from understanding that everything we have is a gift from God.

So there you have it, a contemporary 10 commandments for today. Again, not to replace the originals, but with the hope of reminding us again as we approach Shavuot of how relevant these ancient words can still be in our lives, and of what a great gift the Torah we celebrate today truly is.

A previous blog had a listing of The Ten Commandments.