Good Enough Tech
Michael Flack | Nov 11, 2021
MY BROTHER-IN-LAW just told me about a technology issue that he’s been struggling with. He was trying to get an old scanner to connect with his Mac. The solution required him to upload some outdated software. When he finished explaining how he resolved the issue, I was happy he could scan again. I was even happier that I had a $250 personal computer. Nothing irks me more than paying a premium—the Mac premium, in his case—and winding up with connectivity issues. This reminded me of an article from 2014 titled, “In Praise of Crap Technology.” The author extolled the virtues of his Coby mp3 player. It was an ancient piece of technology, even then. But it allowed him to listen to music while exercising at a very reasonable price. Now, when I say crap technology, I’m referring to older technology that still gets the job done. Not crappy technology that never got the job done, like Google Glass. I like crap technology for several reasons. The first is economics. Until a few years ago, I’d never owned a laptop. I was issued a series of expensive laptops at work. They were high-end because they needed to run company software, like SAP and enormous spreadsheets. After I retired, I wanted a laptop for myself. My computer needs were small. A little Microsoft Office, some blogging and a lot of internet surfing. Buying a $1,200 Mac just didn't make sense. Besides, I’m a PC guy. I did a little research and settled on a bare-bones HP for $250. It has worked out just fine. [xyz-ihs snippet="Mobile-Subscribe"] If asked, most people will say that they just want to pay a fair price for a product or service. I believe this is an out-and-out lie. Most Americans want to pay less for more. Getting…
Read more » Artfully Dodged
Michael Flack | Sep 8, 2022
I HAD THE OPPORTUNITY to view Gustav Klimt’s most famous work of art, The Kiss, while visiting Vienna a few years back. It depicts a couple locked in an intimate embrace. It’s an oil painting with a significant amount of gold leaf—quite distinctive. A few weeks later, I had an opportunity to buy a Klimt. I was in a gallery in Salzburg and came across a drawing of his which was titled Stehender Rückenakt - 1913. I can’t remember the exact price. But since I didn’t buy it, it most likely cost a little more than I thought it was worth—or more than I currently had in my wallet. Still, I’ve always wondered what it would look like in both my living room and my portfolio. This pleasant memory all came back to me recently when a friend emailed me a link offering me a second chance to add artwork to my portfolio. I must admit I was a little leery when I first clicked on it and the newly opened web page allowed me “to skip the waitlist!” It announced that I was now “invited to join an exclusive community investing in blue-chip art.” The link also informed me that Masterworks is a company that buys multi-million dollar works of art, creates a Delaware limited liability company to own each one and sells shares in that company to the public. It resells the art a few years later, presumably at a higher price, and then disburses the proceeds to shareholders. Masterworks enables the fractional ownership of art—basically art for the little people. I accepted the offer and opened an account. Before I could start investing, I needed to make an appointment with Masterworks’ registered financial advisor so he could learn more about me and answer any questions I might have.…
Read more » Voyage to Nowhere
Michael Flack | Jul 24, 2022
"REGRETS, I'VE HAD a few. But then again, too few to mention." What was true for Frank Sinatra most definitely isn’t true for me. I’ve had more than a few regrets, and I want to mention the most recent one. Late last year, Mark Cuban offered me $100 in bitcoin to download the Voyager app, deposit $100 and make a $10 trade. For those of you who are lucky enough not to know what Voyager was, it was an app that offered “a secure way to trade over 60 different crypto assets using its easy-to-use mobile application.” I’ve been retired now for a few years. Since idle hands are the devil’s workshop, I’ve used some of the time to accept bonuses offered by brokers, banks and financial institutions. Besides the obvious reward, I find these offers to be educational, though this time it was a little too educational. Like most people, I was intrigued when I first heard about bitcoin. After a colleague explained to me its inner workings and all the benefits of the blockchain, I was fascinated. I really thought that bitcoin might be worthy of investment. This didn’t last long. I realized that bitcoin may not be all it was cracked up to be when, a few hours later, I tried to explain it all to my wife and none of it made any sense. I should have gone on living bitcoin-free. But when Cuban made me the offer, I figured that—even if bitcoin went to zero—I would still have my original $100. I decided to play it safe. I made the required $10 trade with a quick roundtrip in and out of tether, a cryptocurrency designed to trade one-to-one with the U.S. dollar. In the end, I decided not to sell the bitcoin that Cuban gave…
Read more » Cashing In
Michael Flack | Mar 18, 2022
A FEW YEARS AGO, I fulfilled a lifelong dream and traveled around the world. It was fascinating to see how people lived, worked and—more important—ate. I sampled the cuisine of every country I visited. There was goulash in Hungary, hummus in Israel and escargot in France. In each location, I tried to learn how to ask for “the bill, please” in the local language. It’s “kérem a számlát” in Budapest, “חשבון בבקשה” in Tel Aviv (pronounced “khesh-bon be-va-ka-sha”), and “l'addition, s'il vous plait” in Paris. The smile on the server’s face was well worth the small effort of learning a few words of the local lingo. In each case, I used a credit card to pay the bill. Note that I didn’t say pay the “check.” Outside the U.S., a check is that piece of paper old farts sign promising to pay someone else a certain amount of money. While the concept of using a credit card is ubiquitous worldwide, the actual use of one is far less consistent. In Nordic countries, credit and debit card use is so pervasive that a law was passed in Sweden to ensure people could still get cash from a bank. The law’s purpose was to prevent the country from going completely cashless, which could be a problem during an electricity or internet outage. Canada is also a prodigious user of credit cards, being named the “world’s most cashless country.” At the other end of the spectrum is one of the most advanced economies on earth, Germany. Often, when I asked for “die rechnung bitte,” I was politely informed that a kreditkarte was not accepted. I asked a Berliner why, and he informed me—in impeccable English—that “Germans like to feel their money.” I’m not exactly sure what he meant, but I think it had…
Read more » Lost Abroad
Michael Flack | Jan 15, 2021
ONE OF THE GREATEST business books I’ve ever read is Antifragile by Nassim Nicholas Taleb. In it, he postulates the idea that, while things that become damaged by stress are considered fragile and things that resist stress are considered resilient, “there is no word for the exact opposite of fragile,” things that become stronger due to stress. So, he coined the word “antifragile” and then wrote an entire book about the subject. Well, we’re all familiar with a tax loophole, which has been defined as an “unintentional omission or obscurity in the law that allows the reduction of tax liability to a point below that intended by the framers of the law.” The backdoor Roth IRA is a good example. It allows those who wouldn’t ordinarily be able to make regular annual contributions to a Roth, because their income is too high, to instead contribute to a traditional IRA and then—voilà!—convert it to a Roth. What’s a word for an “unintentional omission or obscurity in the law that allows the increase of tax liability to a point above that intended by the framers of the law”? There is none, so I’ve coined the word “antiloophole,” though I won’t be writing an entire book about it. Like many of you, I own shares in publicly traded foreign stocks and have therefore had to pay foreign income taxes on my foreign dividends. Since I was filing a joint return with my wife and we paid less than $600 in foreign income taxes, we claimed the entire credit for these foreign taxes directly on our 1040. I like the diversification that foreign stocks afforded me, so I kept buying more and more, comforted by the innumerable articles and experts that stated that—if we lost more than $600 to foreign income taxes—all we need…
Read more » A Tale of Two Stocks
Michael Flack | Jan 24, 2022
HI, MY NAME IS MIKE and I’m a stock picker. Actually, I stopped picking a few years ago after I hit rock bottom and finally realized I had a problem. But there’s no such thing as an ex-stock picker. I still frequent Seeking Alpha, read the occasional Barron’s article and, every now and then, have the urge to buy an individual stock. I still occasionally fall off the wagon, but nothing like the ol’ days. Back then, I picked two stocks, but instead of earning a stream of rising dividends, I earned a valuable lesson. Stock No. 1: In the early 2000s, I formed an investment group using what was then the hottest website in the U.S… Craigslist. Over the next few months, I met with a group of diverse investors at what was then the hottest restaurant in the U.S… California Pizza Kitchen. Over numerous Thai crunch salads, we discussed various investments ideas, including “condo-izing” a small apartment building, Vector Tobacco, Audible and—what I thought was the best one—Medallion Financial Corp. Medallion Financial provided loans to buy taxicab medallions in New York, Boston, Chicago, Newark and Cambridge. For those who don’t live in these cities, a medallion is the license required to operate a taxicab. It’s a piece of metal about six inches across that is physically mounted to the hood of a taxicab. Every taxicab has to have one. It was also a license to print money for those who owned one. New York City drastically limited the number of taxis in Midtown Manhattan. Anyone who has ever tried to hail a taxicab outside Penn Station on a rainy Friday during rush hour could attest to its worth. While this country doesn’t like the idea of a cartel trying to set the price of oil, New York didn’t seem…
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