Posts Tagged ‘market’

James Grippando’s Novella “The Penny Jumper” – Trading Stock at Lightspeed

Monday, December 12th, 2016

#highfrequencytrrading $daytrading #stockmarket  thepennyjumper #daytrading #pennystock

 

John J. Hohn - Writer, Reviewer and Commentator

John J. Hohn – Writer, Reviewer and Commentator

Time is money, but what is the price tag that comes with it. Bestselling author James Grippando sets the amount at about 160 million every trading day on Wall Street. That’s for a single millisecond or .001 seconds. Why so much? Simple. High frequency traders on the world’s stock exchanges go to great lengths to gain a millisecond advantage over their competitors. In an intricate network of computers and trading systems, one millisecond gives a firm the chance to increase profits by jumping up the price on large blocks of stock by one cent per share. Companies losing money to the high-jacking of the data stream want to put an end to the practice. Their quest sets the stage for Grippando’s excellent novella, The Penny Jumper.

It will take an complex algorithm to stop the penny jumpers from hitchhiking onto the trades streaming from every corner of the globe. In fact, it would require a genius, one presumably beyond the reach of Wall Street, nestled obscurely in a university staff somewhere working in a field of pure research. Turns out Ainsley Grace – young, pretty and bright – is engaged in a monumental project at MIT that would harness all the telescopes of the world and convert them into one huge cyclops to penetrate outer space. The distances data must travel from the far flung locations needs to be synchronized before a composite image is possible. Ainsley configures an algorithm that has all the scopes seeing as one. Kudos for the achievement, however, do not come with a bonus that would alleviate Ainsley’s heavy student load debt. She accepts a consulting job with a Wall Street firm who is wrestling with the penny jumper problem.

James Grippando - Auhor

James Grippando – Auhor

Leaving Boston for New York, Ainsley comes up with the algorithm her employers that will protect them against the penny jumpers. Problem is, before she can collect her six figure fee, her program is stolen, and to top it off, she is the accused of absconding with it herself. She is being framed but proving her innocence is no easy task and there are disarming twists and turns along the way that make her plight at times seem hopeless.

Author Grippando’s tale of Ainsley’s adventure in the wilds of capitalism, where greed is good, is exquisitely symmetrical. Everything he starts, he finishes. No loose ends. The author’s style is lean and efficient, providing just enough detail to orient the reader with each setting. The pace of the mystery is almost as fast as the data streams central to the story without sacrificing insight into the characters or concocting unlikely coincidences to move the plot along. The courtroom scenes are compelling. The dialogue crisp and authentic. Ainsley’s relationship with her attorney and friend, Connor, is straightforward and realistic; in a word, refreshing. Grippando is a master at breaking down the scientific premise of the plot into layman’s terms. In his hands, brevity does not equate to superficiality. The author quotes Carl Sagan, for example, to answer to the age old debate of agnosticism versus atheism. He takes less than a paragraph were others have wasted pages. In a story about really bright, thinking people, the author’s genius shines in a plot that has thoroughly thought . There are plenty of surprises along the way, right up until the final page.

The Penny Jumper Cover

The Penny Jumper Cover

The Penny Jumper is nearly flawless. Author Grippando is marvelously inventive with every detail to keep the story credible, save one. Bad guy, Vlad Kosov, uses mob muscle to get the price reduced by half on a 50 million dollar property in Hong Kong. Real estate transactions at that stratospheric level, especially in Hong Kong, just don’t seem vulnerable to on-site threats from a thug. It wouldn’t matter so much, except that the man who is intimidated into selling is important to the rest of the plot. Readers may trip but not break stride on this detail because the story line is so compelling and beautifully presented. The Penny Jumper is thoroughly entertaining if a bit unsettling once readers realize the high volume trading network at the heart of our cherished free enterprise system might possibly be more vulnerable than most may think.

This review first appeared in somewhat condensed form on bookpleasures. com

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Self Publishing Often Sidesteps the Role Editors Play in Producing a Quality Work

Monday, September 9th, 2013

John J. Hohn, Writer and Reviewer

Time once was that an aspiring author fought to catch the attention of a publisher in order get a book to market. The chances of getting a book considered were slim. But once inside, an editor was appointed to work with the author, suggest revisions, and shape the story so that it would be more acceptable to the reading public.

Ultimately, publishing houses became overwhelmed with submissions. The gate-keeping function became a large part of the overhead and an expense that they would gladly pass on to others. Enter the writer’s agent. Agents represent writers and their works to the publishers with whom the agents have cultivated a relationship. When an agent places a book for an author with a publisher, the agent gets a cut of the sales proceeds. Agents, thus, became the gate-keepers. Traditional publishing houses no longer accept unsolicited manuscripts.

Word processing made preparing a manuscript a snap. Prior to word-processing, manuscripts were composed on a typewriter. Error correction was tedious and messy. Keeping a manuscript clean and free of typos, omissions and other glitches was a challenge in itself – enough to discourage anyone in the grips of an impulse to write a piece of any length.

Word possessing programs check spelling and grammar. Formatting each page is a automatic. The only thing left for the would-be author was to sit down and start keying. The end result is that thousands who would have been turned away from writing now found it easy. More manuscripts surged out of the printers all over the land.

Agents became the gatekeepers . . .

Agents, as gatekeepers, became overwhelmed with the volume. Deluged with submissions as the publishing houses were previously, snap decisions were the key to survival. Wrong format, wrong font, too many pages, too few pages – the criteria for rejection grew longer and longer. Agents now require a Letter of Inquiry, or query letter, to protect themselves against a tsunami of paper. A writer’s fate thus hangs on a well composed 250 word letter of appeal.

But then along came self-publishing. Writers found that they charge right past the agent and the traditional publishing house to get into print with modern digital print-on-demand (POD) publishing. POD can produce a bound book in any quantity from 1 to as many as ordered. (more…)

Detroit, 1966, Testing Ground for the Civil Rights Act of 1964

Monday, January 28th, 2013
John J Hohn and his dog Jessie

John J Hohn and his dog Jessie

#detroit  #detroitriots  #civilrightsact  #riots

Detroit was just another city, as far as I knew. Then my boss at the Minneapolis office of The Travelers called me one morning in the fall of 1965 to tell me that I was being transferred to the Motor City.

I ran the two blocks from the bus stop on 50th and Penn to tell my wife the news. It meant a raise. It meant a new home. It meant a ride on a jet plane. My career was underway. That night I went to the public library and looked up everything I could on Detroit. All I remember today is that “Detroit” means “straights” as in connecting waterways, and it had more miles of interstate per capita than another other U. S. City.

Detroit was huge. Downtown seemed to stretch for miles where Minneapolis was only a few blocks long. The company put me up in a downtown motel. My assignment was to find a home for my family, invite my wife to join me once I narrowed down the selection, and then make arrangements to move.

At the time, Detroit was in the middle of the automobile boom. Near full employment meant everybody was in the market to buy a home. My salary was about $5,500 year. Not bad for a guy in only his second year with the company, and I needed place large enough for my wife and me and our five children. Yes, $5,500 would support a family of seven in 1965, not well but the bills got paid.

I felt diminished, almost insignificant, by Detroit’s bigness. “The Battle of the Bulge” was playing in a theater within walking distance. With time on my hands in the evening, I headed out. The broad expanse Michigan Avenue was well lighted and humming with traffic. Yet uneasiness overtook me. There were almost no white faces on the street. Nearly everybody was black. I had never been in the minority in my life. I didn’t like it. A group of teenagers, all African-Americans (a term not in common use in the 1960’s), were laughing and clowning around on the sidewalk in front of me. As they approached, it looked as though they would not make room for me to pass, so I turned into a doorway of a bar and stepped inside. Not one white person in the place. I waited nervously for the youngsters to pass and went back out onto the street.

John J. Hohn, 1966

Detroit was prospering and prosperity brought changes. I was counseled about the neighborhoods that would be better suited for my family: i.e. no blacks. I finally found a place in Detroit proper just two blocks off of Tireman Avenue, the street that formed the boundary between Detroit and Dearborn. Dearborn was nestled under the right arm and shoulder of Detroit. Home of Ford Motor Company, Dearborn, under Mayor Orville L. Hubbard, was a blatantly racist, exclusively white middle class community, something that I discovered only after moving. The homes for sale in the neighborhood I chose were watched closely by the locals for fear the first black family might buy one and move in.

I was not concerned about the racial mix of the neighborhood. Nothing in my experience had told me that I should be. Prices were lower because it was a changing neighborhood. African-Americans had already encroached when they bought couple of homes on the fringe and that signaled the start of a decline. White homeowners believed that once a black family moved in, housing values in the immediate area would plummet. The belief, as beliefs often do, became a self-fulfilling prophecy as whites rushed to put houses on the market before the values dropped and the sudden appearance of new homes for sale drove prices downward.

I grew up in South Dakota, in a community that had almost no minorities in the general population. There was one African-American girl in my high school graduating class of 104. The state’s largest minority was Native American who were kept out of sight on reservations (see my earlier post on the subject.) The apprehension I felt on the streets of Detroit was the fear of the unknown, the fear of being without fellows of the same color nearby. And the fear that I felt in search of a home was that I would buy the wrong place, in the wrong neighborhood, and it would not be safe for my family.

I was aware of the racial conflict in America. I had read James Baldwin. As a high school teacher, I had my students (in an all white school) read Black Like Me. One of my white college classmates guarded James Meredith when Meredith walked to his first day of class at the University of Mississippi. I, like so many others, had seen the ugly violent face of discrimination and hatred as it played out on national TV. Detroit’s size was overwhelming, yes, but to be immersed among African-Americans for the first time in my life was a confrontation of sorts also. I didn’t want anyone I met to think that George Wallace spoke for me or that I was looking the other way at the lynching, church bombing, kidnapping and other atrocities that were taking place. I was fearful that, because of the color or my skin, I would be seen as another who could not be trusted because he belonged to the white hateful horde so violently opposed to allowing minorities to participate fully in American society. Yet here I was, two years after the Civil Rights Act of 1964, participating in a real estate venture that admitted racism as a consideration.

“This is probably OK,” the real estate consultant from my company told me. “You’ve got Oakman Boulevard right behind you. Those are expensive homes. Not just anyone can afford to move in there.”

I took a moment to knock on the door to the house next door. A woman called down to me from an upstairs window. “Yes?”

“I’m looking at the place next door for my family.”

“Oh. Wonderful! My, that’s wonderful.”

“Can you tell me if there is shopping close by?”

“Oh, yes. Very close. I shop in Dearborn, and the store I go to is only minutes away.”

“How about the schools?” I asked.

“You’ll just have to forgive me. We are grandparents and don’t have children in school any more. The schools are on the other side of Joy Road.” I would find out that Joy Road was the line between the integrated neighborhoods and the changing neighborhoods of west Detroit. The implication of the woman’s comment was lost on me.

(more…)

Internet Marketing Requires High Impact Photography to Attract

Monday, October 1st, 2012

Authors who self publish face many challenges in marketing their work. In my previous posts, I tried to establish several key concepts:

  • The task of Internet marketing is to attract.
  • Promotional efforts must focus on identified markets with available points of entry.
  • No data attests to the efficacy of one approach over any other.
  • Sales goals must be set realistically.
  • Positive reviews by established, credentialed reviewers are essential.
  • No guarantees. An excellent literary achievement may not sell well whereas a poor one may.
  • A respected presence in the market is built on trust.

Trust is established as a shopper’s perception is satisfied with the soliciting author’s propriety, competence, and intent. To succeed, an author needs to become consciously competent in projecting these qualities. Photos have high immediate impact on the reader and far more power to attract than the printed word. The photo on any web site should project a positive, trustworthy image.

The author must first decide whether photo is to project a comprehensive personal portrait or a  characterization that accentuates a side of the author’s personality that is representative of the author’s style and aesthetic values.  Portraits project a broad threshold for establishing trust. Characterizations, on the other hand, project an image that implies something specifically about the thrust of the author’s work  or personality.  A few examples may help to illustrate these points.

Portrait versus Characterization

Penny Sanesevieri, President, Author Marketing Experts.

This lady knows knows the Internet. The portrait is of Penny Sansevieri, President of Author Marketing Experts, a firm that helps authors ramp up their entrance into Internet marketing traffic. Penny’s photo is high impact for several reasons. She projects a picture of her true self. She is looking up into the camera, which places the viewer in a dominant position and grants the viewer a sense of control. Yet Penny’s open expression does not give up any of her power. The books she holds are often cropped on Facebook and other sites, but the position of her hands strongly implies that she has something of value to offer. The  image establishes a broadly attractive threshold for building trust.

John West

John West’s photo projects a engaging portrait of  himself . Again, he looks directly into the camera at the viewer. He looks upward, perhaps not as much as Penny, but enough to yield the viewer a dominant, controlling position. His smile is relaxed. Hands and arms are always important, nearly as important as a subject’s eyes, and John’s arm behind his head is non-aggressive. John’s congenial direct expression projects a broadly attractive threshold for building trust. Most web sites only allow a postage stamp size area for a photo. The impact of John’s portrait is not diminished by a reduction in size.

A  direct, into-the-lens photo risks becoming confrontational. The confrontational quality can be softened with attention to a few simple rules.

The Eye of the Beholder — The Lens

Eric J. Hohnm Musician

This is a photo portrait of my son Eric. He is on the same level as the camera, but the composition of the photo, the neutral placement of his hands on his audio mixer, his quiet reassuring expression, and the soft black-and-white lighting all project trustworthy qualities. Black-and-white may also have nostalgic overtones. The photo is artistic without being affected. Composition and lighting, subjects deserving discussion in their own right, can enhance the impact of a portrait but they are often risky for the amateur. Props can be used effectively in a photo. In this case, the inclusion of Eric’s mixer panel quietly attests to his profession as a sound man and musician. Because of the lighting and the use of black and white, Eric’s photo may have reduced the impact of the photo but did so in a manner that did not weaken the trust-building threshold.

My own photo in the banner to my web site is also on the same level with the camera.  It is perhaps slightly more confrontational than Eric’s, but I am a serious writer. Humor is almost never the thrust of my work. I want my portrait to project me as a thoughtful, somewhat serious guy who is open to others but tending to be a bit more formal than the others featured in this article. My photo may also have narrowed the trust threshold because the serious expression projects less warmth and willingness to relate.

Tom Rieber, Author

Tom Rieber writes fast-moving, adventure/crime novels. His picture is completely consistent with the thrust of his work. Dark glasses are usually a bad idea, but his are not opaque. Eyes are the most important in any photo; cover them and the viewer is denied the most important source of information about the subject. In Tom’s case, however, dark glasses are high impact. His photo communicates confidence, a quality softened somewhat because he looks up into the camera. Photos that are not taken head on–with the subject turning into the camera–usually communicate an offhand, candid quality, as if the subject was otherwise occupied at the time the picture was taken. In Tom’s case, his sideways look enhances the casual quality of the portrait and that quality, along with the beach background, may have narrowed the trust threshold somewhat, but at the same time adds to the image of a guy with carefree lifestyle who is comfortable with himself.

Avoiding the Eye of the Camera

Looking away from the camera is risky because the subject disengages from the viewer. The subject appears uninterested in the viewer, but something more subtle is actually taking place.  The subject is sharing his or her perspective with the viewer and becomes one with the viewer. Done well, the sharing can be on a quietly intimate level. The subject’s message is this is how I see myself.  Most amateur efforts in this approach fail and very little is communicated about the subject. But exceptions prove the rule.

John Coates

The photo of John Coates attracts and establishes a strong threshold for building trust because it is completely non-confrontational. John’s expression is calmly thoughtful. The composition could be improved if the photo was not so tightly cropped around the subject’s head, but it is sufficiently open to create distance for the viewer to consider the image without a sense of intruding on the subject. The softer blue tones also convey a sense of calm thought. Coates’ upward gaze is fixed on something distant, a deep thought perhaps or a reverie. The placement of John’s hands is consistent with the thoughtful, almost spiritual, impact of this very honest photo. The seriousness of the composition may limit the appeal of the photo, but it does so without reducing trust-building threshold.

Most portraits concentrate on depicting the author in an honest rendering and do not usually project specific clues  about an author’s work or writing style. (more…)

Self Publishing Succeeds only with Competent Marketing.

Monday, September 17th, 2012

Author John J. Hohn and dog Jessie

I chose the self publishing route for my novel, Deadly Portfolio: A Killing in Hedge Funds, and went to press with it before I understood all that was involved with marketing a book. I assumed my experience as a career salesperson, as I have reported in previous blog postings, would carry me. I wanted to apply what had worked well for me throughout my career in promoting my book.

Where to begin? At first, selling on the Internet appeared to be a numbers game, like drummer methods in selling; i.e. make 25 calls, cold calls, with a memorized spiel every day, and odds will eventually work in your favor. The law of numbers meant that every rejection brought the salesperson closer to a sale. Onerous business. But the comparison is fair.

Cold Calling and Creating A Buzz

The thinking behind cold calling and “creating a buzz” on the Internet is essentially the same. More exposure increases the likelihood that someone will opt for the product or service being offered. For those durable enough to use it, the numbers game pursued on the Internet may eventually lead to a level of success.

The trouble with cold calling and trolling the Internet is that 1) they are boring, 2) they do little to help build trust between buyer and seller, 3) they are inefficient and time-consuming, and 4) they often fail to differentiate a superior product or service from the run of the mill.

Most people feel comfortable making the buying decision only after they have developed trust in the salesperson and the company being represented. That being the case, the place to begin any sales effort is with an understanding of how to build trust with another and how to construct an ethical sales presentation based upon that knowledge. (more…)

Authors Who Self Publish Must Become Skilled Marketers of Their Product

Monday, September 10th, 2012

Author John J. Hohn and dog Jessie

When I decided to self publish my first novel Deadly Portfolio: A Killing in Hedge Funds, I thought that I could make the book happen—become a big seller, harvest scores of glowing reviews, and find the world had come knocking. Some of that has come true.

The reviews have been consistently enthusiastic. I have been invited to radio and pod-cast interviews and to contribute to the web sites of others. My own web site has reaped dozens of positive comments. I thought that I was on the right track. I thought that I was making it happen. Sales of the book have been steady, but despite all of this positive activity, the Times Best Seller List, or anything like it, is still well beyond my far horizon.

I knew little about the publishing world when I began poking around in the industry. I had been a successful salesperson throughout my career. I felt confidant that I would find the knack to Internet selling and my experience would be a great help. The skills set had to be the same even if the marketing landscape was different.

Finding the Market

The first step for a salesperson in any field is to define a market—an approachable large group of people who share an identified need in common and possess the resources to address it. In investment management services, that meant affluent business owners and professionals who had money to invest. Finding a starting point was as easy as picking up the Yellow Pages. Points of entry to the market included service clubs, professional associations, and membership in charitable organizations—anywhere one could expect to find qualified people. But what about marketing a book?

I wanted family, friends, classmates, local bookstore owners and others to read my book, but compared against the 10 per cent of the American population who read, they were hardly a market. 30 million people are readers in this country and millions more outside the U. S.

From the onset, I was urged to create a buzz on the Internet. I polished my web site, created a presence on twitter, facebook, Linkedin, and a host of other online facilities. Keeping current with posting became a full time job, so much so that I had almost no time for writing.

Independent Market Exists for Those Making Money in It,

Consultants and publicists urge their clients to be active on an array of sites, but I have yet to see any statistics that establish the X number of tweets will generate Y number of sales. Or that A number of facebook posts will predict B volume in sales. I doubt that anyone is keeping track. One consultant proclaimed that it takes 50 posts on an author’s web site in order to get a buzz started. 50 is certainly better than 20. 100 might be twice a good as 50. But with neither number is there any statistical assurance the promotional effort will pay off.

Independent authors are actively courted by publishers, publicists, consultants, reviewers, and book festival and contest sponsors of all sorts because they, above all, are the ones who are making the money in of the publish-on-demand market. The market exists for them. They were not around when traditional publishers  represented the only way into print. Of course, they praise an author’s effort. Anything else is to turn away a client and the bucks that go with it.  Authors enter the arena wishing to have their dreams fed and their aspirations nurtured, realistic or not, and the affirmation that they are seeking is being delivered bushel upon bushel by those who are making money, not off the reading public, but off the writers. The  industry exists primarily as a market for those who are working within it. The writer is their market and their prey. The reading public is a tertiary consideration, at best. (more…)

When a Million Is Not Enough — Part II ( Margin is not the Answer)

Wednesday, March 14th, 2012

John J. Hohn and dog Jessie

Everyone saw it coming except my client. Big Dan pulled up stakes and left. My client had backed him until her million dollar nest egg was severely depleted and her own well being in jeopardy. The margin loan (See Part I) was not being repaid. It was on the books at a rate of 8.50%. Advisors are often compensated for promoting use of margin loans. They can get paid a few basis points on the interest. My policy was to avoid margin. My reasoning went as follows:

  • The interest charged on margin loans is a difficult to beat with a return on investments.
  • The rate  is usually higher than what a bank might offer.
  • Borrowing money to bolster portfolio performance is inherently risky and usually reflects a lack of planning. If a client doesn’t have enough money to make a plan work, the goals have not been set realistically
  • Borrowing is addictive. Once an investor takes out a margin loan, additional borrowings become easier and easier.
  • Planning becomes much more complicated with the additional task of retiring the loan to be worked into it.
  • Borrowing on margin is almost always justified because the investor wants to make a high-risk purchase. A sure thing is almost always a long shot and when it doesn’t pay, the loss is twice as painful because the loan is still on the books.
  • Most investors would not borrow money from a bank or mortgage company to fund an investment purchase, as it seems too risky. A margin loan is no less risky, just more convenient, so much so investors do not stop to think.

True to form, my client called one day to tell me that she wanted to buy stock in a local software company that planned to put all the books ever published on the Internet and allow anyone with a computer to access them. No. This wasn’t Google. It was a local start-up that was being put together by a man who had one failure notched in his belt already—a robotics company that never got off the ground and lost thousands for scores of local investors.

“Everybody is getting in,” she insisted. “We’re friends. I see him at the club all of the time.”

I asked her if she had seen any literature, a statement from an investment banker, or anything of the sort.  “He’s not going to delay things by jumping through all of the bureaucratic hoops. He says business is over regulated by the government anyway.” I realized that she could write check on her account any day that she wanted, so I thanked her for calling, promised to look into the situation and call her back.

Research is Part of a Financial Advisor’s Service

I was curious. But I also believed that primary research is part of the package of services I offered my clients. Clients often take a narrow view a financial advisor’s service. The advisor gets slotted into a role as a stocks and bonds broker who buys and sells for them and little else. The advisor may do little to discourage the client. Research does not always end up with a recommendation to buy or sell anything. The advisor will see the time as unproductive, and if the advisor is being paid on a per-trade basis, research is not necessarily income generating. It can lead to other investment ideas or  help build loyalty because it is a value-added dimension of the relationship with the client, but the payoffs are not as immediate as many advisors might like.

I discovered that the founder of the new company was not following the usual protocol in making an initial public offering. I was unable to reach him by phone and he never returned my calls. I asked other financial advisors in town for whatever information they had on the company and everyone reported the same results. I called my client to let her know what I had found. (more…)

Financial Advisor Enjoys Referral to First Millionaire Client.

Friday, March 2nd, 2012
Author John J. Hohn, Retired Financial Adviser

Financial Advisor John J. Hohn, Retired

She was going to be my first million-dollar account. It was my first year as a financial advisor. The attorney who handled her divorce referred her to me. In her 30’s, she was very attractive. Her poise, I found out as time passed, was more a product of her ignorance over what to do than cultivated reserve. She had learned—and one can only guess at the causes—to play the role of the consummate victim.

A million-dollars ought to have been enough to maintain a modest but comfortable lifestyle even for someone in her early 30’s. The stock market averages a return of 8.00% over the period for which records have been kept. $80,000 might be a little too much to expect year in and year out. But she was also awarded child support by the divorce court, and although her ex had yet to come through with the payments, he was the wealthy son of a wealthy family and there was no concern over his ability to pay.

A Million Dollars Ought to be Enough

I proposed a moderate risk portfolio for her, one that balanced a well-diversified allocation of stocks with a robust collection of bonds and ample access to cash for living expenses. She seemed to understand the plan. She seemed impressed with the need to stay within a budget. Nothing could have been further form the truth.

“It was just such a cute car,” she explained over the phone one afternoon. “I didn’t think that it would hurt to buy it. It was the only one they had. It’s a convertible.” She was on vacation at the beach when she called. She bought the car from a dealer she didn’t know. She paid sticker price for it. She paid cash. She did not trade her station wagon because, as she explained, she still needed it for hauling her boys around.

I allowed that perhaps $55,000 off the top of the portfolio might not make that much difference over the long haul, but that she needed to recommit to her budget. I began to fill the Dutch Uncle role that often falls to a financial advisor, one for which he or she is really never trained as so much depends on the advisor’s own life experience—a good argument for choosing an advisor who is at least 35 years old.

I heard from an attorney that she had won her case against her ex for the back child support. “The case came up in a best practices review bar meeting as an example of overcharging,” he explained. “These guys really ripped her. Their charges were so egregious that the participants reviewing the case actually laughed about it.” She had employed a well-known firm in Winston-Salem, one with whom I had dealt often enough to know how expensive they were, and in more than one case, how arrogant they could be. (One of the firm’s partners showed up for a lunch with a multimillion dollar client and me, and it became immediately apparent that he had not reviewed the file before meeting with us.)

I was alarmed, of course, and without revealing my source invited the woman in to meet with me. I told her that the fees she had been charged were exorbitant and she should appeal through the North Carolina Bar Association for a review. She refused. The attorneys had taken approximately 98% of the award that the court had given her. She did not want to make the effort, although some adjustment was all but assured because her case was so outrageously over the line. (more…)

Homemakers Managed Very Well Without A Second Car

Tuesday, February 7th, 2012

Author John J. Hohn, Age 9, 1948

#1940s  #homemaker  #midtwentiethcentury 

World War II ended The Great Depression. The country had been recovering leading up until the attack on Pearl Harbor, but once war was officially declared, American industry turned full blast to producing the arms to fight in Europe and the Pacific. Two-car families were a rarity during the 1930’s and the 1940’s. Production of automobiles ceased entirely sometime during 1942, and whatever was in the garage at the end of that year was going be the transportation for the family for the duration. If the family auto was needed for the husband’s business or employment, homemakers relied on home deliveries and other resources to keep the pantry well stocked.

Home deliveries and selling in the home were common marketing practices. Some vendors like Jewel-Tea had sales personnel driving vans stocked with house wares and foodstuffs that they presented to housewives in the home. Jewel-Tea pottery and dishware are popular nostalgic collectibles today. Two creamery dairies in our home delivered milk to the door. Empty quart and pint glass bottles were set out for the milkman to take back to the creamery for reuse. A returnable quart bottle would fetch a nickel if a kid could find one and return it.

Twice a week, the iceman’s pickup truck trundled down the alley as he looked in his customers’ windows for their orders. To place an order, homemakers placed a card in the window with the desired weight showing at the top of it. Seeing the card, the iceman stopped, threw back the tarpaulin covering the ice in the back of his truck, and using an ice spade, chopped out a chunk as close to the weight specified by the order as he could make it. Chips flew as he chopped, and on hot days, we would gather around to grab a chip or two as if they were a Popsicle treat. With ice tongs, the deliveryman picked up piece to be delivered, weighed it, and then slung the chunk up on his leather shoulder patch and carried it into the customer’s home.

My Boyhood Home, 412 Pine Street in Yankton Today.

Door to door salesmen plied their wares from door to door once prosperity returned. The Fuller Brush man sold more than brushes. His case might also contain soaps and toiletries, shoe polish and other sundries. Vacuum cleaners were also sold door to door and became very popular, as only the wealthiest could afford them during the depression. Without a vacuum cleaner, rugs were taken up in the Spring and Fall, hauled out of doors, hung over a clothesline and the dust was beaten out of them by hand with a rug beater amid coughing and sneezing by the person assigned to the chore. Once vacuum cleaners gained wider acceptance, the rage became wall-to-wall carpeting, an immediate sign to a visitor that the household owned a vacuum cleaner and the beauty of waxed natural wood floors became a casualty to the venial vanity.

Life insurance agents also made the rounds to homes to collect on policies on a weekly or monthly basis, sometimes just a few cents of premium. The agent was often referred to as the debit man, and large companies like The Prudential, Metropolitan and others were reluctant to abandon the practice, especially in the poorer neighborhoods and collections from homemakers were still being made by debit men up until the 1970’s in some areas.

Pine Street in My Hometown Looking Very Much Like It Did in 1948

In my hometown of Yankton, South Dakota, many grocers delivered orders to the home. My mother telephoned Hasker’s Market at least once a week. She knew the butcher personally. “And, Roy, I’d like a nice lean roast for Sunday. Do you have something really special on hand? Yes. For seven. My sister and husband will be eating with us. A shoulder? Aren’t they a little tougher? Ok. No. That’s fine. I’ll take your word on it.” Reaching agreement on the meat sight unseen over the phone, Mom would complete her order for everything needed for her meal planning or the household.

Later in the day that the order was placed, Walt Larson would pull into the family driveway on his Harley-Davidson with a sidecar cargo carrier loaded with orders. Holding two bags of groceries in one arm, Walt walked right into the kitchen without knocking. “Groceries!” he would announce. His presence in the home was accepted as commonplace. Walt today would be considered a challenged person. He was competent to drive a motorcycle, however, it was one way that the community looked after the man. He performed an important job that utilized his abilities to the fullest. Today, he would probably be in a sheltered workshop and taxes would pay for his care and some menial form of employment. (more…)

Inflation Persists as a Concern for Folks in Retirement on a Fixed Income.

Friday, January 27th, 2012

Author John J. Hohn, Retired Financial Adviser

Financial Adviser John J. Hohn, Retired

I worked in the financial services industry for over 40 years, the last fifteen of which as a Financial Advisor for Merrill Lynch in Winston-Salem, NC. My novel, Deadly Portfolio, builds a story around Matthew Wirth, a retiring financial advisor who, in preparing for his own retirement, is turning his practice over to junior partner, Morrie Clay.  The following interview, while fictional in its presentation, expresses opinions based upon my experience. I have been retired since the end of 2007 and I am no longer a licensed investment advisor.  –John J. Hohn, Author

Reporter: Mr. Wirth, you are just one month into your retirement. Do you have any special thoughts on the transition into retirement, especially the financial side of things?

Wirth: It’s like shoving off in a boat. You need to work things out so that your savings and investments are good for the duration. There is no stopping to replenish anywhere along the way. Not unless you want to become a greeter at Wal-Mart or take up some job that a senior can handle.

Reporter: That doesn’t sound like anything you have in mind at this point in your life.

Wirth: No. I hope not. My wife and I still have income from Social Security and dividend and interest income from our investments. Also, I’m not opposed to harvesting profits from time to time. The tax rate on capital gains is often less than the rate a couple pays in income tax. Too many people, especially retirees, hold on to their stocks too long, well past their peaks and into decline. The selling decision is more difficult decision than the buying decision. If a stock has done well, we think that it has more room to run. But every high from high someday declines. The same research that goes into buying a stock or a fund goes into selling it. Research, decide, invest. It’s that simple.

Reporter: You make it sound so cut and dried.

Wirth: Investing is simple. Human beings are complex. There is a point of diminishing returns to research. Usually three good reasons are all anyone needs to make a decision. Anything less usually does not help people feel as sure as they wanted to be.

Reporter: So you are a buy-and-hold investor?

Wirth: Absolutely. These guys, the fast draw artists, glued to their laptops waiting for a stock to break one way or the other are too much for me. Some trading platforms can be downloaded to smaller devices like cell phones, and a trader can buy or a sell at any time from any place. I wouldn’t want to live that way. I don’t believe in holding a stock come hell or high water either. People who retire with a lot of their company’s stock often hold too much of their old employer’s stock, and they can not be convinced to sell it. I some cases, like Merrill Lynch, Wachovia, Bank of America, Krispy Kreme—too mention a few—they paid terribly for their loyalty.

Reporter: Let’s say that I am a buy-and-hold investor. Do I watch my stock portfolio? How closely should I watch the market?

Wirth: Great question. I’d say never. Never watch the market. Watch the economy. Human beings control the market. Humans are motivated by fear and greed. The economy is a much more reliable predictor of how well investments will perform. I like to compare it to horse racing, although I don’t put investing in the same category as gambling. Look at the economy and find the lanes that are most likely to produce a fast track. In a recession like the one we have been experiencing, defensive stocks—staples, health care, medical care—have provided the better performance. That will change. When it does, find a few good horses in the other lanes. You’ll do fine.

Reporter: What about bonds? You haven’t mentioned them.

Wirth: Good old, boring old bonds. Retirees favor them too much. They think that bonds are the untouchables and will never lose money. But they do. Think back to the inflation that this country experienced in the last couple of years of the Carter Administration. Money market funds—cash—were earning 16 to 19 percent at the time because the government lost control. We had a war to pay for. We had Johnson’s “Great Society” to pay for. We were in debt for both so we just let money get real cheap. We paid the debt of at rate of about 60 cents on the dollar. Bondholders took a bath. The interest they were getting paid didn’t keep up. When their bonds matured, they had no buying power left in them. It’s another whole story—maybe another interview on some other day. That’s why I am concerned about the spending and the huge national debt today. We keep bringing up short-term solutions, but none will work. Letting inflation take over will look too easy in the long run and people living on fixed income will bear the brunt.

Reporter: Could that happen again?  That kind of inflation?

Wirth: It’s happening all of the time. The only question is how severe is it. When I graduated form college in 1961, anyone landing a trainee position with a major company felt great at being offered $5,200 a year for a start. A dollar went a lot farther in those days, of course. I bought a house for $18,000 in 1969. In 1978, it sold for $82,000. The same house.  Nothing much had been done to it. A good automobile in 1964 might have cost $4,800. Today, the sticker price is probably $48,000. We aren’t getting anywhere with all of this. We are just putting bigger numbers on everything and going down the road as if nothing is wrong. (more…)