Bitcoin, Gold, Cash, or Equities

Let's start with a hypothetical $ 10,000 (that I don't have). But upcoming the hypothetical investor is about ready to receive $ 10,000: perhaps from a bonus, an inheritance, a tax refund or pennies from heaven. What would I do?


This expresses my view perfectly: Bitcoin and the Incredible Power of Fiction
"When the history is written, cryptocurrencies will likely be described as one of the most brilliant scams in history." ... "We all laugh at primitive tribes which used large stones (or pigs) as currency. Well, laugh as you will, but a stone or a healthy pig is something. Cryptocurrencies are nothing except the marketing power of inventors, financiers and others who love the idea of buying a black box (which is obviously empty) for the price of a Kia and dreaming that it will turn into a Mercedes. There have been times recently when this dream has materialized within hours. This is not just a bubble. It is not just a fraud. It is perhaps the outer limit, the ultimate expression, of the ability of humans to seize upon ether and hope to ride it to the stars."
As an aside, I have .0039 in Bitcoin. I "invested" a dollar 3 years ago.

You'll need a bit (no pun) more than $ 10,000 for 1 Bitcoin today


 A metals broker I have used: Apmex
  1. Must be stored (safety deposit box)
  2. No dividend
  3. While there is a market, there's no ready market: to sell you have to box, insure and ship
  4. Some view Gold the same as Bitcoin: "“(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” ... "Whereas, you know, Coca-Cola (KO) will be making money, and I think Wells Fargo (WFC) will be making a lot of money, and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that." Warren Buffett
  1. If the sky ever falls ... (remember ... if the world "ends" the Internet will be down!)
  2. Beauty
  3. Makes a nice gift to grandkids when they turn 18 (my plan!)
  4. You can buy an ETF 
  5. To counter Warren Buffett:

At today's rate, $ 10,000 will buy you this:


Have an solid emergency fund: How to Build an Emergency Fund When You're Counting Every Penny - There are ways to save money even when money is tight
You’ve heard it time and again: It’s important to set aside three to six months’ expenses for an emergency fund. Easier said than done, right? If you have a lot of debt, live on a fixed income or have unpredictable expenses, putting aside that much money can seem nearly impossible. The good news is you don’t have to do it all at once - even a little money in savings can go a long way.
Comment: $ 1,000 isn't enough! If you have none, use that $ 10,000 for your emergency fund!

I'm going with Warren's view expressed above. I have an emergency fund. I've got my couple of coins. I would go with a solid dividend stock like sleepy General Mills (in the news today because they are acquiring Blue Buffalo). 100 shares of GIS (which pays a 3.6% dividend) for about $ 5,400 and 100 shares of Coca-Cola for about $ 4,400 (pays a 3.6% dividend as well) 

Comment: If interested in Bitcoin, Coinbase is a good place to buy. But it's funny money

Contrarian view: Bitcoin is a better gold

On ICO's

I don't either!


The Filthy Streets of San Francisco

Diseased Streets


The NBC Bay Area Investigative Unit surveyed 153 blocks of downtown San Francisco in search of trash, needles, and feces. The investigation revealed trash littered across every block. The survey also found 41 blocks dotted with needles and 96 blocks sullied with piles of feces.

How dirty is San Francisco? An NBC Bay Area Investigation reveals a dangerous mix of drug needles, garbage, and feces throughout downtown San Francisco. The Investigative Unit surveyed 153 blocks of the city – the more than 20-mile stretch includes popular tourist spots like Union Square and major hotel chains. The area – bordered by Van Ness Avenue, Market Street, Post Street and Grant Avenue – is also home to City Hall, schools, playgrounds, and a police station.

“The contamination is … much greater than communities in Brazil or Kenya or India"
Comment: Nice!

Jim's Tax Tips

Back to Basics: What You Need to File Taxes


Prep the proper paperwork. Gather up all your income statements from the previous year and find the right forms so you can report all income and claim every credit or deduction by taking advantage of every available deal.
My tips:

  • Do your own taxes. I've been doing my own taxes for 40+ years. By doing your own taxes, you will understand how the tax system works.
  • Use a tool like TurboTax (there are many other products but I've been using TurboTax almost exclusively for decades). The product that I prefer is the client version (versus the cloud or online version). We discovered that the cloud version doesn't handle Federal estimated taxes). Another advantage of the TurboTax client version is that you can go directly to the form(s) if needed
  • Download and be prepared to use the official IRS instructions for the current year. This year we used it for the issue of Foreign Dividends.
  • Have a filing system: Ours is a hanging folder for current taxes. After we file, we move the contents of this to a manila envelope, seal it and write on the outside "Taxes" + the year
  • I also have a folder system (Microsoft One-Drive)

  • This year we scanned every document to PDF and saved in the cloud
  • Have a checklist. Because we are retired, we are done with W-2's but we receive 1099-R's so for 2018, my document checklist looks as follows:

  • I key in the data from the documents as they arrive (the 1099-DIV from Wells Fargo is imported). We have a "two set of eyes" rule. We review (screen share) as the data is entered. Upon filing we review again (a double check)
  • Retain: receipts from HSA purchases (we have a separate file for this)
  • Retain: all receipts from charitable contributions 
  • Celebrate the privilege of paying taxes!


The Monsters are Due on Main Street

Day before Parkland, grandmother foiled grandson’s school shooting plans

In his own words:

"I'm preparing myself for the school shooting,” the teenager wrote, according to court documents. “I can’t wait. My aim has gotten much more accurate ... I can’t wait to walk into that class and blow all those f---ers away."

“I’ve been thinking alot [sic],” the entry said. “I need to make this shooting/bombing at Kamiak infamous. I need to get the biggest fatality number I possibly can. I need to make this count.”

“I’ve been reviewing many mass shootings/bombings (and attempted bombings),” he added, according to the court documents. “I’m learning from past shooters/bombers mistakes, so I don’t make the same ones.”
Comments: I could care less if the AR-15 were banned - the problem is not with this gun. We live in a sick society that spawns these monsters. PJ Media has a helpful article that is related:
5 Terrible Things the Media Communicates to Every Potential School Shooter:
  1. You will be famous
  2. The world will come to a stop for you and talk about nothing else for days
  3. A school is the target that will get you the most attention
  4. You should use an AR-15; they are the most dangerous and cool
  5. No one will shoot back at you at a school—and we’ll make damned sure it stays that way!

One time out on pastoral visitation (as an aside - every pastor should really visit in the homes of his congregants. You'll learn a lot!). I was visiting in the home of a family that had a very filthy house. It smelled and it was sticky. They knew I was coming and did nothing (apparently) to prepare for my visit. I was afraid to sit down (but of course I did). They had among other filthy things a very dirty aquarium. The image below represents what I saw. And in that turbid, murky water little goldfish were fighting to survive.

This is the world in which we live: a fallen, wicked, dirty, polluted, confused world that needs the light of the Gospel.

Update: I renamed this blog post to The Monsters are Due on Main Street on 2/19 (after the Twilight Zone episode The Monsters Are Due on Maple Street. I used "Main Street" because it is one of the most common street names in the United States

What is a "Worldview"?

James Sire: Some Personal Reflections


[A worldview] is A set of assumptions (or presuppositions) held (either consciously or unconsciously) about the basic makeup of the world. A worldview answers such questions as these:
  1. What is the nature of ultimate reality? Is it matter, God, or ideas?
  2. How does the universe work? Is it a closed system or open to divine reordering through revelation and miracle?
  3. What is the meaning of history? Is it haphazard, linear, or cyclical?
  4. What is the basis of morality? Is it God, the self, or society?
  5. What is the human condition and is salvation possible?
  6. Is there an afterlife, and, if so, what it is like?
Comment: Top image from the AFA Journal. James Sire's The Universe Next Door.

Two helpful images (from Visual Unit)


Newell Brands (NWL) - My "beat down" stock buy

Newell Brands


  • It is "beat down" ... 48% off of its 52 week high
  • Low P/E ratio
  • I expect my first dividend of $ 23. in mid-March
  • I like the brands 
  • My investment horizon for this is at least 52 weeks.
  • Basically the return beats the yield on my savings account
Related: This is positive:

If I only had $ 3,000 to buy a used sedan - The Buick Park Avenue

2000 Buick Park Avenue

Comment: we rented one when our son graduated from USMC boot camp in San Diego.


"That photo!" - 50 years later: Why I didn't go to Viet Nam

Eddie Adams' iconic Vietnam War photo: What happened next

The photo was taken 50 years ago - February 1st, 1968. The background (read the entire article above)
Heavy street fighting had pitched Saigon into chaos when South Vietnamese military caught a suspected Viet Cong squad leader, Nguyen Van Lem, at the site of a mass grave of more than 30 civilians. Adams began taking photos as Lem was frogmarched through the streets to Loan's jeep. Loan stood beside Lem before pointing his pistol at the prisoner's head. "I thought he was going to threaten or terrorise the guy," Adams recalled afterwards, "so I just naturally raised my camera and took the picture." Lem was believed to have murdered the wife and six children of one of Loan's colleagues. The general fired his pistol. "If you hesitate, if you didn't do your duty, the men won't follow you," the general said about the suddenness of his actions.

  • Did I remember it? Sure! Probably was published in Newsweek and newspapers that I read.
  • Where was I? Freshman at the University of Cincinnati.
  • Why wasn't I drafted? I had a 2S student deferment. Relevant law.
  • What about the draft lottery? It was on December 1st, 1969 (My Junior year). My number was 311. The lottery ended the 2S system. In 1970 men were called up for the draft up to number 195. In 1971 up to 125. When I graduated from college I was eligible for the draft but my high number excluded me
  • Did I know anyone who died in Viet Nam? Yes. Bill Littleton. OHHS 1967

  • He had only been in Viet Nam for 4 months

From Tim Rodenberg's Facebook page

At the traveling Vietnam Memorial Wall in Union Township, Clermont County. My best friend from high school was killed in Vietnam and I placed a wreath by the panel containing his name.

What to make of today's market drop?

Credit Markets to Stock Investors: Calm Down


So why are stocks falling?

The difference between the two asset classes this week may in part reflect stocks’ more exuberant start to the year.

Equity markets drew record inflows and the S&P 500 rose 5.6% in January, its biggest monthly gain since March 2016. Since the beginning of the year credit spreads on both the euro and dollar iBoxx corporate indexes have declined by roughly 0.1 percentage point. “All of the discussion at the moment that is negative about the equity market, none of it is about the economics, it’s all about those valuations and ratios,” Mr. McAlpine said. I

nvestors have been debating whether U.S. stocks look expensive, and what valuation should be used to measure that. The S&P 500’s 12-month rolling price to earnings ratio, a popular valuation measure, reached 23.4 in January, its highest level since 2002.

But not everyone believes that the message from corporate debt markets is the correct one. On Monday, S&P Global Ratings warned that the global proportion of highly leveraged companies, with a debt to earnings ratio above five to one, has risen by 5 percentage points since 2007, to 37%. Higher debt levels leave companies vulnerable to unexpected fast increases in interest rates, which would make it more costly to pay off their debt.

Comment: So what is Jim doing? Today I bought 6 shares of DUK. Source of above 

The Day After:

Wells Fargo "taken behind the woodshed" - time to Breakup Wells Fargo?

The Fed's unprecedented slap at Wells Fargo may cost the bank more than just $400 million this year


Last week's unprecedented rebuke on Wells Fargo from the Federal Reserve was noteworthy in a number of ways. Never before has the Fed placed a firmwide limit on a bank, stopping them from growing.

Outgoing Fed Chair Janet Yellen described the growth restriction as "unique and more stringent then the penalties the Board has imposed against other bank holding companies for similar unsafe and unsound practices, but is appropriate given the pervasiveness and persistence of the problems at Wells Fargo."

The Fed has enacted this by preventing the bank from growing assets. This means, that all else equal, the bank cannot write any new loans. However, there are some changes within their balance sheet that they can make in order to be able to lend, such that they remain "open for business" in CEO Tim Sloan's words.

Still, these changes may cost them in the region of $400 million of earnings for this year alone, according to the bank's estimates. The rationale for this particular form of punishment stems from the bank having prioritized growth since the financial crisis. In the Fed's view, Wells Fargo failed to increase risk management and oversight alongside that growth. Thus, the central bank decided to limit growth until things like risk management catches up. It also felt the incentive for Wells Fargo to act will be strong, since they will be starved of the growth they seek in the meantime.
Maxine Waters: I want to break up Wells Fargo (9/2016)


The top Democrat on the House Financial Services Committee said Thursday that she is actively working to break up Wells Fargo. Rep. Maxine Waters (D-Calif.) announced that the creation of potentially 2 million fake accounts by bank employees has led her to believe the bank is too large to be effectively managed.

“I have come to the conclusion that Wells Fargo should be broken up. It’s too big to manage,” she said. “I’m moving forward to break up Wells Fargo bank.” Waters made her announcement at a hearing with John Stumpf, the bank’s CEO and board chairman. For several hours, Stumpf was excoriated by members of both parties by the wrongdoing at his bank. The bank potentially created more than 2 million accounts without authorization from customers in order to meet sales goals.
Warren Statement on Fed Chair Yellen's Regulatory Actions Against Wells Fargo


Today, United States Senator Elizabeth Warren (D-Mass.) released the following statement on the Federal Reserve's decision to freeze the growth of Wells Fargo and remove four of its board members:

"For months, I have repeatedly pressed Janet Yellen to hold Wells Fargo accountable for its fake accounts scam and push out responsible Board Members. Today she did it - in her last act as Fed Chair. Fines alone will never rein in fraudulent behavior at the big banks and by pushing out Board Members at Wells Fargo, Chair Yellen sends a strong message. Her decision today demonstrates that we have the tools to rein in Wall Street - if our regulators have the guts to use them," said Senator Warren. "The massive fraud at Wells Fargo showed the whole country that we need more accountability on Wall Street. But for more than a year, we've watched as President Trump and his administration raced to turn big banks loose again to once again threaten our whole economy. Trump has filled our top economic jobs with people obsessed with sucking up to Wall Street. Today is Chair Yellen's last day at the Fed. Tomorrow, her replacement will face a choice: show the same kind of courage - or own the next financial crisis." Today, Chair Yellen sent a letter in response to Senator Warren's many calls for removing Wells Fargo Board Members. Read the letter detailing the Fed's actions against Wells Fargo here.

Comment: Reader may think that I care (or am biased) because I am a Wells Fargo retiree. I actually am neutral. As a customer I am very happy with Wells Fargo but I could just as easily be with Charles Schwab.  While we are very diversified, we are also Wells Fargo investors. The stock did take a hit today!

What the Wells Fargo board could decide is that a self-initiated breakup could be best for investors!  Imagine this (a hypothetical even split):

Final: Look ahead to the mid-terms. Imagine a Democratic sweep! Maxine Waters as the chair of the House Financial Services Committee and Elizabeth Warren as the chair of the United States Senate Banking Subcommittee on Financial Institutions and Consumer Protection Update: