130/30 Funds, Starbucks (SBUX), Griping about the TSA, SHLD and Burnout!
* John Templeton on Success: “I don’t understand why everyone doesn’t study success. I suppose there are two reasons why most people don’t. One is ego; the other is stupidity. It’s only common sense to study success – not only in investments, but in all facets of life.”
* 130/30 Funds: An Innovation in Mutual Fund Underperformance: The latest fad in mutual funds is a 130/30 fund, referring to the fund's long exposure of 130% of its assets, and short exposure of 30% of its assets. This is a departure from history, because mutual funds (the dominant mode of asset management in the US, with over $10 trillion in such funds) have not been allowed to sell short. (Why this changed, I can't remember.) Clearly, someone is taking a page from the hedge fund book, which isn't a terrible idea - assuming these funds succeed in attracting assets, they will put fee pressures on hedge funds, which is generally good for investors. However, I remain skeptical as to whether they will notably outperform, or have lower volatility - it is quite possible for a fund's long AND short positions to go in the wrong directions together.
* Understanding burnout: “Happiness equals reality divided by expectations.” - Alden Cass
* I'm a Starbucks addict. Are you? About six months ago, I started drinking Starbucks (SBUX) coffee on the weekends. The first few times, I didn't really realize what happened, but I had so much more...energy. I slowly clued in that Starbucks had much more caffeine than the homebrew I used to make. I've since ratched down the size of coffee I order, but Starbucks is part of my daily ritual. Ever late to the party, I stumbled across this article in Slate about the caffeine in Starbucks coffee. Based on my web research, the reported caffeine in Starbucks coffee varies widely, but all measurements are higher than any other national chain serving coffee. Here's a sample:
The Wall Street Journal earlier this year sent samples of coffee from Starbucks, 7-Eleven, and Dunkin' Donuts to Central Analytical Laboratories. The lab reported that a 16-ounce Starbucks house blend coffee contained 223 milligrams of caffeine, compared with 174 and 141 milligrams in comparable amounts of Dunkin' Donuts and 7-Eleven coffee, respectively. According to the Journal, the average Starbucks coffee drink contains 320 milligrams of caffeine. (This chart from the Center for Science in the Public Interest shows different measurement levels, including the scary finding that a 16-ounce Starbucks grande has nearly three times as much caffeine as a No-Doz.)
* If you've taken a plane in, say, the last few years, you know the TSA has instituted a bunch of "practices" for making us safer, all of which seem more designed to annoy passengers than protect them. Seth Godin had a great write-up based on his experience over Thanksgiving weekend. Here's an excerpt:
[At the airport,] the JetBlue team decides to tell a story about confidence and empathy, about competence and kindness. They staff the security line with talented people, they plan a route through the terminal, they figure out what the TSA is going to want.End result: fast lines, happy employees, loyal customers.
Just on the other side of the line are the bureaucrats at the TSA. They tell a story too, but it couldn't be intentional. "No Cake!" the screener yells. "No pie either!" and they make the person traveling to her family throw out her home-baked cake. [...] Is this the sort of government we want? We deserve? We should pay for? [Ed sez: great question!]
* I told you I'm watching Sears Holding (SHLD)...and so is Deutsche Bank, who said a few weeks back that shares could be worth $327 (vs. ~$175 today), based on $10 billion in their real estate and $1 billion from their brands.
* Finally, a political gem: Charles Schumer on Chuck Webb: "He's not a typical politician. He really has deep convictions," said Schumer, who headed the Senate Democrats' campaign arm.
