MARK TARSES TENANT NEWSLETTER
November, 2010
BEWARE OF BANK OF AMERICA ATM CARD THIEVES.
In October, Berkeley police arrested 2 men, charging them with stealing thousands of dollars from Bank of America ATMs after customers used the machines but forgot to take their ATM cards when they left. This happens fairly often, 23 times this year in Berkeley alone. It works this way - a thief watches a Bank of America ATM from a parked car or by panhandling near the machine. He waits for a customer to use the ATM and leave his card in the machine. When that happens, the thief is then able to make cash withdrawals from the victim's account. He can also remove the card from the ATM and use it to make purchases at nearby stores.
ATM card thieves target Bank of America because of the way the bank's ATMs are designed. Bank of America ATMs return a customer's card after he has completed his transaction, so it is easy for somebody in a hurry to forget his ATM card and leave it in the machine. Most other banks in Berkeley aren't having this problem because their ATMs work differently. Some banks have card swipers, so the card never leaves the customer's hand. Other banks use ATMs that return the card to the customer before it dispenses cash or accept deposits. So if you have an account at Bank of America, be careful. Professional thieves are watching Bank of America ATMs!
WHY DO PEOPLE GO TO POISON OAK FESTIVALS?
California has some of the best and biggest agricultural festivals in the country. There's the Gilroy Garlic Festival, the Castroville Artichoke Festival, and the Watsonville Strawberry Festival. Plus we have wine, table grape, apple, peach, almond, walnut, pistachio, date, and chocolate festivals. With so many really good festivals to choose from, why would anyone go to a poison oak festival?
Forestville. I once drove through Forestville, up in Sonoma County, during the Forestville Poison Oak Festival. There was a sign on the road that said: "FREE POISON OAK" with an arrow pointing to a booth at an intersection. There were several vehicles parked at the booth. Now you may wonder: "Why would anyone want poison oak?" I don't know the answer to that question, but I do know this - there are people in this world who will take ANYTHING if it is free and go out of their way in order to get it. Due to budget cuts, Forestville has discontinued it's poison oak festival, but the city's motto is still "Poison Oak Capital of the World."
Columbia. They have a big poison oak festival in Columbia, a Gold Rush mining town in the Sierra foothills. Categories for trophies include biggest poison oak leaf, best poison oak jewelry, and best photo of a poison oak rash. The Columbia Poison Oak Show has been held every Fall since 1982. It brings a lot of tourists into town. See: Columbia Poison Oak Show. Many of the floral arrangements at the Columbia Poison Oak Show are very skillfully put together. Here is a photo of an entry in "Class 2: Poison oak floral arrangement with another plant." Notice the watermelon at the bottom of the arrangement, carved to look like it has teeth and is about to eat the poison oak. The basket enclosing the arrangement is woven out of poison oak vines. You can buy a poison oak floral arrangement at the show - but who would you give it to?
MANAGED MUTUAL FUNDS ARE A SUCKER BET.
U.S. Treasury bonds have been beating the stock market for decades, but what about mutual funds? It seems like large, well managed mutual funds should be able to outperform the overall stock market. Mutual fund managers are among the brightest and best paid people on Wall Street. Many mutual fund managers have a base salary of over $20,000 a week. You can hire very smart people for that kind of money.
A Random Walk Down Wall Street. In 1973, one of the most influential books on investing ever written, "A Random Walk Down Wall Street" was first published. The author, Burton G. Malkiel has impressive credentials. He was chairman of the Economics Department at Princeton University and a member of the President's Council of Economic Advisors. He served on the boards of a number of America's largest financial institutions. He is still active at Princeton University. Many business schools around the U.S. have "Random Walk" and "Efficient Market" courses based on his book.
Monkeys Throwing Darts. In his book, Malkiel analyzed the long term performance of managed mutual funds. He found that the majority of managed mutual funds underperformed their index every year. He concluded: "A blindfolded monkey throwing darts at a newspaper's financial pages could select a portfolio that would do just as well as one carefully selected by the experts." This line was not intended to be taken literally. It was meant to be metaphor for a random selection process. However, a number of Wall Street 'experts', trying to discredit Malkiel, did exactly as he suggested. They had monkeys throw darts at a Wall Street Journal and then constructed hypothetical mutual funds out of the stocks hit by the darts. It usually turned out that the portfolios selected by the monkeys outperformed the majority of managed mutual funds during the following year.
San Francisco Chronicle. In the 1990s, the San Francisco Chronicle took up Malkiel's challenge. Every December, the Chronicle asked 8 of the bay area's top financial advisors to recommend stocks for the coming year. Then they sent a reporter to Marine World theme park in Vallejo. They gave rubber darts to "Jolyn", the park's orangutan and got her to throw them at a Wall Street Journal. On January 1, they would publish the names of the stocks selected by the financial advisors next to the list of stocks picked by the orangutan. In the same issue, they would show how well the orangutan did with the previous year's selections. Well, you probably know what's coming. The orangutan did as well as the the financial advisors, and she always outperformed the majority of managed mutual funds. After a while, some financial advisors refused to participate in the Chronicle challenge because they had become a laughing stock, unable to beat a monkey. I have a friend who fired her financial advisor because he was one of the participants in the Chronicle challenge, and he never beat Jolyn.
Why? Why can't mutual fund managers beat monkeys with darts? It is because you can't fight the laws of probability. During the past 40 years, only 20% of all actively managed mutual funds outperformed their index over any 10 year period. The main reason for this dismal performance is the cumulative cost of management expenses. However, in a random selection process, like monkeys throwing darts, 50% of the time the monkeys will outperform the index, and 50% of the time they will underperform the index. It's like flipping a coin. The odds are 50/50, and there are no management fees. The reporters for the San Francisco Chronicle only gave Jolyn a banana bread for her services. The lack of management fees gives monkeys an insurmountable advantage over mutual fund managers. So.....why would you keep your life savings in an investment that has never done anywhere nearly as well as monkeys with darts? If you own managed mutual funds, perhaps you should think about that.
THE BATES MOTEL.
In 2008, the East Bay Parks District built a large outdoor sports complex at the Berkeley Marina. Our mayor, Tom Bates, arranged to have the place named after himself. That annoyed me. While the Tom Bates Regional Sports Complex is beautiful and gets lots of use, Mayor Bates didn't pay for it, and I don't believe that in a democracy, government buildings, parks, bridges, etc. should be named for living politicians. That's the sort of things that dictators like to do. Hitler, Stalin, and Saddam Hussein named things all over the place after themselves.
Also located at the Berkeley Marina is the city's largest hotel, the Berkeley Doubletree. It used to be the Berkeley Marina Radisson. When Radisson announced that the hotel was going to be rebranded, I suggested that it renamed the Bates Motel. It seemed like the obvious choice to me:
Mayor Bates likes to have things named after himself, and the hotel is located next to the Tom Bates Regional Sports Complex.
Alfred Hitchcock movies are still enormously popular, and "Psycho" is the best known of all his movies. There have been 2 sequels to "Psycho", a prequel, a complete remake of the original movie, and a TV spinoff. The shower scene at the Bates Motel is frequently parodied in movies and TV shows.
A number of Berkeley politicians, including former mayor Shirley Dean, told me that they thought that renaming the Doubletree the Bates Motel was a great idea, but unfortunately all of them are political enemies of Mayor Bates, so alas, it didn't happen.
Did you know that Norman Bates was a real person? Even people who have seen the movie "Psycho" many times are surprised to hear that. Norman Bates was based on Ed Gein, a very real serial killer in the 1950s. Gein had a mother fixation. He lived in a large house in a remote location with his mother. She was an overbearing and harsh woman who believed that all women (excluding herself) were prostitutes. She yelled at and belittled her son day and night. After she died, Ed Gein began sealing up the rooms that his mother had occupied, starting with her bedroom, preserving them exactly as they were when she died. After Ed Gein was caught, police found the remains of 15 people on his property.
FREEBIES OF THE MONTH.
Broiler Pan. If you want a new broiler pan for your kitchen stove, just come over to the chocolate room and pick one up.
$50 Extreme Pizza Gift Card. (one per rental unit.) Good at any Extreme Pizza restaurant in Berkeley, Oakland, or San Francisco.
Mark Tarses
