Saturday, February 25, 2012

Pump prices don’t have to give you gas

This week’s sign the apocalypse is firmly set upon us was the story of rising gas prices, the one and only story seemingly capable of getting our focus off of the New York Knicks’ Jeremy Lin. Reading the papers (remember them?) and watching news programming, you would have thought that the very essence of American life was being forcibly pried from our hands, sealed and locked in a steel oil barrel, and dumped deep in the Pacific with all the other toxic unmentionables.

My favorite stories were the “searches” of the local news crews, where they drove around town looking for the least expensive places to buy gas. Come on, is the suggestion really there that I should drive out of my way to save a few pennies on the gallon when filling my tank? Seriously?

When gas prices rise by a few pennies, we seem to lose all rational thought. If prices increase by a dollar, forget thought at all, much less rational thought. It’s all base instinct and outrage.

A dollar?

Take a deep breath and let that mull in the back of your mind for a minute - a dollar.

Reminds me of my parents a decade ago, who drove from Kansas to visit my sister in Boston. Their plans were to drive back via Canada, a place they had always wanted to see, but had never found the occasion. Fuel prices increased in the weeks preceding the holiday, leading them to cancel the Canadian portion of their trip and returning home the most direct – and inexpensive – route. To this day, they still haven’t seen Canada, and while hardly a huge loss (c’mon, it’s Canada, for chrissakes), for what, savings of $70?

I’ve spent more than $70 dollars this month on wine alone, and keep in mind February is a short month and I buy very cheap wine.

How many people change vacation plans over $70? Probably not many, and I’m certain my parents, in a form of rather selective memory, would say they wouldn’t either. Ah, but mask the inquiry in another question – How many people have knee-jerk reactions to rising gas prices? Answer: apparently everyone.

Do you think our gasoline prices are high? It’s a question that’s worth exploring relative to gasoline prices around the world. Are you ready for this? Sit down. Prices for gasoline in Europe are about double that of the United States.

Gasoline usage in this country is ridiculous, and probably based in our collective culture. The latest statistics available are from 2005, but they are staggering – Americans are the world’s largest consumer of gasoline and burn an average of 386 million US gallons (1.46 gigalitres for you metric-obsessed) of gasoline each day.

Sometimes, numbers are so big it’s best to draw comparisons through an illustrative metaphor. Take each of those 386 million US gallons used daily and put them into 55 gallon oil barrels. If you stack each of those over 7 million barrels end-to-end, you will roughly have the height of our indignant outrage over fuel prices.

Americans love their space. That’s why our ancestors moved here and stole all this land. Land represents liberty, at least our liberty, and freedom is represented by our ability to travel the land. In the “old days,” that was by horse, and it was taken so seriously that the penalty for horse theft was … death. Yes, stealing a horse was dealt with more severely than sometimes killing a human. The equivalent today would be the death penalty for grand theft auto. Now, we wouldn’t do that, would we?

No, of course not – car theft penalties in California (where we love our cars) for first time offenders are one to four years imprisonment and a fine. However, relative analysis is always important. Would it surprise you that the penalty for felony car theft is more stringent than felony domestic abuse (three months to three years imprisonment)? Yes, you just might serve more time for stealing a $950 car than for beating your spouse.

I won’t go so far as to say we Americans love our cars more than our spouses, but the raw data could, possibly, lead an objective mind toward some rather troublesome hypotheses.

Okay, back to that dollar from above. Remember that solitary dollar? Let’s assume the worse of the predictions for the summer come true and gas prices increase about 25%, or a dollar a gallon. Filling your 15 gallon tank every two weeks means another $15 every two weeks, or a whole $390 a year.

Is it okay to take the suicide watch off yet? Can we turn some collective attention to anything more pressing?

I know! How about attention to saving fuel and money? Maybe there’s even a way to save so much we actually make money?

Redirect public outcry and make decisions to cut driving by 10 to 25%. At the low end, you’ll incur less of an increase in your total costs. At the high end, you won’t incur any additional costs at all. Moreover, you’ll save maintenance costs for your automobile, including longer periods between oil and filter changes in the short-term, and longer periods between purchasing tires over the long-term.

Cutting driving takes only a little imagination and some good old fashioned persistence. Determine if you can work from home occasionally, thereby eliminating some commuting. Group your errands into one trip from home instead of several. Trade your car trip for a bike ride or a walk whenever possible, and on those occasions you have to drive, try to walk between stops instead of moving your car from stop to stop.

Saving money from limiting your fuel consumption is one thing. How about profiting from other’s consumption of fuel? Give up the thoughts of investing in retail fuel stations, for believe it or not, they don’t make much money off selling gasoline. Their margins come through over-priced convenience items like soda and chips. Rather, you want to find a way to invest in “Big Oil.”

Oh, c’mon now, 99 percenter, get off your high horse. Big oil is not the devil and it is not evil, as selling consumers the oil they consume – what they voluntarily buy - is no more evil than NBC Universal televising brain-dead programming to consumers who want to view that. Remember, no one forces consumers to buy fuel at the pump. The very essence of business is providing value to customers, where value is defined as a simple function of delivering goods or services at a price which consumers are willing to pay. High fuel prices don’t really matter if you don’t pay them, just like the high price of a Honus Wagner baseball card doesn’t matter if you don’t buy one.

“Big Oil” might be best exemplified by Exxon Mobil (NYSE: XON). It currently trades at $87.34 a share, at the high end of its 52-week range of $67.03 to $88.13. At its current price, the dividend yield is 2.2% ($1.88 per share annual dividend divided by share price of $87.34). If you have any money in a passbook savings account or short-term CDs – any money – take a note at the dividend yield, for it is much, much higher than the interest the bank is giving you every quarter.

Americans, it’s time to stop crying and complaining, for nothing is more un-American than that. First off, know the price you pay at the pump is half of what your Italian cousin pays, and while he probably eats better than you do, also revel in the fact you don’t live in his economy or under his government. Then, with your new rational, logical and wider perspective, cut the miles you drive and take the money saved on gasoline and invest in Exxon Mobil or another large international energy (read: “oil”) conglomerate.

More importantly, get on to something more important.

Of course, it’s entirely possible I’m full of gas as it’s just this guy’s opinion.

Pump me up on Twitter @RayHartjen

Saturday, February 11, 2012

All a-Twitter over North Korea

Yesterday, social media networks were a-buzz over the “reported” assassination of North Korean leader Kim Jong-un, with the first mentions occurring on the Chinese microblogging site Weibo, its flames fanned rather unnecessarily by a seemingly large number of Twitter’s close to 500 million users. It’s always dangerous relying on the internet – particularly social media sites – for news, as it’s incredibly easy for false information to spread.

It’s the old FabergĂ© shampoo commercial revisited.  I told two friends, and they told two friends, and so on, and so on … .  It’s easy and so very tempting to read reports as fact when, in fact, they’re often fiction, and even more so with Twitter’s 140-character limit making it difficult for the best of writers to communicate both a single cogent point and cite a reliable source.

Of course, in the case of on Kim Jong-un, we still don’t know for certain the reports are false, as the famously tight-lipped North Korean government has issued forth neither a statement nor even a word or picture to prove reports true or false.  The U.S. intelligence agencies are even in the dark, although after an exhaustive ten-year hunt for Osama bin-Laden led us to find him living comfortably in what passes as a Pakistani bedroom community, one shouldn’t assume their networks are any more reliable than Weibo or Twitter.

Uh oh, I hope I didn’t just reveal the CIA’s and NSA’s most prized intelligence gathering assets.  Just to be safe, I won’t answer the door today.  Or, rather in no effort to beat the rush, just won’t open the door ten years from now. 

As you’ll remember, Kim Jong-un ascended to the title of North Korea’s “supreme leader” upon the death of his father, Kim Jong-il, who was also referred to by his communications staffers, if not his country’s citizens, as “dear leader,” “our father,” and “the general,” all of which are, of course, significant improvements on Libya’s former dictator Muammar Gaddafi.  After all, in the close-knit world of tyrannical dictators, generals, et al. carry so much more credence and credibility than colonels. 

In December, Kim Jong-il’s death created its own little Twitter firestorm, as rumors quickly spread the rapper Lil’ Kim had died.  You hadn’t heard?  While I wish, I’m afraid I kid you not.  One of the illustrious knuckleheads was former Detroit mayor Kwame Kilpatrick, whose tweet can only further sully a reputation rife with indictments and convictions of corruption, extortion, bribery and fraud.  Kwame, if you thought your road back to elected public office was one filled with pot holes, hair pin turns, and dangerous cliffs, just wait until voters find out you care one shake of a lamb’s tail about Lil’ Kim. 

The saving grace in yesterday’s North Korean-based stories was the reporting that after a super-quick building period of just 25 years, the Ryugyong Hotel is finally ready to open its doors in the capital of Pyongyang.  Even ardent students of North Korea, both of them, might not be familiar with this hotel, for it is often edited out of North Korea’s official photographs of the city.  Made almost entirely out of concrete and looking like something you might find scaled down at Space Mountain in Disneyland, the hotel will open only 23 years behind schedule, first as an office building, then as a – get this – a hotel for tourists.

You read correctly, tourists.  Don’t you remember the 70Chinese tourists let into the country in November?  With its first tour bus of tourists in generations, North Korea has now moved just behind Chernobyl, and just ahead of hell, in the rankings of the world’s most desirable tourist locations, and for good reasons, including:
  •  42% of the country’s 24 million inhabitants do not have access to improved sanitation facilities
  •  but they do have access to a whopping 1.18 million telephone lines and 430,000 mobile cellular phones
  •  the country’s GDP of $40 billion is about the same as Apple’s annual net profit
  •  no, none, zero independent media and all radios and televisions are pre-tuned to four government stations
  •  couple its political isolation with the fact only 22.4% of its land is arable and just 1.66% dedicated to permanent crops, and it’s clearly visible why persistent famine exists

But, I guess there’s another way to look at things – there’s only one way to go, and it’s the way up, which gets me to mulling over the possibilities.  Maybe Kim Jong-un will leave behind his family’s legacy of tyranny and push to move North Korea to a free, open, and potentially prosperous society.  Or, if we’re too late and he has already met his premature demise as speculated so much yesterday, maybe his replacement will be an open, democratically elected government instead of another sour-puss chump in a cheap suit. 

Far-fetched possibilities?  Yes, perhaps.  But nowhere near as far-fetched as the idea of Pyongyang dragging in tourists and their wallets to jump start its military-based economy, and we don’t have to spend 25 years building an above ground concrete bunker to speculate.

Of course, it’s just this guy’s opinion, and I suppose I could be wrong.

Tweet me a visa @RayHartjen

Tuesday, January 31, 2012

Facebook’s IPO pokes back

This week’s sign the apocalypse is near comes from the front page of the business/tech section and not from the usual suspect, the news section. Well, unless you live in Silicon Valley, then it’s often both, as is in this particular case. You see, Facebook’s inevitable IPO is quickly approaching, and many onlookers see it as the first volley in a whole new tech bubble. The tech community hasn’t had its collective panties in this much of a bunch since 1999.

While numbers are difficult to project in this “quiet period” in front of the stock offering, strong buzz on the street says we can expect $10 billion to be instantly raised, bringing the total valuation of the company to about $100 billion.

$100 billion.

That’s a lot of acres in Farmville, pokes to old high school friends, and status updates ranging from boring to boorish.

Facebook’s celebrity entrepreneur Mark Zuckerberg has been hesitant to go public in the past, and for pretty good reason. First, who wants to invite the scrutiny of Wall Street and its expectations? Moreover, who wants to share so much money when it could be all mine, mine, all mine (insert maniacal, evil laugh here)?

Of course, employees what some of those riches too, and speculation abounds as to that being the root of this week’s activities, and for good reason. When Facebook stock starts trading publically, fully one-third of Facebook’s 3,000 employees stand to become instant millionaires. At the same time, we’ll see a double-digit increase in number of the world’s billionaires.

Millionaires and billionaires, $10 billion and $100 billion. Before long, we start talking about some real money, huh?

Who knows what happens to the stock after it goes public. It will certainly be interesting to see its revenue streams fully disclosed, as well as its sure-to-be-staggering profitability. Who’s to say it’s not a $100 billion dollar company. But, what does that mean, anyway.

As a comparison, as of today the top of the corporate valuation mountain sees Apple and its market capitalization of $425 billion, with Exxon Mobil trailing along with a paltry $401 billion (note: market capitalization is simply the number of shares outstanding multiplied by the share price, and is a true representation of a company’s valuation, or worth). What’s notable is that both Apple and Exxon make something tangible and have lots of assets. Exxon alone carries almost $200 billion in Property, Plant, and Equipment on its Balance Sheet.

Compare that to Facebook, already 1/4th the size of the biggest of corporate titans. From outside, looking in, what exactly is it? 3,000 employees sitting at 3,000 desks, with a piece of real estate in cyberspace that is exactly like everyone else’s piece of cyberspace real estate, only much more visited. More visited to the tune of 800 million active users, with over 400 million of those hitting the site every single day, sharing 900 million objects that other Facebook users interact with.

Damn! And I thought the dollar amounts were big.

So, that’s what it has become. Our Facebook addiction has really grown into quite the beast, as well as a monkey on some of our backs. It’s not just a time-suck that destroys our relationships with the real people who live and work with us every day while we superficially keep up with the “friends” we haven’t actually seen or spoken to in decades, it’s actually the fuel that drives the engine that is destined very soon to be one of the most valuable companies on Earth.

It’s enough to make one stop playing Mafia Wars just long enough to ponder the next technology apple that will be piled on the technology apple cart, for that’s just what we do – pile on the apple cart. Soon, very soon, the valley will be rife once again with unshaven, T-shirt and jeans clad techies and entrepreneurs, all riding Razors and Segways to work, raising money on the shakiest of business plans - and sometimes just a catchy name, logo, or mascot - pandering to the get-really-rich dreams of the American and international venture capitalist.

Don’t believe me?

Three words.

Pets. Dot. Com.

Like we didn’t see that one spiraling down the toilet from day one. Well, I mean we would have if we had bothered to think about the folly of buying heavy bags of dog food and having it shipped to us instead of just stopping by the store and buying it cheaper and taking it home that same day, when our dog was hungry.

Facebook is truly an international cultural phenomenon and a true Americana example of entrepreneurism and risk taking, and who am I to begrudge that, even if I am just a wee bit jealous and can’t help but think, “Why didn’t I think of it, and why didn’t I think of it first, and if I did think of it first, why didn’t I do something about it?” No doubt, it’s here to stay, and stay in a big, big way.

But, what of the pretenders that follow, the other apples on the apple cart? One thing history illustrates is that apples tumble from upended apple carts, and they not always Apple, if you know what I mean. Do you have your shrewd investing eye, and wallet, on technology stocks? While there can be more than one, there usually is only a select few. Buyer beware the rest, particularly those not in first, for eventually someone holds the bag and it’s filled with you-know-what.

Of course, I guess I could be wrong, as it’s just this guy’s opinion.

If you can’t find me on Facebook, hit me on Twitter @RayHartjen.

Saturday, January 28, 2012

A Fair Shot Heard ‘Round the World

State of the Union addresses have never been my thing, from the artificial standing ovation that eventually spreads to both sides of the aisle to the shameless, pompous politicking of not only the President, but of the many after speech commentaries provided by politicians for and against, as well as the almost infinite number of TV talking heads that think they’re smarter than us. Keith Olbermann or Bill O’Reilly, anyone? Child, please.

As a kid, I used to tell my parents that if a network had the stones to put entertainment programming on against the State of the Union, they would kill in the ratings. Sure, such a move would severely hamper the reputation of a network’s news division, but since when does the news pay the bills at a network?

President Obama’s address on Tuesday night didn’t disappoint my low expectations. He certainly got my attention, although perhaps not in the manner that his team of speech writers might have intended. “We can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Cue record scratching.

What was that? (Hit rewind on DVR)

Fair shot?

Have we collectively sunk so low as to where we’re bemoaning needing a “fair shot?” Seriously, since when do Americans sit back and cry about wanting a fair shot? This country was built by people who proactively took the shots and called the shots. That’s why most of us moved here, and more of us do every single day.

Our American heroes, both real and fictionalized, are ones who overcame seemingly insurmountable obstacles and persevered, fighting through, and eventually accomplishing goals and fulfilling dreams. From Walter Mitty to John Wayne, from Henry Ford to Warren Buffet, from Famous Amos to maybe you, we’re a country about go-getters and action, accountability and responsibility. For the love of God, we didn’t collectively sit through six Sylvester Stallone portraits of Rocky for nothing, did we?

Now, this isn’t a Republican versus Democratic in an election year rant, although full disclosure will have me tell you I didn’t vote for our current president last time around. Full disclosure will also suggest that doesn’t mean I won’t vote for him this time around, for there’s ample time to decide who’s best prepared to lead our country to where it needs to go, and at this point in time I am very open minded and undecided. But, this I’m certain of: we don’t need any talk about “fair shots.”

You get no more fair shot in this world than in America. If you don’t believe it, get yourself some luggage, perhaps a U-Haul or something, and get out and try it someplace else. Just do yourself the favor of not burning your bridges, because you most likely will be coming back.
America has been, and continues to be, the land of opportunity. Only, there is one requirement to seize upon all the potential out there waiting for you. It’s simple. Go grab it. Get off your lazy, pampered, self-entitled ass and work hard.

Sorry to break it to you, but Andy Warhol was wrong. Everyone is not going to be famous for fifteen minutes. You won’t have a camera crew follow you around like you’re a second-coming of the Kardashians. You won’t answer the door one day and open it to a letter informing you that you just inherited $100 million from a long-lost relative.

Success is predicated on smart, hard work. Now, “occupying” some place is certainly hard work – who wants to live in a cardboard box in the middle of winter, relieving yourself in the bushes, and searching daily for an AC outlet? But, it’s not smart. Instead of using your iPad - poor, pitiful, hopeless disenchanted 99%-er, with your glorified toys and 4G necessity of a phone – to poke your network of not-so-friendly friends into joining a pointless protest, how about using it to network for a … wait for it … a job? One that pays you for your work. Use those same skills of organization and communication and put them to work in a productive manner.

Making your own shot, calling your own shots, and making success happen will allow you to one day pay taxes to accommodate the next generation of even more self-righteous, self-entitled knuckleheads who embark on costly protests of the mean, hard, un-fair life of Americans.

President Obama, if you want to earn my vote, you need to change your messaging, and actually just slightly. I don’t want to give anyone a “fair shot,” for I don’t want to further a habit of giving. Give a knucklehead a fish, feed the knucklehead for a day; teach the knucklehead to fish, feed the knucklehead for a lifetime. Forget talk about giving a “fair shot.” Rather, let’s equip our citizens with the tools and go-get-‘em attitude to take advantage of the plentiful shots, opportunities, that are so readily available, there for the taking save for a little work ethic and determination.

And for those you waiting for your “fair shot,” please, grow up and take a little responsibility. Don’t be afraid to scrap your knuckles and strain your back. Go find your passion, reach your potential, and live your life. It’s not going to be given to you by a benevolent, paternalistic government. Rather, it’s already there, like a buried treasure. It’s up to you to pick up the shovel and find it.

I’m waiting to take you best shot on Twitter @RayHartjen