Leaving for Far Off Lands
I will be out for the next two weeks to far-off, exotic places, so blogging will be light to non-existant. Here is where I'm going:


South Korea, which owes its freedom to the fact that the U.S. first conquered the country that was brutally occupying it in 1945, then 5 years later sent tens of thousands of its soldiers to die when it was invaded by its northern neighbor. (It's no coincidence that S. Korea Liberation day is the same day as Victory in Japan day).

Japan, which owes its freedom to the fact that after the U.S. leveled their country, we occupied them, set up democratic reforms, and left, allowing them to turn themselves into the second largest economy in the world.


Taiwan, which owes its freedom to the fact that the U.S. not only armed the tiny nation, but let China know that any attack on Taiwan would be met with military response by U.S. forces.


Unfortunately I won't be heading to any other countries that owe its freedom to the U.S. like France, Belgium, Germany and about a dozen others. At least the three countries above are stead-fast allies of the U.S. (S. Korea is wavering a bit and it will actually be fascinating to watch what happens to U.S. relations there).

posted by Director_Mitch @ 3:26 PM (Permalink)
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Tradeshows: Are They Worth It?
Question from David by email:

Do you have much experience with tradeshows and events? These events are about $5k each. What are your thoughts of sending a pre and post show mailer to the attendees for these events?

The mailings cost about $3. Would you recommend this for a startup?

My advice: do the tradeshow, skip the mailers.

First, the mailers: Unless your show is incredibly industry and participant specific, 95% of the mailers are going to reach people who aren't interested in your company or are the wrong people (i.e. your customer's director of sales). And the 5% who might be target customers and the right person within the company probably toss out the mailer along with all the other mailers they get before/after the trade show (I know, I have been on the receiving side of many of these).

Unless you are a consumer product company, you probably know who your potential customer base is, and it probably represents less than 100 companies. A more effective way to do mailers is to acquire a specific mailing list of these customers, keeping the number of mailers you send out and your costs to a minimum, instead of blanketing an entire trade-show list. However, my experience with non-consumer mailers is that the response/lead rate doesn't justify their expense.

On trade shows: in general, I find them very worth while, but how you do them depends on what your goals are and how the trade show is organized:

Market/Industry Data Mining - I find trade shows helpful for just seeing what is going on in an industry, so I always get a general pass and "walk the floor", look at demos, and get people in various companies to let me know what they are doing and planning. You'd be surprised on how many potential customers/partners you stumble into this way.

Booth - Getting a booth is sometimes worthwhile, IF you have something to demonstrate and if your target customers are walking the floor. If you don't have a demo, it really isn't worth it to send Biff and Bill to stand around in a booth and hand out brochures.

Private Booth/Hotel Suite - I personally like this approach IF you have a demonstration AND you know who your target customers are. In this case, telling your potential leads that you have a PRIVATE demo piques their curiosity and allows them to set a time, allowing your customer to manage his time at the show more effectively and allowing you to have the right people in the room (nothing is more frustrating than having a "whale" wander by your open booth and not having the right people there to glad hand him). It also keeps your competitor's prying eyes away from what you are doing.

I have seen companies do all three at the larger trade shows like the Consumer Electronics Show (CES) and Comdex, but this obviously depends on what you have ready to show and your budget.

posted by Director_Mitch @ 1:47 PM (Permalink)
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Ukrainian News Roundup
Did you know that there were countries in the world besides the U.S. and Iraq? This is probably hard to believe from the front page news coverage, but it's true. So let's see some interesting developments out of Ukraine (and please don't refer to it as "The Ukraine"):

First Head of a Foreign Government Put on Trial in the U.S. Since Manuel Noriega (WSJ link requires subscription, but less detailed story here)

Hey, this is sort of interesting. I would think the papers would cover this more.

Mr. Lazarenko served as prime minister when Ukraine was the third-biggest recipient of U.S. foreign aid and a linchpin in America's grand plan to bring prosperity and democracy to the former Soviet Union.
...
Mr. Lazarenko defends himself against money laundering and wire fraud charges. The government alleges that he illegally extorted millions, depositing at least $114 million in U.S. banks.

Gives me some hope about the Iraqi Oil for Food scandal, although nearly half the charges in the 53 count indictment were thrown out. Once the U.S. gets through with him, he'll have to face Ukrainian justice.

Ukraine Says It Seized 'Red Mercury'
This is something I expect to get buried in the mainstream press, but thought I would get more play in the blogosphere.

Security agents in the southern city of Odessa seized 24 pounds of a substance they said was radioactive and identified as "red mercury," a State Security Service spokesman said Monday on condition of anonymity. He said they arrested two men from a Middle Eastern country.

"Foreign citizens were looking for an opportunity to purchase a quantity of radioactive material in Ukraine and to sell it in the Middle East," said the spokesman, who would not say what country the men were from or where the material came from. He said the arrests were made several weeks ago.

Ukraine Won't Withdraw Troops from Iraq (WAPO link requires free registration)
These guys have taken casualties and have been steadfast allies to the U.S. Go out and thank a Ukrainian for their support.

posted by Director_Mitch @ 9:19 AM (Permalink)
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I Guess Schools Can No Longer Show Pictures of the Holocaust
I'm a little late to follow up on this one:Teachers Faulted Over Berg Video

But I was taking time to think about whether there was anything equivalent that could of been shown to me when *I* was in high school 20 years ago.

And of course there was: pictures of the Holocaust. Both the Holocaust images and the Berg video show the brutality that Western Democracies face and the total deprivation both Fascism and Islamic extremism hold towards human life. And pictures of Nazi brutality were shown in my sophomore history class and no one went into histrionics. I imagine today that Schindler's List is probably shown in a lot of classrooms.

If the Left is going to fault the teachers for showing this video - something the superintendent said might cause "unfettered emotional and psychological damage to children" - then we also need to protect them from the brutality that happened in Auschwitz.

Note: I didn't notice until after I wrote this that at the very end of the linked article that a 14 year old said the very same thing. Smart kid.

posted by Director_Mitch @ 8:27 PM (Permalink)
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What Gas Station Boycott?
In a continuing series of entries I seem to be doing on oil...

The silly gas station "boycott" is making the rounds again. Today's effort was as effective as the last one: my lunch time fill-up today had me waiting for a few minutes at a gas station bursting at the seams with cars.

This periodic event is attempted whenever gas prices get around $2. I understand anger at rising prices - I get pissed off by the price of milk, which unlike gasoline, IS set by the government (In fact, it is illegal in California for a retailer to sell milk below a minimum price). The politicians pick up on the anger and do all sorts of political posturing without doing anything to address the problem, and I suppose it must work or they wouldn't do it.

Oil and gas prices would go down if the U.S. would pursue policies that would increase domestic production and add to worldwide supplies, such as opening drilling off the California coast and opening ANWAR (Alaska). The federal and state governments could immediately lower gas prices by lowering gasoline taxes, which range anywhere from 20% to 40% of the cost consumers pay, depending on what state they live in. But you know none of these things are going to happen (gas isn't over $2 a gallon, taxed gasoline is over $2 a gallon)

Democrats don't want oil drilling in their back yard, but they want their gas for cheap. The party that claims Iraq was wrong because it was "about the oil", tries to get its followers in a froth when oil isn't cheap while simultaneously pursuing policies that insure that the nation's supply must come from that region.

Am I missing something in their thinking?

Americans pay less for gas than any industrialized nation, but when it goes through the psychological $2 mark, the complaining starts. Yet these same consumers will happily pay $1.70 for a cup a coffee, $4 for bottled water, and $6 for a six pack of beer. So if gasoline is ranked with other goods and services people buy, it is still a bargain, even at $2 (and I won't mention $7-$9 that bars like to charge for martinis these days).


posted by Director_Mitch @ 2:45 PM (Permalink)
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Making Political Hay?
Looks like I need a copy editor, as seen in my email this morning:

Dear Director Mitch:

Please excuse me if my poor English. In your article, you say "political hay". Please explain political hay.

This phrase is in reference to not just an American phrase, but a regional phrase even native U.S. speakers outside the South may not be familiar with (I'm in California but am a Texas native).

The phrase in question is Make Hay While the Sun Shines. This bit of advice, handed out with lots of other folksy sayings down South, refers to taking advantage of situations while events outside your control are in your favor.

In this case, there has been a rise in oil prices, which have driven up gas prices. In a free economy, oil and gas prices aren't set by the government, but are driven by a confluence of events ranging from worldwide production, worldwide demand, taxes, environmental regulations, refinery capacity, and dozens of other factors (including the political situation in the mid East. Read The Prize for a real good accounting of this).

Plus, even though gas prices are over $2, in inflation adjusted terms they haven't hit their highest point.

Every time gas goes to $2, however, the democrats go into full speech mode, denouncing the development, although these same democrats will talk to environmentalists and praise and even promise higher energy prices since that will drive down energy consumption, and thus pollution. In typical lefty hypocritical fashion they try to have it both ways.

I expect the democrats to continue to "speechify" (another regionalism) on it, while offering no suggestions on what to do about it (releasing oil from the strategic reserve won't do it, lowering oil and gas taxes will, but I doubt Kerry or Boxer will be suggesting this).

Of course creating stability in the mid East through setting up and supporting democratic reforms in tyrannical, terrorist-supporting states is another way to get a long-term fix on oil prices, but we already know Kerry is against that.

posted by Director_Mitch @ 6:35 AM (Permalink)
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Driving Business Out of California
CNET has an interesting and wide ranging interview of outspoken CEO T.J. Sanders of Cypress Semiconductor. Here is the part that caught my eye:

You'd be insane to open a manufacturing fab in California. You need a big piece of land, you need freeway access to it for your employees, you need water and power, and you need a local government that wants you there. Then you need a local or several local schools to provide you with a relatively large number of trained people to work in the plant. You obviously want to pay wage rates that make you competitive in the world. What I described is not California.
...
The killer factor in California for a manufacturer to create, say, a thousand blue-collar jobs is a hostile government that doesn't want you there and demonstrates it in thousands of ways, through bureaucrats and regulations.

Think anyone in the California government is listening?

posted by Director_Mitch @ 9:10 PM (Permalink)
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Why I Like High Oil Prices
While California democrats and Kerry try to make political hay out of high oil and gas prices, I have a dirty secret: I like high oil prices.

Why do I like high oil prices? Because I own oil wells! (well, percentages of some, which I will go into below) And when oil prices go up, the checks from my oil wells go up much more than what I pay at the pump.

While it may sound selfish that I enjoy extra income while you all pay more at the pump, no one is stopping you from setting up your investments so you can also benefit from high oil prices. The basic problem is that people are unfamiliar with how to do this, and then there is the problem of acquiring these investments.

First, I'll list several different ways to have ownership in an oil well:

Royalties - This is the best type of ownership to have and the hardest to get. As the name implies, this is a percentage of everything that comes out of the oil well, without any burden of the costs to manage, operate or maintain the well (as with anything, there are taxes on it). Royalties are usually given to the land owner where a company is going to drill a well, but the oil company drilling the well usually carves out a percentage or two for itself.

Working Interest - This is ownership in a well where you get a percentage of everything that comes out, but you pay a percentage of the monthly operating expenses to maintain and operate the well (including taxes). This is usually a pretty good deal, but if the well operating costs are high, or if oil prices are too low, you may find yourself paying out more each month than you are getting in. So you end up rooting for higher oil prices.

The benefits of a working interest is that if the well's total costs exceed its total income in any given year, those excess costs can be written off your ordinary income. The downside is that your liability as a working interest owner is unlimited. If the well needs a major overhaul, you may see bills that are much larger than you ever expected.

Limited Partnership - This is a structure that most people are familiar with since it is also used for other investments. There is a general partner who overseas the investment with limited partners who have no say in the operations. The downside in the investment is typically limited to the original investment.

So these three investment options are fairly straight forward and may appeal to some investors. The problem is getting into these investments. You can't call your broker and ask him to pick up a few oil royalties for you.

These types of investments are largely sold by small oil companies and operators, and only to "qualified individuals". In other words, the average person on the street couldn't qualify as an investor by SEC regulations, so the way in is to know someone in the business who can get you in on a deal (which is more or less how I got mine).

There are also a LOT of unscrupulous people and companies who have used these types of investments to scam people. Whether it was selling 500% of a deal, selling interest in wells that weren't drilled or in production that didn't exist - it has all been done. So even if you are qualified, you have to know that the people and company you are dealing with are honest.

In addition, these investments are incredibly risky. While I have all three of the investments above, I'm not mentioning the two dry holes I was involved in. This risk can be mitigated by buying existing production rather than investing in new oil wells. In essence, by buying production you are buying a bond that will fluctuate on oil prices, but there is still the risk that the production will go dry before it has paid off the investment, that oil prices will go down, or that Kerry will nationalize U.S. oil production (hey, it happened in Mexico).

This means the average investor has basically one way to hedge his portfolio against rising oil prices: buying stock in oil companies. This, however, has its own pitfalls. While ExxonMobil has appreciated 20% over the past year, Shell didn't due to accounting irregularities, which has punished the stock.



So the best bet is to buy a basket of oil stocks in order to hedge your finances against rising energy prices (there are also energy indexes, commodities, futures, and other options, but I am trying to keep it simple).

posted by Director_Mitch @ 5:19 PM (Permalink)
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More on Mustard Gas in Iraq (satire)
A democrat friend of mine (yes, I have them, and at least one is voting Bush), sent me the following "breaking news" on the WMD found in Iraq and it's good enough to have been written by Scott Ott:

A weapon of mass destruction containing the deadly nerve agents sarin and mustard gas exploded near a U.S. military outpost just outside of Baghdad. No one on the ground was hurt and there has been no report of surrounding areas being contaminated. U.S military officials said that the mustard gas seems to have been left over from Saddam's regime.

"I knew they had the stuff." Stated President Bush, "What surprises me is the connection between Al-Qaeda and the French. This was not just regular mustard gas. It was Dijon mustard gas. The purest and most deadly form of mustard available to be used both for sandwiches as a solid and as a deadly chemical in the form of a gas."

"That is why they did not want us to go into Iraq!" Stated Donald Rumsfeld, "It all makes sense now! Those freaking French where in it all the way up to their necks. They provided Dijon mustard to the Iraqis! I love that stuff on sandwiches, but in a weapon, it is deadly. This is the beginning of the end of our relationship with the French. They have not heard the end of us."

U.S. General Samuel Kitaroff said that the bomb went off at 4pm local time in Iraq. "It was horrific. There was this dark yellowish paste all over the floor, on buildings and on top of people. I've never seen such a horrific scene in my entire life in the military. It was very spicy too. Many people started feeling sick after licking their fingers."

French President Chirac completely denied the connection between France and Al-Qeada stating that they believe that particular brand of Dijon Mustard was provided to Iraq by Kraft Foods, an American company, since the label on one of the canisters read "Grey Poupon".

Kraft Foods emphatically denied any connection between Al Qaeda and themselves stating "We are pretty sure it was those freaking French again. They just don't like us Americans."

posted by Director_Mitch @ 9:57 PM (Permalink)
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I'm Only 21% Evil?
If you're a lefty, you probably would put my blog at a MUCH higher evil level, although it's been a while since I have been called a Nazi to my face.

On the other hand, my colleagues in the Bear Flag League probably would like to think of the Good in me.




I question these results since I consider myself much more evil than fellow blogger Master of None, but he comes out nearly twice as evil at 41%.

Hat Tip: Patriot Paradox

posted by Director_Mitch @ 8:25 PM (Permalink)
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Was it over when the Germans bombed Pearl Harbor?
That is, of course, one of the funnier lines from Animal House.

But it brings up a good question: why did we go to war with Germany when they never attacked the U.S.? Yeah, Hitler declared war on the U.S. after we declared war on Japan, but Germany really couldn't attack the U.S. in any meaningful way except blow up a few ships in the Atlantic and maybe lob some shells at a city from a sub or ship - little more than piracy, really. Was this enough of a threat to send hundreds of thousands of men into harm's way in Europe?

In fact, the U.S. spent more manpower, money and materiel in Europe than it did against Japan, which actually attacked a U.S. military installation and killed thousands of soldiers. Germany didn't provide an "imminent threat" against the U.S., Japan did. So if today's Left were around in 1942, what would their reaction be?

The U.S. and its allies recognized the threat that Nazism posed towards democracy and mobilized to defeat it, no matter where it was. We're trying to do the same today with Islamic radicalism, but the Left either refuses to recognize the threat for what it is, or is so terrified of losing political power that they would allow this doctrine to grow and fester as long as they gain political advantage from it.

posted by Director_Mitch @ 2:49 PM (Permalink)
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My "Statement" from the SSA
A few years ago I started receiving "statements" from the Social Security Administration. Apparently someone thought that these forms would somehow fool people into thinking that the hard-earned money that is confiscated from their paychecks is going into some sort of account instead of immediately being sent out to current recipients.

The statement has an estimate of the "benefits" I will receive upon retirement, but as everyone knows, there will be no money left after the boomers get through their retirement, so I know the whole piece of paper is a political lie.

One thing that IS accurate, however, is a listing of my earnings since I started working. While I have this data in my tax forms, these are all buried away in some file cabinet, so it is good to see it listed out (you have to take it from the "Medicare taxable Earnings" since Social Security taxable earnings are maxed out at a certain threshold, although I expect this to go away eventually).

I thought I would graph my yearly income, taking the data from the time I started "real" work (not counting college work, summer jobs, etc.). I should note that the numbers don't include capital gains, limited partnerships and other investments I have which aren't taxed by Medicare or SS, but these wouldn't change the graph that much. I've also normalized the data, making the data a percentage of the highest income I ever attained since I don't want to advertise what I make, plus I added an estimate for this year:



Some interesting observations:

o My income went down every time I joined a start-up (twice) since the whole idea was to bet on a lower salary in return for equity in the company. Both bets failed.

o The tech boom was very good to me with in-the-money stock options. I just wish I knew where all that money went (hint: nearly half went back to the SSA, the U.S.A, and California government).

o I took a beating with unemployment during the tech bust, but the upside in stock options more than made up the loss (this is probably the exception with tech workers).

o If I discount the stock options and put in a trend line from the time I started work until today, there is a fairly linear growth pattern. I just hope I can keep the trend going.

posted by Director_Mitch @ 8:53 AM (Permalink)
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