taping stamps to an envelope

Several times a year, there's a charity that sends me a self-addressed stamped envelope - I guess they think that they can prompt me to send them money because of the free postage? I do sometimes give them money (not because of that!), but generally I do not. It may be silly, but I hate the idea of throwing away those unused stamps. So I cut the stamps off the envelope using a pair of scissors, and keep the stamps for reuse later on. I don't send out a lot of mail, so I don't see why I should bother with buying stamps when I can usually get away with reusing these free ones.

When I have a letter to send, I take a couple of strips of clear tape, and attach the stamps at the bottom and the top to my new envelope. I am careful to leave most of the stamp uncovered by tape, so that it's easy for the postal service to postmark the stamps (thereby invalidating them).

I've been doing this for many, many years without any problem. I've never had an envelope returned when doing this - until today!

Above you can see the envelope that was returned to me (FYI - before taking this photo, I had started peeling off the tape from the stamps, but then stopped because I thought this would make an interesting blog post. There was tape over the top of the stamps, and the stamps had not been abraded, when I originally mailed the letter). It is marked "RETURN FOR POSTAGE" and "Re-used Stamps". I figured someone at the post office was unfamiliar with the idea that it's okay to reuse a stamp as long as it has not been postmarked. So I went to the post office to clear things up. I thought that perhaps I had overdone it with the tape this time (a bit too much tape covering the stamps), and I was hoping someone would just cancel the postage for me at the counter.

Well, I was told that taping over stamps is "destroying government property," and it is absolutely not allowed. I explained that the stamps were not "reused" - they had not been used to send anything through the mail and were free of postmarks. Nope! Not allowed!

Yet for many, many years I've been getting away with this. I asked if it would be okay to glue the stamps on. They would neither confirm nor deny whether this was permitted; but at least they didn't say that this was "destroying government property."

I've been searching the internet to determine where the ruling is that you cannot tape stamps to an envelope. Rumors abound, but I have found no definitive answer. I still suspect that the real problem, in this case, was that the stamps were covered with too much tape. If I'd been more careful and exposed more of the stamp surface, this problem would never have occurred. The USPS apparently uses machines which scan the surface of the stamp to check whether it has been cancelled: http://pe.usps.com/text/csr/PS-281.htm:

Most stamps are coated with a substance that may be detected by cancellation machines which verify that postage is affixed. These machines reject letters on which a stamp cannot be detected.

So yeah, I suspect that you can just get away with taping over stamps, provided you leave most of the stamp surface uncovered. But from now on, I'll use glue.

How to take your credit on a hybrid

I feel like a dunce for struggling to figure out how to take the federal tax credit on my new Prius that I bought last year. You might think that the numerous IRS articles on the tax credit for buying a hybrid would reference the correct form to use. Well, if they did, I couldn't find it mentioned. So far as I can tell, it's done using Form 8910, which is used to fill in line 55 of Form 1040. When I first discovered Form 8910, I noticed that Part II of the form refers to business use of the car, which made me think it was a form for business use.

Economics made entertaining (rated 5 stars)

The Age of Turbulence: Adventures in a New World

by Alan Greenspan

Sometimes, The Age of Turbulence wanders into the territory of pontification. Mostly, though, I found that Greenspan’s conservative and libertarian views do not cloud this fascinating presentation of his substantial knowledge of economics and unique perspective on the last few decades of history.

This book would make excellent fodder for a book discussion club (except that it must take at least a year to cover!). I plan on listening to it at least one more time, and may very well buy the book for more detailed examination.

Caveat: I’ve listened to the audiobook on my daily commute to work, and often found it a little hard to focus on the material. It requires some concentration to get the maximum understanding of the material.

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Fortune cookie

No man will work for your interests unless they are his

You can say that again!

May - Confessions of a Street Addict

I just finished reading "Confessions of a Street Addict" by James J. Cramer.

This book is a good counterpoint to Nicholas Maier’s Trading with the Enemy (which I read last March). It is well-written, very detailed, and portrays Cramer in a more even-tempered way. He may throw bottled drinks at his employees and make them wear post-its on their foreheads, but when you get the story from the horse’s mouth, it doesn’t seem like he’s that bad of a guy. And even as he’s busy making everyone surrounding him miserable, there’s no one in the place more miserable than he is, himself. The reporting of his aggravation at the revolving management at TheStreet.com is worth the price of the book.

We are also treated to various nuggets of market wisdom. For example:

On the dot-com craze, p. 238-239:

The public, with high job growth, and lots of 401(k) money to put to work, needed stock to invest in.... Put simply, there wasn't enough public equity to go around, particularly dotcom paper, to equal all of the cash looking for a home.

And further on p. 304:

Major companies, valued in the billions of dollars, visited my office and when closely questioned knew nothing about their own business or the way analysts categorized them. Anything went. Capitalism unbounded and unrestrained.

Yes, quotes like these, coupled with his own stories of what seem a lot like market manipulation to my naive ears, make me want to put all of my cash into government bonds. Oh wait, they're crooks too.

See more progress on: Read one book a month

Krispy Kreme Class Action Settlement

I bought 100 shares of Krispy Kreme between 2003 and 2004. It was one of my more foolish/unlucky investments; I didn't investigate them much. My investment was based on personal experience. I love Krispy Kreme doughnuts, especially when they're hot, and I just knew they were going to be a big hit all over the world.

By the end of 2005, my shares had lost about half their value. I finally decided to sell and take the loss at that point, since I had some capital gains I could offset that year. I had a feeling that KKD was not going to recover for many years, if at all; taking the loss seemed about the best use I could make of the shares. And indeed they have yet to recover, as you can see by the Krispy Kreme stock chart.

I guess the story's not over. I got a thick packet in the mail this week from Krispy Kreme Securities Litigation, regarding the ongoing class action lawsuit on behalf of stockholders against the management. Here are some choice excerpts:

2. What is This Lawsuit About?
This case was brought as a class action alleging that the Class Settling Defendants manipulated and overstated Krispy Kreme's financial results by disguising debts as income and making other improper accounting adjustments, resulting in the artificial inflation of the price of Krispy Kreme securities between March 8, 2001 and April 18, 2005. Class Settling Defendants deny that they did anything wrong.

(In the words of George Costanza - "Was that wrong? Should I not have done that?")

Settlement Fund: $75,000,000 in cash... Depending on the number and type of eligible securities that participate in the settlement and when those securities were purchased and sold, the estimated average recovery per share of common stock will be worth approximately $0.33 before the deduction of Court-approved fees and expenses...

At $0.33 per share, it is not worth my time to participate in the class action. But after reading through the details, it looks like my shares could be worth more. I'll have to read through the papers a little more to figure it out. And I wonder what happens if I do get some piece of the settlement - how is that treated for tax purposes?

Cases like this make index funds very appealing in comparison to stock picking.

You vs the billionaire - NY Times article by Peter Singer

Via Piaw: Peter Singer is back in the NY Times, discussing charitable giving. This article is better than his previous one, The Singer Solution to World Poverty, because it is a little less theoretical and a little more practical in nature. I hope Singer continues to pursue these topics and that people pay attention to what he says.

On a side note, this article introduced me to Zell Kravinsky, apparently a remarkable philanthropist and extraordinary human being. Strangely, I'd never heard of the man before.

A review of "Fooled by Randomness : The Hidden Role of Chance in Life and in the Markets"

Fooled by Randomness : The Hidden Role of Chance in Life and in the Markets

by Nassim Nicholas Taleb

It’s true that Taleb’s ego sticks out from this book like a porcupine’s quills, but whether that bothers you may depend on whether they prick you. It’s hard to take his self-satisfaction seriously; in some ways, he seems just a little sad (but funny). Overall I found his style pretty amusing and had quite a few laugh-out-loud moments while reading the book.

I noted a few favorite examples [from the 2004 revised paperback edition]:

Chapter 7, p 124: “Whenever I hear work ethics I interpret inefficient mediocrity.”

Postscript, p 254: On the inverse rule: “The higher up the corporate ladder, the higher the compensation to the individual”, but the lower the evidence of that individual’s contribution to the company.

Who could be annoyed at a guy who holds such opinions?

I have a few quibbles. I do wish he’d had some graphs in some cases (in the preface, he explains why he refused to add these). If he’s going to claim that outstanding performers got where they are by chance, he could show it by attempting a fit of some variable to a normal distribution. But that’s probably easier said than done. Also, he tends to make generalizations – if something applies to him, then it applies to everyone (for example, he claims he never learns from reading, he has to experience something for it to make an impression – and seems to think this is the case for everyone). I think he should keep in mind that not everyone’s brain functions in the same way, and furthermore the human brain is not identical to a pigeon’s brain. Still, it’s easy to ignore these irritations, which are minor in comparison to the entertainment and educational value of the book.

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Maugham on money

In Chapter 51 of Maugham's Of Human Bondage, Cronshaw discusses money, which is very apropos:

"...There is nothing so degrading as the constant anxiety about one's means of livelihood. I have nothing but contempt for the people who despise money. They are hypocrites or fools. Money is like a sixth sense without which you cannot make a complete use of the other five. Without an adequate income half the possibilities of life are shut off...."

Now if only, over the years, Cronshaw had taken the money that he was spending on cigarettes and booze, and instead put it into a diversified basket of stocks and bonds, he might not be so sour and deprived in his middle age.

[Edit: As dan points out in the comments, it was not Cronshaw who made these statements, but Foinet, Philip's art instructor. I don't recall that Foinet had any financial difficulties, so it's not clear how he got this perspective. Maybe it came from the observation of generations of his students.]

I love my cash-back card

I just got a check in the mail for $121. It's from my Motley Fool 1% cash-back card. I love my cash-back card! People are always telling me that it looks funny or cute, which is a pretty weird experience when paying the cashier.

I wonder if there are any better deals out there...

Not counting on social security

I am not counting on getting social security checks when I retire. It'll be a nice extra if I get some, but if I assumed that I'd have to rely on it for necessities, I'd probably be in a constant state of panic. I guess I fit the profile described in this section on retirement in the April 11, 2006 NY Times (you gotta log in).

So at a time when the national savings rate has fallen below zero ... my family has gone the other way. ... We like to think of it as being frugal, but another adjective — cheap — would not be unfair.

Yup, I'm cheap, no doubt about it!

I've been doing some surfing around the whole social security issue lately, following some back and forth on the subject with Piaw Na.

Here are some quotes from an article in last year's USA Today about retirees who live entirely off social security:

...today, 10.6 million people, or 22% of the 48 million who will receive Social Security benefits this year, live on that [social security] check alone, the Social Security Administration says.
...
Currently, 53% of people in the workforce have no pension, and 32% have no savings set aside for retirement.
...
The [current] average Social Security payout is ... $11,460 annually.

And here's the most recent summary on the status of Social Security and Medicare Programs (from May 1, 2006). [ Edit: Here's the full Trustees report for 2006, and here's another good summary of the report from the Center on Budget and Policy Priorities ]


I've got no pension, but I do have retirement savings. Almost all of those savings are out of my own pocket; only one of my previous employers did the matching contribution thing, and I didn't stay with them long enough for it to make a big difference.

Hard to say just how much money I'll be getting in retirement. Things could definitely go sour. But then there's always the ex-pat option - hello, Panama! (log in required).

Thinking about my charitable giving

Here I go ... again!

Last year, I decided to do a little checking up on the charities to which I give. Just to be sure they aren't taking my money on a vacation to Aruba, or something. Invariably the CEO salaries are sky-high. I guess I have to put up with CEOs taking my money to Aruba, even at non-profits. Actually there's one exception: the CEO of Doctors Without Borders only rakes in $100,479. Now that, I can live with.

But it's not so easy to tell what's up. I found two charity ratings organizations and compared. One is Charity Navigator which has a number and star rating (4 stars is tops) and the other is American Institute of Philanthropy, which gives A thru F. AIP gives you a list of top-rated charities, but if you want to get the poop on anything other than these, you have to cough up some cash for their ratings book, which I'm just not going to do.

Here's my list of charities, followed by their ratings:
Charity : AIP rating : CharityNavigator rating

1. Oxfam : B+ : 52 (3 stars)
   
2. Doctors without Borders : A : 61 (4 stars)
   
3. Amnesty International : "not top rated" : 35 (1 star)
   
4. Disabled American Veterans : not rated (info not provided to AIP) : 69 (4 stars)
   
5. World Wildlife Fund : not top rated : 48 (2 stars)
   
6. NARAL : not rated (info not provided to AIP) : 40 (2 stars)
   
7. Planned Parenthood : A : 68 (4 stars)
   
8. UNCF : A : 55 (3 stars)
   
9. NPR/CPTV (public radio/tv) : not listed : 60 (3 stars)
   
10. Tibet House : not listed : not listed
    
11. NY Times Neediest Cases Fund : not listed : not listed
    
12. Kids with Cameras : not listed : not listed
    
13. CFPA (Connecticut Forest and Park Association ) : not listed : not listed
    

The one thing that kind of shocked me, and made me reconsider, is Amnesty's poor rating. I'm still giving to them, but I may switch over to Human Rights Watch, which gets a much better rating. I've been a long-time supporter of Amnesty. It is an "inherited" charity; my mother gave to them, and participated in their letter-writing campaigns... plus they won the Nobel Peace Prize in 1977 ... so they must be good! Right??

So one of my problems in all this is - who is watching the watchers? How do I know that AIP and CharityNavigator are doing a good job? Can I really rely on their ratings? Sure I can read all the info about what they say they do... just like I can read all the info about what these charities say they do. Hmm.

Why I recommend "Trading with the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street"

Trading with the Enemy: Seduction and Betrayal on Jim Cramer's Wall Street

by Nicholas W. Maier

Years ago, I read "Liar’s Poker", by Michael Lewis, and "Burn Rate" by Michael Wolff. Both very enjoyable books.

"Trading with the Enemy" is in a similar vein, but not as well done as either of those books. Nicholas W. Maier needed a good editor, or he should have put more work into this book himself. It’s just not well put together and at some points it gets a bit boring. The problem could be that there’s simply not enough story to tell and he tried to stretch it out.

Despite all that, there’s the core of a good story in here, and it is worth the read. I wouldn’t recommend buying it; check it out from the library if you can.

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It's "Achieve Financial Independence Week"!

Achieve Financial Independence Week is the third week in October – this October 16-22. The Stower's Innovations Newsletter talks about it; in fact, they invented the week. Here's another link to www.afiweek.com.

Yes, it’s a hokey marketing gimmick to get people to buy insurance. But don’t throw out the baby with the bathwater; there are some good ideas and suggestions in the newsletter. Food for thought.

See more progress on: Become Financially Independent

Pioneering Portfolio Management

A friend of mine loaned me the book Pioneering Portfolio Management, by David F. Swensen. I started reading it and it was pretty interesting. But I have a preference for fiction, so I kept putting this aside. I’ve had the book for a while now, and I’d really like to get it back to my friend. But I also want to finish it. So I need to zoom through it…

See more progress on: finish reading Pioneering Portfolio Management