More Opinion by The Springboard

THE UPRISING OF THE AMERICAN PARTY "Clearly the voters are engaged right now, at least for sure on the republican side, and what they have concluded is that the republican party has not done their job. Thus, Donald Trump gets their vote."

Tuesday, February 28, 2012

Ohio School Shooter Was Bullied

According to most reports on the recent Ohio school shooting incident the shooter, T.J. Lane, was considered to be an outcast and was bullied. In most of these school shooting cases that seems to be an underlying theme. Many might suggest that these kids that wind up walking into schools with guns intent on killing people are misguided psychopaths. I take a slightly different view on this. I think they just snap.

Kids can be cruel, and while in no way am I suggesting that any level of cruelty ultimately justifies anyone being killed, I also happen to think that school officials need to look a little deeper into these kinds of problems. In fact, I think that schools should actually make cases like this a part of the curriculum. Just like many employers hold training on issues like sexual harrassment in the workplace, I think schools should at least heighten the awareness of bullying, its effects on the person being bullied, and the potential dangers bullying could pose if someone wakes up one morning and simply decides he's had enough.

Kids don't do much thinking about what they do and how what they do affects others. That much is clear. They also see life as being infinitely solid. How many times do we hear about kids being killed in high speed car crashes every year? And why? Because they don't believe they can die.

These cases are few and far between. And I should point out that most kids that are bullied don't walk into schools with guns. I also am not naive enough to believe that we can stop all bullying even if we add something into the curriculum. But to do nothing and pretend like it's not a problem, and to simply take the idea that 'this is just kids being kids' leads us down an ever dangerous path.

Monday, February 20, 2012

Walgreens Erring on the Side of Caution Could Boost Competitors Bottom Lines

By all accounts it seems certain that the relationship between Express Scripts and Walgreens is done, and while I sympathise with Walgreen's concern that Express Scripts is undercutting them, I also believe that their decision to part ways with the company could give an edge to growing competition in the pharmacy retail sector. This edge would most notably go to rival CVS, which has been adding stores and beefing up advertising lately.

Walgreens tends to make light of the situation, saying that longer term implications if they'd have decided to accept Express Script's market proposal "would have been far worse than the short term impact on earnings." Still, Express Scripts accounts for nearly 10% of the 819 million prescriptions Walgreens fills on an annual basis. According to most analysts that will shave off about $5 billion in annual revenue from their bottom line. The question is, does that figure only account for the money they'd have earned filling the 80 million prescriptions—what about the losses from potential other retail sales which typically occur as people waiting for their prescriptions browse the aisles, and ultimately buy stuff?

I will say that I applaud Walgreens for at least standing firm in favor of their interests. While losing 10% of a big part of your business can't, in my view, ultimately be good for business, neither is sending a message to other pharmacy benefit managers that Walgreens is open to being strongarmed in order to keep customers.

A deal could still be hammered out. That's true. But the thing is that this tussle between the largest pharmacy retail operator and one of the largest pharmacy benefit managers in the U.S., whose largest client also happens to be the Department of Defense's TRICARE program gives time for Express Scripts to weigh in on how much of an impact on their business they will have without Walgreens in the picture. This time and assessment of impact could either benefit Walgreens, or Express Scripts. Other pharmacy retailers have been clamoring for a chunk of the 80 million prescriptions Walgreens won't currently fill, and CVS stands to gain at least around 20 million of those—a lucky opportunity for them as this could add around $200 million a year to their bottom line.

There is also the question of what impact a merger between Express Scripts and Medco Health Solutions might have, providing the FTC approves it? Walgreens CEO Gregory Wasson has already said that he would not do business with the combined companies.

It's really a wait and see game. Ultimately I think CVS stands to gain the most from this back and forth. Getting market share is all about getting people to switch to your product or service, and Walgreens just essentially handed 10% of their prescriptions business to their many competitors. I think Walgreens should hold its ground. But it should also be careful not to become the next Sears or Kmart when business for pharmacy retail really gets ramped up as more and more baby boomers over the next 15 years or so start getting prescribed more medications, and seek out providers to get them filled.

Even more interesting is that CVS over the last 4 quarters far outdid Walgrens producing better than 3 times the cash than Walgreens did over the same period. In fact, it took in more than $1 billion more than Walgreens did. That means CVS will have more cash to work with to fuel its store improvements, ramp up advertising, repurchase shares and increase dividend payouts to shareholders, and add stores. All feats which could further erode market share for Walgreens. To my mind, that's quite an edge that just gets better if Express Scripts and Walgreens stay on the wrong side of each other.

Sunday, February 19, 2012

Winning the Lottery: The Dream of the Big Win

Why bother to play when the odds are so stacked against you?

Looking at the odds of actually winning the lottery, many people simply say, "Why bother?" But unlike gambling in say, a casino, the amount of money one actually would spend just playing the lottery for a lifetime, for a chance at a huge and life changing payout, is really just pennies on the dollar.

Who wants to win?

The real question may be, who doesn't?

There are very few people I've run into in life who wouldn't want a chance at winning it big in the lottery. All things considered, the fact that nearly every state has at least one lottery, and all lotteries rake in billions of dollars each and every year, you can quickly assume that quite a lot of people play. Where else could one spend just one dollar and have the potential to forever alter one's life? And honestly, who could pass an opportunity like that up? It's of course the dream of the big win that draws us into playing as we envision days spent on mile-long yachts, enjoying what most would call the 'good life,' fat Cuban cigars jutting from our mouths, blowing smoke dollar signs instead of the more familiar 'O's.' If we could just win the lottery, we'd be able to go anywhere we wanted to, do just about anything, and buy whatever our heart's desired without so much as a second glance at a price tag.

Granted, when we think of what is the American dream, winning the lottery surely doesn't top the list. Probably because of the odds. And certainly there are many more sure-fire ways to hit it big—starting a successful business for example, or making a stock pick the likes of IBM or Microsoft, or Google for that matter. But certainly at least thinking about a big lottery payout is on the list.

And certainly the choices of which ones to play abound. Like I said, nearly every state has at least one lottery game, and most states have multiple ways to play. And of course many states participate in the multi-state lotteries like the Powerball and Mega-Millions, which by the way also offer the biggest payouts. The Powerball infact recently upped the ante when it changed to the $2 ticket, and the pot grows much more quickly now when someone doesn't win. If Powerball has a long run without a payout, the jackpot amount could certainly shatter any records set by any lottery before, so it will be something interesting to watch.

It's such a simple idea

That is, despite the odds of course. I'll readily admit that the odds are horribly stacked against you. The likelihood that any one of us reading this right now will ever be among the winner's circle when it comes to a big lottery payout is slim to none. But it is a very simple concept. Shell out a mere buck for a chance, however slim that chance, at raking in enough money to forever change one's life. I said before, you'd likely have a better chance at starting a successful business, or picking a great stock that takes off like gangbusters—still, doing these things takes quite a lot more money to do it. Even if you did get lucky, for example, and bought into Google right after its initial public offering, and held on to it through its stellar rise in value, unless you plunked down a sizeable chunk of money, and were willing to wait it out for a long period of time, you probably would have made a nice return. But even that may not have launched you smack-dab into the league of millionaires.

When you play the lottery you have to forget about how bad the odds are. It's as simple as that. You should have the same rule when you play the lottery as when you walk into a casino. Not a single casino has ever been built on winners, and the most likely scenario is that when you walk out of the casino, your wallet will be lighter than it was when you walked into it. When you play the lottery, you are probably going to wind up at least forfeiting your dollar.

So, what do you really have to lose?

I said before that there have been very few people I've run into who wouldn't want a chance at winning it big in the lottery. And while it is true that many people do play, a lot of people do not. How many times have I heard someone tell me, "You're wasting your time and your money. You'll never win." Of course, the people that tell me this are right. I probably won't. Still, even considering the improbability of the odds is $1, or even $2 to play the new Powerball, really all that high a price to pay for just the chance? Powerball starts off at $40 million. And lotteries have reached amounts as high as $300 million. That's no small change to say the least.

So, what do you really have to lose? I say practically nothing. Consider for a moment that even if you never won a single red cent playing any of the lotteries—not even a single dollar—over the course of a lifetime of playing, the actual amount you'd lose would be insignificant at best.

Let's say that a lifetime of playing the lottery is 50 years. I mean, let's say you play the lottery week after week, religiously, for the sum of 50 years and you never win so much as a dime. Hey, admittedly that's probably more possible than winning the big one. For those of you who don't ever play the lottery, lotteries typically have two drawings per week. For Powerball those drawings are held every Wednesday and Saturday. For Mega-Millions it's every Tuesday and Friday. My own state's lottery holds its drawings on the same schedule as the Powerball. So basically, the cost of playing religiously week after week would only be $2 or $4 depending on which one you are playing. When you do the math that's 2,600 weeks in 50 years, or anywhere from $5,200-$10,400 in a lifetime of playing the off-chance that you might actually win the big one.

Gosh, these really are some terrible odds

It's sort of funny when you really break down the odds. Flipping to the other side of my Powerball ticket, one of the older ones before the $2 change in price, it told me that my odds of winning the big lottery payout was 1 in 195,249,054. Doing a little research, I learned that I have a much better chance of being struck by lightining TWICE in my lifetime. My odds of having that happen to me is 1 in 9million. Putting it into further context, this means I'd more likely be struck by lightning 43 times than win the lottery jackpot once in my lifetime.

Let's hope the former doesn't happen. Winning the lottery sure sounds like a lot more fun than being struck by lightning even once, and truth is, I have absolutely no interest whatsoever on experiencing the equivalent effects of global warming all by myself anytime soon. Of course, if I were to be struck 43 times in my lifetime, which chances are better than winning the lottery, I certainly would become a bit of a scientific phenomenon, and that could likely payoff pretty good as well—assuming I could survive that many strikes...


What I say is this. Being ever realistic you probably will never get the big lottery payout. But isn't it still worth the $2 or $4 a week to at least have the chance? Again, and I hate to sound like a dead horse, without question it's probably a total waste of money. But I can think of a gazillion other things most people waste their money on, in far greater number, than what they'd waste on the off-chance of winning the lottery. Somebody has to be that 1 in 195 million. That's the way it works. And it can only be you if you have a ticket in your hand. For that reason I'll gladly waste my money.

If nothing else, I can of course stay indoors during an electrical storm.

Monday, February 13, 2012

Obama Just Won't Give Up On Failed Policy

If I were to give President Obama credit for anything, I'd have to give him credit for being persistent. In a budget proposal he will propose today he still clings to this idea that taxing the rich is the way to go in order to get this economy moving forward at a faster pace. At the same time he says he wants to create jobs. But in that it's clear he doesn't understand the workings of the economy, and he is blind as a bat when it comes to history.

Raising taxes has never led to more revenues for the government's coiffures, and so far as I can tell, it has never led to job creation either. People, of course, like to point out that President Bush lowered taxes and look where it got us. But the fact of the matter is that it wasn't Bush's tax cuts that got us into the Great Recession, it was many years of failed policy by the Congress and bad decision making by the banks that did us in. And I've argued that it was also caused by a false sense of security and wealth by many Americans fueled by a saturated, and overdone credit market, and a generation of people that had access to too much too soon thinking that the gravy train would just keep delivering the goods—a huge trade deficit and loss of manufacturing didn't help either, but that's for another day.

I have always held that a tax on the rich is a tax on the regular folks. Sure, it feels good for the little guy to think he's getting one over on the "fat cats" when they get stuck with the possibility of giving up more of their riches. But the reality is that all that happens when the rich get stuck is to pass on their costs—to you and I.

Take the fact that I own a duplex that I rent out. As a part of the deal I pay for the heat. In the tenant's eyes they are getting their heat for free. So taking that thinking into account, let's say that the heat I pay for is a tax I have to pay. The tenants can certainly, if they want to stick me with higher costs, turn up the heat if they want to. But the end result is simply that if my costs go up to run the duplex, I will invariably raise the rent to the tenant.

Who pays for the heat? They do.

And just like raising the cost of the heat I provide to my tenants ultimately raises the cost of their rent, so does raising taxes on the rich. As a result of higher taxes the rich and the corporations will simply reduce hiring, reduce benefits, raise the cost of the goods and services they sell in the marketplace, or they will simply pack their bags and open offices and factories in places where costs, and taxes are lower.

Oil is a very good example of this effect. Airlines have been adding fees to try to make up for higher fuel costs all the time.

There is only one good thing about the fact that Obama wants to continue forward with this disastrous idea, and that is that it will, like most of his policies have, fail miserably. The American people are watching. The smart ones get it. And contrary to popular belief, there are smart people on the left, and they get it too. This will solidify the need to oust this guy from office and put someone else in his place who understands the economy, understands the path to economic growth, and who also understands why we are having such a difficult time coming out of this last deep recession and onto a path of more rapid growth—something that historically happens when we hit bad economic times—and that is that it is President Obama's policies which are largely to blame for keeping us running in place.

By the way, might I only close by asking the question, "What's that they say about the definition of insanity?" His budget proposal is more of the same. There's nothing new about it. The outcome will present more of the same as well, however unfortunate that reality may be.

Sunday, February 12, 2012

I Will Play the Facebook IPO

When I read Al Lewis' column in the Wall Street Journal, Facebook, Dead or Alive, last week Sunday, I had to laugh. Quoting himself from a previous colum in 2004 he wrote, "Google's growth curve won't last forever. It's only a matter of time before someone gobbles Google's lunch." He went on to point out that since the IPO Google's stock has soared 580%.


And oops is right, because I've admittedly kicked myself as well more than a few times for thinking Google was just a fad, and that it's stock would eventually be as worthless as nearly all Internet stocks eventually wound up. I didn't play the Internet boom when it was literally going through the roof mainly because I simply couldn't grasp how any of them would make their money. How in the world could a company have a valuation in the hundreds of millions of dollars, even in the billions of dollars without a headquarters and at least some revenue to speak of?

In the end that question certainly was a good one, and while I could have cashed in on short term gains, I simply chose to stick to what I knew.

But Google has been a different beast, and unlike the other Internet stocks of their time, Google actually does have a headquarters, and they do certainly make plenty of revenue. And so far as I can tell, nobody has come along to gobble Google's lunch, and there doesn't seem to be anyone immediately around the corner to take a good shot at it. Google will likely continue to perform well, and despite it all, I have yet to ever own a single share of this company and have no intention to buy any shares now.

Perhaps that's simply because I have this sort of luck that once I plunge into an old winner like this one, things tend to take a swift turn in the other direction. Might I only add here that I was late into Krispy Kreme as well and as soon as I finally pulled the trigger and opened a position, besides the holes in their doughnuts, that decision wound up leaving a hole in my portfolio.

To quote Homer Simpson, "D'oh!"

Facebook, on the other hand, gives me pause. It is a real company, and I do think they can make money—and they are. And let's face it, their subscriborship appears to be on a relative continuous growth curve. People, so far as I can tell, still like Facebook, and newcomers keep rolling on in, in droves. Like Google, I'm just not sure there's anyone who will be able to top Facebook's appeal in the near term.

For that reason I'll be going in on this one. Granted, I will by no means bet the farm. And I intend to only go in for the short term. But I think it's a play that will certainly prove well worth it. For all I know this thing may well gobble my lunch. But if it doesn't, and I think it won't, it certainly is not going to be another one that got away.