Summer Vacation is almost over....

Soon it will be time for students, teachers, and professors to go back to school. One thing I've learned about myself is that I would go crazy in retirement. I don't think I'm a workaholic, but I can't sit around doing nothing.

Here's what I did over my vacation:

1. Exercised - I think I gained some muscle. Actually, I'm positive, since I have to wear "Large" now. I was a "Medium" before.

2. Fixed my mom's desktop computer and my friend's notebook computer. My mom's hard drive died suddenly. So, I changed it and retrieved the data from her old hard drive. My friend had a bad virus.

3. Fixed the sprinklers at my parents' house. A few of their sprinklers were broken, so some of their lawn was dying.

4. I read a book called The Science of Sleep and about 1000 articles in different periodicals.

6. I gained about 3 lbs. of fat because I was eating like "there's a beggar in my stomach" everyday.

7. I lost 3 lbs. of fat when I came back to Seoul by eating less and exercising more.

8. I saw three movies with my brother. (Yes, two men going to the movies together. lol) Wall-E was by far the best film. The others were Hellboy 2 and Wanted. I plan on seeing the Korean film The Good, The Bad, and the Strange. The Good, the Bad, and the Ugly is one of my favorite movies. I also like the film's song, which is one of my favorites - "Don't let me be misunderstood" by The Animals.

9. I bought some new materials for my classes.

10. I bought stocks to increase my capital. Hopefully, they'll all go up in value.

11. I donated a little money to the National Military Families Association. I'm not deeply religious, but I'm going to begin tithing.

12. Finally, I spent a lot of time learning about Milton Friedman, the economist and Nobel Laureate. I agree with most of his theories and ideas. He is reviled by government, labor unions, schools, etc.

Lone Star Strikes Again

Lone Star Funds has made headlines in Korea, Japan, Germany, and the U.S. Why? Because they're the ultimate bottom feeders. A "bottom feeder" is defined as an opportunist in politics or business.

Lone Star bought Tokyo Star Bank in 2001 for $400 million. They later sold the bank for around $2.8 billion. Most Koreans already know about the Korea Exchange Bank purchase in 2003. Lone Star paid $1.3 billion. They are currently in the process of selling the bank to HSBC for around $6 billion. AHBR, once Germany's largest mortgage bank, was taken over by Lone Star in 2005. Recently, they acquired $30 billion in CDOs from Merrill Lynch and only paid $6 billion.

In addition to distressed banks, Lone Star buys golf courses, restaurants, hotels, construction companies, supermarkets, mortgage companies, etc. What do they have in common? These companies were all near bankruptcy or desperate when Lone Star bought them.

We often say: "Hindsight is 20/20." This means that we can fully understand an event after it has happened. All of Lone Star's investments look brilliant now, but at the time, no one else bought these companies. There is no doubt these guys are very good at what they do, which is buying when no one else wants to buy and pouncing when the owners are desperate to sell.

According to Lone Star Fund investors, the fund has a target return of 25% a year. lol Unfortunately, the average person cannot invest in Lone Star Funds. (Wouldn't you like a 25% return every year?) However, we can learn from their strategy. =)

Trans Fat Law

A new bill was signed into law by the Terminator last week. No more trans fats in California.

We will terminate you (by 2011). According to the law, restaurants will be fined between $25-$1000 for violations.

From the Telegraph:

WHAT ARE TRANS FATS?
Trans fats (or trans fatty acids) are created in an industrial process that adds hydrogen to liquid vegetable oils to make them more solid

WHY ARE TRANS FATS USED?
Easy to use, inexpensive to produce and last a long time. It gives food an attractive taste and texture

HOW DO TRANS FATS AFFECT OUR HEALTH?
They raise bad (LDL) cholesterol levels and lower good (HDL) cholesterol levels, increasing heart disease and stroke risk

To follow up with my Libertarian beliefs, was this law necessary? Most restaurants have already been phasing out the use of trans fats. Who is going to police restaurants? Do we have to hire an army of fatty police? How is the government going to pay for the this? (Taxes my friends.)

This law is what Libertarians call a "nanny law." It's basically when government treats individuals like 5-year-old children. Here are other nanny laws being proposed:

1. No spanking toddlers

2. No smoking in your car (if children are present).

3. No incandescent light bulbs in your home.

4. Restaurants will be required to list the calories for their food.

If you want to make people safe, put us all in a plastic bubble like John Travolta.

See those girls? Don't worry they're safe.

"The government solution to a problem is usually as bad as the problem."

"Governments never learn. Only people learn."

"I am favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible."

"If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."

"Nothing is so permanent as a temporary government program."

"We have a system that increasingly taxes work and subsidizes nonwork."

"Only government can take perfectly good paper, cover it with perfectly good ink and make the combination worthless."

- Milton Friedman

Free Video File Converter

I stumbled upon this WinFF Free Video Converter. It has all the characteristics of software that I like.

1. It's small. (Only around 3 MB.)

2. It's free.

3. It's intuitive.

You can convert files to iPods, AVI, Quicktime, FLV (for Youtube), etc. If you upload videos to Youtube, you have to spend time waiting for Youtube to convert the file to FLV. However, doing this ahead of time can save you a couple of minutes.

If you combine this with VirtualDubMod, you can do a lot of video editing.

Here's a screen shot:

You can find WinFF and other freeware on my web page.

Microsoft e-mail

Here's an internal e-mail to all employees from Steve Ballmer, CEO of Microsoft. He definitely has cockiness...

From: Steve Ballmer
Sent: Wednesday, July 23, 2008 4:30 PM
To: Microsoft - All Employees
Subject: FY09 Strategic Update

With FY08 complete, I want to discuss my priorities for the year ahead and share my thoughts about the key strategic topics that are on everybody's mind, including Windows, competition with Apple and Google, our software plus services strategy, and Yahoo.

I also have news about an organizational change and a transition in our Senior Leadership Team.

First, I want to thank you for your hard work and the dedication you showed during the past 12 months. FY08 was a milestone year. Our revenue jumped $9.3 billion to more than $60 billion. Operating profit grew 21 percent to $22.5 billion.

These outstanding numbers are the direct result of your commitment to the priorities I outlined last July. A lot has happened since then, but our fundamental strengths, challenges, and strategic goals remain largely the same. Therefore, my priorities are consistent with last year. In FY09 we must continue to:

1. Invest in the right opportunities;
2. Expand our presence with Windows, Office, and developers;
3. Drive end user excitement for our products;
4. Embrace software plus services; and
5. Focus on employee excellence.

By focusing on these five areas, we can continue to grow revenue, increase profit, and expand our market share. These priorities are also critical as we work to address key issues surrounding our business in the coming year:

• Windows: The success of Windows is our number one job. With SP1 and the work we've done with PC manufacturers and our software ecosystem, we've addressed device and application compatibility issues in Windows Vista. Now it's time to tell our story. In the weeks ahead, we'll launch a campaign to address any lingering doubts our customers may have about Windows Vista. And later this year, you'll see a more comprehensive effort to redefine the meaning and value of Windows for our customers.

We also have to drive developers to create rich applications for Windows. With Internet Explorer and Silverlight, we have great tools for creating applications that run everywhere. But we also need to make sure developers have the .NET skills to write unique Windows applications using Windows Presentation Foundation. To keep today's Windows applications alive, vibrant, and exciting, we need both--applications that run everywhere and rich client applications.

• Apple: In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we're changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We'll do the same with phones--providing choice as we work to create great end-to-end experiences.

• Business and enterprise: Our enterprise and server business has never been stronger--today we are on the verge of becoming the number one enterprise software company. We need to continue to push on all fronts--mail with Exchange, business intelligence with PerformancePoint, virtualization with Hyper-V, and databases with SQL Server. We have to drive our enterprise search capabilities, our unified communications solutions, and our collaboration technologies. And we must continue to compete against Linux in key workloads such as Web servers and high performance computing.

• Software plus services: Some people think software plus services is all about search. But it's really about changing the way software is written and deployed. The future is about having a platform in the cloud and delivering applications across PCs, phones, TVs, and other devices, at work and in the home. It's also about driving change in business models through advertising, subscriptions, and online transactions. Software plus services is a huge opportunity for us to deliver new value on the desktop and the server to all of our customers. This year at PDC, you'll hear more about our cloud platform initiatives and the next versions of our Live and Online technologies.

• Google: We continue to compete with Google on two fronts--in the enterprise, where we lead; and in search, where we trail. In search, our technology has come a long way in a very short time and it's an area where we'll continue to invest to be a market leader. Why? Because search is the key to unlocking the enormous market opportunities in advertising, and it is an area that is ripe for innovation. In the coming years, we'll make progress against Google in search first by upping the ante in R&D through organic innovation and strategic acquisitions. Second, we will out-innovate Google in key areas--we're already seeing this in our maps and news search. Third, we are going to reinvent the search category through user experience and business model innovation. We'll introduce new approaches that move beyond a white page with 10 blue links to provide customers with a customized view of their world. This is a long-term battle for our company--and it's one we'll continue to fight with persistence and tenacity.

• Yahoo: Related to Google and our search strategy are the discussions we had with Yahoo. I want to emphasize the point I've been making all along--Yahoo was a tactic, not a strategy. We want to accelerate our share of search queries and create a bigger pool of advertisers, and Yahoo would have helped us get there faster. But we will get there with or without Yahoo. We have the right people, we've made incredible progress in our technology, and we'll continue to make smart investments that will enable us to build an industry-leading business.

As I mentioned earlier, I have important organizational news. Today we are announcing that the Platforms and Services Division will be split into two businesses: Windows/Windows Live and Online Services. We are also announcing that Kevin Johnson will leave the company. He will work to ensure a smooth transition.

Since 1992, Kevin has been a key contributor to many of this company's most important achievements. As president of the Platforms and Services Division, Kevin has built an incredibly talented organization and laid the foundation for the future success of Windows and our Online Services Business. Over the last 16 years, through everything from his work as head of the company's worldwide sales, marketing, and services efforts, to his leadership in transforming our field operations and repositioning the company to focus on opportunities in emerging markets, Kevin has played a vital role in this company's success. There is no doubt that his passion and dedication will be missed.

Effective immediately, Steven Sinofsky, Jon DeVaan, and Bill Veghte will report directly to me to lead Windows/Windows Live. In the Online Services Business, we will create a new senior leadership position and conduct a search that will span internal and external candidates. In the meantime, Satya Nadella will continue to lead Microsoft's search, ad platform, and MSN engineering efforts, and Brian McAndrews will continue to lead the Advertiser and Publisher Solutions Group. Both Windows/Windows Live and the Online Services Business are led by a strong group of executives on the technical and business side who have the talent and experience to address the challenges we face and drive the next generation of growth and success.

Looking ahead, I see an incredibly bright future for our company. As I said at the June 27th Town Hall for Bill, we are the best in the world at doing software and nobody should be confused about this. It doesn't mean that we can't improve, but nobody is better than we are. Nobody works harder than we do. Nobody is more tenacious than we are. We're investing more broadly and more seriously than anybody else. Our opportunities to change the world have never been greater.

I look forward to working with all of you as we focus on our five priorities in FY09.

Steve

Fear = $

I saw a great video yesterday that supports Warren Buffet's mantra: "We simply attempt to be fearful when others are greedy and to be greedy when others are fearful."

This video clip is an interview with S&P's Sam Stovall. He cites historical evidence that Consumer Confidence is a bellwether for the stock market. Basically, when Consumer Confidence is low as measured by the Confidence Board, it signals we've reached the bottom or close to the bottom of the market. Recently, the Consumer Confidence Index hit a historical low of 50.1, which is the 5th lowest in history. The lowest was December 1974 which bottomed out at 43.2 However, the S&P 500 returned 37.2% in 1975. Bush's lowest level was March 2003 61.4 By the end of 2003, the S&P 500 had a 28.7% return.

I'm going to start keeping an eye on this index. It's published once a month.

Maybe George Costanza was right. If we just do the opposite, it must be right.

Supplements

A lot of us gym rats are taking supplements. Usually, it means a trip to Namdaemun for protein powder, creatine, BCAAs, etc. I found a website in Korea that's roughly the same price for Optimum Nutrition. Door to door delivery. It'll save you a few hours in the afternoon. =) Most of all, it's convenient.

Some items are still too expensive like fish oil. The Omega-3 sells for roughly double the price in the U.S. =(

How many supplements do I take? You don't want to know.

Or do you?

This is not everything. It's just what I could fit on one shelf. lol


Here's the powder group:


Do you take any vitamins?

The Sky is Falling!

I never thought I'd ever witness one of these, but there was a "bank run" or "run on the bank" here in California. Basically, it means bank customers get scared and withdraw all of their money at once or in a short time. Since most banks invest their funds in long-term investments, bank runs can be devastating as was the case with Indymac Bank. The bank was subsequently taken over by the U.S. government. There are very few banks in the world that can withstand a bank run, except maybe the Bailey Building & Loan. Even George Bailey understands the seriousness of a bank run.

Look at all these people waiting to withdraw their money.





Here's what I find impressive. They are just calmly sitting there waiting for the bank to open. No riots. No protests. No fires. I think Americans might be some of the most orderly customers in the world. lol



They have a good reason to remain calm. The Federal Deposit Insurance Corporation (FDIC) guarantees your money up to $100,000. Anything over that amount is not covered. However, the FDIC decided to give Indymac customers 50% of their money over $100,000. For example if I had $150,000 in my bank account. I would receive $100,000 plus $25,000 (50% of the amount over). Korea has their own version of the FDIC called the Korea Deposit Insurance Corporation (or KDIC). The Korean government guarantees up to 50,000,000 won (about $50,000). In Britain, they have the Financial Services Compensation Scheme (or FSCS) that guarantees up to 35,000 pounds (around $70,000 U.S.)

What's the lesson here? If you have a lot of money, put the money in several banks. Or better yet, invest it. I think this is a great opportunity to buy big bank stocks. When these smaller regional banks fail, where will the customers put their money? Under their pillow? I doubt it. I think most of them will choose a larger more stable bank. Jim Jubak agrees:

My thesis that this conservatively managed bank (USB) will be able to grab market share thanks to troubles at other banks remains intact. Total average loans grew by 12% from the second quarter of 2007. Total average deposits climbed 14% for the quarter. The increase in provisions for bad loans needs to be put in perspective too. Yes, the net charge offs for bad loans climbed this quarter from the first quarter, but we're still talking about an increase to .98% from .76%. Resident home mortgage charge offs remained below 1% at .91% and the charge offs on home equity and second mortgages climbed to just 1.13%. In the conference call the company said it would conserve capital by reducing its expenditures on buying back shares in order to 1) protect the current dividend of $1.70 a share (The yield on July 16 was 7.49%), and 2) have enough cash to make opportunistic acquisitions in a battered financial industry. I like that thinking. As of July 18, I'm keeping my target price at $44 a share by December 2008. (Full disclosure: I own shares of US Bancorp in my personal portfolio.)

Wall-E

Last weekend I saw Wall-E. If you haven't seen this movie, I highly recommend it. It's by the geniuses at Pixar (now a part of Disney). In terms of story, creativity, and production, this film was a joy. Aside from the humor, this movie has a lot of messages. Most of them are critical of our modern society. For example, instead of President of the United States, the position is referred to as the CEO of the United States. In addition, the future is a world where people do nothing except sit in a chair. Everything is brought to them. As a consequence, everyone is overweight. There is also a computer character taken from Stanley Kubrick's 2001. It looks and acts like "HAL."

Finally, before the film begins there is a hilarious creative short.

Here it is in its entirety:

The rabbit is so cute. =)

Barbecue

Summertime means barbecue time in the U.S.

Last weekend, we had a barbecue. My older brother cooked everything. =) I was at the gym.

First, he smoked some ribs and baked some corn bread.

Then, he baked some rosemary potatoes.

He grilled some veggies.

Here's the whole dinner.

At least I went to the market and bought some beer. =)

It was a hearty meal. I have to exercise more...

Oxtail Soup

Okay. I've been home for a little over a week and I've cooked one of my favorite dishes - oxtail soup. Who doesn't need some tail? =)

First, I cooked the oxtails in a large pot for over 4 hours. The really annoying part is skimming. There's a lot of strange crap that floats to the surface.

4 hours later, I added ginger, bay leaves, tomatoes, carrots, onions, salt, and pepper in that order. I cooked until the carrots were close to tender.

Finally, I added potatoes and some V-8 vegetable juice.

Here's the finished product:

Yum. I ate 2 bowls for dinner. =) (Yes. I'm a pig.)