Soy Sauce

November 17, 2008

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I got a call from a telemarketer last week. It was one of those calls where you can chop the interest rate on your credit card. I decided to tell the caller that they were in violation of the “Do not call” list and that I would refer subsequent calls to the attorney general’s office – so I hit the button to talk to a human.

Then the call got weird.

I hear a woman in the background. “Can we get some soy sauce with that? A lot of soy sauce. We both like soy sauce. Can we get like ten each?”

The conversation goes on like this for a bit – clearly she is using her cell phone to order lunch while she is supposed to be answering calls. Eventually, my one year old daughter makes a sound in the background. The call realizes what has happened and focuses her attention on me in the only way possible.

Yep, she hung up on me. Hopefully this was one of those calls that is being recorded for training purposes.

Rest in peace, Michael Crichton

November 6, 2008

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A literary icon of our generation has passed away. The great writer Michael Crichton ended his battle with cancer at the age of 66 on November 4.

Crichton is best known for his masterpiece, Jurassic Park. As a bit of a dinophile, this became one of my favorite books. Over the years, I read many other Crichton books – Congo, Sphere, Airframe, Timeline, Prey, and Next among them. Crichton also wrote Twister and created the television show ER. I await the final Crichton novel, now scheduled for release on May 4, 2009.

Thank you for everything, Michael, and enjoy your eternal reward. You deserve it.

Election

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Did you stay away from the polls because you didn’t think your vote counted? One effect of the apathy caused by the electoral college is the down-ticket effect. If you are a Democrat in Texas or a Republican in California, you are correct that your presidential vote would not have swung the state. However, your vote may have changed the results of local races – and this can also have an impact on you. In my state, a candidate in one race currently holds a lead of 6 votes.

If you don’t like the electoral college, there is a way to fix it. Contrary to popular belief, a state does not need to award their electoral votes to the candidate who wins the popular vote in that state. The state has complete control over how their votes are awarded.

There is currently an effort underway to functionally abolish the electoral college. A number of states have formed an agreement to cast their electoral votes for the winner of the national popular vote. This will only occur once enough states have joined to ensure 270 electoral votes (meaning that if a candidate won the popular vote and had this bloc of states give him/her their electoral votes, he/she would achieve an automatic electoral college majority.. Until then, the states will continue to assign electoral votes via the current method.

Read more at this web site:
http://www.nationalpopularvote.com/index.php

Contact your state legislators regarding this.

And another thing …

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I can’t believe I forgot this one. Announcers who interview people, and miss a good chunk of the game in the process. If you want to interview a guy between the action, that’s fine. But I don’t want to miss an at bat because of the interview.

I heard an interview a few months ago. I want to say it was Mike Schmidt, but I might be wrong. Anyway, the guy be interviewed would always wait until the end of the play before he would answer the question. That is awesome – everyone should do that.

Things that drive me crazy in sports

October 30, 2008

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8. Not enough luge on TV. I absolutely love the sport – it is second only to baseball. Yet, I get to see it only once every four years.

7. Prices. Seriously, toss me some sort of a bone. The ticket prices are absurd, I pay to park, and concessions and gift shops are overpriced. Some stadiums have all-you-cam-eat-without-puking sections, which is nice. Some places have family deals (4 tickets, 4 dogs, 4 sodas), but usually only for less popular games. Really, do a bit more. If I’m paying $75 a ticket for my family of 4, let me park for free. Don’t make me buy overprice preseason tickets as part of a season ticket package.

6. College athletes who want to get paid. First of all, you are getting paid. Full tuition, room and board, books. I would have loved to have gotten these benefits from my college job. Second, the vast majority of athletic departments do NOT make a profit. The majority of schools are not getting rich on athletics; they are breaking even or losing money. Sure, some sports might make a profit, but do you really want to pay a bad QB and not pay an All-American volleyball player, simply because football makes money and volleyball doesn’t?

5. Efforts to shorten games. MLB has done this. NCAA football has done this. I like sports. Why would I want to shorten the games? The NCAA’s tactics resulted in fewer plays per game, which is a loss for the fans. If I am a roller coaster fan, do I want to see the amusement parks shorten the ride time? No, of course not.

4. Lack of NCAA football playoff. Some of the NCAA’s arguments might make more sense if there wasn’t a playoff in every other division. It’s OK for 1-AA (FCS) players to play all the extra games, miss class time, etc, but it’s not OK for 1-A (FBS) players?

3. Baseball teams are not allowed to trade their draft picks. The results in players often being chosen based on signability rather than talent. In other words, I use the #1 pick to draft the 4th best player, because he will sign for a reasonable amount. Why not allow me to trade my pick the the team with the #4 pick. This allows them to grab a guy they wouldn’t have been able to get at #4. At #4, I get the same guy I would have taken at #1 – plus I get some additional value from the other team.

Alternately, perhaps I trade a 2nd round pick for an aging veteran for a playoff push.

Draft picks could become currency, and allow a lot more trades to occur. Some opponents say that this would not be a panacea. OK, sure. But I haven’t heard anyone making a solid argument that it would hurt any teams. If there is a good chance of it helping some teams, and a very small chance of it hurting anyone, do it! This is a great cost/benefit scenario.

2. The “down without contact” rule in NCAA football. A player can trip over his own feet, 20 yards from the nearest defender, and he is immediately down. Come on, people, this makes no sense. I can understand this in cases where the player is at the risk of injuries, but there are many cases where a player could easily jump up and continue running.

1. The designated hitter. Don’t get me started on this one …

Paranoid

October 26, 2008

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My wife and I were at Target this weekend and decided to check out a GPS navigation system they had on sale.

After trying to find them in electronics, we are directed back to the massive and glorious automotive section.

We get back to automotive. Sure enough, several GPS units are on display. Sort of. The guts have been taken out and replaced with a piece of paper showing showing a navigation route. It reminded me a bit of the fake TVs and computers that furniture stores use as props. Full color, of course – they spared no expense.

The strange thing, though … is that the store had taken the precaution to lock them down. Certainly, the temptation to steal a plastic GPS shell with a paper insert would simply be too great for most thieves.

Which is better – Roth or 401K?

October 24, 2008

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First, the disclaimer. The Soap Boxers (SB) is not a tax professional. While SB makes every effort to provide accurate information, SB is not liable for damages that occur from use of the information. This information is only intended as a “jumping off point”. You should perform your own research or consult your tax professional before deciding on a strategy.

The great debate

Many people are convinced that one of the two strategies is THE BEST, and that the other is a lesser strategy. Is this true? In a word, no.

First, I’ll explain the basic differences. With a Roth, you pay tax on the money, then invest it. When you withdraw the money at retirement, you owe no taxes. With a traditional IRA or 401(k), you take pre-tax money and invest in. When you withdraw the money at retirement, you do owe taxes. There are other differences, but I’ll focus on this. For the sake of simplicity, I will use 401(k) to refer to 401(k)s and traditional IRAs.

What if the tax rates are the same?

If your tax rate is the same now as it is at retirement, there is no difference in the amount of money you are eventually able to keep. Let’s assume that you have $10 to invest for retirement, you are in a 10% tax bracket now and at retirement, you can invest in a fund that will give you fivefold your money at retirement, and that you can withdraw 100% of funds at retirement. Obviously, this is a dramatic oversimplification for the sake of illustration.

Roth: You take the $10, pay $1 in taxes, then invest $9 in the fund. You are able to withdraw $45 at retirement.

401(k): You invest the entire $10. At retirement, the fund is worth $50. You pay tax of $5 and are able to withdraw $45.

As you can see, the end result is the same. The values only differ if your tax rate today differs from your tax rate at retirement.

Monkey wrench

What would happen if a drastic change were made to the tax brackets? Let’s say that suddenly, the tax rates were doubled – the 25% bracket became a 50% bracket. The Roth investors would be huge winners, as they have already paid taxes on their retirement funds – at the old rate.

On the flip side – what would happen if the rates were slashed in half – the 25% bracket became a 12.5% bracket? The 401(k) folks would be the big winners – they get to pay the future rate of 12.5% instead of the 25% that the Roth investors paid on their past investments.

Imagine the worst case scenario for Roth – a federal sales tax that completely replaces income tax. Roth investors would not have to pay income tax when they withdraw their money, but they would suddenly be taxed again with the consumption based sales tax.

OK, let’s take a step back. None of these drastic scenarios is likely to occur (if the sales tax ever occurs, there will surely be a Roth fix as part of the plan). However, relatively minor changes to the tax brackets could change your results. It is possible that the 25% bracket would become a 22% bracket or a 28% bracket. While you can’t base investment decisions completely on possible future changes, neither should you completely dismiss the possibility.

A free lunch

If your company matches a contribution, take advantage of it. For example, your company matches the first $1000 in a 401(k), dollar for dollar. You might be in a situation where a Roth typically makes more sense for you. However, you should still invest $1000 in the 401(k) in order to obtain the matching funds. You have just doubled your money. Even if you pay a higher tax rate on this money at retirement, you will come out ahead.

The youth

OK, let’s shift gears to the assumption that the brackets will remain pretty much the same, aside from being indexed for inflation.

When you are young and in the lower tax brackets – 10% and 15% – a Roth makes much more sense than a 401(k). It is pretty unlikely that you are going to end up in a bracket lower than 15% when you reach retirement age.

Fast Forward

Big retirement next egg
OK, shift to age 50. You have invested very well, and you expect your post-retirement taxable income to be 150% of your current taxable income. Great – the Roth still makes the most sense for you.

Small nest egg
You haven’t invested as well as the last guy, and you expect your retirement taxable income to be 60% of your current taxable income. In this case, the 401(k) makes sense. Reduce your taxable income today with the 401(k) contributions, and pay the lower rate when you retire.

Big salary
Once again, you’re age 50. You have been promoted 4 times in the last 3 years and are making money hand over fist. You have invested pretty well over the years, but you only expect your retirement taxable income to be 60% of your current taxable income – simply because your income level has exploded. Again, the 401(k) makes the most sense.

Other factors

Note that I have referred to taxable income, rather than gross income. Many factors can impact taxable income and shift the Roth/401(k) decision. An example would be mortgage interest. Perhaps you are currently deducting a large amount of mortgage interest and plan to have the house paid off at retirement. This will push your future taxable income higher (making Roth more attractive than it might have otherwise been)

Another example would be some sort of windfall income. Perhaps you earn a substantial amount of money from a sideline in a given year (book royalties, game show winnings, etc). This might cause a one year spike in taxable income and make 401(k) more attractive than it might be in other years. On the flip side, you might get laid off (or take unpaid time off) and experience a lower than usual taxable income that year – making Roth more attractive that year.

Keep an open mind

Remember to revisit your retirement options. Do not feel that once you pick an option, you must only invest in that type of retirement plan. When circumstances change, you may want to change the way you save for retirement. A Roth might make sense for you at age 25, but a 401(k) might make more sense at age 45.

Hanging Chads

October 23, 2008

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Chad Ocho Cinco (nee Johnson) will wear the name “Johnson” on his jersey throughout the 2008 season and will switch to Ocho Cinco in 2009. At issue is Rebook’s investment in Johnson jersey. Had Chad switched names on his jersey, he would have needed to reimburse Rebook for the cost of the worthless Johnson jerseys.

Chad is going to be really upset if he ends up being traded to a team who already has a #85. Ocho Cinco would look pretty dumb atop the #84.

Star Trek madness

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Captain Kirk is mad at Sulu for not being invited to Sulu’s wedding.

Sulu says that Kirk was invited, but didn’t RSVP.

Seriously, people, let’s not get upset about this. Obviously, the invitation got lost in the mail. Don’t let the USPS break up your friendship.

http://www.cnn.com/2008/SHOWBIZ/10/23/william.shatner.takei.ap/index.html

Coors Field Hangover

October 20, 2008

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As many of you know, I have been trying to determine if the Rockies have a significantly different LD rate at home vs. road. To me, this would indicate a Coors Hangover with breaking balls (they would break more sharply on the road, and the Rockies would need to adjust for that after seeing flat breaking balls at home).

I found what I needed in baseball-reference.com’s PI section. I took the raw data and massaged it to force it to give up its secrets.

Here is the data. Strikeouts, bunts, and fielder’s choices are excluded from the rates. There were only 8 FC all year, so they are statistically insignificant. Bunts were excluded because the hitter is not trying put good wood on the ball. Since I only included at bats, sac flies are not included (they are PAs, but not ABs)

Without further ado:

5557 total at bats.
Overall
4270 full swing BIP
Ground: 1861 – 43.6%
Fly – 1499 – 35.1%
Line: 910 – 21.3%

Home:
2153 full swing BIP
Ground: 906 – 42.1%
Fly – 751 – 34.9%
Line – 496 – 23%

Road:
2117 full swing BIP
Ground: 955 – 45.1%
Fly: 748 – 35.3%
Line: 414 – 19.6%

Analysis:
3.4% more balls in play are hit for line drive in Coors than on the Road. Line drive are very commonly hits (I haven’t calculated BA for the various types yet) so the extra LDs are going to boost BA and slugging.

Also, Rockies hitters struck out 651 times on the road vs. 549 on the road. It seems logical that this is due to more sharply breaking moving pitches, although there might be other explanations.

The extra 100 BIP at home (due to the fewer Ks) would result in 30 extra hits (assuming a BABIP of .300) – or an extra 0.4 hits/game.

I have not run the numbers for any other teams, so I’m not sure if this is a typical home/road split of not. I’ll probably run the numbers for the rest of the NL West to get a decent baseline.

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