Wednesday, April 26, 2017

What Percentage of Investment Advisers are Women?

After reading that only 16 percent of brokers are women, one wonders whether the ranks of registered investment advisers are more gender neutral.

The answer seems to be yes, but the data are elusive. This 2014 article indicates 30 percent of RIAs are women, and you would guess the percentage is higher today. 

But counting RIAs proves difficult. Do you include hybrids who work for fees but also collect commissions? What about hedge fund managers? 

Even the fuzzy figures indicate that the hundreds of thousands of brokers (aka financial advisers) vastly outnumber RIAs. 

Monday, April 24, 2017

Google Finance

Now in beta, Google's financial site offers easy access to investment news and basic market data. Special Google twist: Google domestic trends, a feature that charts the rise and fall in the number of searches in various categories, including financial planning.

Sunday, April 23, 2017

Scammed by a Scot

How venture capitalist William Icon, who probably doesn't exist, fleeced international investors.

Saturday, April 22, 2017

Irene in Blue

Irene Heitzman (1938-2017) in client-entertainment mode, at a trust conference in San Diego.


Thursday, April 20, 2017

Irene Heitzman, R.I.P.

Irene Heitzman, the wife of Merrill Anderson's superstar salesman Sam Heitzman (also President and Chairman), died yesterday. Irene worked briefly in our Stratford office, but her major contribution to the firm was as hostess or co-hostess of our customer events at sales conferences.  She and Sam were well matched—outgoing, friendly, well read, insightful, never at a loss to carry a conversation.  A great sales team.

Here is Irene's obituary:

Irene Angi Heitzman resident of Charleston passed away peacefully on April 19, 2017 at St. Francis Hospital in West Ashley.
Irene is preceded in death by her parents William and Priscilla Angi, sister Betty Gabriel, brothers Tom and David Angi, and brother Desi Racz all of Dayton, OH. She is survived by her husband of 58 years Sam (Hud) Heitzman, her son Jordan Heitzman, daughter Darcy Guthrie and her husband Chris Guthrie and triplet grandchildren Ethan, Charlotte and Will Guthrie all of Charleston, SC.
Irene enjoyed her teaching career in Piqua, OH, but longed for the warmer weather in California and South Carolina; she lived in both of these states three times each through the course of her life.
Irene was an avid Duplicate Bridge Player and played regularly in Westlake Village, CA and Hilton Head Island, SC while her husband travelled for work. After Sam retired and they moved to Charleston they became full time duplicate bridge partners. Irene achieved Silver Life Master.
Irene always said she never met a cruise she did not like. She travelled the world on different cruises, but her all-time favorite cruise was taking the triplets along with Darcy and Chris on a cruise.
Irene also enjoyed reading and crossword puzzles. Irene was a beloved wife, mother, grandmother and friend. She never knew a stranger and always had a kind word and a smile for everyone she met.
Services will be private at the request of her family. In lieu of flowers, the family asks that you consider a donation in her memory to the Charleston Bridge Center, 1740 Ashley Hall Rd., Charleston, SC 29407.
Arrangements in care of Charleston Cremation Center And Funeral.
To send flowers or a memorial gift to the family of Irene Angi Heitzman please visit our Sympathy Store.

Click here for more.

Wednesday, April 19, 2017

Massacre of the Stock Pickers

Investors who use index funds to invest in the stock market usually do better than stock pickers. That's become conventional wisdom.
According to new 15-year data in SPIVA's 2016 scorecard of stock fund performance, "usually" should be changed to "almost always."


Fewer than one large-cap stock fund in ten matched or beat its benchmark over the last fifteen years. More than 92% underperformed. 

Some say indexing itself has dulled the price moves of large caps, making stock pickers' job harder. Perhaps the pickers did better with mid caps? No, they did worse. A whopping 95% of mid-cap funds underperformed. So did 93% of small-cap funds.

Note that some mid-cap and small-cap funds may have beaten the S&P 500 even though they fell short of their more challenging benchmarks.

If actively managed mutual funds can't  beat the market, can highly-compensated hedge fund managers do better? That's the theory Warren Buffett put to his now famous test.  He bet that, over ten years, Vanguard's low-expense S&P-500 index fund would outperform a portfolio of five funds of funds, invested in more than 100 hedge funds. After nine years the results are clear: Another massacre of the active investors.


Buffett observes that the defeat was virtually pre-ordained. Some 60% of the funds-of-funds' gains were paid to the hedge fund managers and fund-of-fund packagers.
As long as "nobody wants to be average," active stock picking will live on. Hope springs eternal, as The Wall Street Journal($) reports: Active Managers Stage a Comeback.

Wednesday, April 12, 2017

Happy Blogiversay!

This blog was started on this day in 2005.

Many thanks to JLM for his persistent erudition.

Thursday, April 06, 2017

An Annual Report Worth Reading

JPMorgan's CEO, Jamie Dimon, offers frank comments on the state of our nation in the company's annual report. American education, for instance, is "a national emergency."

The annual report is also worth skimming as a guide to banking trends. On the wealth management front, JPMorgan Chase plans to offer "inexpensive" automated advice and digital transactions to both retirement and personal investment accounts.

Ordinary investors really need investment help, according to this graphic from the report.

Sunday, April 02, 2017

Cross Selling at Bank of America

Megabanks want customers to use more of their financial products and services. They emphasize cross selling (to a fault, in the case of Wells Fargo).

Why then would a big bank go out of its way to trash its reputation and stink up its brand?

Latest example, Bank of America and a couple who were unfortunate enough to have the bank buy their new mortgage, which they hoped to modify.

For torturing the couple, Bank of America has been fined $45 million by Judge Christopher Klein of the U.S. Bankruptcy Court. His decision begins like this:
Franz Kafka in 1910

Franz Kafka lives. This automatic stay violation case reveals that he works at Bank of America. 
The mirage of promised mortgage modification lured the plaintiff debtors into a kafkaesque nightmare of stay-violation foreclosure and unlawful detainer, tardy foreclosure rescission kept secret for months, home looted while the debtors were dispossessed, emotional distress, lost income, apparent heart attack, suicide attempt, and post-traumatic stress disorder, for all of which Bank of America disclaims responsibility.
The Great Recession triggered the couple's woes. Most likely they'll recover their financial footing and return to prosperity, and one day a Bank of America broker from Merrill Lynch may ask for their wealth management business.

Will they welcome him with open arms?

Or will they pick up sticks and  beat him like a piñata?

Tuesday, March 28, 2017

"Fearless Girl" Faces Down Bull


Photo: Boston Globe
State Street Global Advisers scored big with this one.

Update: Presumably due to overwhelming demand, Fearless Girl's Wall Street gig has been extended to February, 2018.

Sunday, March 26, 2017

Live Long and Prosper: the Tontine


A group of people invest equal amounts in a fund and in turn draw an annuity — an annual payment — until they die. The annual payments of surviving members increase as others die, and the last one standing winds up with the entire dividend. Upon that last investor’s death, the arrangement terminates.

That's a tontine. At the turn of the 20th century, nearly 50 percent of all American households were buying "tontine insurance," a product that split premiums between traditional life insurance policies and an investment pool, with deferred dividends paid out to survivors after 20 years. The pile of tontine money grew so large that crooks swarmed in and killed the golden goose.

Moshe Milevsky, a professor at York University, is a long-time fan of tontines, as we noted here and here. Now he seems to be gaining allies.

Could variations on the tontine be the longevity reward needed to counter longevity risk? Ideas range from the straightforward to the high tech (bitcoin tontines?). Major barrier: the wall of investment, insurance and gambling regulations a tontine product must climb.

David Rockefeller and Brooke Astor

Following the death of David Rockefeller, John D. Rockefeller's last surviving grandson, Tbe New York Times recalls his role as friend and protector of his fellow philanthropist, Brooke Astor.

If you need to refresh your memory of "arguably the most sensational, high-profile case of alleged elder abuse ever to make the tabloids," scroll down our posts on the story.

Tuesday, March 21, 2017

Did a Stock Slump Radicalize Steve Bannon?



Marty Bannon , Steve Bannon’s father, worked fifty years for AT&T, rising from lineman to middle management. Whenever possible he bought AT&T shares, his only investment. When Marty retired, the AT&T represented his retirement fund and, in his eyes, the family fortune.

Then came the Great Recession. In October, 2008, Marty panicked. Apparently fearing AT&T would go to zero, he sold for over $100,000 less than he had paid.

Steve Bannon has enjoyed a more varied career: Goldman Sachs banker, documentary film maker, and now chief strategist in the Trump White House. But his life’s pivotal point, according to The Wall Street Journal, was the loss his father took on that nest egg.
There were many factors that turned Steve Bannon into a divisive political firebrand. But his decision to embrace “economic nationalism” and vehemently oppose the forces and institutions of globalization, he says, stems from his upbringing, his relationship with his father and the meaning those AT&T shares held for the family. 
“Everything since then has come from there,” he says. “All of it.”
Why was Marty able to ride out AT&T's staggering 2000-2001 price drop but not the lesser decline in 2008? A “sell” from TV’s Jim Cramer may have triggered his panic attack.

Was "Wall Street" really to blame for allowing Marty to buy high, sell low? Not entirely, and not enough to cause Steve Bannon to go radical, in the view of The New Yorker's Nicholas Lemann.

Bottom line: Retirees like Marty Bannon shouldn’t obsess with market swings. They’re income investors. And income wise, AT&T investors have little to complain about.

In 2008 AT&T paid $0.40 quarterly, up from $0.355 the year before. Since then, the quarterly dividend has increased by a penny every year: $0.41 in 2009, $0.42 in 2010, and so on. The 2017 quarterly dividend is $0.49.

If Marty Bannon still had his shares, his investment income would have grown by more than 20 percent since 2007.

Monday, March 13, 2017

Caution: Some Investment Products May Be Hazardous to Your Health


John Bogle, from his recent NY Times op-ed on the fiduciary rule:
[Gary] Cohn, most recently the president of Goldman Sachs, called it “a bad rule” and likened it to “putting only healthy food on the menu, because unhealthy food tastes good but you still shouldn’t eat it because you might die younger.” Comparing healthy and unhealthy food to healthy and unhealthy investments is an interesting analogy.
Introduction of the Labor Department's fiduciary rule has been delayed, possibly forever. But the losing battle has had positive results. Investment costs are dropping, and more investors understand the difference between registered investment advisers and financial advisers.

Nevertheless, the terminology is designed to confuse. Michael Piwowar, the acting head of the Securities and Exchange Commission, believes a fiduciary rule is a bad idea . But he suggests it might be time to stop calling brokers "financial advisers." 

Got any ideas for an alternative designation?

Wednesday, March 08, 2017

Remember the Arrogant Trustafarian?

"Born Rich," the first documentary from Jamie Johnson, the Arrogant Trustafarian, profiled an assortment of his fellow trust fund babies. Yuckie as most of those rich kids appeared, ten years later some had moved on to productive lives.

Just one was an outlier from the start: "down-to-earth, never dissing her family or the privilege she was born into."

Yes, Ivanka Trump.

Friday, March 03, 2017

Very Rich? Deep in Debt? Perhaps It's All the Same

As wealth grows it tends to become more volatile, harder to appraise. "If you can count your money," J. Paul Getty once explained, "you don't have a billion dollars."

Aubrey McClendon (Wikipedia)
Extreme case in point: The pile of debts – or, possibly, the significant wealth – left by Aubrey MeClendon after his death in a car crash a year ago.

McClendon borrowed heavily as he he started over after his ouster from Chesapeake Energy. and the plunge in oil prices may have brought him to financial ruin. Could the dramatic rebound in oil put McClendon's estate back in the black?

Wall Street Journal subscribers can read the story here.

Wednesday, March 01, 2017

How to manage $36 billion

The Wall Street Journal updates the situation of the Harvard endowment (probably behind the paywall).  Half the staff is being let go, so there will be much more reliance on outsiders.

Their new manager, N. P. Narvekar, was recruited from Columbia, after a 14-year stint managing Columbia's money.  His claim to fame was that he succeeded in both up and down markets, and didn't lose much in 2008, when other endowments were crashing.  He did it with singles and doubles, not major bets.

The article provides some insight behind the Harvard endowment's recent lackluster performance, tracing it to the departure of Jack Meyer and his team after a blowup over their compensation.  At the time, Harvard alumni felt that performance bonuses paid for surpassing stated benchmarks were, I don't know, not enough "Harvard-like"?

Narvekar has a three-year contract at $6 million per year.  Doesn't seem like much for managing $36 billion, does it?

Tuesday, February 21, 2017

Habits of Highly Unsuccessful Investors

Why do some older investors lose big while others prosper? An AARP survey suggests a few reasons.

Those who get fleeced tend to be risk takers. They crave home runs, not singles.

Often they trade more frequently.

They're more likely to be drawn to unregulated alternative investments. "Nearly half of fraud victims," the survey finds, "compared with less than a third of general investors, agreed that 'the most profitable financial returns are often found in investments that are not regulated by the government.'”

They're more susceptible to sales pitches.

The losers surveyed were 70 or older, but the same traits can separate anyone from his or her money.

Tuesday, February 14, 2017

When Bombers Trumped Inheritance

From a  Bessemer Trust lawyer's notes on the recent Heckerling Institute on Estate Planning.
Estate tax repeal has been considered by various administrations. One staffer from 1986 has stated that negotiation of the momentous 1986 Tax Reform Act came down to one last item. The legislative staffers told President Reagan that he could get rid of the estate tax but he would have to give up the B-2 bomber. President Reagan replied that he would rather keep the B-2 bomber.

Thursday, February 02, 2017

Forging a Will? Don't Draft It Online

Matt, a roustabout who survived the Deepwater Horizon explosion and received a multi-million-dollar settlement for his injuries, wanted to buy a house in his home town. At a local real estate agency he was introduced to Donna, who found him a property near her own home. Soon Matt, with Donna's encouragement, was dating her teenage daughter, Alex.

When Matt died in a crash of his Crossfire (no seat belt!)  his considerable estate presumably passed to his young son. But lo and behold, Donna soon found a copy of a will Matt had made in 2014, leaving almost everything to Alex.

Where was the original? The resourceful Donna found that, too, in front of witnesses, when she opened a safe in Matt's home. The will shortchanged Matt's son so severely that the probate court approved a settlement giving him 15% of the estate.

But the young son may do much better, if the Feds don't decide to keep Matt's assets. Someone has discovered that Matt's will was drafted online, at Formswift.com. When? Digital footprints indicate the will was created in 2015, some days after Matt died.

Donna is slated to go on trial for her alleged crimes in April. You can read the whole story here, complete with a few quotes from the Wills, Trusts and Estate Prof.

Or maybe it's not the whole story, Circumstantial evidence hints that Matt did make a will, so far unfound.

Thursday, January 26, 2017

Irrational Exuberance and the Dow

From The New Yorker, January 15, 1966

Little did Hayden Stone or the rest of Wall Street know, but the DJIA's mid 1960's high (1,000!) marked the end of the great post-World-War-II investment boom.

Stocks staggered on through the Go-Go Years, but not until 1982 did the market begin its next great advance. Hayden Stone itself did not survive the 1970's.

In the long run, of course, Hayden Stone was right. Families whose founders invested boldly in 1966 and stayed the course now enjoy the fruits of a DJIA that just hit 20,000.

Evidence that you can't get what you don't pay for

It was just over 16 years ago that the Harvard Management Company and investment chief Jack Meyers parted ways.  Meyers had quintupled Harvard's endowment, growing it from $5 billion to $25 billion.  He was paid a pittance for that performance, by Wall Street standards at the time. Nevertheless, the Harvard alumni were outraged when they learned he was paid $7 million in one year, even though his compensation was tied to beating established benchmarks.   Apparently the alumni were confident that comparable returns could be had for less cost.

It didn't work out that way.

 Today's Wall Street Journal [paywall] reports yet another major shakeup for the Harvard Management Company.  The endowment has annualized gains over the last 10 years of 5.7%, well below Yale's 8.1% and the second lowest in the Ivy League.  Four different heads have tried to meet the return targets over the last decade, with the latest starting last December.

The new plan:  Outsource almost everything, and lay off 230 employees.

The nice thing about this approach is that the alumni never need to know how much the outside managers are being paid.  If they ever get good endowment returns again, they don't have to lose sleep over whether the manager was paid too much for achieving them.

A new spirit of noncompetition at Harvard Management is revealed in the closing paragraph of the WSJ piece:

Remaining staffers will focus on Harvard’s portfolio overall instead of on specific asset classes. Mr. Narvekar plans to tie staffers’ pay to the endowment’s overall performance instead of that of their asset class starting in fiscal year 2018.
We'll be watching to see how that turns out.

Wednesday, January 11, 2017

Is Portfolio Rebalancing a Waste of Time?

Could investment advisers become even more redundant? On average, they can't pick stocks that do better than average. So they settle for allocating assets and periodically rebalancing to maintain the ideal allocation. But what if their clients would be just as well off if their portfolios remained untouched?

Source: The Wall Street Journal

Some investment professionals, the WSJ reports, now believe "rebalancing is no better or worse a strategy than buy-and-hold."

A study mentioned here confirms that belief:
Compare the path of two hypothetical portfolios constructed by T. Rowe Price. Each portfolio starts with $100,000, with 60% in a mix of stocks—including shares of large and small companies, U.S. and foreign firms—and 40% in high-quality U.S. bonds. One portfolio is rebalanced annually over the 20-year period through 2015; the other is left alone. Both portfolios deliver the same returns, with annualized gains of just a bit more than 7%.
Rebalancing did reduce volatility. In theory, lowering volatility by periodic rebalancing should enable a skittish investor to come closer to  the long-term returns enjoyed by a buy-and-hold investor. 

In practice, rebalancing requires the skittish investor to shift money from stocks just when their gains make them look like a great buy and purchase stocks when their prices are scarily depressed. Easier said than done.

Monday, January 09, 2017

The Estate Plan That Amazed Samuel Pepys

Samuel Pepys
Not long after Christmas, three and a half centuries ago, Royal Navy bureaucrat and diarist extraordinary Samuel Pepys paid a call on Lord Crew.There he heard a remarkable story of inheritance.

An old friend had left Lord Crew's brother, Mr. Nathaniel Crew, an estate paying 600-700 pounds per  annum. Surely a worthy income in those days.

But Mr. Crew's good fortune had not come by bequest or devise. The recently deceased friend had left no will.

Nathaniel Crew
Rather, the amazed Pepys reports, the friend "had, above ten years since, made over his estate to this Mr. Crew, to him and his heirs for ever, and given Mr. Crew the keeping of the deeds in his own hand all this time; by which, if he would, he might have taken present possession of the estate…."

"This is as great an act of confident friendship," writes Pepys, "as this latter age, I believe, can shew."

Oddly, in his portrait the trustworthy Nathaniel looks a bit shifty. In reality he went on to become one of the Church of England's longest serving bishops.

Sunday, January 01, 2017

“Does anyone under the age of 30 even know what a check is?”

At year's end your obedient blogger wrote a check. If he lived in Denmark, he'd never write another.

Wednesday, December 28, 2016

Will Trump be the Stock Market's New Hoover?

As the year winds down, stock investors apparently welcome the prospect of a Republican in the White House. If the Trump presidency brings bumper returns, it will defy the odds. As Cullen Roche illustrates, the stock market tends to do better –much better–under Democrat presidents. Since Herbert Hoover took office, stocks have returned an average of 1.7% annually under Republicans. Returns under Democrat presidents, 10.8%.

From The Washington Post comes this chart of stock performance.


Will the market continue to greet Trump as enthusiastically as it welcomed Herbert Hoover? There's no telling, but we probably shouldn't worry. As Roche concedes, "judging stock market performance by presidencies is silly."

Friday, December 16, 2016

Christmas Price Index 2016

PNC's long running whimsy, the annual index of what it costs to acquire the gifts named in The Twelve Days of Christmas, was virtually inflation free this year. Some prices dropped a bit, while earnings of drummers and pipers rose modestly.
The cost of twelve drummers drumming rose 2.8%

The Trustworthy Investment Manager's Twelve Days of Christmas

Poster by Xavier Romero-Frias, Wikimedia Commons
W. Scott Simon keyboarded The Twelve Days of Christmas of a Modern Prudent Fiduciary nine years ago. Then and now, there's more to investing like a true fiduciary than "putting the customer first."

Wednesday, December 14, 2016

Decline and Fall of the Fiduciary Standard

Efforts to impose a fiduciary standard on brokers handling 401(k) accounts have been losing ground. Proposed regulations have been so watered down that some brokerage firms figure they'll make more money, not less. With Republicans controlling the new Congress, even the emasculated fiduciary standard is likely to be deferred or discarded.

For a reminder of the high hopes motivating the standard's proponents in 2009, see Fiduciary Standards for Broker-Dealers.

Saturday, December 03, 2016

Lies, Damn Lies and Politicians' Tax Talk, Continued

While campaigning, President-elect Trump promised massive income tax cuts. Now his choice to serve as treasury secretary says upper-income taxpayers will receive no "absolute tax cut."

As politicians know too well, nobody pays income tax on all their income. They pay on a "tax base," representing income less exemptions and deductions, and they may pay even less thanks to tax credits. If you remove or limit enough tax breaks to expand the tax base significantly, you can cut tax rates and still increase tax revenue.

Consequently, politicians find it easy to propose lower rates, even though their tax cuts are less, than, er, "absolute."

The good news for top-bracket taxpayers: Trump's proposed rate cuts, lowering the top rate to 33% and cutting the rate on business income to 15%, are so robust that no realistic increase in the tax base could deprive them of an unqualified, unconditional tax cut.

Earlier post: Lies, Damn Lies and Politicians' Tax Talk.

Friday, December 02, 2016

The Top 400 Club's Last Hurrah

Taxpayers needed almost $127 million in 2014 income to gain entry to the Top 400 Taxpayers Club, The Wall Street Journal reports.

That elite group received 1.3% of income in 2014, paid 2.13% of income taxes (at an average rate of 23.13%, the highest since 1997) and made 6.9% of all charitable contributions.

Typically, taxpayers gain membership in the club by selling a business or otherwise realizing a humongous capital gain. Relatively few retain their membership for a second year.

The IRS says it is disbanding the Top 400 Club. In future it will issue data on a slightly less exclusive group, the 1,500 or so taxpaying  households who constitute the top 0.001% of all taxpayers.

Wednesday, November 30, 2016

Where Harried Billionaires Go to Ground

Beachfront villa, Albany, the Bahamas
This week Tiger Woods returns to competitive golf, at a resort where he owns a home – Albany in the Bahamas.

Many of Tiger's Albany neighbors are even richer than he is, but perhaps not happier. "Billionaire," Tiger suggests,  is a high-stress life style.
We have one-tenth of all the billionaires on the planet here, and that’s saying something. For them to come down here and feel safe and feel like they can be here and operate and run their businesses but also bring their families and enjoy leisure time here as well, and have that privacy, is incredible.
Those of us who can't afford Albany still can admire a resort where the marina accommodates a 300-foot yacht. Check out the web site.

Wednesday, November 16, 2016

The Year of Donor-Advised Funds?

Many charities dislike donor-advised funds – they want direct donations now, not gifts, possibly larger, in the future. Many individuals and families love them.

According to data in the WSJ,  contributions to donor-advised funds have grown by double digit rates for seven years in a row. At the end of 2015, donor-advised funds held more than $78 billion. And that was after paying out over $14 billion to charities during the year.

Could President-elect Trump's proposed income tax changes, including a large standard deduction and a cap on itemized deductions, slow the growth of donor-advised funds in years to come?

Will donors try to beat the tax changes with a surge in donations this year?

Monday, November 14, 2016

Will Trump Promote Dynastic Wealth?

Some of President-elect Trump's campaign proposals are proving perishable. (The Great Wall may look more like a fence, or perhaps a line of "No Trespassing" signs.) Abolishing the federal estate tax, a mainstream Republican goal, could have a better shelf life. Paul Sullivan in the NY Times fears "wealthy families may find it much easier to amass dynastic levels of wealth."

But dynastic wealth isn't necessarily all that great, as George Goodman, writing as Adam Smith, pointed out in his 1960's classic, The Money Game. While a fortune in appreciated stock makes a family feel rich,  they don't necessarily live rich.

Goodman used IBM, the Google-Apple-Amazon of its day, to illustrate.
Mr. Smith said to [his wife and children], "Our family owns IBM, which is the greatest growth company in the world. I invested twenty thousand dollars in IBM and that twenty thousand has made me a millionaire. If something happens to me, whatever you do, don't sell the IBM." Mr. Smith himself never sold a share of IBM. Its dividends were meager, naturally, and so Mr. Smith had to work hard at his own business to provide for his growing family. But he did create a marvelous estate. ***
Mr. Smith died; the IBM was divided among his children. The estate sold only enough IBM to pay the estate taxes. Otherwise the children—now grown, with children of their own— followed their father's dictum, and never sold a share of IBM. The IBM grew again, made up for what had been amputated to pay estate taxes, and each of the children grew as rich as Mr. Smith had been…. They had to work quite hard at their own businesses, because their families were growing and their only money was in IBM. Only one of them even borrowed on his IBM, to get the down payment for a heavily mortgaged house. And the faithful children were rewarded by seeing IBM multiply and grow. *** 
The Smiths are now in their third generation of IBM ownership, and this generation is telling the next, "Whatever you do, don't sell the IBM." And when someone dies, only enough IBM is sold to pay the estate taxes. 
In short, for three generations the Smiths have worked as hard as their friends who had no money at all, and they have lived just as if they had no money at all, even though the various branches of the Smith family all put together are very wealthy indeed. And the IBM is there, nursed and watered and fed, the Genii of the House, growing away in the early hours of the morning when everyone is asleep.

Tuesday, November 08, 2016

Collector's Corner

Octagonal Iznik-style tile, possibly from Syria, 18th/19th century, decorated with an intertwining flowerhead and leaf motif in cobalt blue, turquoise and brown glaze, diameter 10 inches. After conquering Constantinople in 1453, the Ottoman Turks launched a building boom that utilized much tiling and pottery from the town of Iznik in Turkey. The Iznik style utilized fritware with designs combining traditional Ottoman arabesque patterns and Chinese elements. Fritware was a low-fired mix, mainly of silica and glass.

Classical Iznik production declined after the 17th century, but works generically described as “Iznik”--such as this tile from Syria—continued to be produced into the modern era. This tile fetched $431 at a Skinner, Inc., Fall auction.