Sourland Mountain Preserve

 

As when I lived in Ossining I sometimes take walks in nearby parks on weekends weather permitting.  In general I liked the trails in the Ossining area better than the ones around Princeton.  One problem with New Jersey is that the trails can get muddy.  However I have found some satisfactory places to walk near my new home.  Recently I have been venturing a bit further afield including to the Sourland Mountain Preserve which according to google maps is 23 minutes from my house.  A trail map can be found here.

I have mixed feelings about this park.  The trails have a lot of rocks and exposed roots which can make hiking unpleasant.  In addition while you are walking up a mountain (or what in New Jersey passes for a mountain) with several hundred feet of elevation gain the area is heavily wooded so for the most part the views aren't very good.  There is one exception, a natural gas pipeline cuts through the park and the right of way has been cleared of trees.  This leads to some good views including one on a clear day of the New York City skyline which is about 40 miles away.

Referring to the trail map linked above starting from right-hand-side of the parking lot the skyline view can reached by following the trails through the points labelled 1,2,3,C,4,5.  Then looking downhill on a clear day the NYC skyline can be seen from the right-hand-side of the cleared area where the bench is.  It is on the horizon beyond the nearby white domed building.  It is then an easy albeit a little steep in places walk down the pipeline cut back to the parking lot (through locations labelled C,13,TH). 

I took photo Sunday, May 7, from near the bench.   I used a cheap Canon camera which does however have a telephoto lens.  Photos taken using my phone or my camera without using the telephoto feature didn't show the skyline very well.  The photo is about what you can see with the naked eye.  I also had a pair of binoculars which gave a better view.  The big tall building above the center of the white dome is One World Trade Center (aka the Freedom Tower).  This was a relatively clear day, I have been there on two other days when the skyline was just an indistinct smudge on the horizon although still visible if you knew exactly where to look.

2022 Taxes

Hopefully I am now done with my 2022 state and federal income taxes.  I received a refund check from New Jersey last Wednesday, May 17, and deposited it Friday.  As usual I did my taxes using the TurboTax Deluxe program.   Intuit (publisher of the TurboTax programs) tries to upsell more expensive versions of the program but I have always found the Deluxe version to be sufficient.  I filed the returns a few days early on April 12.  I submitted the federal return electronically shortly after midnight and mailed the NJ return on the way to work.  TurboTax tells you to expect to wait 24-48 hours to receive conformation that your return was accepted but in recent years I have gotten a federal confirmation in just a few minutes.  38 minutes this year.  I always mail my New Jersey return because TurboTax charges a fee to file it electronically.

I owed a considerable amount on the federal return.  This was largely because I had some US savings bonds come due (reach final maturity after 30 years) last year.  Tax on savings bond interest is deferred until the bonds are redeemed which is nice but means a big bill when they finally come due.  And the income is considered ordinary and doesn't receive the favorable tax treatment capital gains and dividends do.  Of course I knew the bonds were going to come due and had increased my estimated tax payments but not as it turned out by enough.  I still got a New Jersey refund because savings bond interest (like all interest paid by the federal government) is exempt from state taxes.

I didn't have any major issues with the program.  The handling of state income refunds is no longer a problem as Trump's changes to the tax laws mean I now take the standard deduction and don't deduct state income tax.  Although I live in a blue state the essential elimination of the deduction for state income tax hasn't hurt me because I had been paying the alternative minimum tax which didn't allow this deduction. 

Rare Event

Earlier this month while reviewing my checking account I noticed an oddity.  The last four withdrawals (bill payments for somewhat random amounts) had added up to exactly $1,000.00.  This is pretty unlikely.  Perhaps roughly a one in 100,000 chance of adding up to an exact multiple of $1,000.00.  Recently I have been averaging about 10 transactions per month for this account.  So over 50 years there would be about 6,000 chances for this to occur.  Of course I might also have noticed if some different small number of consecutive transactions had done this.  Still this seems like a once in a lifetime event or close to it.

Making the event even less likely (although probably more noticeable) the before and after balance in the account was an even dollar amount.

2022 Portfolio Review

Last year was a bad year for stocks.  The market as represented by VOO, Vanguard's S&P 500 index fund ETF, was off 18.17% (consisting of a capital loss of 19.53% partially offset by dividends of 1.36%).  My main brokerage account did quite a bit better being off only 10.79% which is outperformance of 7.38% .

During the year I made a number of moves.  Early in the year I sold my WBK ADR's.  WBK is an Australian bank that had not done well and when it was announced the ADR program would be terminated selling seemed the simplest thing to do.  Near the end of the year I belatedly sold my INTC as after many years of missteps I finally got fed up enough to sell.  At the same time I bought VGT, Vanguard's technology ETF, to keep exposure to the sector.  VGT has close to 40% of its funds in just two stocks, AAPL and MSFT.  I would prefer less concentration but bought it anyway.  I also bought RY and BMO the two of the five big Canadian banks that I didn't already own.  And I bought VIG and SCHD two ETFs that try to buy stocks with growing dividends.  Both have low expense ratios and good records.  However VIG invests more in stocks with low current yields than SCHD.  Currently VIG is yielding 2.00%, SCHD 3.63% (compare to VOO at 1.65%).

The following performance figures aren't super precise.  I calculated yearly returns for the buys, sells and dividends received as if the money was kept in cash without interest for the remainder of the year.  All interest on my cash position was attributed to the remaining cash somewhat overstating the actual yield.  As usual I added Canadian tax withheld back in as this is intended to be a before tax accounting.

At the beginning of  2022 I was 50.48% invested in VOO which of course matched the market (as measured by VOO).  I was 29.78% invested in individual stocks which with a return of -4.03% (-6.88% capital, 2.84% income) outperformed the market by 14.14% or 4.21% overall.  I was 13.26% invested in ETFs (besides VOO) which with a return of -4.38% ( -6.99% capital, 2.61% income) outperformed the market by 13.79% or 1.83% overall.  And my cash position of 6.48% (which excludes the cash used for buys made during the year) returned 2.46% for outperformance of 20.63% or 1.33% overall.

4.21%, 1.83% and 1.33% adds up to 7.37% of outperformance in good agreement with the 7.38% cited above.  My performance relative to the market had previously been pretty bad, these results make the overall comparison more respectable although I am still trailing.  However it is possible this performance in a bad market year shows that my portfolio is safer than the market something I am willing to sacrifice a little in expected total return for.  However in a generally rising market my inability to stay fully invested has been a drag on results.  And there is little justification for it as I have substantial cash reserves outside this account.

Pension Unguaranteed

 I started drawing a pension from IBM late in 2009 in the form of a single life annuity.  That is I will receive a fixed monthly payment for the rest of my life.  Initially less than half the monthly payment was guaranteed by the government through the PBGC.  However as I explained here over time this gradually increased until in 2017 the entire amount became guaranteed.  I had thought this meant I had nothing left to worry about (with respect to a default) however this was not quite correct.

Effective January 1, 2023 IBM paid the two largest insurance companies in the United States, MetLife and Prudential, to assume this pension obligation.  Each will be responsible for half presumably to spread the risk.  In the process the PBGC guarantee disappeared which I had not realized could happen.  There are state insurance guarantee funds which will provide some protection for these annuities but it appears that at least in some cases not for the full amount.  Although the risk of a default appears quite small it is a little disconcerting to be in any danger when I had thought I was totally safe in this regard.

Realistically the biggest risk to the pension value has been and remains inflation.  As of the end 2022 the value of my monthly pension payments as measured by the consumer price index (CPI) has decreased by 27%.  So the value has been slowly eroding.  Or over the last two years not so slowly as the decrease in value at the end of 2020 was only 17%.  Fortunately I have other financial resources.  However someone solely supported by a fixed income in retirement is quite vulnerable to inflation over time. 

Thunderbird

As well as the hardware problems mentioned in my last post I also recently had a software problem.  Starting on Tuesday June 7, 2022 the default Windows 10 email program (Version 16005.14326.20970.0) starting displaying some of my received emails as unreadable markup language gibberish. Strangely my oldest machine using the default Windows Vista email program was still able to display these emails in a human readable format. Some internet research provided no clue as to what was going wrong or how to fix it.  So I decided to try the free email program Thunderbird.

Downloading Thunderbird was easy but getting it to communicate correctly with my Aol email server was a bit aggravating. If you make a mistake you can get into an unfixable state which requires erasing the Thunderbird folder in an obscure Windows directory and starting over. However with the help of considerable internet research and trial and error I eventually got things working.  Once set up correctly Thunderbird seems to work fine. The problematic emails are now readable.

So this problem ultimately wasn't a big deal. However it left me a bit annoyed with Microsoft. It is not to their credit that the Windows Vista email program seems to be superior to the Windows 10 one.  As well displaying emails correctly I prefer the whole user interface.  I much prefer the Windows Vista photo gallery program as well.  It seems like Microsoft figures that it doesn't pay to spend too much money on these sorts of basic functions. 

Lenovo Chromebook 3

Early in 2020 I complained about a cracked screen on my HP notebook computer (model 15-b0015dx) which HP refused to fix under their warranty.  However I continued to use the machine for web browsing.  Besides the cracked screen the computer was prone to overheating and shutting down.  Perhaps this was causing long term damage as recently the disc drive appears to have progressively failed making the machine unusable.  The symptoms were as follows.  First the computer started closing some windows immediately after opening them.  This made some programs like Microsoft Solitaire unusable but others like the web browser continued to work normally.  Various purported remedies found on the internet failed to fix the problem but I didn't suspect a hardware issue at the time.  Then a few weeks later I noticed some of the icons normally on my desktop were missing.  I tried to reboot the computer to fix this but I ended up in the Windows Recovery Environment instead after some messages about automatic repair failing.  The recovery environment provides a MS-DOS window.  MS-DOS commands seemed to be working normally and I was able to save a couple files by copying them from the C: drive to a memory stick.  Then perhaps unwisely I tried running chkdsk.  This ran for over a day reported numerous errors and seems to have damaged my hard drive further.  When it finally finished MS-DOS could no longer find the C: drive making it hard to do much of anything.  Fortunately I had already saved the file I cared about most.       

My older Dell laptop which I had not been using much had failed more abruptly (probably also with a bad disc drive) a few months earlier so I needed a new machine for web browsing.  I ended up ordering a Lenovo Chromebook 3 - Model 82BA001FUS (11.6" HD Laptop - Celeron N4020 - 4GB Memory - 64GB eMMC - Onyx Black)  on sale from Best Buy for $79.  It was delivered a few days ago and I have been trying it out.

Chromebooks use Google's Chrome OS instead of  Microsoft Windows.  Together with a somewhat different keyboard layout this took a little getting used to.  It seems to work okay for web browsing the primary intended use.  However I don't (at least so far) find it as pleasant to use as the HP notebook (even with its problems).  The screen is noticeably smaller and displays less of a typical web page making for more paging up and down.  And I find the keyboard a bit awkward.  Although this is in part lack of familiarity.  It takes a little time to get used to using the alt key to emulate some of the missing keys (so for example delate is alt + backspace, page up is alt + up arrow and so on).  On the plus side the machine seems sturdier than the HP notebook and hopefully will hold up better over time.  The solid state drive is faster and may be more reliable than a mechanical disk drive but it offers considerably less storage and won't last forever as each memory cell can only be written to a limited number of times before becoming unreliable.

Bottom line I was attracted to this machine because of the cheap price and it seems functional.  However it is clearly low end, many people will prefer to pay more for a better machine.