Normalcy vs. Complacency

Normalcy vs. Complacency

OK, a couple of my clients have wondered why I haven’t bothered to comment on the recent gyrations in the market. Some of you might be wondering the same thing. I might well have commented last week when it appeared the sky was falling, but as it happened I was on vacation in St. John, one of the Caribbean islands hit hardest by last fall’s hurricanes (and happy to be there spending money, thereby helping the recovery efforts). Internet service on the island is still very sporadic, and we didn’t have any service where we were staying. Standing outdoors there last week, it was nice and warm, and the sky didn’t appear to be falling at all, just blue and beautiful.

Of course, by the time I returned the market indexes had begun to recover, and the Dow Jones Industrials and the S&P 500 ended this week up 4.3% each, their biggest gain in five years. Stocks are still off their recent record highs, but certainly things appear to have stabilized.

Happy of New Year!

I’m very excited to wish you all a happy 2018 by announcing I am moving my New York City office into the Empire State Building this week. This building is of course an architectural icon to the entire world, but it also recently became the icon for sustainability in the city, having undergone a major green renovation several years ago. I’m proud to be in this space (59th floor) – it’s actually been one of those secret dreams of mine for some years. I’m truly looking forward to hosting you there!

I closed off 2017 with an SRI Investing tradition, making two donations to honor you, my clients, in appreciation of the trust and confidence you place in us. Even more importantly, you care enough to invest your assets to help create a better world. The first donation went to Heifer International (, helping to create financial opportunities in underserved communities worldwide. The second donation is to purchase carbon offset credits from Native Energy in Vermont (, to make our professional practice carbon neutral. Native Energy was founded in 2000 (the same year I started my SRI practice) and is now a leading provider of carbon offsets, renewable energy credits, and greenhouse gas consulting. 

I also want to make my annual invitation to you – to have us prepare your tax returns for 2017. Kurt Matthews, my brother, and I work as a team to produce your returns (together, we have over 7 decades of tax preparation experience). Kurt will be sending a tax organizer out to current tax clients shortly. We have direct access to your investment information forms (1099s, etc.) from Schwab or Foliofn – so when the rest of your information is assembled, just mail it in. If you are interested in having us prepare your returns for the first time this year, please email or call me and we’ll set that up.

Most of you will be aware that the end of 2017 saw the passage of arguably the most ill-advised tax legislation is memory. It is also the largest change to the tax law since 1986. The vast majority of those changes take effect next year. Hopefully, you read my earlier blog on this legislation and had the opportunity to prepay some of your state and local taxes, and possibly make some additional charitable donations, prior to yearend, assuming you itemize your deductions. Many who itemize now will find themselves taking the standard deduction next year. Your tax returns for 2017, however, will look very similar to those in recent years, and we’re happy to prepare them for you.

Each new year presents new opportunities and new challenges. The ineffective and corrupt morass that is present-day Washington D.C. will require all of us who hold our democracy dear to be vigilant and proactive in 2018. In addition to competent leadership, democracy also requires a fair, just, and sustainable economy to support it. It continues to be SRI Investing’s mission to help you bring that about, while securing your own financial future in the process.

May the work continue!   

Here It Comes – Major Tax Changes

The new tax law hasn’t been formally ratified by the U.S. House and Senate, but all indications are that the Tax Cuts and Jobs Act of 2017 will be sent to the President’s desk in the next few days.  As you probably know, the House and Senate versions were somewhat different.  What does the new bill look like?

First, public “C” Corporations will see their highest marginal tax rate drop from 35% to 21%, the largest one-time rate cut in U.S. history for the nation’s largest companies. Anticipation of this corporate tax cut (meaning higher after-tax corporate earnings) might well be the single largest factor in the stock market’s continued rise to date.

Despite the promise of tax “reform” or “simplification,” the bill actually adds hundreds of pages to our tax laws.  And the initial idea of reducing the number of tax brackets was apparently tossed aside in the final version; the new bill maintains seven different tax rates: 10%, 12%, 22%, 24%, 32%, 35% and 37%.  Most people will see their bracket go down by one to four percentage points, with the higher reductions going to people with the highest income.  Tax brackets, going forward, will be indexed to inflation, meaning that the “real” income brackets will remain approximately the same from year to year.

The new individual brackets break down like this:

Individual Taxpayers

Income $0-$9,525 - 10% of taxable income
$9,526-$38,700 - $952.50 + 12% of the amount over $9,526
$38,701-$82,500 - $4,453 + 22% of the amount over $38,700
$82,501-$157,500 - $14,089.50 + 24% of the amount over $82,500
$157, 501-$200,000 - $32,089.50 + 32% of the amount over $157,500
$200,001-$500,000 - 45,689.50 + 35% of the amount over $200,000
$500,001+ - $150,689.50 + 37% of the amount over $500,000

Joint Return Taxpayers

Income $0-$19,050 - 10% of taxable income
$19,051-$77,400 - $1,905 + 12% of the amount over $19,050
$77,401-$165,000 - $8,907 + 22% of the amount over $77,400
$165,001-$315,000 - $28,179 + 24% of the amount over $165,000
$315,001-$400,000 - $64,179 + 32% of the amount over $315,000
$400,001-$600,000 - $91,379 + 35% of the amount over $400,000
$600,000+ - $161,379 + 37% of the amount over $600,000

Other provisions: the standard deduction is basically doubled, to $12,000 (single) or $24,000 (joint), $18,000 (head of household), and in an interesting provision, persons who are over 65, blind or disabled can add $1,300 to their standard deduction.

The bill calls for no personal exemptions for 2018.  And the Pease limitation, a gradual phase-out of itemized deductions as taxpayers reached higher income brackets, has been eliminated.

Despite the hopes of many taxpayers, the dreaded alternative minimum tax (AMT), remains in the bill.  The individual exemption amount is $70,300; for joint filers it’s $109,400.  But for the first time, the AMT exemption amounts will be indexed to inflation.

Interestingly, the new tax bill retains the old capital gains tax brackets—based on the prior brackets.  The 0% capital gains rate will be in place for individuals with $38,600 or less in income ($77,200 for joint filers), and the 15% rate will apply to individuals earning between $38,600 and $452,400 (between $77,400 and $479,000 for joint filers).  Above those amounts, capital gains and qualified dividends will be taxed at a 20% rate.

In addition, the rules governing Roth conversion re-characterizations will be repealed.  Under the old law, if a person converted from a traditional IRA to a Roth IRA, and the account lost value over the next year and a half, they could simply undo (re-characterize) the transaction, no harm no foul.  Under the new rules, re-characterization would no longer be allowed.

For many taxpayers who itemize deductions, the adjusted gross income number will be higher under the new tax plan, because many itemized deductions have been reduced or eliminated.  Among them: there will be a $10,000 limit on how much any individual can deduct for state and local income tax and property tax payments.  Before you rush to write a check to the state or your local government, know that a provision in the bill states that any 2018 state income taxes paid by the end of 2017 are not deductible in 2017, and instead will be treated as having been paid at the end of calendar year 2018. But if you do expect to owe additional 2017 state income taxes in April, consider paying them by December 31.

The mortgage deduction will be limited to $750,000 of principal (down from a current $1 million limit); any mortgage payments on amounts above that limit will not be deductible.  However, the charitable contribution deduction limit will rise from 50% of a person’s adjusted gross income to 60% under the new bill.

What about estate taxes?  The bill doubles the estate tax exemption from, currently, $5.6 million (projected 2018) to $11.2 million; $22.4 million for couples.  Meanwhile, Congress maintained the step-up in basis, which means that people who inherit low-basis stock will see the embedded capital gains go away upon receipt.

And many pass-through entities like partnerships, S corporations, limited liability companies and sole proprietorships will receive a 20% deduction on taxes for “qualified business income,” which explicitly does NOT include wages or investment income. A last-minute addition to the Conference bill specifically allows this deduction for real estate developers - a move likely to benefit Mr. Trump specifically. 

As things stand today, all of these provisions are due to “sunset” after the year 2025, at which point the entire tax regime will revert to what we have now.


Adapted from a Bob Veres draft, with permission.

Market Correction?

SRI investors, like virtually all investors, know that over time markets go up and markets go down. When they go up for an extended period of time we call it a bull market – vice versa, it’s a bear market. Well, we’ve had a bull market now for a very extended period of time, more than 7 ½ years. Eventually, a bear market will follow. We know that. We just don’t know when and how severe it could be.

I happen to believe in some unsubstantiated investment “street” wisdom – that more money has been lost trying to avoid market “corrections” and bear markets than has been lost in the events themselves. If that wisdom is true, it is for a simple reason. Investors who bail out of their stock holdings while predicting (i.e. guessing, following a hunch or a chart) a market downturn are very often wrong about the timing. After they pull out, the market continues to go up for a substantial period of time – they miss out on the upside in their anticipation of the downside.

Of course, if we’ve continued holding our stocks when the market does turn south – well, it doesn’t feel good watching your diminishing portfolio. And bear markets don’t spare SRI portfolio holdings just because we think they are sustainable, responsible, or create impact. Both “good” companies and “bad” companies participate when economies go into their periodic recessions and the market follows suit.

Smart investors and their advisors know how to manage these market ups and downs. First, the good news is that the market is indeed cyclical, meaning that what goes down also comes back up, sooner or later. And, quoting another piece of investor wisdom, while markets often go down faster than they go up, they have always gone up more than they’ve gone down. Past performance never guarantees future results, but look at any graph of stock market index performance from, say, the beginning of the 20th century until now. Despite all cyclical setbacks (including the worst - 1929 and 2009) the longer movement has been upward for more than 100 years. Professional, periodic rebalancing of portfolios to maintain a more or less steady asset allocation helps to enhance this trend. And saving more, in any scenario, is always a good thing. 

Making money in the stock market almost always requires investors to have diversified portfolios representing successful companies - invested for the long term so they are not caught short having to liquidate their holdings in a down cycle. This is more of an issue for older investors who are gradually liquidating their portfolios to maintain a comfortable retirement. It makes sense for these investors to have flexible distribution plans if possible, taking larger distributions during bull markets and smaller distributions during bear markets to help sustain the portfolio over time.

A bear market is most definitely coming. You heard it here. But with your professionally managed SRI portfolio and the maintaining of a long-term perspective and plan, your portfolio will most likely continue to grow, regardless, well into the future.

The New Tax Legislation


Chances are, you’ve heard that tax “reform” is right around the corner—that is, if you can call it “reform” when hundreds or perhaps thousands of new pages are about to be added to the tax code.  First, the White House released its tax legislation wish list.  Now the Republicans in the House of Representatives have released a proposal called the “Tax Cuts and Jobs Act,” which fleshes out some of the details.

The House bill would reduce the number of tax brackets from seven currently (10%, 15%, 25%, 28%, 33%, 35% and 39.6%) to four: 12% (up to $45,000 income for singles; $90,000 for joint filers), 25% ($200,000 single; $260,000 joint), 35% (over $500,000 for singles; $1 million joint) and 39.6% (above $1 million for single filers; $1.2 million joint).  The impact on any individual is complicated; people who are currently in the 15% bracket and the bottom of the 25% bracket would, under the new bill, pay taxes at a lower 12% rate.  People who were previously in the 28% bracket would tumble down into the 25% rate.  People making between $20,000 and $40,000, and those between $200,000 and $500,000 would experience a tax increase as they move into a higher marginal rate.  

The dreaded alternative minimum tax would be eliminated under the new bill; however, the AMT credit carryforwards would still be deductible.  The bill would continue the current capital gains rate structure of 0% (for those with up to $51,700 individual/$77,200 joint in taxable income), 15% (up to $425,800 individual/$479,000 joint) and a 20% rate for those in the top tax bracket.  The 3.8% Medicare surtax on net investment income (which includes capital gains and dividend income) would be retained, and be added onto the 15% and 20% capital gains rates.  So the actual capital gains rates would be 15%, 18.8% and 23.8%.

Meanwhile, the personal deduction and standard deduction would be combined into an expanded standard deduction of $12,000 for individuals, $24,000 for joint filers. Some families with more than three children would lose benefits under this proposal, since their personal deductions under the old system would have exceeded the expanded standard deduction in the newly proposed one.  A higher standard deduction, by itself, would reduce the number of people claiming itemized deductions, but in addition, the bill would greatly reduce the list of qualified deductions, reducing the number of itemizers even more.  Under the new proposal, people would no longer be able to deduct any state or local income taxes paid, but they WOULD be able to deduct local real property taxes (like a home and/or a vacation home) up to a maximum of $10,000 a year.  The mortgage interest deduction would be limited to debt on the first $500,000 of a home mortgage (down from $1 million today).

One very distressing part of this proposed legislation for SRI investors and the electric vehicle industry would be the elimination of the EV tax credit, as well as limiting the ability of clean energy developers to use solar and wind tax credits. These are important tax incentives for emerging industries that are striving to reduce global warming emissions, clean our air, create jobs, and save consumers money.

Corporate tax rates would be lowered dramatically.  The C-corporation (which is publicly traded companies) would see a maximum 20% tax rate, while pass-through companies like S corporations, partnerships and LLCs would be subject to a maximum rate of 25%--with some very complicated provisions designed to keep their owners from shifting personal income into and through the company to take advantage of potentially lower rates.

Finally, for the very few people who pay estate taxes, the good news is that the exemption limit, currently $5.6 million, would double to $11.2 million per person, $22.4 million for married couples—and the estate tax, according to the language of the bill, would be eliminated altogether in 2024. Gift tax limits would also go up to the exemption amounts.

Would any of this affect your tax bill in 2017?  No.  The provisions, if enacted, would impact the 2018 tax year.

What are the odds of passage?  Who knows?  The Senate is also working on its own version of tax “reform.”  


Adapted from a Bob Veres draft, with permission.

Big Oil Making Bigger Moves to Alternatives

SRI investors can easily have doubts about whether their investment actions are really making a difference. It is, after all, very difficult for each of us to see or discern the impact our actions have in the world. This can be especially true about climate change, a global problem that is already upon us, and the ongoing dangers from which could be catastrophic. When we divest from fossil fuel companies and/or engage them in shareholder advocacy initiatives, are we moving the needle at all?

We look for hopeful signs, and sometimes they appear. Earlier this week, Bloomberg New Energy Finance published research showing the world’s major oil companies more than doubled the number of acquisitions and investments made in clean energy companies in 2016 from the year before, spending $6.2 billion in the process.* The clear indication is that when big oil discerns the time has come for profitable development of alternative energy, it will be ready with the expertise and the additional investment dollars to ramp up quickly.

Investments in solar and wind projects led the way, while interest and investment in biofuels is on the decline. Venture capital is also going increasingly into new digital energy and storage – the technology that is making the deployment of solar and wind energy much more efficient and less costly.

To be sure, the major oil companies continue to spend much, much more on their core business, the development and distribution of oil and natural gas. Yet, they are also seeing more clearly the handwriting on the wall and are responding.

The future dangers and present damage from climate change are everywhere, the recent major hurricanes the most obvious and visible examples. SRI investors who have avoided oil and coal investments for decades, and the many who have recently divested more completely by implementing fossil free portfolios, can certainly not take most of the credit for these recent moves by big oil.

Yet, the fossil free divest and reinvest movement has gained traction all over the world and has sent a very visible message to the fossil fuel companies. In addition, the numbers of environmental shareowner proposals presented at company annual meetings have increased steadily in recent years. Some of these proposals received unprecedented shareowner support in 2017. Three of them – introduced at ExxonMobil, Occidental Petroleum, and PPL – received majority shareowner support, the first time this has happened.

SRI investors certainly ARE having a positive and significant impact.

*See Mention of specific companies is not intended and does not constitute a recommendation to invest.

Equifax Quagmire

Protecting our identity, our data, and our assets from online hackers is becoming more important and more challenging every day.  When one of the nation’s largest credit bureaus is hacked, we’re doubly reminded of the dangers.

Just in case you haven’t seen the news in the last couple of days, Equifax has experienced a major breach that has compromised company data (Social Security numbers, names and addresses) of an estimated 143 million U.S. consumers. The company has created a web site that is supposed to tell you whether Equifax believes your personal data was part of the breach. The company is also offering free credit monitoring for one year for all Americans, regardless of whether your data has been breached or not.

In addition, I highly recommend you read today’s Your Money column (by Ron Lieber) in the New York Times ( - front page) for more insight and some actionable steps to enhance your own personal security.

Let me say a few words about your accounts under my and First Affirmative’s management. Whether your accounts are at Charles Schwab or FolioFN Investments, know that these custodians are always highly vigilant about the security of your assets. Each of these companies (as well as virtually all major banks and securities firms) receives thousands of fraudulent attempts to access client accounts each year, and each has developed very sophisticated cybersecurity defenses against these attempts. In addition, they are also insured for client losses should any of these attempts succeed. Few ever do. Attention to cybersecurity is also an integral part of the operations of both SRI Investing and First Affirmative.

As of yesterday, and for the foreseeable future, if you wish to request a withdrawal from any of your accounts, I would ask that you email the request to both Karen Kiriazis and me. When I see the email request I will call you to verify your request. If you don’t hear from me right away, please call me and leave a message as well. We will not process a withdrawal or outgoing transfer until I have spoken to you by phone. Finally, as I’ve done before, I urge you not to attach any documents with sensitive information to any emails you send to us. If you need to send a document to us, we will provide you with a more secure cloud transfer process to do so.

Please take care and stay vigilant.

Socially Responsible Lifestyle? It Could Be Fun

SRI investors care about people and the world. I know. I work with a whole group of them. They’re my clients. I’ve experienced many instances in my years of professional practice that revealed that my SRI clients care about me as a person, not just as their financial advisor. My favorites are the times one client or another has called me during a down market to ask how I’m holding up!

I care about my clients as people also (that is, not just as clients). Thinking about them, I was reflecting recently on what it might mean to live a socially responsible lifestyle. Your first thought might be, “Oh no, this doesn’t sound like fun – he’s going to get really serious here.” Well, no. What I want to suggest is that having fun, and having it now, is the way to go.

If you’re like most people, you carefully put off doing something fun—like taking a trip or treating yourself—until you’ve finished your work. Of course, for most people, the work never ends, and the fun gets put off repeatedly.

The hidden assumption behind putting off fun is that you won’t enjoy it if you have uncompleted work to do. But what if research showed that when you put fun ahead of work on your priority list, it is at least as much fun as it would have been in the unlikely case of your finally getting everything cleared off your desk? Is it possible that you’ve been deferring joy for no reason?

One recent experiment suggests this might be so.* Working adults were given two assignments: a strenuous battery of cognitive tests and a fun iPad game that involved creating and listening to music. Some were assigned the cognitive tests first, others started with the iPad game, and they were asked beforehand how much fun they expected to have.  

The beforehand responses suggested exactly what you would think: people in the
“play first” category predicted lower enjoyment ratings than participants in the “play after” group. But when asked the same question after they had completed both activities, the participants reported equally high enjoyment, regardless of the order. Play first participants enjoyed themselves just fine.

Other similar experiments have yielded similar results. Having fun before all the work is done is, well, just as much fun! If your definition of “responsible” has you working too hard and continually putting off doing things that provide fun and enjoyment, you have company. American workers work longer hours and take fewer vacations than anyone in the industrialized world. Most of them are unhappy with work-life balance, leave paid vacation days on the table, and wish they could find more time for fun. Studies suggest, however, that leisure improves our work.  People often work better and are more satisfied with their jobs after returning from restful breaks. We might keep postponing doing something fun for “the right time,” only to realize that it never seems to come.

So, one suggestion for a socially responsible lifestyle is: Have fun now. Your work will likely improve, and you really will enjoy yourself, and your life, more.

In my next blog, I’ll offer another suggestion for a responsible lifestyle: Meditate. 

*See “Stop Putting Off Fun for After You Finish All Your Work,” by Ed O’Brien, Harvard Business Review, July 7, 2017. Blog adapted from a Bob Veres draft, with permission.

SRI on the Fourth of July

Whether by luck or grace, depending on your viewpoint, I was a healthy baby born on the Fourth of July – so to me it’s not only a special day for the country. On most July 4th weekends in my life I have been proud to be a citizen of the USA. 

Not so much this year. Since that fateful election back in November, I’ve felt mostly embarrassed for my country or, to be clear, for my country’s leadership. As David Remnick remarks in a current article for The New Yorker magazine, “Every day, Trump wakes up and erodes the dignity of the Presidency a little more. He tells a lie. He tells another……He trolls the press, bellowing ‘enemy of the people’ and ‘fake news.’” And on and on. It remains hard for me to believe that such a person has become, and is, President of the United States.

Friends and clients have been concerned about their investments. When, they ask, will the fiasco that is the Trump Administration ruin our business environment in the same way it has unhinged our politics and our public discourse? When will the markets discern that Trump’s policies, assuming he can accomplish anything concrete at all, will in fact be damaging to American workers and to the overall economy?

Yet the markets continue to rise. The second quarter numbers are in. U.S. markets turned in their third-best first half of the year since 2000. The broadest index of U.S. stocks, the Wilshire 5000 Total Market Index, was up 8.73% in the first half. The Wilshire U.S. Large Cap Index was up 9.27% - the Russell Midcap Index 7.99%. Even international stocks, having lagged U.S. stocks for most of the post-2009 upturn, have joined the party. The EAFE Index of European and Far East stocks was up 11.83% in the first half. Although U.S. economic growth appears to be slowing down of late, there is no indication yet that a recession is imminent.

Market-wise, it appears the fireworks are appropriate. SRI investors, however, think about market returns from a different perspective. Surging market returns reflect a growing economy, but in an era of irresponsible leadership what might that indicate? Could it be the growing economy this market is contemplating might also be an unsustainable one? Capitalism can work that way. The triumph of business without responsible regulation and oversight, and the emotional bull markets that often accompany it, can blow up. Bubbles burst. Memories of 2008-09 fade fast.

Should SRI investors, therefore, be running for cover? Having counseled my clients for years to maintain their investment plans and to ride out unpredictable but inevitable market downturns to obtain longer-term profits, I’d be disingenuous if I said yes. Smart investors never react in fear.

There is a bigger and better reason to stay the course, however. SRI investors, at least the ones I’ve met, are generally hopeful and intelligent people. Hopeful and intelligent people know the only successful global economy in the long term will be a more just and sustainable economy. If that is the future economy SRI investors are intelligently investing in, and helping bring about, they are bound to be winners.

SRI on the Fourth of July? It’s more important, and a better strategy, than ever. 

Reading Your Quarterly Performance Reports

If you work with a fee-only financial advisor, you receive portfolio performance reports every three months—a form of transparency that financial professionals introduced at a time when the typical brokerage statement was impossible to decipher.  Taken by itself, however, the information you glean from any one quarterly report is virtually useless unless viewed in a larger context.  It’s very difficult to know if you’re staying abreast of the market, and for most of us, that’s not really the point anyway.


The only way to know if your investments are “beating the market” is to compare their performance to “the market,” which is not easy. You can compare your return to the Dow Jones Industrial Average, but that index represents only 30 stocks, all of them large companies.  Most peoples’ investment portfolios include a much larger variety of assets: U.S. stocks and bonds, foreign stocks and bonds, both including stocks of large companies (large cap), companies that are medium-sized (midcap) and smaller firms (small cap).  There might even be stocks from companies in emerging market countries from, say, Latin America.  There are often real estate investments in the form of REITs.

To know for sure that your portfolio of investments outperformed or underperformed “the market,” we would need to assemble a “benchmark” portfolio made up of index funds in each of these asset categories, in the exact mix that is in your own portfolio.  Even if we could do that precisely, daily, weekly and monthly market movements would distort the original portfolio mix by causing some of your investments to gain value (and become larger pieces of the overall mix) and others to lose value (and become smaller pieces), and those movements could be different from the movements inside the benchmark.  After a month, your portfolio would be less comparable to this custom benchmark so painstakingly created. In addition, indexes only track movements in security prices, without regard to the expenses necessary to manage any actual portfolio.

There are several keys to evaluating portfolio performance in a meaningful way—and the result is very different from comparing your returns with the Dow’s or the S&P 500’s.

1) Take a long view.  What your investments did last month or last quarter is purely the result of random movements in the market, what professionals call “white noise.”  Even one-year returns fall into the “white noise” category.  It’s better to look at your performance over five years or more; better still to evaluate through a full market cycle, from, say, the start of a bull market to the start of a new bull market.  However, you should remember that there are no clear markers on the roadside that say: “This line marks the start of a new bull market.”

2) Compare your performance to your goals.  Your financial plan (or your investment policy statement) might indicate that your investment goal is to generate (say) 4% returns above inflation for you to have a great chance of affording a long, comfortable retirement.  If that’s the goal, then chances are, your portfolio is not designed to beat the market; it represents a professionally educated guess as to what investments have the best chance of achieving that target return, through all the inevitable market ups and downs between now and your retirement date.

3) Recognize that some of your investments will go down even in strong bull markets.  The concept of diversification means that some of your holdings will inevitably move in opposite directions, return-wise, from others.  Ideally, the overall trend will be upward—the investments are participating in the growth of the global economy, but not at the same rate and with a variety of setbacks along the way.  If you see some negative returns, understand that those are the investments that might well give you positive returns if/when other parts of your investment mix are suddenly, probably unexpectedly, turning downward.

4) Keep in mind that if yours is an SRI portfolio it can be expected to perform differently from a non-SRI portfolio.  Sometimes the performance might lag, and sometimes there is outperformance.  Viewed in a larger context, if a “regular” portfolio is designed to participate in the growth of the global economy “as is,” your SRI portfolio is designed to help bring about, and participate in, a growing sustainable economy for our and our children’s future benefit.

None of this implies you shouldn’t look at your portfolio report when it comes out.  Make sure the investments listed are what you expect them to be, and let your eye drift toward the longer time periods.  Notice which investments rose the most and which were down and you’ll have an indication of the overall economic climate.  And if your overall portfolio beat the S&P 500 this quarter, or over longer periods of time, well, that probably only represents white noise.

Adapted from a Bob Veres draft, with permission.

There It Goes

I’m a life-long fan of the New York Yankees. Among my earliest TV memories as a child is watching Mickey Mantle hit home runs. These days Michael Kay is the TV play-by-play broadcaster of the New York Yankees. He’s well-known for calling home runs. As the ball is leaving the park, he hollers, “There it goes, see ya!”

This afternoon, Donald Trump gave the same message on behalf of the United States to the Paris climate accord and virtually all other nations, with virtually the same emphasis. There it goes, see ya! We can only hope the same cannot be said for our civilization’s chances of averting climate disaster. Trump’s latest move, arguably the dumbest in a whole series of dumb moves as President, makes me ashamed of being a citizen of the United States. It is becoming hard to watch the news at all without becoming truly shaken.

Perversely, the markets gained broadly today as oil prices stabilized. In my last blog, I commented on the market’s reaction to Trumpism thus far. Investors have done well in the markets since the election as it continues to interpret Trump’s actions as creating a wild, wild west business climate in which profits will abound. Yet this optimistic outlook for the business climate couldn’t be more different than that for our real climate.

SRI investors have different reasons for continuing to maintain their long-term investment plans. Many might be wondering now if it really makes sense to invest in a sustainable economy when the business world seems to be careening in the opposite direction. Yet, in recent weeks a number of the nation’s largest tech companies, including Apple, Microsoft, Alphabet (Google), and Intel signed an open letter urging Trump to keep the U.S. in the Paris accord, noting that expanding markets for clean technology creates new jobs and contributes to economic growth. Another open letter to the President ran as a recent ad in the Wall Street Journal, offering strong support for the Paris accord – signed by the CEOs of thirty other major U.S. corporations, including Morgan Stanley and Bank of America. Even ExxonMobil was against the exit, and its former CEO and Trump’s Secretary of State, Rex Tillerson, just signed an international declaration emphasizing the importance of the Paris accord in tackling climate change!

The smartest leaders and innovators of the best companies in the world, large and small, will continue to move toward greater sustainability because they know their future profitability, indeed their future survival, depends on it. SRI investors are helping them get there with their investment decisions and increasingly successful shareholder advocacy initiatives. In a very recent landmark investor vote, 62% of ExxonMobil shareholders voted on May 31 to require the company to report on the impacts of climate change to its business. With the President’s decision today, there will be more impacts to report.

In the meantime, the next Presidential election cannot come soon enough. And when it does, we can only hope the cry will be, “There he goes, see ya!”

Where Are We Now?

So, here’s the conundrum we find ourselves in today as investors. On the one hand, the U.S. economy is still on track and expanding according to the leading indicators I’m looking at. It suggests the current 8-year bull market has no fundamental reason now to reverse itself and become a bear.

On the other hand, there is Trump. Why do I say that, you might wonder? The markets have taken a roller coaster ride up since the election in what quickly became known as the “Trump Bump?”  The Bump seems only to have added to the bull with the promises of tax rate reductions for business and less regulation dangling in the air. 

In my mind, however, the Trump Bump is only the latest example of how the markets often act contrary to reason and logic in the short run, even as they tend to follow the larger economy in the longer term. 

The Trump I’m worried about is the ever capricious, totally unpredictable, real live individual in the White House who, day by day, exhibits his incompetency while occupying the most powerful office in the world. The Comey firing is only latest in a continuing series of troubling events. Let me quote John Cassidy of The New Yorker magazine on that:

At a time like this, it is important to express things plainly. On Tuesday evening (May 9), Donald Trump acted like a despot. Without warning or provocation, he summarily fired the independent-minded director of the F.B.I., James Comey. Comey had been overseeing an investigation into whether there was any collusion between Trump’s Presidential campaign and the government of Russia. With Comey out of the way, Trump can now pick his own man (or woman) to run the Bureau, and this person will have the authority to close down that investigation.
That is what has happened. It amounts to a premeditated and terrifying attack on the American system of government. Quite possibly, it will usher in a constitutional crisis. Even if it doesn’t, it represents the most unnerving turn yet in what is a uniquely unnerving Presidency. (The New Yorker, May 9, 2017)

It seems very likely to me that this President’s reckless actions will eventually cause a national or global political crisis that will spill over to negatively affect the economy and trigger the next downturn in the markets. Yet, in the immediate wake of the election I wrote that the global economy transcends almost any national political event. Of course, I was concerned then the markets would do a nosedive and wanted to caution my clients to stay calm. Instead, the markets catapulted upward. 

And there’s the lesson. I’ve said it repeatedly. We can’t predict future events, or how the markets will react to them. How many of us predicted Trump would be a serious Presidential candidate? How many of us predicted he would become President? How many SRI investors, in the wake of the election, thought a Trump presidency would cause the markets to leap ahead? What we know now about the markets and the economy is essentially the same as what we knew before the election: the markets have been up for about 8 years, the leading U.S. economic indicators are still mostly positive, and we will have a market downturn in the foreseeable future, although we don’t know when.

There will almost certainly be market turbulence ahead. Smart investors, and in my humble opinion SRI investors are all smart investors, will stick to their long-term investment plan, and get ready to rebalance their portfolios if the market makes a major move. If you are not in the stock market now, make sure before you jump in that you have an appetite for some risk and are ready to invest for the long term.

Where we are now is in the thick of change and uncertainty, always a time for investors to stay calm.

Happy Countries

The World Happiness Report is out, and a group of independent experts have now compiled surveys of people in 156 countries, asking them to evaluate their lives on a scale of 1-10.  They then looked at some of the factors that seem to contribute to happiness, and identified five: real GDP per capita (a measure of average wealth); healthy life expectancy at birth; freedom to make life choices; generosity; and whether they perceived their society to have elements of corruption.

Number One on the list is Norway, and you might see a certain pattern when you see the runners-up: 2) Denmark, 3) Iceland, 4) Switzerland, 5) Finland, 6) The Netherlands and 7) Canada.  Sweden comes in at number 10, rounding out the socialistic Nordic societies.  In between are 8) New Zealand and 9) Australia.

Where does the U.S. rank?  Number 14, behind Israel (11), Costa Rica (12) and Austria (13).  The U.S. ranked poorly in social support and, interestingly, mental illness.  America’s ranking was as high as third in 2007, when people were less likely to cite corruption as a part of their lives.

Where are people least happy?  Most African countries reported low levels of happiness.  And, interestingly, the people in China report being no happier today than they were 25 years ago, despite rapidly-growing per capita income.  Chinese respondents to the survey attribute their lagging happiness to rising unemployment and a poor social safety net for the less fortunate.

What does all this have to do with SRI?  Maybe nothing, but my bet is that SRI investors are happier than the average American, not only because they have money to invest, but because they know they are doing something to contribute to a happier world!

Adapted from a Bob Veres draft, with permission.

Young Adults – Are They Good or Bad with Money?

Younger Americans (often called the Millennial generation) are saving their money at a higher rate than their Baby Boomer counterparts at a similar age.  Research from the Transamerica Center for Retirement Studies shows that nearly three-quarters of younger adults are saving for retirement at an earlier age than past generations.  Half are putting away 6% of their income or more—a statistic that makes this generation the best cohort of savers since the Great Depression, despite having to carry record high levels of student loan debt.  Those who participate in their workplace retirement plans are saving 7% a year, on average.

Unfortunately, these same younger Americans are not equally good at investing.  While they are more aware and supportive of SRI than previous generations, the research suggests that many younger people are frightened and confused by the topic of investing in general, and often keep their money in their bank accounts.  That’s a problem, since low interest rates essentially drop the return on investment to 0% a year.  In the Transamerica survey, 25% of younger respondents said they weren’t sure how their retirement savings were invested, and, when they were encouraged to look more closely, they reported higher allocations to bonds, money market funds and other low-return investments than their Baby Boomer or Generation X counterparts.

Investing starts with saving, so younger Americans are off to a good start. Unfortunately, investing is not a topic taught in high school – not even in college for the most part. Young people want to do good things with their investment assets as well as make a positive return – hence their enhanced interest in SRI. Yet many are too afraid of risk.  Although equity markets do go down from time to time, they have always recovered and beaten their previous highs.**


*Article adapted from a Bob Veres draft, with permission.
**Past investment performance is no guarantee of future returns. Consult with your financial advisor about your personal situation.

Walkable Cities – Better Infrastructure

Only a couple of weeks into the new Trump presidency, it is tempting already for liberals and progressives to despair. The Paris Climate Accord, the Affordable Care Act, Mexico, seemingly anyone of Muslim descent, and the entire U.S. news media are under siege by the new administration. Perversely, the stock market is up on the expectation of increased business profits due to the easing of regulation, without regard to the inevitable societal cost of those policies to the environment, labor, and human rights.

One of the few nods to something hopeful Trump made during the election campaign were his statements about building up the nation’s infrastructure. Most knowledgeable commentators, despite their politics, agree the country badly needs a facelift in the form of a major modernization of our bridges, urban public transportation, inner cities, public schools, and hospitals. Undertaken properly and with commitment, modernizing our public infrastructure would provide major economic stimulus, many new jobs, and increased productivity and efficiency. 

Yet, as Paul Krugman of the Times asserted recently in his column (New York Times, Infrastructure Delusions, January 14, 2017) – “there will be no significant public investment program, for two reasons.” Congressional Republicans have set their priorities on eliminating health care for millions and cutting taxes for the rich. They have no demonstrated interest in any serious public investment program. And President Trump, despite his campaign rhetoric, has no serious policy or plan for infrastructure investment, just as he has no serious replacement for the Affordable Care Act.

The infrastructure discussion raises an associated and equally important issue - what type of infrastructure investment do we most need? Do we have a vision that would allow us to target infrastructure investment in the most optimal and beneficial way?

One vision gaining social traction is the concept of the walkable city.** More and more people in both the baby boom and millennial generations are attracted to an urban lifestyle in which community amenities like shopping, entertainment, and social activities are within walking distance from where most people live. Compact geographical areas with these “walkable” characteristics are popping up all over the country, in big cities like New York and Boston, as well as newer suburban areas being developed with walkability in focus (see

Together, the baby-boom and millennial generations number about 160 million people, about half the U.S. population. Boomers are working longer, but as they grow older are increasingly concerned about being stranded in car-dependent suburbs and having to care for homes that are too large. Many millennials grew up in the suburbs and have had enough. Increasingly, they are looking for the social energy, job opportunities, and creativity found in more urban environments and are often happy to walk or bike to get around in these areas. In all, the market for walkable communities today is estimated at three times the demand for the suburban development fueled by the soldiers who returned from World War II and their families.

Aside from their increasing popularity, making communities more walkable will help the country address some very challenging issues:

Carbon footprint: Communities that require less driving use less energy and produce fewer greenhouse gases and other pollutants. Simply put, they are more sustainable.
Economic development: Construction and other industries that help create walkability hire low- and medium-skilled workers. Badly needed jobs are created.
Financial returns: Investment in walkable urban areas will likely yield healthy medium and long term returns.***
Upward mobility: Walkable communities can make the American dream accessible again for working and middle class Americans.
Social fabric: Walkability strengthens local communities, civic participation, and social resilience.
Health and wellness: Walkable communities improve people’s physical and psychological well-being by encouraging more exercise and time outdoors.

Contrary to the vision of walkability, Federal government investment has encouraged suburban sprawl for decades. As the Cold War between the Soviet Union and the U.S. took hold after World War II, financing the growth of the suburbs, the shopping mall, interstate roads and the automobile were purposeful strategic economic policies for competing with and out-producing Soviet central planning. Today, although those original strategic concerns haven’t been valid for decades, Federal subsidies (think Fannie Mae) perversely continue to encourage new single-family suburban home building further and further away from the cities, so that buyers will be able to afford them. Yet many of these same buyers work in the cities, and their driving requirements increase apace, as does the expense of the roads needed to transport them.    

In sum, today there are nowhere near enough walkable communities to meet the emerging demand, and this presents a tremendous business opportunity for local businesses, citizens, city and suburban planners to partner together to create them. And as SRI continues to grow and flourish in the U.S. there will be more and more investors seeking the impact and community investment vehicles that will finance them.

Infrastructure development? Forget Trump. Buy, build, and invest local – in walkable communities.

** Much of this discussion of walkable cities is taken with appreciation from The New Grand Strategy, Restoring America’s Prosperity, Security, and Sustainability in the 21st Century, by Mark Mykleby, Patrick Doherty, and Joel Makower (St. Martin’s Press; New York, NY; 2016).
***Investing involves risk, including the loss of principal.  Past performance does not guarantee future results.

Mention of any security or investment strategy should not be considered an offer to buy or sell that security or to employ that investment strategy.  For information on the suitability of any investment for your portfolio, please contact your investment advisor.

SRI is Booming!

Since November 8, the world has seemed darker for many SRI investors and others who see themselves as socially liberal or progressive. In my last two blogs, however, I’ve suggested that actions by the U.S. government will likely not dictate the future of human and planetary wellness and sustainability. Simply put, our future is still in our own hands, in how we as people and communities conduct our lives, our relationships, and our businesses – in how we generate our incomes and how we spend and invest those incomes.

On that front, there is some very good news, released very recently by US SIF (The Forum for Sustainable and Responsible Investment). SRI is booming!! In 2016, USSIF’s SRI Trends Report* reports that sustainable, responsible, impact (SRI) investments in the U.S. now total $8.72 trillion. That’s a 33% increase from 2014!

Most of this investment volume is implemented by professional money managers on behalf of financial advisors and institutional and retail SRI investor clients like you. These managers consider environmental, social, and corporate governance (ESG) criteria alongside financial criteria in constructing and managing their portfolios, and the top two issues they are considering today are conflict risk (i.e. terrorism and war-making) and climate change.

An integral and important part of the SRI trend is the active participation by SRI professionals and investors in shareowner advocacy. Shareowner resolutions filed on ESG issues from 2014 to 2016 represented over $2.5 trillion in assets at the beginning of 2016 – and those resolutions are garnering greater support at corporate shareowner meetings around the country.

Taking an increasingly important part as well is the continued growth and spread of different impact and community investment opportunities and products. Community impact investments** allow more and more investors to direct their capital toward local farming and urban community development, fair trade businesses, sustainable forestry, micro-finance, alternative energy projects, and so on.

Perhaps most gratifying – the explosive SRI growth is being driven largely by client demand. SRI continues to bubble up from the grassroots, from people like you and me and from religious and endowment institutions, not from government action or mandate. 

*See Report of US Sustainable, Responsible and Impact Investing Trends 2016, published by US SIF.
**Mention of specific types of investments does not constitute a recommendation to invest.

Getting a Grip

It’s been about two weeks since the election. I’m very thankful I could spend much of the first week with friends and colleagues at the annual SRI Conference in Denver. As a group, we grounded each other – enabling us each to “get a grip” on the implications of having Mr. Trump as our next President. We came away from the conference collectively believing that SRI is now more important than ever. My own reflections have me wanting to be more specific and articulate about why and how I think that is true.

In the coming weeks, I will be writing more often, focusing on three themes I believe are important as we continue our work together as SRI investors. Before I say more about that, let me comment more immediately on the markets. In the aftermath of the election, the markets have been amazingly calm, and that is a very good thing. At a moment when many investors might have reacted emotionally with their assets, as they often do when unexpected events occur, cool heads have prevailed so far. In my mind, this is only one more example of an investor maxim – we simply can’t predict how the markets will react to future events. That is true about near-term future events and longer-term future events. To say a Trump presidency portends uncertainty is an understatement, and how the markets will react in the coming years is even more uncertain. We can only predict the markets will move more in concert with the economy than with U.S. governmental action, and in this case that might also be a good thing. Fundamentally, though, nothing has changed yet to warrant investors changing their long-term investment strategies.


Back to the three themes I will be writing more about. The first is climate change, no surprise. On this issue, I agree with Paul Krugman of the New York Times, who wrote last week it is the thing that concerns (scares) him the most about a Trump presidency. Already, the President-elect has named a climate change denier to head the EPA. Time is growing short for the world to make the transition to sustainability, and the U.S. should be leading the transition. Yet all political signals right now are to the contrary. SRI investors will play an ever more crucial role in encouraging the move away from fossil fuel energy production and a faster conversion to alternative energy. And while investing directly in alternative energy companies has so far been a dicey proposition, the development and production of alternative energy has been accelerating in recent years as the costs of that development have come down dramatically. That trend, along with the advent of new investment options, will only continue despite the obstructionist policies of a Republican-dominated federal government. 

The second theme I want to focus on is community impact investing, and this for me stems directly from the election results. It is well-documented that Trump’s electoral college victory was made possible through his effective appeal to a wide swath of mostly white, blue-collar voters from the geographical heartland of the country. “Make America Great Again” implies a prior fall from greatness, and roughly 60 million U.S. voters ratified that belief with their votes. It’s also apparent these voters put aside concerns about Trump’s evident narcissism, racism, and history of abusive treatment of women because they believe he will help them improve their lives financially. As an advocate for SRI, I think it’s important we pay attention to that, for it is true that so many of the people who voted for Trump are the same people who live in communities that have not recovered economically or financially from the Great Recession of 2008-09. When we as SRI investors engage in community impact investing, we are directing capital in the U.S. specifically to these same communities, creating more opportunities for economic flourishing. This election tells me we haven’t done nearly enough on this front, and so I will be highlighting more community investment opportunities in future articles.

Finally, I believe in and am professionally committed to SRI because I believe SRI investors are helping to bring about a better world. At the unexpected dawn of a Trump presidency, many Trump opponents now feel a better world will be less attainable, if attainable at all. But do we have a clear picture of what that better world will look like? Yes, we say, it will be a more just, compassionate, and sustainable world, but can we see clearly what it will take to get us there? What are the concrete details, and the specific public and economic policies that will bring about and comprise a just and sustainable economy? I want to explore those questions more fully going forward because if SRI investors want to direct their capital to bring about a better world, it makes sense we will do so more effectively if we can more clearly envision that world.

The future beckons. SRI will continue to be an important part of it.  

The Great Divide

Unthinkable. That is the word that kept coming to mind last night as the election results poured in. Is this really happening? This morning, however, a bit more clarity has me asking myself why I am so surprised. Has Trump not been doing the unthinkable for months now, and come out on top with every new contest?

Clearly, so many in our country are seeking major changes, changes they are hoping will make their lives better. I shuddered earlier in the campaign when many Sanders supporters were saying publicly they would likely vote for Trump rather than Clinton. In my mind, many Trump voters have been flailing about blindly, and did so again yesterday. But are we not engaged in sustainable, responsible impact investing (SRI) to change our country and our world for the better? Are we not also seeking better lives for ourselves and our children?

As investors, and especially as SRI investors, we want to avoid acting blindly with our portfolios. Now, when the markets will surely be choppy for some time – now is the time to remain calm and to stay with your long-term investment plan. Times of uncertainty are rarely good times to sell. The value of your portfolio does not depend on who occupies the White House, but rather on economic fundamentals that today are global in nature and ultimately transcend U.S. politics. Indeed, the type of world we live in, and in which we will live in the future, is and will be shaped less by how we vote than by how we spend and invest our money.

The Great Divide. Politically, that might well and accurately describe our country. But on a more fundamental level, all of us are seeking better lives, lives with more joy and freedom. It does us little good to bemoan an election that has not gone our way. Rather, last night’s results add clarity and purpose to why we are SRI investors, and why we will do well to stay the course. 

Good News About Global Warming

It surely isn’t news to SRI investors that our world is in for trouble unless we make significant changes in how our global economy produces the energy it needs to function.  Indeed, investing in and for a sustainable planet overall is a primary SRI objective.  Yet, global climate reports tell us that even if we shift totally over to clean energy tomorrow (not likely), the troubling warming trend—and polar ice melts, flooding of coastal areas, and increasing droughts, hurricanes and severe winters—will continue to accelerate for the next 30-50 years. The damage has already been done.

But is it irreversible?  An ideal solution would not just reduce carbon dioxide and other greenhouse gas emissions, but remove some of what has already been pumped into the atmosphere.

There are two interesting developments along this front.  First, researchers from Columbia University’s Lamont-Doherty Earth Observatory in Iceland are perfecting a technique which would mix carbon dioxide captured from the smoke stacks of a power plant with water and hydrogen sulfide, and then inject the mixture into basalt rock—a substance which makes up about 70% of the Earth’s crust.  The result: 95% of the carbon solidifies into stone, due to a reaction between the various ingredients.  In effect, carbon dioxide has been turned to stone and stored away securely—more or less forever.  Currently, in Iceland, the local energy utility has been pumping 5,000 tons of carbon dioxide a year into underground rock formations.

Of course, that’s a small drop in a very large bucket: currently our various industrial processes release more than 30 billion tons of carbon dioxide into the atmosphere each year.  But if each power plant had its own recapture facility, that figure would come down dramatically.

Meanwhile, a company called Global Thermostat* is testing a carbon capture unit in Silicon Valley that could suck carbon dioxide directly out of the air, reducing our global carbon footprint and potentially reversing greenhouse gas concentrations in the atmosphere.

The unit, which looks like a giant dehumidifier, would be attached to a power plant or factory, and be powered by the residual heat of the facility itself.  Large pipes would bring the power plant’s emissions into the unit, while external intakes would suck in the outside air.  The carbon is captured from both sources, rendering the plants “carbon negative,” reducing carbon dioxide in the nearby atmosphere—and cranking out a pure enough form of carbon to be sold at a profit for industrial uses, including plastics, manufacturing, bio-fertilizers, biofuels and soda factories.  All but the fuels would keep the carbon sequestered and out of the atmosphere.  

The test unit can extract up to 10,000 tons of carbon per year, which means the world would need roughly 3 million of them to offset the current level of emissions, and many more if we want to start scrubbing the atmosphere and addressing those scary future projections.  The company envisions attaching these units to power plants, and also creating farms of them in remote locations to start the long, difficult process of undoing the environmental damage of our energy economy.

Developments like these, along with the fact that the cost of producing usable solar energy has come down dramatically in recent years to become truly competitive with producing fossil fuels, provide hope that our planet might recover and reasons to believe that SRI investing in sustainability will be profitable.


*Mention of specific securities should not be considered an offer to buy or sell that security.  For information on the suitability of any investment for your portfolio, please contact your investment adviser.

Adapted from a Bob Veres draft with permission.

A Market High – Yes, Let’s Celebrate

In case you hadn’t noticed, the S&P 500 index reached record territory yesterday (July 11), and the Nasdaq briefly crossed over the 5,000 level before settling back with a more modest gain.  At 2,137.6, the S&P 500 finished above the previous high of 2,130.82, set on May 21, 2015.

SRI investors want to make a positive difference with their money, but they also want to experience some positive gains financially, so it’s nice to see the markets recover.  We’ve waited more than a year for the markets to get back to where they were before the downturn this January, before Brexit, before a lot of uncertainties in the last 12 months.  But a market top can suggest a different uncertainty; after all, many investors regard market tops warily.  When stocks are more expensive than they have ever been (so goes the thinking) it might be time to sell and take your profits.  However, if you had followed this logic in the past and sold every time the market hit a new high, you’d probably have been sitting on the sidelines during most of the long ride from the S&P at 13.55 in June 1949, which was the bull market high after the index started at 10.  New highs are a normal part of the market, and it is just as likely that tomorrow will see a new one as not.  In fact, the Dow is approaching another all-time high of its own right now.  Overall, the market spends roughly 12% of its life at all-time highs.

We all know the next bear market will start with an all-time high, but we can never know which one in advance.  Market highs do not necessarily become market tops. The smart advice for SRI investors is the same whether the markets are up or down.  Save, invest your savings in potentially profitable businesses that might also improve society and the environment, and stay invested for the long term.  So yes, let yourself relax and celebrate the highs when they come.

Information about market indexes was obtained from sources we believe to be reliable, but we cannot guarantee its accuracy.  Indexes are unmanaged groups of securities and are not directly available for investment.  Past performance does not guarantee future results.


Adapted by Gary Matthews from a Bob Veres draft, with permission.