According to James Larue, he made a request to his 401k to sell in 2000 and his plan didn’t. Now he’s suing his employer for over $150,000 of losses in the tech bubble crash. While his suit in principle makes sense. James has a legitimate complaint if it’s true that he issued an order but the order was ignored. However when you start sniffing below the surface, the story begins to smell a little fishy.

James Larue worked at a management consultant firm and in 2000 and 2001 he says made requests to change his investment allocation that he says were not honored. However, he wasn’t aware of this until 10 months after the fact, and after a precipitous fall. Why wasn’t he aware? Was is he in coma? Was he on an undercover assignment? Nope, he just didn’t bother checking.

The administrators of his plan are potentially guilty one of two things. 1) they criminally defrauded Larue in some scheme to benefit themselves 2) they were sloppy and failed to execute the order. In the former case, they would need a reason to do this. There seems to be no apparent motive here for that. Both the employer and the plan administrator (companies like Fidelity and Vanguard) have no reason to prevent a transaction. They do not materially profit from not executing a request. It’s certainly possible that the plan administrator did not implement his request due to some type of clerical or technical error. However in that case, I’m unsure that LaRue would be due the full $150,000 for such an error. It’s not like he checked his account to make sure the transaction was processed. While I’m not a proponent of constantly checking your portfolio, I do think it’s important to check the portfolio and setup when you make changes.

I personally would not be surprised if LaRue either screwed up or there was some type of miscommunication. People are often confused between reallocating existing funds and changing where future investments are made. Maybe LaRue changed his future investments but did not change his current asset allocation? I find it hard to believe that someone who would bring this type of case all the way to Supreme Court is also the type of person who would wait 10 months before checking his account.  The Supreme Court is not hearing the case to determine liability as much if employees have the right to sue 401k operators under the laws that govern pensions. I can agree with Larue on that. I see no reason why a employee shouldn’t be able to sue a 401k operator if there is a real case of fraud. Larue’s case, however, doesn’t pass my sniff test.

Over Thanksgiving, I gave a good yelling to my dad when I got out of the bathroom.  He had recently stocked the bathroom with probably what was the cheapest toilet paper I have ever used in my life.  It was the generic toilet paper from Market Basket, one of the lower priced Supermarkets in the Boston Area.  I have no problem with either Market Basket or Store branded products.  I think both can deliver fantastic values on some products.  Market Basket toilet paper is not one of these products.

I preach frugality on most things.  I don’t personally believe in owning flashy cars, designer clothes, or most other luxury items.  I do, on the other hand, spend much more than the average person on traveling and I definitely believe in treating my bottom to “luxury” toilet paper.  As a guy I have occasion to use toilet paper on average 5 times a week.  When I do have to use toilet paper, I use a generous amount - I would say at least 20 sheets each visit on average, or about 7 feet.

I can purchase the least expensive toilet paper, Scott’s 1 Ply, available at drugstore.come for $9.99 for 12 rolls or 6000 sheets. The stuff I used at my Dad’s was much cheaper.  He didn’t recall how much it cost, but I wouldn’t be surprised if it at was at most half the price of the Scott’s.  I’ve used the cheap Scott’s 1 ply sheets before, and after using the Market Basket toilet paper, the Scott’s 1-ply would feel like Quilted Northern.  The more expensive and thicker Charmin’s Ultra is offered at $9.99 for 12 rolls, or 2400 sheets.

• Scott’s 1 Ply: 6000/$9.99 = .1666 cents a sheet
• Charmins’ Ulttra: 2400/$9.99 = .41625 cents a sheet
• Market Basket (estimated) = .1666/2 = .08 cents a sheet

Knowing how much toilet paper I use, and the going price of toilet paper, I can figure out how much it really costs me to use the luxury brand over the course of lifetime (I estimate generously that I have about 60 years left on the ticker).

20 sheets X 5 visits X 60 years X 52.15 weeks = 312,900 sheets of toilet paper for the rest of my life

At most I can save a bit $1000 over my lifetime. This doesn’t even take to account the fact that I believe I would probably have to use more sheets of the cheap stuff to do the same job as better toilet paper. My estimate of total sheets is on the  high side as I haven’t accounted for the fact that about half my toilet paper usage is provided free at work.  The actual savings is likely to be much less.

Next time you’re victim of cheap toilet paper consider sending a message with a gift of your own.  Life’s too short, and butt cheeks too sensitive to expose to thin grainy toilet paper.  I certainly rather make my sacrifices elsewhere in life.

I spent two nights in Honolulu two nights in Maui, and 4 in Kauai. I will only be skimming over my time in Honolulu and Maui given that I didn’t actually do much on those islands.

Honolulu

I stayed at the Ohana East in Waikiki. My girlfriend’s company paid for the room which they were able to get a fantastic rate of $75/night. The Ohana hotel company runs a wide range of hotels in Honolulu. The Ohana East is on the lower end of the scale. The location is good but not fantastic. It’s near the main drag, but not on the beach.

Waikiki beach itself is a great beach if you haven’t been to other beaches in Hawaii. Since we visited during off season, the beach was only moderately crowded. Compared to a beach in Cape Cod or the Jersey shore during the summer, the beach was positively abandoned. Waikiki is good swimming beach with gentle surf by Hawaiian standards. The snorkeling given the volume of beach goers is not the best.

Maui

In Maui we stayed at the Beachside Motel near the airport on the bay. We stayed there because it was cheap and conveniently located to where my girlfriend needed to be. Unless there’s a strong reason you need to stay near Kahului, the main town in Maui, I would look to other hotels in more recreational locations.

Given my short time in Maui, I only managed to do two things:

One: I drove around the western half of the island. This is the less famous drive in Maui. The drive to do is the one to the eastern side of Maui, The Road to Hana. I instead drove around the western island, the smaller of the two connected islands, which is still incredibly scenic in itself. The drive is series of mountain switchbacks across a one lane road. Depending on the traffic levels, it can make for some interesting moments as two cars traveling in opposite directions try to make room for one to pass.

Two: I snorkeled in Lahaina near Black Rock. On our last day in Maui we rented snorkel equipment parked the car near the series of resorts in the Western town of Lahaina and made our way to Black Rock. Black Roak is craggy rock jutting out to sea at the beach near the Sheraton hotel. Torches are lit up a night along a walkway towards the top of the rock from which brave souls jump into the sea. I was not such a brave soul. I was only brave enough to snorkel by daylight in the vicinity. Because of the geology of the area, the shore quickly becomes much deeper in the vicinity of Black Rock. This geography makes for excellent near shore snorkeling. There is both coral and fish to be scene. Remember do not get near the coral as your touch can kill coral that may be hundreds of years old.

Kauai

Kauai was really my vacation while the rest of Hawaii was just a bonus. Without any work obligations, my girlfriend was free to spend time with me. We were able to do what we wanted when we wanted, making the best of 4 nights, and three full days.

Using the Hanalei Bay Resort as our base of operations, we generally stuck to the northern and eastern side of the island. Not having done my research ahead of time, I only earned winter was rainy season in the North Shore when we arrived. Luckily it was reasonably sunny 3 out of 4 days. The waters are rougher during rainy season while in contrast the south is calm in winter and stormier in summer. Even without the seasonal variation, the north shore is known to be the wetter locale. However like much of Hawaii rain will often come but does not often stay through the whole day. Expect showers, but don’t expect constant rain. However if sun and surf is your main interest, I would recommend staying in the South especially in the winter.

The North Shore

Princeville on the east marks the beginning which might arguably be the prettiest area of Kauai. Princeville is on the eastern shore of Hanalei bay, and is best described as a posh gated golf course community. The north shore because it gets more water than the other shores is by far the greenest, and this greenery frames the ocean perfectly

• Princeville
  • Princeville Hotel (accommodations - $$$$)
  • Hanalei Bay Resort (accommodations - $$)
  • Café Hanalei, La Cascata (food - $$$$)
• Town of Hanalei
• Postcards Café (food - $$$)
• Kee Beach
• Na Pali Coast

The Eastern Coast

The east coast is home to Kaua’is largest towns Lihu’e and Kapa’a. The airport and Marriott Hotel are located in Lihu’e which is the most commercial part of the island.

• Kapa’a
• Wailua
• Lihu’e
  • Marriott – Café Portofino (food - $$$)
  • Hamura Saimin (food - $)

Southeastern Coast

Poipu

Poipu is known as the Wakiki of Kauai. I didn’t really see that while spending about an hour on this shore. The Sheraton and Hyatt are two big hotels in this area. The Hyatt has wonderful oceanfront restaurant called the Tidepools which features independent thatched huts linked by bridges over a carp pond and waterfalls. I didn’t get a chance to visit the restaurant, but many friends who have been to Hawaii have. All we really managed to do at Poipu was watch rather subdued sea spray at Spouting Horn. The horn needs the bigger summer surf to put on a real show.

Princeville

As you pass the gated but open entrance to Princeville, an ornate fountain welcomes you to what could be just another expensive suburban community. The Hanalei Bay Resort and the Princeville Hotel are the primary hotels/resorts in the compound. While there are commercial properties in the area, Princeville is on the most part residential. The Princeville Hotel run by Starwood features one the grandest lobbies I have ever seen. It’s a lobby befitting one the most expensive hotels on an island full of expensive hotels. The rack rate for rooms can be easily over $500 depending on the season. The rooms themselves are located below the lobby which sits on the 9th floor. The Princeville manages to get around Kaua’is building ordinances against any buildings taller than a coconut tree (3 or 4 stories) by building down rather than up. The bulk of the hotel is built into the cliff walls of Hanalei Bay. The Princeville hosts two very expensive restaurants, the Hanalei café and La Cascata. The food at the café is more contemporary while La Cascata offers more traditional Mediterranean fare. One way to enjoy the view without paying through the nose is to have drinks and appetizers at The Living Room, the main bar at the Princeville. The outside terrace adjacent to the main seating area is popular location to catch the sunset. This is what we did one night before actually feeding ourselves with cheap Chinese takeout at Panda’s Kitchen in Hanalei.

Hanalei

Heading west past a sharp and badly identified hairpin turn is Hanalei Bay which is encircled by lush mountains. At the apex of the bay lies Hanalei a quaint town with a small town center with a number of restaraunts both within and outside the Chin Young marketplace. Towards the water, Hanalei town hosts a wonderful beach, Hanalei Beach. Hanalei Beach makes up a greater portion of the bay and offers wonderful swimming year round. We were there are on slightly stormy day, and as a results found good but manageable surf. I regretted not having a boogie board as watched first time surfers hitting the waves in wet suits. Next time in Hawaii, I’m going to try surfing. I felt I didn’t have enough time on this trip to dedicate a full day to learning.

Postcards Café

The restaurant built in 1992 is a replica of an old. The menu eschews meat other than fish, and generally uses organic ingredients where available. The interior is relaxed without being too informal. In addition there is an outdoor seating area on the patio where we actually ended up sitting. We started off with the pupu platter, a perfect sampler for two, which was excellent. The platter consisted of fried tarot, shrimp, tuna sashimi, and vegetarian spring rolls. Our expectations were raised. However, both our entrees disappointed. I had the wasabi encrusted Tuna, while my girlfriend had the seafood Sorrento pasta. Both were delivered less than warm which I’m willing to excuse. What I won’t excuse it that both entrees were lacking in flavor. I was also surprised to see the seafood Sorrento used rotelli. I generally think of rotelli in a pasta salad rather than as proper pasta for a main course. Continuing the drive east from Hanalei across more one lane bridges are a few more beaches and the last stop on the Kuhio highway (route), Kee Beach. Past the beach heading south and east is the beginning of the Na Pali coast. Kee Beach is well protected by an extensive coral reef system located close to shore. As a result the surf is gentle, and there is decent snorkeling, though there is a limited amount of live coral to see right near the shore.

Na Pali Coast

Na Pali coast is the northwestern shore of Kauai. It’s in inaccessible by car. The Kalalua trail begins at Kee Beach and extends 11 miles down the coast offering breathtaking views of cliffs and ocean. Beyond the first two miles past Hanakapi’ai beach, a permit is required to continue. Hanakapi’ai beach is one the most dangerous beaches in Kauai. On average one person dies a year swimming in the surf of beach that’s unprotected by any type off shore reef system. Swimming is to be avoided. My girlfriend and I hiked the first 2 miles and then a secondary hike off the main trail to Hanakapia falls. Neither the main nor the secondary Hanakapi’ai Fall’s trails are easy, especially in wet winter conditions. The trails are both slippery and steep in some locations. In addition, the way to the falls involves a number of stream crossings. These stream crossing can be dangerous during wet conditions. The rocks are slippery and the current strong especially after heavy rains. However the rewards for making the hike are spectacular views of the coast on the main trail, and gigantic and secluded waterfall on the secondary trail.

Some fellow hikers enjoying the water. They were braver souls than I. Given that it was somewhat cool day in the shade of the fall, neither I or my girlfriend wanted to venture in the uncertain pool. The pool beneath the falls was somewhat dark ominous. We did get a chance later to refresh ourselves inthe smaller secret falls up from the Wailua river.

The hike to waterfall is 8 miles round trip and makes a wonderful day hike. The entire Kalalua trail hike on the Na Pali coast is 11 miles and must be broken across multiple days. Camping with permits is allowed currently at Hanakapia and at the end of trail at Kalalau beach. The other campsite between Hanakapia and trail end is currently closed. While I haven’t traversed the trail myself, I’ve heard that it’s not the easiest hike with some the same muddy conditions that mark the first two miles along the way. One section of the trail has completely disappeared, washed off the hillside by rains. Without any clear path to make footing, it’s advisable to bring a shovel to be able to dig out a foot path from the face of the hill.

Kapa’a

Kapa’a is Kauai’s beautifully compact and slightly bohemian urban mecca of yoga and would be vegans. Restaurant and stores abound. One of the Bubba’s Burgers is in town, the other being in Hanalei. Bubba’s serves and old fashioned hamburger, shakes, fries, and gigantic onion rings. They also sell Bubba t-shirts and other trinkets. In addition to Bubba’s our river guide also recommended Mermaids as a good lunch spot, and Kintaro’s for good sushi.

Wailua

South of Kapa’a is Wailua which has more of strip mall feel in comparison to the more alternative Kapa’a. The main reason to come to Wailua is Kayaking. East of town is the main mouth of the Wailua river and popular destination for both self-led and guide led tours. We enjoyed an excellent tour with the mom and pop run Wailua Kayak Adventures. We were dropped off and picked up by mom and pop at the Wailua river, and taken out on the river by their son. I thoroughly enjoyed the tour, and was more than happy with the service provided. Compared to some of the larger kayaking companies, Wailua Kayak Adventures offers an excellent deal at $85 per couple to share a two seat Kayak. Unlike some of their competitors who provide a full lunch, Kayak Adventures only provides a snack, but some of their competitors charge almost the same ($85) per person as does Wailua Kayak Adventures charges per couple. Given that the morning tour that starts at 7am finishes around 1pm, I think lunch afterwards and DINNER for at least TWO days can be paid out of that saving. Wailua Kayak Adventures is located past the town of Kapa’a to the north after “Movie Tours.” It’s no longer located behind Coconuts as many guidebooks state.

Lihu’e

The only two things I did in the Lihu’e area were either air travel or food related. The Kauai airport is located on the outskirt of the town. In addition commercial businesses of Kauai, as few as they may be, tend to be located in Lihu’e. We had two meals in Lihu’e that were as about as opposite as they come. Hamura Saimin serves Saimin noodles which might just be another name for ramen. I had the “special” saimin which comes with pork, wontons, and vegetables for $6. There is no better value on the island (certainly not one I came across). Even without the fantastic low low price which is cheaper than the Ramen I can get in Boston, it was the best ramen I’ve had in years.

Café Portofino at the Marriott

Mom and Pop at Wailua Kayak Adventures recommended that we go to the Marriott. They told us the restaurant overlooked the beach and the bay and was a perfect place for a sunset meal. It was, except we missed sunset by a few minutes as we ran late making the walk from the parking lot. If you go to either Café Portofino or Duke’s Canoe Club, it’s actually more convenient to park at Kalapaki beach rather than the Marriott parking lot. Café Portofino is the more expensive of the two options. Both restaurants have a similar view of the bay, but at Duke’s you can avoid being serenaded by the Harpist that provides light background music at the Café. The food at Portofino is standard Italian fare with a few more seafood offerings. It’s good but nothing special. You go for the view. While Hanalei Bay is much grander, Kalapaki beach and accompanying bay has a much more intimate feel that I find is better suited as backdrop to dinner.

I’m generally not a fan of most actively managed mutual funds.  I think on the most part you’re paying too much for too little performance.  Most actively managed funds do not beat the index without even taking into account the higher expenses.  I’m not an absolutist, however, I think there are some quality funds and fund company.  I personally own DODFX and do think very highly of the Dodge and Cox mutual fund company.

Reading this article at Smartmoney by Jack Hough really got my gall up however.  I’ve always known Mutual Fund companies typically incubate funds before they’re allowed into the wild of retail iinvesting. Incubation involves opening a new fund to only select investors.  Often times these select investors are employees or other connected individuals.  I never thought too much of it.  I just assumed it was a way of managing the growth of a mutual fund.  If you are to believe Jack Hough, incubation is nothing more than a marketing trick to lure more suckers.  I believe Jack.

By incubating a number of different funds and only promoting the successful ones, mutual funds can effectively try a bunch of competing strategies and be right either way. Heads they win, tails you lose. After a successful incubation period, mutual fund companies then come out and market these “successful” funds showing X number of years of superior performance. The losers are tossed into the dust bin and forgotten.  If you are going to invest in actively managed funds at least look for funds with superior performance with the same manager(s) over period years while the fund has been open to investors.

Mutual funds love to tout historic performance of their funds, but this is often reflection of survivorship bias. Survivorship bias is the bias of only looking at funds (or stocks for that matter) that are still in operation. The failures are ignored.  There is survivorship bias in marketing only funds that come out successfully out of the incubation period.  Beyond incubated funds, it’s not like mutual funds ever bring attention to their poorly performing funds, and especially already liquidated funds.  Mutual funds shut down all the time because they aren’t any good, but you don’t hear too much about these losers from the fund companies.  I imagine there might be more to be learned by examining not just the record of success for a particular fund manager or company, but failures as well.  I tried tracking this information down, and haven’t had any luck other than finding aggregate numbers of liquidated funds for particular years.  Any paid users of Morningstar have access to this information?