Why is the NBA so black?

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Race relations in this country are worse than they have ever been since the 1960s.  Basketball in the NBA has never been better.

A couple months ago we had the Oscars and the associated controversy that not a single nominee in any of the acting categories was black.  I’m not really into the Oscars (Foxy Lady is because she loves the runway shows), but I’m really into basketball.  It got me thinking about how overwhelmingly black the NBA is and what causes it to be so.

Let’s just get a couple things out of the way:  I have no problem with the racial composition of the NBA.  I love watching good basketball.  The better the players, the better the basketball.  If the best players are black, then those are the players I want to watch.

 

NBA demographics:  The NBA is overwhelmingly black.  About 80% of the players are black, 18% are white and there is a small handful of Asian and Hispanic players.  But that’s a little misleading; the league is much blacker.  All players are not created equal.  You have your stars who play the most minutes, score the most points, and get the most exposure.  And you have the benchwarmers who are counted in those player statistics but live in virtual anonymity.

If you look at the best players, they are even more black than the overall NBA.  The most recent all-star game featured 26 players, one of whom was not black (Pau Gasol).

That trend is consistent going back at least to 1990 (when I got tired of counting).  You usually have 2-4 non-black all-stars.  I said “non-black” instead of “white” because Yao Ming, an Asian, has been an all-star.  So between 85-95% of the all-stars are black.

You see similar results looking at the All-NBA teams.  Going back to 1988 (when the current format was adopted), there have been 135 All-NBA first-team players (5 players each year for 27 years).  Of those 135 players a grand total of 12 where white; the other 91% were black.

In a country where about 13% of the nation is black, we have a league that is 90%+ black.  Clearly something is going on.  Now let’s figure out what it is.

 

Role of genetics:  This is a tricky one, certainly a “politically correct” minefield (but really this whole blog is a politically correct minefield, so whatever).  Of course, NBA players are physically different from the broader population.  The average height of an NBA player is about 6’7”, while the average height of an American man is 5’10”.  That’s a pretty big difference, and one obviously driven by genes.

The data show that black men and white men are similarly tall.  The data does show that Hispanic men are significantly shorter, so that goes a long way in explaining why there are so few Hispanic players, but it doesn’t explain the black-white disparity.

Clearly to be successful in the NBA you have to win the genetic lottery.  In a country with 30 million men between 20 and 35, there are only about 350 NBA players.  Given that the life of an NBA player is pretty awesome along almost every dimension, let’s assume a large portion of those men would want to be NBA players if they could.  So statistically, an average guy has about a 1 in 100,000 chance of being in the NBA.

Of course, our genetics goes a long way in weeding most of us out.  To be in the NBA you need to be tall, but then you also need to be fast, strong, have a deft touch and endurance, and on and on.  And these don’t seem to be traits that can be inherited from your parents.  In the entire 60+ year history of the NBA there have been over 3000 players, with about 70 whose fathers also played in the NBA.

Certainly 2% of the player population implies some type of genetic gift that is passed on from father to son, and 2% is much higher than the chance of an average American making it to the NBA, but that really doesn’t seem all the high.  If a generation ago those NBA players had the best genes, which they then passed on to their sons, why aren’t there a lot more sons of NBA players following in their fathers’ footsteps?  Genes are important but there must be an even more important ingredient.

 

Talented is talented:  There’s a lot of reason to believe that the most talented players in the NBA would have succeeded in life, even if they didn’t play in the NBA.  We know that genetics plays a role in determining who makes it to the NBA, but that seems to be table stakes.  You have to have a minimum amount of genetic “gold dust”, and obviously the more the better, but the father-son data shows beyond that genetics plays a very small role.

So what could be the larger determinant: hard work.  What makes the best NBA players the best is hard work.  It’s difficult to look at this analytically, but the league’s best players—Michael Jordan, Kareem Abdul-Jabbar, Kobe Bryant, LeBron James, and more recently Steph Curry—are/were notorious for their amazing work ethic and practice methods.

Empirically, we see this translate beyond the basketball court.  Definitely, it’s difficult to assess their work ethic or careers away from basketball because they made so much money in their NBA careers, there isn’t a need to work.  But if you look, you can find it.  Magic Johnson became a hugely successful businessman after his playing days.  Jerry West is probably the best NBA general manager ever.  Kareem is one of the most intelligent and thoughtful people in media when he decides to make himself available.  Charles Barkley is the best basketball analyst, Larry Bird is a highly regarded executive for the Indiana Pacers, Bill Russell was a championship coach, and Jordan was a professional baseball player.

All those players are generally considered among the 20 greatest players ever.  To be that good in the NBA takes a work ethic, charisma, insatiable desire to succeed, and on and on.  The point is, all those translate to success in pretty much every field, in athletics or not.  If basketball never existed, if professional sports never existed, those guys would have succeeded in business or science or whatever career they ultimately pursued.

If Jordan entered the construction industry, Jordan Custom Homes would be the largest homebuilder in the Carolinas.  If LeBron was an aerospace engineer, the LBJ6 rocket would be powering the first manned mission to Mars.  If Kobe went into the restaurant business, you could order a Black Mamba with cheese from 25 locations across the Philadelphia area.  If Magic went into the movie theater business, he’d have the most successful theaters in Los Angeles—wait, that actually happened.  If Kareem became a historian, he would be a best-selling author—wait, that actually happened too.  You get my point.

 

The Black Thanksgiving:  Highly regarded sports journalists David Aldridge and Michael Wilbon have called the NBA All-star weekend the Black Thanksgiving.  I don’t know about that, but the mere suggestion speaks to how popular the NBA is in the black community.   Basketball is extremely popular in the United States, and among the black communities in the US its popularity is off the charts.

There are about 5 times as many white people as black people in the US.  Yet, estimates show that there are more black NBA fans than white.  Statistically, that’s astounding.  If you do some quick math, that means the black community has about 7 times as many NBA fans per capita.  And keep in mind the NBA is really popular among whites.  That’s not to say every single black American is an NBA fan, but if those numbers are accurate (as well as the sentiments of Aldridge and Wilbon) it can’t be far off.  No matter how you slice it, the NBA is uber-popular among blacks.

You can pretty easily imagine that makes a virtuous cycle.  Black boys see black men in the NBA, and want to do that when they grow up.  That leads to a new generation of black NBA players who inspire a new generation of black boys.  More on this in a minute.

 

A terrible career choice:  Deciding to pursue a career in the NBA is an awful career decision, and any parents who wanted the best for their sons would probably steer them away from that.  Think about it for a minute.  Sure, if you’re at the very, very apex of the NBA pyramid then you probably have the best life in America (money, fame, women, etc.), but those perks fall off extremely fast.  Actually, even if you’re at the very top (think LeBron) your life is amazingly awesome, but actually quite ordinary compared to other career choices.

If you’re a top 3 basketball player then you earn about $25 million per year in salary plus $50 million in endorsements.  If you’re top 30 (low end of All-stars), you make about $10 million per year and no endorsements.  Top 300, you’re barely in the league, probably working from 10-day contract to 10-day contract and doing auto dealership security in between those; let’s say you pull in $250,000.  Top 3,000 or lower, you’re really good in pick-up games at the local YMCA and you support yourself with a job that has nothing to do with professional basketball.

Compare that to a job like engineering.  If you’re a top 3 engineer in the country, you own your own tech start-up and are worth $5 billion.  Top 30, you still probably own a start up, or maybe you’re CEO of a more established company; either way, you’re pulling in $20 million a year.  Top 300, you’re a CEO or senior VP, pulling in $5 million a year.  Top 3,000, VP level, pulling in $1 million per year.  Top 300,000, a cushy manager level job making $150,000+.

Add on top of all that that the average NBA career is less than 5 years, most of which end not by the player’s choice, while the average engineering career can go on indefinitely.  Between the NBA and engineering, if you look at it purely as a job to earn an income for you and your family, why would anyone pick basketball?  And we used engineering as a comparison, but the story would be near identical for accounting or finance or doctors or lawyers or computer programmers or a ton of other careers.

 

Going all in:  To make it to the NBA you pretty much have to dedicate your entire life to basketball.  This isn’t something you can do halfway.  Because of that, pursuing the dream of playing in the NBA becomes an extremely high-risk proposition.

If you’re a young man with the physical gifts to seriously pursue the NBA, you have a choice you must make.  You can give 100% of yourself to basketball, but then that doesn’t leave much time or energy for you to develop other skills—math, science, literature, etc.—that could be helpful for non-basketball careers.  So basically, you’re making the choice of “basketball or bust”.

On the other hand, if you hedge your bets, and dedicate some of yourself to basketball but also pursue those other interests, you’ll never make it to the NBA.  Sure, that’s a flip statement, but it’s fairly accurate.  If you’re only giving 50% or 80% or 90% or 99% to basketball, there are thousands of other guys who are willing to give more, give 100%.  All other things being equal, the guys giving 100% are going to make it before the guys giving anything less.  That is a recipe for a high-stakes gamble that doesn’t pay off for the vast majority, and it leaves those who play and lose in a very difficult situation.

Let’s play with the numbers just to see how risky it is.  Assume there are 50,000 guys who want to play in the NBA for every NBA roster spot.  Only 5% of those guys have the physical gifts to even make it a reasonable consideration, so that’s 2,500 guys for every NBA spot.  5% of those guys go all in and dedicate their lives to basketball—that’s 125 guys for every NBA spot.  Those are horrible odds.  Sure, one will win and we’ll celebrate him, but the other 124 will be screwed.  They’ll have developed really strong skills in dribbling and shooting and rebounding and defense, but other than the NBA there aren’t a lot of jobs that value those skills.  Sadly, the vast majority will be forced to take low-wage jobs because they don’t have marketable skills.

Maybe I’m wrong on the exact numbers, but directionally I’m right, and the larger point is absolutely true.  Pursuing a career in the NBA is a huge gamble where a very small portion win and most of the losers not only lose, but they lose big and hit rock bottom.  It’s a terrible career aspiration for a young man.  Yet, why do so many young men, especially young black men, pursue it?

 

Poor man’s game:  Larry Bird has become a bit of a polarizing figure due to his race.  He’s pretty universally regarded as the best white NBA player ever, and certainly among the top 20 when you compare him to black players as well.

He once made a statement that basketball has become a “black man’s game”.  Of course it was controversial because anything said in our society about race is controversial.  And the data I showed earlier seems to corroborate his view, yet I think he’s wrong.  Basketball isn’t a black man’s game, it’s a poor man’s game.

Doing a bit of internet research, mostly relying on Wikipedia articles, I took my personal list of the top 20 NBA players, and grouped them based on how they grew up: poor, middle-class, or rich.  The data is hard to come by since it’s not like they track this and explicitly say this guy grew up poor while this guy grew up in the middle class.  Certainly I got some of these wrong, but directionally I’m right.

Poor Isaiah Thomas, LeBron James, Larry Bird, Jerry West, Oscar Robertson, Allen Iverson, Dwayne Wade, Magic Johnson, Wilt Chamberlain, Bill Russell, Karl Malone,  Elgin Baylor, Moses Malone, Shaquille O’Neal
Middle-class Kareem Abdul-Jabbar, Michael Jordan, Tim Duncan, Hakeem Olajuwan, Julius Erving
Rich Kobe Bryant

 

There are 20 names on that list, and 14 of them grew up poor.  Some grew up so poor they explicitly said so in the bios like Russell, Oscar, Bird, West, and both Malones.  With a normal swath of the population you wouldn’t expect 70% of the best people to be poor any more than you would expect them to be 90% black.

Interestingly, the only NBA great who grew up rich is Kobe, whose father happened to play in the NBA.  Maybe one day Steph Curry will make the list of all time greats, and maybe if Grant Hill not had terrible foot injuries he would have made it too.  Both those men grew up rich, but they also grew up with fathers who were professional athletes (Steph’s dad played in the NBA, Grant’s in the NFL).  So it’s hard to separate genetic gold dust from wealth.  But from this data it seems pretty clear that very few rich kids make the NBA, and the few examples have a genetic component.

Something is going on, so let’s figure out why basketball greatness is so correlated with poverty.

 

If you don’t know, you better ask somebody:  Certainly poverty can be an enormously powerful motivating factor.  We’ve already discussed that to succeed in the NBA you have to work harder than the other 50,000 people who are also chasing that one spot.

Many players have explicitly said that their impoverished childhoods motivated them to do whatever it took to succeed in basketball, staying late to practice when all the other kids went home.  Does a rich kid have that same motivation?  I think reasonable people would say maybe not so much.

So there’s probably something there, but why basketball in particular?  If you’re a kid who’s poor but has the will to succeed in an incredibly competitive environment like professional basketball, why choose basketball where the risk of failure is so high?  Why not use that same intense drive to study math and science to become a world-class engineer?  We know the rewards at the top are just as good, and the risks and consequences of failure are considerably less.

This is where the poverty card comes in.  Nearly every little boy dreams of being a professional athlete at some point.  Given the “Black Thanksgiving” factor, that desire is probably even more acute among black boys.

Knowing the odds are so against it, informed parents will encourage their boys to develop other skills “just in case that basketball thing doesn’t pan out.”  However, if the parents or other adults in that boy’s life aren’t informed, the boy may not know that chasing that basketball dream isn’t a good idea.  Further, he may not know what other dreams to chase.

If you grow up poor, it’s probably because your parents don’t have good jobs.  If they don’t have good jobs, it’s probably because they aren’t educated.  Of course these are generalizations, but national data clearly shows strong relationships between these factors.

In impoverished communities, how knowledgeable are the adults of careers like a scientist or an engineer or an accountant?  Probably not a lot, because they don’t interact with them.  If they aren’t knowledgeable it’s really hard to tell the little boy, “you know what you’d be really good at?  Finance because you’re so good with numbers.”  That’s a huge missed opportunity.

But in poor communities, what’s something that people are knowledgeable about?  Sports.  It’s on TV, it’s celebrated in the towns, it’s seen as an avenue to upward mobility.  So loving but unknowledgeable parents see their talented sons and push them towards basketball.  Those parents love their boys just as much as richer, more knowledgeable parents do.  They want professional success for their boys just as much.  It’s just the poorer parents don’t know about all the options that rich parents do, so they fall back on the thing they see all the time—basketball.

 

The correlation of poverty and race:  If we believe that the NBA is “a poor man’s league” more than it is “a black man’s league”, then that begs the question why is it so black?  The answer is, sadly, that black America is much poorer and less educated than white America, on average.

This of course is a serious and important issue in our society, and one that I hope improves.  Unfortunately, it’s an extremely difficult and complex issue that defies easy solutions.  Nonetheless, it’s a fact.  And that fact is what is driving the NBA to be overwhelmingly black.  A higher percentage of black boys are raised in poor and poorly educated families.  Hence, a higher percentage of black boys are pursuing sports careers because they don’t have parents who are knowledgeable enough to wisely steer them to something else.

 

The trail of career corpses:  You’ve stayed with me for over 3,000 words, so let’s put a bow on this.  Why is the NBA so black?

First, let’s clearly debunk the myths.  It’s not that black men are bigger, stronger, or more athletic.  That’s a racist view which the data clearly refutes this.

Now, let’s look at the reasons, and more importantly how that impacts our society.  The key driver seems to be poverty in the boy’s family, and the associated lack of knowledge that accompanies that—lack of knowledge about the abysmal odds of success and lack of knowledge about alternative careers.  Since poverty is more prevalent in black communities, that leads this issue to be more prevalent among black boys.

This is further compounded by the oversized importance and popularity of basketball in the black community (Black Thanksgiving), leading to a self-perpetuating system.  Basketball is so popular among blacks that more blacks pursue it as a career.  As more blacks are showcased in the NBA, it becomes more popular among the blacks, and on and on.

As a fan of basketball I love it because I get to watch so many amazing athletes play such an amazing game.  As an American who wants racial harmony, I hate it.

Pursuing a career in the NBA is like using lottery tickets as your retirement plan.  The winners are celebrated, but for every one winner there are thousands of losers who no one thinks about.  For every one LeBron there are tens of thousands of No-name McGees who went all in on that NBA dream, but failed and were left with nothing.  NOTHING!!!  The fact that it happens disproportionately to black men furthers one of America’s biggest, saddest, most difficult issues—the racial income gap.

Just for example, look at Ed O’Bannon.  He was the best college basketball player in 1995, winning the Wooden Award as such and leading UCLA to the national championship.  No doubt he completely dedicated himself to basketball in order to be the best.  But the NBA didn’t work out, and after two seasons he was out of the league.  Now he is a car salesman in Nevada.  I don’t know what car salesmen make or how fulfilling of a career that is, but I bet it’s not that good.  The world thought Ed was the best at basketball, and we know if he pursued engineering or finance or law or medicine he could have been pretty good there too.  As it turned out he wasn’t the best at basketball, not even in the top 500.  Basketball is a cruel mistress and if you aren’t at the top then you’re nothing.  But other careers are much more tolerant, and maybe O’Bannon could have been among the top 1000 engineers or doctors or lawyers.  If he was he’d be pulling in over a million dollars per year.  As it is, he’s a car salesman.

O’Bannon is an example we know about, and I admire his bravery for telling his story.  The fact is there are millions of O’Bannons out there who have crappy careers because when they had their chance to go all-in on something, and they went after the longest of long shots.  And this happens to blacks more than any other race.

That’s the part I hope changes.  I hope more parents, including black parents, but especially poor parents, start having serious talks with their sons and tell them they are talented and maybe they could make the NBA.  But, even more importantly, they are talented and definitely they could become successful doctors and lawyers and scientists and engineers.  If money is important, there’s more money in those careers than the NBA (a really important point).

So there you have my take on why the NBA is so black and why I hope it becomes less black.  By the way, GO WARRIORS (since my Lakers suck)!!!

Panama Canal

Sunset with sailboat

There probably isn’t any man-made structure that is more intimately related to its country as the Panama Canal is with Panama.  When I went through it on my sailing trip, it was truly awesome.

 

The actual canal experience

Ironically, the Canal doesn’t look all that impressive when you see it at first, especially if there aren’t any boats in it.  There are two “lanes” each of which is about 100 feet wide.  So when you compare it to all the rivers you’ve seen in your life, it’s actually quite a bit smaller.  But once you see one of the Panamax (ships specifically designed to be as large as the Canal will accommodate), you then start to realize what an amazing feat of engineering it is.

Panama is about 30 miles wide and obviously the canal cuts through that.  On the Atlantic side there are three locks (more on these in a second) next to the port city of Colon.  Then on the Pacific side there are three more locks next to the country’s capital of Panama City.  In between the engineers dammed the Chagres River to make Lake Gatun which sits in the middle and is the path that ships go between the two sets of locks.

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Entering the first lock. You can see the huge ship in front of us. Also, you can see how we are “rafted” to the sailboat next to us.

The locks are pretty amazing.  Basically the boats go in these chambers that are 100 feet wide and about 1000 feet long (that’s what the Panamax boats need to fit into).  Coming from the Atlantic Ocean we entered the locks at sea level where they were at their lowest points.  After you enter the locks, the huge doors close behind you and you can see the walls rising about 35 feet above you.

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The doors closing on the lock.

Once the all clear sounds, they flood the chamber and the water level gradually rises, about a foot per minute, until the water level along with all the boats are 25 feet higher than when they entered.  The doors at the other end open and you go into a second identical chamber, repeat the process, go into the third chamber and repeat the process.  By the time you’re done with the third chamber, you are about 75 higher than when you started, 75 feet above sea level.

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That same door, but now the water is 25 feet higher, having lifted us in the process.

When we did it, of course we were on a much smaller sail boat, so we and two other sailboats “rafted” together, tied up to each other’s sides so we acted like one really wide sail boat, and entered the chambers behind a huge 800-foot long cargo ship.

We started the whole process at about 4pm.  Once we got out of the third chamber and into Lake Gatun it was about 8pm so we slept there for the night.  In the morning we motored across Lake Gatun, passing massive cargo ships going the other way.  The lake is about 30 miles so the motoring took us about six hours.  At about 2pm we came to the Pacific locks and repeated the whole process in reverse, and finally entered the Pacific Ocean at about 4pm.  In 24 hours we went 40ish miles from the Atlantic to the Pacific.  Without the canal, we would have gone all the way around the southern tip of South America which would be about 12,000 miles.  Truly incredible.

There’s so much to say and 600 words won’t do it justice, so of course if you have any specific questions for me just let me know.

 

The Canal’s impact on Panama

I started this by saying how important the Canal is to the country, and it’s hard to overstate it.  Panama wouldn’t exist as a country without the Canal.  Back in the early 1900s, President Teddy Roosevelt knew that a canal would greatly benefit the United States economically, militarily, and politically.  At the time, the land we call Panama was a part of the country of Columbia.  Negotiations to build a canal with Columbia weren’t progressing so Roosevelt basically declared Panama and independent country.  He signed a treaty with the new country to build a canal and the rest is history.

As an economic engine, the canal charges fees for ships to go through.  For our small sailboat is was about $500, but for the big ones it can be in the hundreds of thousands of dollars.  Those fees account for about 10% of the country’s economy.  10%!!!

Plus there is a ton of ancillary economic activity that occurs because of the Canal.  The total all in for us to get through the Canal was about $2000.  The $500 was directly to the Canal but then the other $1500 is for consultants who help you with all the paperwork and linehandlers who help guide you through the canal.  Those are a lot of good jobs for a lot of Panamanians.

For big business, Panama City probably the biggest banking hub in Central America, thanks to all the business going through the Canal.  Plus you have warehouses, fuel for the ships, hotels and groceries and all the other stuff you need with those ships coming through.  It’s a huge economic driver.

In fact, that 10% actually is way underestimating how much the canal means to the country.  When I flew in to Panama City, you pass the city skyline and I must say I was really impressed.  It’s got to be the richest city in Central America and a rival to many Latin American cities like Mexico City or Sao Paulo, despite Panama City only having about 2 million people (the entire country has about 4 million people).

Generally speaking, in no specific order the richest countries in Central America are El Salvador, Panama, and Costa Rica.  The reason Panama is on the list—THE CANAL.  The average Panamanian makes about $13,000 per year.  Costa Rica’s average is $11,000, Mexico and Brazil are $9,000, and countries like Guatemala and Honduras are less than $4,000.  The Canal is probably single-handedly responsible for about 50% of the average Panamanian’s income, one way or another.  Of course, I bring all this up because I am an economist but it truly is fascinating.

 

Put that all together, and the Canal is a singular structure in the world.  I’m thankful I got to see it close up.

Sailing retro-diary (part 3)

Sunset with sailboat

Welcome to the exciting conclusion to my sailing retro-diary

 

Saturday, April 2—We wake up in Baleena Bay.  After breakfast Jim and I take the dinghy down, put the outboard motor on it, and then head to shore.  Bear in mind, we don’t have visas for Costa Rica, so when I step foot on land I have illegally entered the country.  We chose this because for the boat to enter is a 2-3 day bureaucratic process plus a $500ish fee.  Since we only want some fuel, we’re hoping to get in and out without going through that hassle.

When we get there I start looking for Jose who is the guy who is supposed to be selling diesel.  The place is a tiny, tiny town with a dirt road and maybe ten or so buildings.  I don’t see any obvious gas stations so I knock on a door.  A nice guy answers but he speaks no English.  Using my very broken Spanish, I learn that there is a Jose but he only sells gas, no diesel.  I also learn that the nearest gas station that sells diesel is about 10 miles away.  Damn!!!

Fortunately, the guy offers to drive me for $20 so we load our four 5-gallon jerry cans into his tiny Hyundai.  As we’re driving I figure there’s a 2% chance that I’ll get kidnapped, but all goes well.  He was a really nice guy and 30 minutes later we have our fuel, are back on the boat, and ready to go.

At about 11:00am we’re heading out and on our way again.  Then we have another highlight of the trip—we catch a fish.  It’s an amberjack that Jim reels in and then Laura butchers it and we have it for a late lunch, about an hour after the guy was swimming in the ocean.  I must admit that I did tear up a little when we caught him and we sprayed alcohol in his mouth to kill him.  Circle of life.

The rest of the day and night is pretty tame.  We are motoring a lot because of course the wind is on our nose, and even stays on our nose when we make a right turn (how is that possible).  Given this, I think we’re all relieved that we have all the extra fuel.

Route map

 

Sunday, April 3—This was definitely the craziest day.  Throughout the trip, Jim and Laura have been very closely looking at the weather reports, as you would expect if your house was floating into potential storms.  We knew the Papaguyo winds were coming, and today they hit.  Apparently, the wind from the Caribbean side comes over the land through some valleys and hits the Pacific side going 20-30 mph or more.

During most of the day the wind is hitting us right on our nose (of course) even as we try to hug the coast where the wind is calmer.  By 2pm we have a problem: we can sail east (opposite of where we with max engine power with the wind and waves beating the hell out of the boat.

Or we can sail across northwest (the direction we want) but there’s no land for over 150 miles.  We’ll be able to sail due to the direction of the wind, but the wind will be very strong so that’s a concern.  Jim and Laura (more Jim than Laura on this one) decide to go NW.  The sailing is good at first, with the wind blowing 15-20mph and us sailing about 6mph, so it seems like a good decision.

As night comes the wind picks up to 30mph, which is super strong and which most sailors would say is something you never want to sail in.  But there’s nothing we can do now other than keep going.  The boat is bouncing like a basketball.  For most of the night all three of us are up, not that we’re needed but because there’s no way you can sleep through this, plus for Jim and Laura I think they’re understandably concerned.  For me, I think it’s a ton of fun like riding a roller coaster.

By about 3am I get to where I could sleep through anything, so I go down and zonk out.

 

Monday, April 4—After the crazy day yesterday, this is an easy day.  We’re sailing parallel to the coast going about 4 mph, with a 10 mph wind, so it’s actually really pleasant.

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Very calm sailing now that we’re going along the coast after the roller coaster ride.

However, we have a bit of a challenge.  We’re within 50 miles of the marina and it’s 10am.  So we can’t just go straight through because we’d get in in the middle of the night.  In general, you never want to check in to a marina “after hours”, and with the Costa Rica experience, there’s no way we’d do that.  So we sail another 8 hours, and get within about 30 miles of our destination.  There’s an anchorage there that we’ll chill out in for about 10 hours.

We get to the anchorage and it’s kind of odd.  It’s not in a bay or anything.  It’s just out in the ocean, opposite a beach with a resort.  We can actually see the people walking around (and horseback riding).  We’re so close, but it’s out of the question that we take the dinghy off and go into town.  So I can just watch an imagine those people drinking Cokes with ice.  Mercifully, 10pm comes and we head off for the final stretch.

 

Tuesday, April 5—WE MADE IT!!!  We took off from our anchorage at about 10pm and night before, and pulled into the marina at Puesto Del Sol.  Within 5 minutes of getting tied up, I was off the boat and on my way to a shower.  Actually, that might have been jumping the gun as Jim was talking to the hotel people about immigration, but I was a man of a mission, not having had a real shower in 10 days.

I talk to one of the hotel hostesses who speaks English very well, which is nice because I don’t want to put the effort in to showing someone how bad my Spanish is.  She gets me some of those mini shampoos and soaps and the internet password.  I learn later that I took her English skills for granted.  She’s one of only two people at the hotel who speaks English.

Maybe this is two personal, but during my shower when I was shaving, I went through two new razors; they kept getting clogged because of all the sunscreen.  Gross.

When I am finally feeling human, I ask for Coke with a separate glass completely filled with ice.  Then I order two green salads.  Not that Jim and Laura’s cooking wasn’t good (it was) but I am really craving fresh vegetables.  I spend the rest of the day drinking ice-cold Cokes and catching up on email.

 

Wednesday, April 6—This was a bit of a waste of a day.  The resort is pretty isolated so there’s really not a lot to do.  I got all caught up on my internet browsing, and just enjoyed taking it easy without bobbing in the water.

Interestingly, we are literally the only guests at the resort.  There are something like 20 staff and us.  For lunch Jim, Laura, and I walked into “town” (just a strip of 5 or so houses).  It was great but the regulars were pretty convinced that the owner of the hotel traffics drugs, since it’s a really nice place but there’s no one ever there.  Oh well.  The lunch was really good.

 

Thursday, April 7—Today I fly home.  Since all flights from Managua to the US leave at around 7am.  So that means that I have to get in a cab in Puesto Del Sol at 2am.  Not that I really slept a lot since I was so excited to get home, but still early.

Like the flight out, the one back was pretty easy.  From Managua to Miami to Charlotte to Greensboro.  The only goofy thing was we sat on the tarmac for about an hour in Charlotte on our way to Greensboro.  Keep in mind that it’s about 100 miles from Charlotte to Greensboro, so we literally could have driven and gotten home fast.  Oh well.  I got home and got to see Foxy Lady and the cubs.

What a trip!!!

 

I hope you enjoyed the retro-diary.  It was such an awesome trip.  I don’t think words can adequately express it, but I am so, so grateful to Jim and Laura letting me join them.  I hope I was as good a guest as they were hosts.

Wednesday, I will go in-depth into my Panama Canal experience and thoughts on it.

 

Sailing retro diary (part 2)

I’m sorry, I’m sorry, I’m sorry.  I openly acknowledge that I suck and haven’t been as dutiful in this blog and my sailing story as I should be.  But I have some really good excuses.  Mini Fox brought home hand-foot-and –mouth and promptly gave it to his older brother, so we had two sick cubs who couldn’t go to school.  Plus, work has been pretty busy, so it’s been hard to get the columns out.  Okay, I’m done with my excuses.  Here is the gripping continuation of my sailing retro-diary.

Route map
Our route–the pin shows where we started the day (around 8am)

Monday, March 28—We got up, ate breakfast, gave the boat a good once over to make sure everything was shipshape, and we left at about 10am.  Since we’re in the canal channel, it’s quite busy with sailboats, motorboats, and huge cargo ships.  Obviously, we have to keep an eye out for all those.  Also, because it’s fairly close quarters on the water, we are motoring just to have more control and maneuverability.  Plus the wind is right on our nose, so it’s not like we could sail anyway.

After motoring for about 3 hours we’re pretty clear of the city and now in open ocean.  You can definitely tell the difference—the waves are much bigger.  It’s not uncommon to see slow, rolling waves that are 10 feet high, peak to trough.  Fortunately, they are very slow so there’s probably 100 feet between then, allowing the boat to bob up and down.  You get to the point where you don’t really feel it, but it’s still pretty cool.

By 3pm Jim and Laura are getting pretty sick of motoring, and we’re all a little discouraged that the wind is not cooperating.  We’re near Otoque, a tiny island in the Gulf of Panama, and we decide to head to it to anchor until the winds pick up.  We change course, but apparently the wind gods had other plans, because just then the winds pick up.

Otoque
We got pretty close to Isla de Otoque before the winds picked up and we kept on truckin’

Of course they were teasing us.  The winds picked up enough to put us back on course but then it was hit or miss.  We still motored the whole way, but we were able to get an extra 1-2 mph from the wind.

Once night came, we started the night watch.  7pm to 7am is split into four three-hour shifts (7pm to 10pm, 10pm to 1am, 1am to 4am, and 4am to 7am).  Since I’m new I don’t get my own shift but my job is to sit with Laura on the 7pm to 10pm shift and then again with Jim on the 4am to 7am shift.  This will let me get comfortable with things and then hopefully tomorrow night I can have my own.

But I’m a weenie, and after dinner I start to feel seasick.  I can some medicine, one of those patches you put behind your ear, and it works okay but not great.  I head down below at about 9pm and sleep until about 6am.

That said, “sleep” is the operative word.  Since the wind was blowing on our nose, it was bouncing the boat up and down probably 4 feet every 20 seconds.  Imagine trying to sleep on a trampoline with other people jumping.  I didn’t think I slept at all but then I realized that I’m not really a fire-breathing spaceship, so I must have been dreaming.  If I was dreaming then I must have been sleeping.  No matter, I definitely didn’t get a good sleep.

 

Tuesday, March 29—It’s a new day and I’m starting to get my sea legs.  We sail for a few hours and then make the turn around Los Santos point.  This is a big deal because once we turn, the wind will be in a favorable spot and we can actually sail.

We do make the turn, and wouldn’t you know we have the best sailing experience.  We on a broad reach which means the wind is blowing perpendicularly at our side.  This is the fastest “point of sail” and the boat ends up topping out at about 8 mph, which is really fast for sailing.  In fact, Jim says this is probably the fastest the boat has ever gone.  I’m glad to be a part of that.  The afternoon is super peaceful, watching the sunset and zipping by on the water.  This is really why you sail.

That night I take my own night shift.  I get the 1am to 4am shift.  This is the worst because it’s the most unnatural.  The double shift (having 7pm to 10pm and then 4am to 7am) isn’t so bad because that’s a bit natural in that you’re staying up a little late, until 10pm, and waking up a little early, at 4am.  But that’s definitely in the realm of a normal sleep cycle.  Even the early single shift (10pm to 1am) is okay because basically you’re being a night owl and then you can sleep in.  But the late single shift is just tough.  Oh, well. 

The boat is on auto-pilot so basically you’re just looking out for other boats and keeping an eye on stuff.  That gives you a lot of time to just gaze out into the sky, and at night, in the middle of the ocean with nothing else around, it’s really spectacular.  I’ve never seen so many stars.  I’m used to looking at the Orion constellation with the three stars on the belt, a few making the sword and then two for the arms and two for the legs.  Now I see all those and then a hundred more, just in that constellation.  I can see the band that makes up the Milky Way and a couple shooting stars. Truly amazing.

 

Wednesday, March 30—The wind stayed with us, so in the morning we were still sailing which was really nice, although it wasn’t as good as yesterday.  Now we’re only going about 5 mph.

We’ve settled into some pretty standard meals.  I eat cereal for breakfast every day, and for lunch usually we have sandwiches and some chips.  Being on the boat is weird because there are no grocery stores, so that subconsciously makes you think about running out of food, even though as Jim says, we have enough food to last us a couple months.  I say that because I’d love to devour a bunch of Pringles, but I find I only take a couple.  In the afternoon I eat my daily Snickers bar; I bought two dozen on our provisioning run for this trip.

In the early afternoon we pass between the Isla de Cobia and Isla Jacarita.  At some point we were talking about stopping here to go snorkeling and take it easy.  To my relief, we decide to keep going because the winds are decent and the timing just isn’t right.  Even though my personal schedule is extremely flexible because I don’t have a job, I still feel a strong urgency to keep moving.  I hope this doesn’t come through to Jim and Laura and tick them off.

I have the early night shift (10pm to 1am), and I get to see one of the coolest things ever.  Phosphorescence are microscopic organisms in the sea which can light up similarly to fireflies.  They do it when they are touched.  Well, it just so happened a pod of dolphins came in the middle of the night.  Normally, you couldn’t see them (although you can hear them breathing when the come to the surface which is really cool).  But with the phosphorescence you can see the dolphins zoom by with their eerie green contrails.   They did this for 20 minutes or so.  Just amazing.

 

Thursday, March 31—We entered Costa Rican waters this morning, so we’re making progress.  At this point we’re probably about a third of the way through the trip.

We’ve been motoring a lot.  Going into this, I figured that you were always sailing, but that isn’t anywhere near reality.  Sailing is obviously better—it’s more comfortable (when motoring the wind is usually on your nose so you’re crashing into the waves), it gives you that romantic feeling of a bygone era, it’s fuel efficient, and it’s faster (sailing you can go in the 5-6 mph range while motoring you’re usually at 3-4mph).

But there’s the major tradeoff that you can’t sail if the wind isn’t right.  Apparently we’ve really pissed Neptune and his brother Poseidon off and they’ve decided to put the wind right on our nose, despite us slowly changing our course to follow the coast.

Dolphins
Visitors checking to make sure our hull is up to code.

Mother Nature does try to entertain us, though.  We see a couple rays jumping into the air and doing flips.  Totally amazing.  Then we see a pod of about 8 dolphins who swim with us.  They are amazing of course, but being that close to them you can hear them breath.  It sounds remarkably like humans who are exercising.  Like the Bloodhound Gang sang, “We ain’t nothing but mammals.”

I get the double night watch (7pm to 10pm and then again from 4am to 7am).  The first shift is uneventful, but by the time my second shift comes along we are in the middle of a storm.  It’s raining and in the distance there is lightening.  Lightening is never good to get too close to, but especially on a boat where it can fry all your electric components.   That aside, it was amazing seeing the wall of clouds around us.  Really neat.  That’s a common theme, I know—so many neat things to see that you just don’t get in normal, land-lubber life.

 

Friday, April 1—We’ve been motoring pretty consistently so we’re becoming more and more concerned about fuel.  I’m a math guy so I do all the calculations, and as best as I can tell, we should be okay to make it our destination in Nicaragua.  But it will be close, close as in we might have less than 10 gallons of fuel left.  Understandably, that’s too close for Jim’s comfort.

The problem is that it’s really hard to figure this out.  We knew starting the trip we had 70 gallons.  After that, almost everything is an estimate or guess work.  We have 6 jerry cans on the deck with 5 gallons of diesel each, so that’s definitely 30 gallons.  But how much is in the fuel tank?  We measure that by putting a dowel rod in a hole in the engine, similar to the way you check the oil in your car.

You see how deep the fuel is and then compare that to a hand-written chart.  So if the dowel measures 18 inches that means you have about 20 gallons.  The problem is the ship is rocking so it makes it really had to get a good measurement.

Then you don’t really know what your fuel economy is.  How many miles to the gallon are you getting?  We anticipate this problem and measure our fuel in the morning and then again midday, but because of the boat rocking we aren’t confident in our results.  As best as we can tell we are getting about 7 miles to the gallon, but that could easily be plus or minus a mile which could make a difference.  I do the calculations and we should be okay, but Jim and Laura are a bit more conservative and decide we will stop to get more fuel.

They look at the cruising guide and find a nice anchorage that has diesel.  So we head there and motor in at about 10pm.  I’m bummed that we’re stopping but I am glad that we’ll have a peaceful night’s sleep without any rocking on the boat.

 

Wow.  I guess I’m a talker.  This post is getting long.  Check back in on Monday for the exciting conclusion to the retro-diary.  I know I have broken your trust, but I promise I’ll post again on Monday (the post is already written).

Sailing retro-diary (Part 1)

Sunset with sailboat

As many of you knew, I had an amazing opportunity to go on a super-cool sailing trip with some friends, Jim and Laura.  I met with them on the Atlantic side of Panama, transited the canal, and then sailed up the Pacific coast to Nicaragua.

There’s so much to talk about, a little of it related to personal finance but most of it related to just a totally amazing and different lifestyle that is sailing.  Sailing is going to take over the blog for the next few weeks, as I figure there are some really interesting topic areas that you might enjoy.  Here’s what you can expect:

  • Retro-diary (this post)
  • The canal
  • Your neighborhood—the marina
  • Your neighbors—fellow sailors
  • Impressions on Panama’s economy
  • Kids sailing
  • How expensive is the sailing lifestyle
  • Life on a 150 sqft boat

 

Wednesday, March 23—I had a two-layover flight in front of me, the first leg from Greensboro to Washington DC, taking off at 5:30am.  Despite Greensboro being a small airport with a quick security line, I still had to get up at 4:00am to check in early because it was an international flight.  Great news, the flight is delayed an hour, so now I’ll start freaking out that I’m going to miss my connection and be screwed.

Luckily, the flight from Greensboro takes off when they say, so I get to Washington with about 40 minutes before my flight to Miami leaves.  Incidentally, the flight into Reagan National is pretty spectacular—you get amazing views of the Washington Monument and the Capitol.

The flight to Miami is pretty uneventful and then I find that the food options on the concourse there aren’t that good.  No matter, I just have an hour before the Panama flight takes off.  Similarly, the Panama flight is uneventful, so all in all, a pretty non-descript day in the air, and really isn’t that what you want?

I land in Panama City and struggle with my broken Spanish to explain to immigration that I don’t have an address I’m staying at.  I’m staying on a boat.  The lady tells me I have pretty eyes, but I need her to repeat it about nine times, so that takes a little bit away from the compliment.  Sorry.

I finally make it through and then meet the driver that Jim set up for me.  We drive the entire width of Panama, about 40 miles (at a cost of $100—oddly, US dollars are the currency in Panama) and make it to the marina by 4:00pm.  Earlier than I expected but still a long day.

 

Thursday, March 24—Today is provisioning day.  We take a taxi from Shelter Bay Marina to Colon, the major city on the Atlantic side of the canal (Panama City is on the Pacific side of the canal).  We head to a big outdoor mall, and you really appreciate how easy and convenient shopping is in the US.  The major hardware store is about the size of the paint department at Home Depot; in general, things just seem harder to get here and you have to go through more hassle.  That said, the grocery store was big by Latin American standards, about the size of one at home, and the prices were similar.

We get about $300 of food and then head back.  We actually drive over the canal.  It’s a pretty amazing experience to drive by some of those Panamax ships (ships designed to be as big as possible but still fit in the canal).  Suffice it to say, they’re huge.

Back in the marina we go to happy hour and dinner for our bon voyage.  We’re with probably a dozen people.  Invariably the discussion turns to politics and how stupid Americans are.  When it comes out I’m a Republican, they react like I’m a Nazi.  Actually, it’s a pretty interesting discussion that I’ll go into more detail in an upcoming post.

 

Friday, March 25—Today we start our journey.  The transit consultant has us scheduled for 3pm which sucks because we just wait the whole day.  Mercifully, we get a call midday saying we’ve been pushed up to 1:30pm.

At the appointed hour we leave the marina, and motor out to the bay in front of the canal.  I’m pissed because I didn’t put sunscreen on but figured I was safe because I was staying in the shade.  Stupid.  My forearms are burned and now I swing to the other side of the pendulum and start applying sunscreen like it’s going out of style.

The consultant and two helpers get on board and we get the instructions.  We are going to raft up with two other sailing boats.  So the three boats will be tied together, side by side, and we’ll motor into the canal along with a big cargo ship.  We motor in and at one point we scrape against the wall on our side.  Jim and Laura are freaked out, understandably, but there’s no damage done.  It was pretty mild but it makes tensions high.

We pull into the first lock.  The water is low, so we pull into a chamber with 50 foot high walls, bearing in mind the big cargo ship is in front of us.  The big door closes behind us and then they flood the chamber.  The water rises about one foot per minute, so it’s not crazy or anything, but it’s still amazing that our sailboats, each weighing probably 10 tons, are being lifted 25 feet.  And that’s to say nothing for the monster ship in front of us.

After about 20 minutes we clear the first lock.  We do that two more times, for a total of three locks, and an 80 foot vertical rise, and we’re in Lake Gatun.  That’s all for tonight.  We anchor, eat dinner, and then go to sleep.  With some foreshadowing, since the boat is in the open water (a large lake) it is bobbing in the waves which makes it a little difficult to sleep.  I’m sure it will be better when we’re in the open ocean and the waves are bigger.  Awesome.

 

Saturday, March 26—The second day of the transit.  We motor for 30 miles across Lake Gatun; keep in mind the country is only 40 miles across so the lake takes up about ¾ of the width of the country.  Crazy.

Jim’s a little edgy because of the scrape yesterday, and the Pacific locks are supposed to be harder.  Once we arrive at the first lock, we raft together again with the same boats and go in front of a different, but just as large, cargo ship.  It’s the same process but reverse.  We go in a lock that is totally filled up and the water slowly drains to where the walls end up 40 foot above us.

Since this is the day before Easter, there’s actually a HUGE crowd of spectators at the observation deck.  Literally about 2000 people watching the boats go through the locks.  I wave like I’m a movie star on the red carpet, and some of the kids are kind enough to wave back.  We go through the three locks, unraft, and then we’re free and clear.

We pass under the Bridge of Americas which is kind of the “official” point when you say you’re out of the canal.  Jim has calmed down and is looking forward to some of the bourbon I brought him from the states.  We anchor, and go to sleep.  I’m a bit worried that we’re in an open anchorage just outside of Panama City and the seas are higher, making sleeping harder.

 

Sunday, March 27—Today we are getting the boat ready for our big passage.  We will be sailing 800 miles so we need to get everything ship-shape.  This consists of cleaning the deck, tying the dinghy down, checking the oil in the engine, and filling up the jerry cans with diesel.  We’re done by about noon, so I’m hoping that we take off, but Jim and Laura have more-completely embraced the “take things easy” lifestyle than I have (despite my early retirement), so we’re leaving tomorrow.

We have dinner with a friend of Jim and Laura’s who is getting ready to sail to French Polynesia (about 5000 miles in open ocean) “singlehanded” which means it’s only him on the boat.  Initially I think that’s pretty insane, but by the end of the trip I will think that’s totally full-on loco.  Good luck to him.

At the restaurant there is a message board next to the bathrooms, and it’s filled with people looking for passage from Panama to French Polynesia or Australia.  It seems crazy to “hitchhike” across the Pacific, but there are literally about 20 flyers for people asking for this.  In a weird way it makes sense that if you own a boat and maybe there are only two of you, you’d want some help.  But still it seems bizarre.

Dinner’s over.  We’re going to sleep on the eve of our departure.

 

This post is starting to get long, so I’m going to break it up.  Come back tomorrow to read about when we actually started sailing on our 800 mile trip.

The investment that is awesome for both your pocket book and the environment

rooftop-solar-2-537x358

The Fox family made an exciting purchase/investment (Foxy Lady calls it a “purchase” and Stocky calls it an “investment”, with the distinction leading to extensive debate) this week—solar panels.  I guess you can take the fox out of California, but you can’t take California out of the fox.

For those of you who like to bottom-line it, our solar panels are going to give us an 9% investment return, all the while reducing our carbon footprint by about 9 tons of CO2 annually.

 

Back in California, solar panels were really taking off.  On our street alone we probably had four or five neighbors who put solar panels on their roof.  Since we have moved to North Carolina, literally I have yet to see a house with solar panels.  Back in California, Foxy Lady and I had agreed that we would take the plunge and get solar panels, but we were waiting for the falling prices to stabilize.  Once we figured that we were going to move, we put those plans on hold until we settled in our new home.

So we moved to North Carolina and started seriously looking into the idea of putting solar panels on our roof.  Here’s our story:

 

How much does it cost?

We bought a 20-panel set-up, with each panel being a 265 watt array (they are about 6 feet long and 3 feet wide).  The all-in cost was $18,900, and that included everything from the panels to installation to all the permitting with the state and energy company.

When all the dust settles, I won’t end up paying $18,900 but quite a bit less.  First, there are massive tax incentives when you install solar panels.  The federal government gives you a 30% tax credit on your purchase.  The state of North Carolina also had a big tax break but they discontinued it at the end of 2015, so I missed out on that which was a bummer.

There is financing available, but since I was paying up-front, I got a 6% discount.  Plus, I was able to pay with a credit card, and since it was such a large purchase I played credit card roulette and saved another $1300.  When you add all that up, our net price was $11,000.

List price

$18,900

Federal tax credit

-$5,700

Cash discount

-$800

Credit card roulette

-$1,400

Net price

$11,000

 

How does it work with your electric bill?

The solar panels are installed on our roof, and when the sun shines on them they product electricity—that’s the whole point.  Then there’s this thing called “net metering”.  Basically that means that during the day, when the sun is shining on our panels, we’re producing more electricity than our house is using.  That excess electricity goes into the power grid, and our meter actually goes backwards.

Then at night, when the sun isn’t shining, we’re using power from the grid and our meter goes up, as normal.  So the “net metering” is when you take all the power we used and subtract the power our solar panels generated.

That’s a pretty sweet deal for us because we get the use and reliability of the power grid, but only pay for a fraction of it.  As you can imagine, the power companies are trying to move away from this system to something where you buy electricity at retail and then any excess power you put back into the grid you sell at wholesale.  Politically it’s a hot potato as states want to encourage solar panels and other renewable energy, so they’re keeping net-metering, at least for now.  For us, since we got in with net-metering we’ll be grandfathered in if the law changes, but that’s a big factor in all this.

 

How did you figure out the financial return?

As you would expect, I ran the numbers a thousand different ways to understand what type of return I would get for this investment.

First, you have to estimate how much electricity your panels will produce.  As I said, we got 20 panels each with a 265 watt capability.  That comes to 5300 watts, but that would be in 100% perfect conditions.  When you factor things like the angle of our roof, and more importantly the direction of our roof, you end up reducing that by 22%.  Just in case you’re curious, south facing roofs are the best and for those you would reduce by 15%.  Our roof facing almost due west, with a slight southern slant.

Then you have to estimate the number of sunlight hours per day.  The government has rated all the municipalities for this calculation, and western North Carolina comes in at about 6 hours per day.  Of course, that factors in clear days during the summer when you’ll get 14 hours of sunlight, cloudy and rainy days, and winter days.  Put that all in and it’s supposed to average 6 hours per day.

Solar panels

20

Wattage per panel

265

Total watts

5,300

“Real life” adjustment

78%

Expected kilowatts

4.1

Sunlight hours per day

6

kWh per day

24.8

kWh per month

744

kWh per year

8,930

 

You can do all the math and you get about 25 kilowatt-hours per day or about 750 kWh per month.  Our current electric rate is about 10¢ per kWh, so we expect this investment to generate about $75 in savings per month.  A $75 monthly return on a $11,000 investment comes to about 7% return.  If you factor in that electricity rates will probably rise about 2% per year, the return goes to 9%.  9%!!!!!

Remember that in the stock market returns average about 6-8%, but there are major ups and downs, like what we went through last year.  This is 9% pretty much guaranteed.  The closest thing you could compare it to is a 30-year US bond, and right now those are returning about 4%, so this is over double that, and we all know how important an extra 1% return is.  Yowza!!!

Of course, the proof of the pudding is in the eating.  Over the next bit, I’ll find out how many kilowatt-hours our solar panels actually generate, and I’ll find out if electric rates go up that fast or not.  Those will obviously impact our return, possibly dramatically.  I did a quick sensitivity analysis that shows worst-case the return is 4% and best case it’s 10%.  Obviously that’s a big range which would drastically impact if this is a good investment or not, so stay tuned and I’ll provide more detailed updates on this as I see how we’re tracking.

 

How did you figure out the environmental return?

The other major benefit, and some would say the more important benefit, of solar panels is the environment.  We are generating pollution-free energy to power our house.  There’s no coal or natural gas or oil that is being burned to generate those 750 kilowatt-hours which means there are no carbon emissions.  I know some people question the role of carbon dioxide on global temperatures, but I definitely think that it has a negative impact, and I want to do what I can to help.  If in doing so I get a really good financial return, all the better.

Those 8,390 kWh per year, if generated at a coal power plant, which is where our normal power comes from, would be over 9 tons of CO2 each year.  That certainly seems like a lot.  Just to put it in perspective, Foxy Lady drives a Honda Fit and I drive a Toyota 4-runner, and together those generate about 6 tons of CO2 per year.  Basically our solar panels will eliminate the carbon footprint of our cars, and have some carbon offset left over for one more car.  To me, that’s a pretty big deal to me.

 

What are the risks?

There are three major risks that I see.  First, we need to see what type of power the panels actually generate.  The math says it should be about 9000 kWh per year, but we’ll see.  As we said above, that number can have a huge impact on the type of return we get.

Second, this is a long-term investment.  The payoff for the panels is about 11 years.  That’s a long time and a lot of stuff can happen.  The warranty on the panels is 25 years, so we should be okay there.  But what if we move?  Will the new buyers pay extra for the panels?  Who knows.

Third, and this is the biggie, is the chance that Duke Energy changes their rules.  We mentioned that net metering is a huge advantage to all of this, and we’re supposed to be grandfathered with that.  But laws can change and sometimes people get screwed.  If we got taken off net metering to a less advantageous system, this investment would take a real nosedive.

 

There you have it, the first chapter in our story on solar panels.  There’s a lot that we need to see play out, so I’ll keep you updated.  But going in to this, I think it’s an amazing opportunity to do something great for the environment (taking 3 cars off the road), as well as an awesome investment return (9%+).

I screwed myself by rolling over my 401k

rollover-ira

Kind of, but not really.  I wanted to put a dramatic headline up to see if that would drive more traffic.  However, I did lose a little bit of money by rolling over my 401k from Medtronic into my IRA with Vanguard.  Here’s my story:

 

As you know, I left my job at Medtronic a while back.  Whenever you leave a job, there’s actually a lot of work involved with your finances.  You have to move them from the accounts set up by your company, to your own individual accounts.  Best case is it’s a pain in the butt; worst case is you can forget about some of it and lose it forever.  So it’s an important process.

So when I left Medtronic I knew I had to take my 401k account and roll it over into an IRA.  But there wasn’t a lot of urgency because Medtronic had their 401k at Vanguard, and all our other accounts are at Vanguard, so it seemed fine.  But then the Medtronic/Covidien merger happened, and as part of that, Medtronic switched from Vanguard to Aon Hewitt.  I wanted to keep all my money in one place for convenience sake, so I called Aon and initiated the rollover.

For those who have never done it, it’s a pretty simple process.  You set up an IRA account where you want the money to go (Vanguard in my case).  They’ll ask you how you want to fund the IRA and you click on a choice that says something like “Rollover”.  Then you call up the place where you’re money is at (Aon in this case) and start the process.  Usually they’ll send you a check which YOU DO NOT CASH, but instead just send it on to Vanguard.  Overall the process takes about two weeks.

But that two weeks is what screwed me a little bit.  During those two weeks your money is not in the market.  As you know from many posts I have done, the stock market is really unpredictable in the short-term, so it’s impossible to time the rollover process to your advantage.  Ideally, that two week process would coincide with a brief downturn in the market.  Conversely, you hope that two week period isn’t when the market stages a blazing recovery.

Based on the title of this post, you can probably guess what the case was for me.  As we know, the first few weeks of the year were really bad for stocks, and then they started a slow recovery.  If I could predict the future, that would have been the time to do my rollover, at the beginning of the year right before stocks fell 10% over the course of a couple weeks.  Of course, if I could predict the future, I would own my own island in the Caribbean.

I took the plunge in mid-February, and as you can see, stocks started inching up.  It was a perverse feeling: of course I like when stocks go up because we have so much invested in stocks.  But on the other hand, I felt that part of my portfolio was missing out on those gains.  Following the stock market too closely can really mess with your head.  Anyway, after a week, I got my check from Aon, which I promptly sent to Vanguard.  In that week, stocks were up about 0.8%.  My 401k from Aon was worth about $140,000, so missing out on that 0.8% gain cost me about $1100.

Once I put the check in the mail to Vanguard, the investing gods decided I needed to be further humbled, so in the next week stocks went on a major tear, rising about 3.2%.  Of all the times, why then?  My being out of the market for that week cost me another $4400.

Roll over IRA

Add that up and you’re talking a decent chunk of change.  My timing for doing the rollover couldn’t have been worse, and in the end I missed out on about $5500 in market gains.  That sucks.

But you win some and you lose some.  I am sure that I have come out ahead some of the other times I’ve transferred accounts, but as Matt Damon’s character said in Rounders: you tend to remember your spectacular loses more than your amazing wins.  Just human nature I guess.

That said, there’s definitely a lesson there, which is you need to stay in the market.  As we have discussed ad naseum, the market is very unpredictable in the short term often times with wild swings.  But over the long term it has a relentless upward march.  I had to get out of the market for a pretty unavoidable reason, so maybe I get a pass.  But what about those people who got spooked by the January plunge and then missed out on the February recovery?  They got crushed and could have really hurt their financial plan.

 

So there you go.  I hope you were entertained by my misfortune.

Why are falling oil prices dragging the market down?

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Oil is pretty special.  After air and water, it’s probably the most important substance for mankind.  Different from air and water, oil is not free (or nearly free).  Oil touches every part of our life, even the lives of “green” people who drive electric cars and have solar panels on their roofs.  Oil takes us from point A to point B in our cars and airplanes.  It gets every single product from its producer to its consumer—food, clothes, cars, phones, everything.  In many communities it powers the plants that literally keep our lights on.

Historically, going all the way back to its discovery in Pennsylvania in the 1859, the price of oil has been prone to booms and busts.  Early on, the discovery of a single well could send prices plummeting, driven by fears of over-supply.  More recently, supply restrictions like OPEC or geopolitical conflict can send the price soaring; while signs of weakness in demand like a global economic recession can send prices diving.

The past couple years have been no different.  Oil has fallen from over $100 per barrel to where it stands today, less than $35.  That’s quite a fall in prices, but why is that such a big deal?  Interestingly, as the market has been struggling the past few months, many market pundits cite the fall in oil is hurting the stock market.  But does that really make sense?  Let’s take a look.

 

Market pundits, as usual, are full of crap

As we all know, the market has been extremely volatile lately.  That coupled with the price of oil falling has led a lot of talking heads on channels like CNBC to correlate the fall in the market to the fall in oil.  However, if you look closely, you’ll see that there isn’t much of a correlation.

Since 2014, the price of oil has fallen 65 weeks and risen 47 weeks, while the S&P 500 has fallen 49 weeks and risen 63 weeks.  So there different but the real nail in the coffin is that of the 112 weeks, oil and the S&P 500 have moved in the same direction . . . (wait for it) 53% of the time.  So they have both risen or both fallen a little more than half the time.  They have gone in opposite directions, one goes up and the other goes down, 47% of the time.  That seems like a flip of the coin to me.  So the data totally refutes the idea that oil is driving the market in a major way.

The markets are incredibly complex, and it’s naïve to believe that the price of a single commodity, even the most important commodity there is, would drive the market.  Those talking heads need their sound bytes and need to appear as though they’re explaining what’s going on, but we know better.

So first, and foremost, don’t believe everything you hear from CNBC.  They have a lot of airtime to fill, and they say a lot of stuff that under the slight of Stocky’s analytic scrutiny is total crap.

 

Case for the fall in oil hurting the stock market

Obviously if the price of oil falls 70% over the course of a couple years that is going to have a devastating impact on the oil industry.  And remember that the oil industry is incredibly big (probably about the third largest industry in the US) and incredibly complex.  There are geologists looking for new oil deposits, drillers, truckers and pipeline people taking oil to/from refineries, refiners, all the way down to gas station attendants.  So let’s look at how the price of oil impacts them.

The people who run gas stations aren’t going to be affected at all.  Drivers are still filling up their cars (probably even more than before because gas is so cheap), and the gas stations are still making their couple cents markup on each gallon of gas.  No Impact.

Refiners are probably impacted a little bit, not because their business is going down (similar to the gas station people, it’s probably going up), but because their customers, the oil producers are getting squeezed by price, so that is probably trickling down to them.  My neighbor owns a couple oil refineries and he has mentioned that they normally charge something like 15% of the cost of the oil they refine, so obviously if prices go down they get impacted.  But people are still using plenty of oil so the refiners are still going to be plenty busy, and if they have to raise prices to make it work, basic economics say they should be able to.  Small impact.

Geologists and drillers in the US are feeling the pain.  When oil was at $100 there was a huge incentive to try to find extra supply so that kept a lot of these people employed looking for and then drilling new oil wells.  However, as you can easily imagine, when oil is trading at $30 there’s no where near that incentive to find new wells.  Plus you have all the industry that goes with helping set up wells and keeping them running.  Think of cranes and enormous drills, wiring and tubing; all sorts of crap (Halliburton is a big player here).  When you aren’t looking for new wells, you don’t need all that other stuff.  A lot of those people are out of work.  Major impact.

That even flows through (pun intended) to the people running the wells that are online.  Even after you factor in the huge start-up costs to find a well and get it going (more on that in a minute), there are significant costs in keeping a well up and running.  If a well is profitable at $100 but not at $30, then those wells might get shut down, and those people might lose their jobs.  Medium-major impact.

Finally you have the truckers who transport the oil around.  They are probably getting less business taking crude oil from US fields to the refineries, but they should have just as much business as ever from taking refined gasoline to the gas stations.  Plus, truckers are pretty flexible; if they aren’t driving oil they can easily drive something else.  Small-medium impact.

There are a lot of players in the oil industry, and some of them, especially those involved in the discovery of oil are really hurting.  And of course this has a compounding effect where they lose their job, can’t buy things other people product, and on with the downward spiral.  But let’s not lose sight of the bigger picture.  There are probably 150 million working Americans.  Only a very, very small fraction of those are in the energy industry, and only some of them are losing their jobs.  So this impacts a relatively small number of people, but it impacts them in a large way.

 

Case against the fall in oil hurting the stock market

How about the rest of us?  Oil’s price falling is unambiguously a good thing.  Something we all need is getting less expensive.  Obviously we feel that at the pump where it used to cost $60 to fill up our car and now it only costs $25.  We can all use that $35 to spend on other things which keep other people employed, or we could (gasp!!!) save it.

And as I said above, oil permeates through every part of the economy.  So if you don’t drive a gasoline car, you’re still getting the positive benefit because it cost less to get your food to the grocery store, to fly your FedEx package across the country, and nearly every other thing you use in your daily life.  This is what the press has called the “oil dividend,” the extra money that we’re all getting because things aren’t as expensive.  It won’t add up to millions, but it’s not unreasonable to imagine a family saving $1000 a year because of the lower oil prices.

If you compare two scenarios though, it seems lopsided.  An oil worker is losing his job while a family is saving $1000.  But remember it’s a numbers game.  Maybe there are a tens of thousands of people (and that seems high to me) in the oil industry who lost their jobs.  But there are a hundred million people who are getting a small benefit.  It’s a numbers game and the masses, with their small benefit, clearly make up for the relatively small amount of people who get crushed.

 

Final verdict

So if you look at all that, clearly the fall in oil prices should be a good thing for the economy.  And largely it is.  The nation is pulling out of a recession and there is broad-based economic growth.

But there’s still a nagging voice that is saying “not so fast”.  The problem with oil prices isn’t that it’s low now and a while ago it was high.  We have an amazingly adaptive economy that can thrive with low oil prices just as easily as it can with high oil prices.

What screws things up is when oil price change so quickly.  As I briefly mentioned earlier, starting up a new oil well is a major undertaking, and “major undertaking” is French for “expensive”.  Before a single drop of oil comes to the surface, companies are investing tens and hundreds of millions of dollars.

Of course, they would only do this if they thought they could generate a profit.  If oil was at $100 then they would look at all the places that can profitably produce oil at $100 and start getting to business.  Now they aren’t dummies and they know oil prices can move, so there’s a risk involved but that gets factored in too.  But when the bottom falls out of the price of oil and those wells become unprofitable, at some point they have to shut down the well and much of that initial investment gets lost.

And it’s not just oil producers.  Look at a company like Tesla.  They make electric cars, and as you can easily imagine, electric cars are really attractive when oil prices (and thus gas prices) are high.  You can see it in their numbers: sales have slowed down considerably as oil prices as fallen.  Just like the oil producers, the fine people at Tesla need to figure out if they should expand, make a new factory, all that stuff.  If they did that when oil prices were high (which in fact they did) then a lot of that investment might be in trouble now that oil prices are low.

Making it even more local, imagine your neighbor was looking to buy a new car.  When gas prices were high she was considering a Nissan Leaf (about $30,000) instead of a Honda Civic ($18,000), in large part to take advantage of savings on gas.  She buys her Leaf figuring she’ll save $2000 per year on gas, but then gas plummets and her savings are only $1000.  Her “investment” of the extra $12,000 she spent on the Leaf is in bad shape.

 

To bring this home, I think it’s unquestionable that lower oil prices are a good thing.  Yeah, a few people might get hurt, but that’s pretty small compared to the masses that are helped.  But the real problem isn’t high or low oil prices, but it’s unpredictable oil prices.  That’s when people or communities or companies make large investments which might turn out to be really bad decisions.

What about you?  How is the low cost of oil impacting you?

Investing’s sucker bets—Mortgage insurance

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As you know Foxy Lady and I recently bought a house, which means we recently got a new mortgage.  If you’re anything like us, your mailbox get bombarded with offers to sell you mortgage insurance.  On the surface it seems like a good idea: if you passed away then your mortgage would be paid off.  Who would argue with that?  Well, that’s where Stocky will, as a public service, show you how these are terrible uses of your money.

 

Deceptive marketing

First, I want to point out that the fine people at Symmetry Financial Group are guilty, in my humble opinion, of some pretty shady marketing practices.  They make this form look like it’s some type of registration with local government or something.  Even at the top they put “second notice”, seeming to say “hey buddy, you ignored filling this out the first time and it’s really important that you do it.”

If you’ve had a mortgage before, you know there’s a ton of paperwork, much of it you don’t read and don’t really understand.  Also, there’s a ton of stuff that needs to be registered with the state, city, county, etc.  They folks are preying on those fears that you think this is something you need to do; need as in required by law or you’ll get fined or something like that.

Anyway, whatever.  I’ll get off my soap box.  I know people are doing their best to sell stuff, but the way they present this seems shady to me.

 

How it works

There is no way I would ever buy mortgage insurance, but for the purposes of this blog, I called them up to learn more.  I was able to speak to Audrey, a very nice lady by the way.

We had (notice the tense of that verb, it will become very important in a little bit) a mortgage where we owed $417,000.  This mortgage insurance will completely pay off our mortgage if either Foxy Lady or I pass away.  Of course nothing is free in this world, so we are offered that peace of mind for the low, low price of $106 per month.

That’s the basics, but there are a couple wrinkles.  We could get the coverage just for Foxy Lady (since she’s the rodent-winner) or just for me (since I’m the cubs’ primary care giver).  That monthly price goes down if you just want to cover one home owner instead of both.

 

Why it’s not worth it

We’ve talked about life insurance before, and this is really just another type of it.  But when you start to look under the hood of this type, you see that it’s a really, REALLY bad deal.  Listed in order of badness, here are the reasons I think mortgage insurance is a sucker’s investment:

  1. It’s really expensive—Foxy Lady and I each have insurance policies that cost us about $50 per month and would pay out $1.5 million if either one of us died. This policy costs $106 per month and would pay out a maximum of $417,000 if either one of us died.
  2. Double dipping—At our ages, the most likely cause of death for Foxy Lady or me is an accident. Given that, there’s a fairly good chance that both of us would perish in the same accident—we drive together a lot, vacation together, sleep in the same bed, etc.  If we both died our life insurance would pay both our policies, but with mortgage insurance if both of us die, they only pay the mortgage, not twice the mortgage.
  3. Dissolving payout—The policy is meant to pay off your mortgage. When we first got our mortgage it was $417,000.  Today it is $412,900.  A year from now it will be $403,700, and ten years from now it will be $290,500.  So this policy is set up to pay you less with each month that passes.  Maybe today you look at it and say, maybe $106 a month is worth a $417,000 life insurance policy.  But every month that payout gets less and less.
  4. Perverse incentives—Somewhat related to #3, if you are so disposed to want to pay off your mortgage faster (this is something I don’t recommend, but there’s some deep water here which can be the topic of a whole other post), you’re actively diminishing the value of the mortgage insurance. Sure, the fine people at Symmetry Financial Group love this because if you do pass away the amount they give your loved ones is less.

 

So there you have it.  Whenever I get these in the mail I instantly round-file them (unless I need to take a picture for a column).  I just think they’ll a really bad deal.  If you are concerned about what would happen to your loved ones in the event you die, which can be very valid, get normal life insurance.  You’ll get much more bang for your buck.

Quit the LPGA for the sake of gender equality (and uber-compelling sports)

Nelson Mandela once said that sports “laughs in the face of all forms of discrimination.”  And he’s absolutely right.  Sports is an incredibly democratizing force that has the power to break down bigoted barriers.

Jesse Owens showed black men were just as good as any man.  In 1936 he outran Adolf Hilter’s eugenics athletes at the Berlin Olympics.  Greg Louganis showed that gay men could compete and win in athletics just as well as straight men.  In the 1984 and 1988 Olympics be dominated the diving competitions, bringing home 4 gold medals.  In 1954 the boy’s basketball team from Milan High, the team on which the movie Hoosiers was based, showed that a bunch of farm boys from a tiny speck of a town could outplay any other team in the state of Indiana.

 

We’ve come a long way, but not that far for women

Women’s sports have made tremendous strides in the past several decades.  The US Women’s soccer team captivated the nation over the summer, bringing home their third championship.  The WNBA will celebrate its 20th anniversary next year.  Women’s tennis is as popular as ever, and Serena Williams won “Athlete of the Year”.  Title IX, passed in 1972, has expanded female collegiate athletics by orders of magnitude.

Yet for all that progress, women’s sports as a spectator sport has lagged woefully behind their male counterparts.  Sure there are some bright spots like tennis and soccer and more recently MMA thanks to Ronda Rousey, but when evaluated by virtually any metric of popularity, women’s sports is SUBSTANTIALLY behind men’s.  There are fewer women professional athletes, their games/tournaments/matches draw much smaller crowds, people aren’t willing to pay as much to see them, they have lower television ratings, they get less ESPN coverage, they have much lower name recognition which leads to much smaller endorsement deals, and because of all of this they earn much, much less money.

I don’t believe these issues are related in any way to concerns about equal pay for women in the broader economy (actually I think that $0.79 study has serious flaws in it, but that’s for another day).  Sports is probably the most capitalistic industry.  Athletes get paid what they are worth or, thanks to free agency, they play for someone else.  Fans watch sporting events that are exciting to them, and they don’t watch those that aren’t.

So why aren’t women’s sports more popular?  Because it’s an inferior product.  Women’s sports just aren’t as good as men’s.  I’m not trying to be sexist, although I can certainly understand why it might come across that way at first, but please read on and you’ll see my logic.  Some may argue that they’re different and you can’t really compare them, like apples and oranges.  And there’s some truth to that.  But fans vote with their feet and their wallet, and they are voting that men’s sports are better.

 

Exclusionary sports = less entertaining sports

On the surface it’s easy to look at this and blame misogyny.  After all, most sports fans are men, although it’s not skewed nearly as much as you’d think.  For example attendance at NFL games is about 56% men, 44% women.

The answer lies in the exclusionary nature of women’s sports.  By definition, women’s sports only allow women to compete, excluding men.  Men’s sports on the other hand aren’t really men’s sports as much as anyone who can compete.  To play in the WNBA you have to be really good at basketball AND have XX chromosomes.  To compete in the NBA you have to be really good at basketball, and that’s it (you’ll notice there is no “M” in the NBA).  As I once explained to my wife in an extremely crude manner, “it doesn’t matter if you have one dick, two dicks, or no dick.”

Which league has the better, more entertaining, more popular product?  Obviously the NBA.  And it’s because most of the best basketball players in the world are men; the NBA allows those players to compete in their league while the WNBA does not.

And this isn’t just a woman thing.  Compare the Olympics to its cousins who exclude competitors based on some criteria.  The Olympics is far more popular than the Special Olympics (excludes competitors without disabilities), the Gay Games (excludes heterosexual competitors), the Senior Olympics (excludes younger competitors), the Junior Olympics (excludes older competitors), and any other that I may have missed.  It’s not even close.

Of course that’s not to say that women’s sport or those other exclusionary sports aren’t worthwhile.  THEY ABSOLUTELY ARE.  If women had to compete against men, most probably couldn’t, so I’m glad there are women’s (and more importantly girl’s) leagues.  Blind people or those with Down’s syndrome or paraplegics couldn’t compete against non-handicapped people in most sports, so I’m glad there is the Special Olympics.  The Gay Games seems as much a get together for like-minded people as it is a sporting competition so I’m glad it can serve that purpose.

But that doesn’t mean I’m willing to vote for them with my feet or wallet.  I’m a huge sports fan and I watch the sports that are entertaining and compelling.  Sometimes it’s women’s ice skating or gymnastics during the Olympics, last summer it was Serena’s run for the Grand Slam, and of course I watched the Americans win the women’s World Cup.  But mostly (roughly in order of importance to me) it’s men’s basketball, football, baseball, and soccer.  And I’m not alone.  All those metrics I mentioned earlier show that most men AND MOST WOMEN agree with me.

There’s a simple formula here.  If you want to produce the best, most popular sports product, you have the best athletes.  Not the best female athletes or the best male athletes.  Not the best old athletes or the best young athletes.  Not the best black athletes or white athletes.  THE BEST ATHLETES.

 

Playing with the boys

Quick, name the most famous race car driver you can.  Maybe you said Jeff Gordon.  He’s pretty good.  He won the NASCAR championship four times and 93 races over his career.  Maybe you’re old school and you said Dale Earnhart (won 7 season championships, 76 races) or Richard Petty (7 season championships, 200 races).  Maybe you’re new school and you said Jimmy Johnson (6 season championships, 75 races).

You know who a lot of people say: Danica Patrick.  She’s probably one of the most popular racers out there.  Is it because she’s won so much?  No, she hasn’t won a single NASCAR race.  Is it because she’s pretty?  Maybe, but there are a lot of pretty women out there, many much prettier than Danica.

She’s so popular because she is a woman competing against men.  If she was racing in a female only circuit, no one would care.  She wouldn’t do GoDaddy and Secret commercials, for which she makes about $10 million per year, among the highest of any NASCAR driver.  But she refuses to race against inferior competition because of her gender, and the public loves her for it.

Remember Tom Watson’s second place finish in the 2009 US Open?  There has been a lot of guys who finished second place in golf tournaments, but why do we remember this one with Tom?  Because he was a 59 year old guy competing against golfers in their 20s and 30s, and he nearly beat them.  Sure, there’s a golf tour for old guys, it’s called the Senior PGA and its ratings suck.    Watson could have dominated that the Senior PGA, but he decided to compete against the best without any qualification and the golfing community loved him for it.

Does the name Jim Abbott ring a bell?  He was a major league pitcher who had a record of 87-108.  That’s not really all that good, but why do we remember Jim?  He did that with one freaking hand; he was born without a right hand.  Sure he could have been the all-time greatest pitcher at the Special Olympics, probably pitching perfect games every time, striking out every batter he faced.  But no, he decided to compete against the best baseball players in the world, and he won.  Opposing teams even tried to bunt against him, figuring he couldn’t field the balls because of his missing hand.  He took on that challenge too, having a fielding percentage commensurate with his fellow pitchers, all of whom had two hands.

Here are examples of athletes who could have competed against inferior competition because of their gender or age or disability.  But all of them refused to be held back, and they competed against the best athletes in the world at the highest level.  And for that the sporting public loved them more, gave them more money and more ESPN coverage, and came out to see them in greater numbers than their performance alone probably merited.

 

Women’s sports are holding female athletes back

So let’s bring this full circle.  Women’s athletics.  Physiologically, men are stronger and faster than women.  Because of that it would be nearly impossible for even the most gifted female athlete to compete against men in sports like basketball or baseball or MMA or swimming or track and field.  Even the all-time great Serena Williams would probably lose in the first round of the men’s bracket (although it would be entertaining as hell to see—more on this in a second).  The US women’s soccer team would almost certainly lose three games in a row, probably not even scoring a goal, if they competed in the World Cup.

But there is an extremely popular sport where I think women can compete against men—golf.  Right now there is a tour that features the best golfers in the world, the PGA, and there is a tour that features the best players in the world but excludes men, the LPGA.  As you would imagine, the PGA is much more popular, covered on ESPN much more extensively, pays its winners much larger purses (about twice as much), produces much bigger stars, and on and on.

Every once in a while, a brave female golfer decides not to be held back by her gender and competes in the PGA.  Everyone loves it—Presidents mention it, the media goes bonkers, and that woman golfer starts trending on Twitter in a major way.  Unfortunately, it happens very rarely, about once every few years.  Anika Sorestan did it in 2003 and Michele We did it a few times between 2004 and 2008, and that’s about it.  Sadly, most women compete in the LPGA in anonymity for lower pay with smaller crowds and less coverage.

Why don’t more women compete against the boys?  The common refrain is that women aren’t as strong as men (fact), and can’t hit the ball as far (possibly fact), so they can’t compete (fiction).  So long as female golfers continue to buy into this self-defeating paradigm, they’re missing out on gold and glory the likes of which no female athlete has ever seen.

 

Why women can compete against men in golf

Really the whole thing comes down to drives off the tee.  There’s no real reason women can’t putt as well as men.  That involves the ability to read a green, hand-eye coordination, and a deft touch.  Strength is not a factor.  Women’s abilities there are certainly equal to those of men.

The middle game, between the drive and green, can involve hitting the ball a long way, but club choice can probably address that.  Maybe a stronger, male golfer would use a 7 iron when 170 yards from the pin, so a weaker, female golfer would use a 5 iron.  Problem solved.

So let’s get back to the driver.  As you would expect, male golfers hit the ball longer with a driver than female golfers do.  Dustin Johnson averages the longest drives on the PGA tour at about 319 yards, while Joanna Klatten averages the longest drives on the LPGA tour at about 274 yards.  That’s a difference of about 45 yards.  Interestingly, that 45 yard difference tends to be consistent.  The difference between the average drive length for PGA golfers and LPGA golfers is about 41 yards.  The difference between the best golfers, Jordan Speith for the PGA and Inbee Park for the LPGA, is 43 yards.  The difference between the golfers with the shortest average drives, David Thoms in the PGA and Lisa McCloskey in the LPGA, is 45 yards.  So it seems there’s something to that 45ish yard distance.

Yards PGA LPGA
Longest driver Dustin Johnson—319 Joanna Klatten—274
Average driver 290 249
Shortest driver David Thoms—270 Lisa McCloskey—225
#1 player Jordan Speith—292 (ranked 77th) Inbee Park—249 (ranked 78th)

 

Now an extra 40 yards on each hole is a big deal.  It might seem like a pretty insurmountable advantage for the male golfers, but a closer look shows a few different reasons why maybe it isn’t that big of a deal after all.  First point, golfers don’t use their driver on every hole.  Certainly, they don’t use it on the four par 3s typically found on each course.  Additionally, there are shorter par 4s where the male golfers tee off with a three-wood or an iron, because they don’t need to get maximum distance.  Finally, courses may be designed to limit the advantage of a long drive.  Doglegs are a common feature on holes which force golfers to hit shorter shots off the tee so they can make the turn when the dogleg bends.  Ponds and streams have a similar effect.  All those are examples of how hitting longer balls doesn’t necessarily mean playing better.

Second point, no one knows how far women can drive a golf ball.  Just as noted above, men aren’t always hitting the ball their hardest with their biggest club because of the course features, there’s no reason to think the same doesn’t apply to women.  LPGA courses are set up to be shorter than PGA courses.  If women are teeing off closer to the green than men, it shouldn’t be surprising that they don’t hit the ball as far.  Taking the 2015 US Open and Women’s US Open as examples, the men’s (although it’s not really right to call it “men’s” since women are able to compete in the US Open as well) course at Chambers Bay in Washington was 7384 yards long while the women’s course at Lancaster Country Club in Pennsylvania was 6483 yards.  That’s a difference of 901 yards for 18 holes.  Do some easy math and what is that difference on a per-hole basis?  Wait for it . . . . 50 yards.  Hmmmmm.  Women drive about 45 yards shorter than men do, but they play on courses whose holes are about 50 yards closer.

Third point, faster, harder swings aren’t the dominant factor in successful drives.  Golf club technology has made amazing strides forward.  Sure you still have to swing the club, but weaker individuals can hit balls further thanks to titanium drivers, carbon-fiber shafts, and all the other stuff in clubs today.  Driving is more a matter of hitting the ball in the sweet spot and with the proper back swing, than it is swinging hard.  If swinging hard was more important you’d see golfers with thick arms and butts who can really generate some serious club speed due to their strength.  As it is, most golfer have thin body frames.

Final point, just because you drive long doesn’t mean you win.  Look at the #1 golfers on the PGA and LPGA tours.  Jordan Speith is the #1 golfer on the PGA, but he has the 77th longest drive on the tour, 27 yards shorter than the longest driver.  Inbee Park is the #1 golfer on the LPGA, but she has the 78th longest drive on tour, 25 yards shorter than the longest driver.  Those numbers are eerily similar.  Of course the reason is that the other components of the game, that have nothing to do with strength, allow these golfers to succeed.  It’s commonly acknowledged that Speith is the best putter on the tour, and he leverages that to win more than anyone else.

 

For gold and glory

Let’s put a bow on this package.  It’s not true in a lot of sports, but in golf women can compete against men and they can win.  THEY CAN WIN.

Why do professional athletes compete?  For fame, for immortality, to beat others, to prove they’re the best, for money?  All those become bigger and better for a female golfer who competes in the PGA.  And not just a little bit better.  Orders of magnitude better.

What’s the most famous tennis match ever?  Billie Jean King versus Bobby Riggs in 1973.  It was dubbed the “Battle of the Sexes”.  It was played in the Houston Astrodome in front of over 30,000 fans (attendance at the US Open championship for tennis is usually about 24,000).  It was carried live television and seen by millions.  And competitively it was a farce.  King won, “proving” a woman could compete and win against a man, buuuuuuut King was in her prime at age 30 (Serena was 34 when she won three grand slams) and Riggs was 55.  King didn’t prove that a woman could beat a man as much as she proved a younger person could beat an older person.  Even so, it was an enormous deal that captivated the nation and which people still talk about nearly 50 years later.

Can you imagine if a cadre of the world’s best women golfers decided to do the same thing?  We’ve seen it already just in small doses, but what if it became a real thing where women seriously competed against men, not just as a one-week lark but as a legitimate member of the tour?  The internet would explode, Twitter would blow up.  Instantly, they would be on every late-night talk show, they would get top-billing on ESPN, they would have more endorsement deals than they would know what to do with, they would get White House invites, they would have throngs of fans at the events.

And if they won?!?!?!  That wouldn’t be the biggest sports story of the year, it would be the biggest story of the year or maybe even the decade (if there wasn’t a major war).  She would instantly win “Athlete of the Year”, a Congressional medal of honor, and probably a Nobel Peace Prize.  Seriously, what event would have a bigger impact on gender equality that a woman showing she could beat the men on the field of play?

It would put a sword through the heart of the argument, currently a very valid one, that women’s sports are inferior to men.  It would inspire millions of girls (and boys too) to take on the biggest challenges and know you can come out the winner if you work hard enough despite your vagina.

It could do all those things and it’s so achievable.  Will it be easy?  No, such things rarely are.  Will it force the best golfers on the LPGA to eat a little humble pie as they go from being dominant among inferior competition to fighting it out against the world’s best?  Yes, absolutely yes.  But if those LPGA golfers are doing it for money or fame or importance, all those things wait for them by taking on the men.  Only that money and fame and importance are hundreds of times bigger than the best they can hope to achieve now.

I don’t know if it will happen, but as a sports fan and as an advocate for gender equality, I sure hope so.