Fifty Years Ago, Married Women Got a Charge Card

Those "Her reaction is Chemical" ads we showed you "might have a place in Ms. magazine's hall of shame," Jim Gust suggests. Actually, the idea of a woman hiring her own investment adviser probably raised a few eyebrows among old-school males.

Here's a better candidate for the Ms. hall of shame. This 1967 Carte Blanche ad assures the traveling man with a wife back home he'll be glad "to have someone with influence looking after her while they're away."

But remember the context of the times. Married women were routinely denied credit because it was assumed they had no income. Carte Blanche comes to the rescue by offering them a card of their own, though surely backed by their husbands' credit – and it's pink!

The Little Woman and the Tire Guy

 Kathleen Thomas heads a successful advisory firm that holds our securities for us. Heightwise, you might describe Kathleen as a little woman. (And you might be surprised to learn she's run in seven Boston Marathons.) While on vacation recently, she took a damaged tire to be repaired, and the tire guy . . . well, read her story for yourself.

Tire guys prey on men, too, but the complaints I've heard have come from women.

And it's not just tire guys, of course. Male financial advisers have been known to condescend to "the little woman." Perhaps that's one reason Kathleen and her mostly female staff are doing well.

Men, Women and Investing in 1967

How do men and women differ? As a Google engineer discovered recently, that topic may be too hot to handle. Yet financial marketers have long believed in the need for sex-specific messages.

Here are examples from Chemical Bank's ads fifty years ago. 

The ad agency's perception: Men care about process: an investment adviser who works hard. 

Women care about results: investment peace of mind.

Popular Books on Investing

Had time to kill the other day. Dropped by Barnes & Noble to check out new books for investors.  As always there was a fresh crop of informational guides, but the two featured volumes were venerable classics: the latest revised editions of Benjamin Graham's The Intelligent Investor and Andrew Tobias's The Only Investment Guide You'll Ever Need.



Graham's masterwork, which advises us to buy stocks offering a margin of safety, also ranks third at the moment on Amazon's list of best-sellers on investing.

Amazon's number one, interestingly, deals with psychology rather than p/e ratios. In Mindset, the New Psychology of Success, Carol W. Dweck argues that some people have fixed mindsets while luckier people have growth mindsets. The fixed mindsets fear failure. The growth mindsets see failure as a learning experience.

Is your fund lagging its benchmark? Cheer up. You're not failing, you're getting educated.

Death Should Not Be a Taxable Event

“The basic argument against the estate tax is moral. It taxes virtue - living frugally and accumulating wealth. It discourages saving and asset accumulation and encourages wasteful spending.”

Milton Friedman's 2001 open letter urging the abolishment of the federal estate tax was signed by 276 of his fellow economists. Now, eleven years after Friedman's death, the letter has been revived, signed this time by more than seven hundred economists, including four Nobel Prize winners. 

To whom it may concern: 

Spend your money on riotous living - no tax; leave your money to your children - the tax collector gets paid first. That is the message sent by the estate tax. It is a bad message and the estate tax is a bad tax.

The basic argument against the estate tax is moral. It taxes virtue - living frugally and accumulating wealth. It discourages saving and asset accumulation and encourages wasteful spending. It wastes the talent of able people, both those engaged in enforcing the tax and the probably even greater number engaged in devising arrangements to escape the tax. 

The income used to accumulate the assets left at death was taxed when it was received; the earnings on the assets were taxed year after year; so, the estate tax is a second or third layer of taxation on the same assets. 

The tax raises little direct revenue- partly because the estate planners have been so successful in devising ways to escape the tax. Costs of collection and compliance are high, perhaps of the same order as direct tax receipts. The encouragement of spending reduces national wealth and thereby the flow of aggregate taxable income. These indirect effects mean that eliminating the tax is likely to increase rather than decrease the net revenue yield to the federal government. 

The estate tax is justified as a means of reducing the concentration of wealth. However, the truly wealthy and their estate planners avoid the tax. The low yield of the tax is a testament to the ineffectiveness of the tax as a force for reshaping the distribution of wealth. 

The primary defense made for the estate tax is that it encourages charity. If so, there are better and less costly ways to encourage charity. Eliminating the estate tax will lead to higher economic growth, which is the most important variable in determining the level of charitable giving. 

Death should not be a taxable event. The estate tax should be repealed. 

Trumping Death and Taxes

President Trump, in his WSJ interview:

When George Steinbrenner died, like with the estate taxes, the estate paid nothing. And if he would have died like two weeks later, they would have paid 50 percent of the Yankees. That would have been the end of the team, right?

Nope. Steinbrenner died on July 13, 2010. Had he died on July 27 (or even December 27) his estate would have escaped federal estate tax.

And even if Steinbrenner had died in 2011, when the estate tax reappeared, most likely the Yankees would still be around to trail the Red Sox.

Fact-checkers tend to label Trump talk fibbing. He prefers hyperbole.