Friday, August 11, 2017

What Happened To My Newspaper?

Readers of Morris Publishing Group newspapers recently found out their newspaper is being sold to an investor group. This is a big deal, announced Aug. 9, 2017. The loyal customer paying for a print newspaper is a rare thing anymore, as circulation of many newspapers has fallen to a third or a fourth of their glory days before the Internet. Readers surely wonder what does this sale mean for my newspaper?

This article will describe how this deal will affect your Morris newspaper, and explain how we got here.

New Media Investment Group expects to create $10 million to $15 million in “synergies” that will add to cashflow through the acquisition of the Morris newspapers.  The company will likely cut jobs by moving design and copy editing jobs to a centralized location that handles this function for other newspapers in the chain. Over time it is possible to see different slants in the editorials after the change in ownership, scheduled to be completed sometime in the fourth quarter of this year, but I don't think we will see any editorial change in the short term, but over time it's possible content could decline.

The family of William “Billy” Morris III of Augusta, Georgia decided to sell 79 newspapers, including The Topeka Capital-Journal, to New Media Investment Group.

New Media Investment (NEWM), a conglomerate of community newspapers and related online content, is buying the assets from Morris Publishing Group for $120.0 million. 

The 79 Morris publications are in Georgia, Florida, Texas, Kansas, Arkansas, and Alaska, the largest of which is The Florida Times-Union, with a 44,750 daily circulation.

When I started working for The Topeka Capital-Journal in 1999, the newspaper had a circulation of around 60,000, with a Sunday a circulation of 70,000. Circulation has fallen 71%.

In 2015, The Topeka Capital-Journal’s circulation was 21,689 Monday-Friday, and 27,882 Sunday. By 2017 circulation was about 17,000 at The Topeka Capital-Journal, according to a friend of mine who works at the newspaper. My friend remembers 90,000 circulation at one time.

You can say New Media bought the Morris newspapers fairly cheap at about 3.5x to 4.5x the seller's last 12 months of adjusted EBITDA. The $120 million purchase price is a fraction of their worth of $500-$600 million 15-20 years ago. But the reason the deal was so cheap is the outlook for growing revenues is not there, indeed the trend we are seeing  is continuous decline of print advertising and circulation.

Look at New Media Investment Group’s own financials and you will see this company is struggling against a dreadful trend. In 2Q 2017, New Media reported Traditional Print Advertising decreased 12.3% on an organic same-store basis, “an improvement from the first quarter trend, but still reflecting the challenged environment for print advertising.”

Back in the glory days of newspapers, before the dawn of the Internet, newspapers could count on additional advertising revenue when the economy was growing, especially if the real estate market was thriving and the job market was hot causing classified job advertising to grow. But today, young people don’t go the newspaper for a job or a house, they instead go to Monster.com for jobs and Zillow for real estate.

GDP, or Gross Domestic Product, has been averaging about 2% annual gain since the Great Recession of 2008-09, yet newspapers are still losing print advertising revenues. That’s because advertising revenue is going to Google, Facebook, Zillow and a 1000 other web sites. At New Media Investment Group, digital revenue in 2Q was $34.8 million, an increase of 9.0% to prior year. UpCurve generated $17.3 million in revenue, an increase of 44.4% to the prior year and now comprises 52.2% of total digital revenue. But New Media, owner of 125 daily newspapers among its 630 community publications, and 550 Web sites, posted $322.9 million in revenues in Q2 -- a tiny number compared to the giants of Google and Facebook.

Google’s parent company Alphabet makes more money from digital ads than any other company — it’s expected to make $73.8 billion dollars in net digital ad sales in 2017 after subtracting for traffic acquisition costs, according to internet research firm eMarketer. Google represents 33 percent of the world’s $223.7 billion in digital ad revenue this year. Facebook is a distant second at $36 billion this year.

I remember having a conversation about these trends 20 years ago with John Goossen, former publisher of The Grand Island Independent. He was concerned with the idea we were publishing our articles on The Internet for free. If all newspapers do this, he predicted, they will hurt themselves. Well, that’s what happened. We made people pay for their print edition, but they could read it for free on The Internet. This hurt circulation. Newspapers tried to stop this trend by charging for content online, but it was too late. Newspapers are charging for online content, but no one wants to pay for it. Readers are accustomed to free. Google built a new business model allowing users to access their content for free while providing advertisers a way to market their products and services through its powerful “Search" technology.

New Media is acquiring all eleven dailies in the Morris chain, the largest of which are The Florida Times-Union (44,750 daily circulation and 68,591 Sunday circulation), The Augusta Chronicle (26,862 daily circulation and 31,682 Sunday circulation), and the Savannah Morning News (21,588 daily circulation and 26,048 Sunday circulation).

New Media said the purchase price is within 3.5x to 4.5x the seller's last 12 months of adjusted EBITDA, and the deal will be funded with cash on the balance sheet. The purchase is expected to be accretive to free cash flow with net synergies of $10 million to $15 million.

I expect changes at the Morris papers to happen pretty quickly after the deal is done in the fourth quarter. Management at New Media Investment Group has promised net synergies of $10 million to $15 million.”

Google, Twitter, Facebook may have tons of content but it’s not always trust worthy, much of it is fake news or propaganda, it’s like a big soup of “everything.” Fake news about Hillary Clinton played a role in her loss to Donald Trump in the presidential election. I believe the Russians probably interfered with the election process, and people voted without knowing all the facts, but instead relying on myths, perceptions and hate in the form of click bait headlines.

Trump plays into this click bait using his Twitter account.

Somehow we must teach children and the voting republic to learn the difference between fact and fiction. Journalists -- fact checkers -- people who really know how to discern the difference -- are vital to our democracy, if we are to let fact rule over fiction in elections and public discourse. I attribute our low voter turnouts in local elections to the loss of readership of our newspaper. All the young people I know do not subscribe to their local newspaper. Young people grew up reading online, but what are they reading? Now the hottest trend in advertising is mobile sales. People are addicted to their smart phones. Ad revenue is exploding there, and it's not surprising that Google is also a leader in the mobile space too. Smart phones are insanely addictive, with all their apps -- a trend in technology that is likely going to be with us a very long time.


Michael Hooper worked 20 years as a reporter and editor in newspapers in Kansas and Nebraska, including 10 years at The Topeka Capital-Journal.

Thursday, July 13, 2017

Investors Beware Of Sketchy Advice

Editor's note: Jeff Apel, the author of this article, is a longtime journalist and friend of mine. We both worked together at The Grand Island Independent. He has a passion for horses. He works at a casino.

 By Jeff Apel

Shortly after moving to Lexington, Ky., in 2005, I was at a bar when a man walked by and gave me a thumbs up regarding my Nebraska hat. Turns out, Bill graduated from Lincoln Northeast High School and was a huge Husker fan.

Bill had just moved to Lexington to take a job with the cable company. His wife hadn't made the move yet, so Bill and I hung out together at the racetrack and a bar or two.

Bill and his wife, Sherry, eventually bought a really nice house. One thing about Bill was he never could keep a job very long.

I'd stop by the house every now and then, always afraid to ask what Bill might be doing for income. At one point, an elderly relative parked his RV in the backyard and lived in the house.

When the horse economy tanked in early 2000s, Lexington, as the horse capital of the world, was hit hard. Out of work again, after a 2-year stay selling phone systems, Bill asked if I would be willing to help him write a book about how to run a call center, something he had lots of experience in.

I balked because there was no pay involved.

As time went on, Bill mentioned occasionally that, if things got worse, his wife had an aunt living in Lincoln that they could stay with. I couldn't imagine making such a move so I got bill a job in Carmel, Ind., at a company that a casino friend owned. Sherri was supposed to work there as well.

True to form, Bill took off one day, never showing up again. My friend mentioned that Bill kept asking to see the books, saying something about the bottom line didn't add up. His request was denied.

With their home now in foreclosure, Bill and Sherri did move to Lincoln to live in the basement of a house owned by the aunt and her husband. When they arrived, they posted pictures of themselves on Facebook, saying how glad they were to be back in Lincoln and spending time with the family again.

Someone asked Sherri where they were living. She responded that herself and Bill put their belongs in storage in Kentucky and moved in with the aging aunt and uncle to help out. Sherri said she and Bill generously agreed to live downstairs in the house that the uncle purchased for tax purposes.

Not true at all but it sure sounds good. The uncle has owned the house for years, long before Bill and Sherri moved in along with two dogs and two cats.

Bill sent me an email once, telling my to be careful about my gambling in terms of owning horses because it was a high-risk investment. After laughing, I assured him I had enough money on hand to make such a bet.

Unlike him.

Now I see Bill is offering friends investment advice. One guy sought him out on Facebook, asking him if bonds or stocks were a better investment. Bill has got people buffaloed into thinking he's Warren Buffet II who downsized his life style for the benefit of his in-laws.

Man, if those seeking an expert opinion only knew the financial past of the man they were dealing with. He already declared bankruptcy once in his life so foreclosure was basically his only option.

I still send Bill emails when a horse I co-own makes a few bucks. We talk about living in Nebraska, our days in Lexington and he always promises me a job if I ever want to move back to Lincoln.

Nice guy. Just don't ask him for any financial advice.

Monday, July 10, 2017

Westar Energy Stock Declines 5% On New Merger Deal

Stock in Westar Energy (WR) fell -5% today after disclosing a new deal to merge with Great Plains Energy (GXP).
Boards of directors for both companies approved a new merger deal that creates a holding company to be owned by Westar at 52.5% share and Great Plains at 47.5% share.
Stock in Westar fell because some shareholders are disappointed they aren't receiving a premium for their stock in the deal. A previous deal, rejected by the Kansas Corporation Commission, required Great Plains to pay $60 per share for Westar in a combination of cash and stock. The new deal includes no premium. In mid-morning trading, stock in Westar fell to $50.36 per share, down $2.80 per share.
A joint statement by the two companies says, "Under the terms of the agreement, Westar Energy shareholders will exchange each share of Westar Energy common stock for a share in the new holding company. Great Plains Energy shareholders will receive .5981 shares of common stock in the new holding company for each Great Plains Energy share. The transaction has a total equity value of approximately $14 billion. It is structured to permit a tax-free exchange of shares. No transaction debt will be incurred. The exchange ratio reflects the agreed-upon ownership split between the two companies. Following completion of the merger, Westar Energy shareholders will own approximately 52.5 percent and Great Plains Energy shareholders will own approximately 47.5 percent of the combined company. The agreement provides that, upon closing, the new holding company expects to set its initial common dividend at a level which maintains the current dividend for Great Plains Energy shareholders. This will result in approximately a 15 percent dividend increase for Westar Energy shareholders."
The companies also said, "The new, combined company will provide electric utility service to approximately one million Kansas customers and nearly 600,000 customers in Missouri. The combined company will have a new name, yet to be established. “The logic of combining these two companies is compelling. We are confident we have addressed the regulatory concerns with our originally-proposed transaction. We appreciate the Commission welcoming a different way to combine these two companies, preserving the unique value available only through this particular business combination,” said Mark Ruelle, president and chief executive officer of Westar Energy. “This merger creates a stronger company for our customers and a much more valuable company for shareholders, with no additional acquisition debt, along with sustaining commitments to Topeka and Kansas. It is a win-win. For our shareholders, it means a large increase in their dividend. We also expect significant earnings accretion and a larger and stronger earnings growth platform than we could achieve on our own. The company and its utilities will continue to have strong investment grade credit ratings.” 
Westar Energy and Great Plains Energy will merge to form a new holding company, which will operate regulated electric utilities in Kansas and Missouri. Operating headquarters will be in both Topeka, Kansas, and Kansas City, Missouri. Corporate headquarters will be in Kansas City, Missouri. “We are pleased to announce a revised agreement with Westar Energy that we believe directly addresses regulatory concerns with our originally-proposed transaction, while increasing the long-term value and upside opportunity for our shareholders, customers, communities and employees,” said Terry Bassham, chairman, president and chief executive officer of Great Plains Energy. 
Upon closing, Ruelle will become the non-executive chairman of the new company board. Bassham will serve as president and chief executive officer of the new company and will also serve as a member of the board of directors. Senior management roles will be shared by executives from both companies. Among these are: Westar’s current senior vice president and chief financial officer (CFO), Tony Somma, will become executive vice president and CFO. Kevin Bryant, current Great Plains Energy senior vice president of finance and strategy and CFO will become executive vice president and chief operating officer. Greg Greenwood, Westar’s senior vice president of strategy, including regulatory affairs, will become the new company’s executive vice president of strategy and chief administrative officer, responsible for regulatory affairs and merger savings, among other responsibilities. 

Monday, June 26, 2017

Scientist and Mystic Elmer Green Leaves Library of Metaphysical Archives and Books

Colleagues of Elmer Green Plan To Create Library of Metaphysical Archives at His Home at Ozawkie

By Michael Hooper

OZAWKIE, KAN --  A Menninger scientist who combined Eastern meditation techniques with Western medicine left instructions in his will for establishing a library near Ozawkie, Kan.

                                          Elmer Green

Colleagues of Elmer E. Green -- a pioneering scientist in the fields of biofeedback and consciousness -- are planning to create a library at his home at Perry Lake.

Green, who died at age 99 on March 5, 2017, was a world class sailor, pianist, chess player, author and a director of the Voluntary Controls Program at the Menninger Foundation. Green was a physicist who studied Eastern mystics and yoga masters like Swami Rama and delivered lectures on biofeedback around the world. He worked over 30 years at Menninger in Topeka before the institution moved to Houston in 2003. He taught biofeedback as a process whereby electronic monitoring of a normally automatic bodily function is used to train someone to acquire voluntary control of that function. In the 1960s and 70s, that was revolutionary idea, but today biofeedback is more accepted by the scientific community, largely because of research by Green and his associates, said Jeff Nichols, a medical doctor who worked with Green at Menninger.

Elmer Green was one the greatest scientists to ever work at the Menninger Foundation, Nichols said. He was able to bridge mind/body medicine with psychoanalytic theory at the Menninger Clinic – identifying the unifying emphasis on bringing the unconscious to consciousness leading to self-regulation and self-mastery.  

“He was a pioneer in the science of consciousness. The library was his final project,” said Nichols, executor of the Elmer Green estate.

Peter Parks, a Topeka therapist who worked for Green at Menninger, said Green left specific instructions to create a board of directors for the Elmer E. and Alyce M. Green Foundation. The board has applied for 501(c)3 status as a nonprofit organization. The board of directors includes Parks, Sarah Bremer Parks, Jeff Nichols, Karen Malik, Celia Coates and Lesley Carmack. Under that umbrella, there will be the Elmer E. Green Transpersonal Library and Archive.

“It is definitely in his house,” Parks said. “He was very clear about that location.” His house is located on a hill facing the northeast corner of Lake Perry, near Ozawkie, Kan. The location is abundant with trees, animals and birds. Parks said the library will be a “private library and archives with a focus on promoting the science of consciousness studies.” 




                   Carolyn Scripps examines Elmer Green's books.       

Green’s collection includes numerous scientific and metaphysical books including all six volumes of Henry Steel Olcott's "Old Diary Leaves: The Only Authentic History of the Theosophical Society,” and books by Alice Ann Bailey, "Treatise on the Seven Rays," "A Treatise on White Magic," and "A Treatise on Cosmic Fire." He has an early copy of “The Tibetan Book of the Dead” by Dr. Walter Y. Evans-Wentz, who popularized Tibetan thinking in the Western world.

“What Elmer was part of was the merging of the spiritual traditions and practices of the East and the scientific methods and practices of the West,” Nichols said. Subsequent research in mindful meditation has demonstrated numerous health benefits, Nichols said. Westerners who use biofeedback, meditation, mind control, and self-healing techniques owe a debt of gratitude to Green.

There is a collection of science fiction books, catalogs of trips, lectures and research papers on biofeedback and transpersonal psychology, journals and correspondence with his wife Alyce and other colleagues at Menninger and the around the world.

Parks said Green left some money for the purpose of supporting the library. The board is in the process of raising funds. There should be well over $100,000 to get the library going. Green predicted that the library will no longer be needed after 125 years. By that time, humanity will have evolved enough to control greed, deception and destruction of the Earth and Humankind, Green said.

“Elmer believed there is an evolutionary process taking place with humanity, that human beings are actually making progress,” Parks said.

Elmer was 23 when he married Alyce, who was 10 years older and had two children from a previous marriage, Patricia Norris and Doug Boyd. The late Doug Boyd wrote several books including “Swami Rama” and “Mad Bear: Spirit, Healing, and the Sacred in the Life of a Native American Medicine Man.” 

Elmer and Alyce had two children together, Sandra Gey and Judith Green. Patricia Norris has known Elmer Green for 74 years. He married her mother Alyce when Norris was about 7 years old.

Patricia Norris said it would be more accessible to donate his library to a university like the University of Kansas, which has extensive collections of Kansas authors in its Spencer Library. Norris said that her sister Sandra Gey’s husband Fredric C. Gey, information scientist at the University of California, Berkeley, concluded that most of it is already available through the Internet. Most of the books, like the Olcott books, are available online at the Theosophical Society in America.

“Who would travel to Ozawkie to find a copy when they can utilize this service?” Gey wrote.

Roy Menninger, former president of Menninger, was supportive of Green’s efforts. Menninger approved Green's budget, his projects weren't cheap.

“Setting up the library in a remote but beautiful spot is classic Elmer: his own ideas were strongly held. I hope the enterprise is successful,” Menninger said.

        Alyce Green and Roy Menninger share a moment together

There is something special about Green’s home near Perry Lake, said Carolyn Scripps, his personal assistant who cared for Green during the last three years of his life and helped him organize his library.

Scripps said Green built his house on Lake Perry to be close to water and nature. He and Alyce lived there together for many years. 

“The library is a sanctuary, a haven for the body, mind and spirit,” Scripps said. “It’s a  supportive place to nurture the highest and best possible in a human being.”

It is true many, but not all of his books can be found in libraries and online. But, they do not have the extensive margin notes of a scholar who has studied these texts throughout his lifetime, Scripps said. Some books from Green’s teacher, Will J. Erwood, are not available anywhere else. There are also first-edition signed books sent by authors who appreciated Green’s contribution to the science of consciousness. These books are about topics like out-of-body experiences, meditation, near-death experience, acupuncture and energy healing.

While living at Perry Lake, he wrote “The Ozawkie Book of the Dead: Alzheimer’s Isn’t What You Think It Is,” a three-volume set that documents his time taking care of Alyce while she suffered from Alzheimer’s. The books are also an autobiography of their lives.

Green was raised in Duluth, Minn. He was an honor student and prom king, who loved music and considered being a concert pianist. Instead he earned a bachelor’s in physics at the University of Minnesota and worked as a physicist at the Naval Ordnance Test Station at China Lake, Calif. He worked in optics, electronics and computing. Using high speed cameras, he took pictures of missiles in flight. It was while working there that he and his colleagues took pictures of several unidentified flying objects and turned them over to the government, but such pictures were never seen again, Norris said. Green earned his PhD in biopsychology from the University of Chicago.



                                       The ketch Daphnie

Green took his family on a 52-foot ketch sailboat called The Daphne and sailed across the Atlantic from England to the Caribbean in 1958. At one point during rough seas, the boom fell on him and knocked him off the boat. Norris’ first husband motored back to look for him and found him in the water. After the trip, he looked for a place to work on either coasts so he could be close to the ocean waters, Norris said.

               Newspaper clipping of crossing the Atlantic Ocean.
                                   
A researcher at the Menninger Foundation contacted Green, who drove out to Topeka to meet him. When Green saw the tower building on the campus of the Menninger Foundation, he was certain he belonged there because he had had a dream vision of the distinctive tower some time before. Green was hired in 1964 and placed in charge of biomedical equipment in the research department.

Around 1970, Green and his colleagues examined Swami Rama at Menninger and measured his ability to voluntarily control bodily processes, such as heartbeat, blood pressure, and body temperature that are normally considered to be non-voluntary. Swami Rama was able to put his heart in Atrial Flutter on his own volition.

Green wanted to show that an ordinary person could use his own mind to control aspects of the body. He found that it was possible to use your mind to warm your hands, a sign of a relaxed body. The process involves meditation and specifically asking the body to move blood into the limbs. One patient who had a history of migraine headaches was able to warm her hands using this mind-control process. As a result, her migraine headaches went away. “Of the first 13 people we tried it on, it worked on 12 perfectly,” Green said in an interview, “Elmer Green: Reflections on His Life,” which can be found on youtube.

Margaret Olwine, a medical writer for The Kansas City Star, had been taking Valium for her hypertension in the 1970s. She took training sessions on biofeedback and was able to warm her hands, and, in the process, lowered her blood pressure. So she stopped taking Valium, according to "Beyond Biofeedback," written by Green and his wife, Alyce, published in 1977. Olwine lived to age 95. 

Sarah Bremer Parks said hundreds of individuals participated in biofeedback research and clinical work at Menninger with beneficial results without the side-effects associated with pharmaceuticals.  

Peter Parks said Green believed a person struggling with anxiety and depression can use meditation to gain self regulation, self awareness, and, ultimately, self-reliance. Meditation quiets the mind, calms the emotions and strips away stress from outside influences. Then it is possible to listen to the wisest part of the self, and in that place, there is answers. Green didn’t tell people how to live. He helped people find out for themselves, because they often had the answers inside if only they could relax and listen.

Green delivered lectures in Japan, Great Britain, the Philippines and Australia. He gave 40 lectures in California alone. He went on a 4,500 mile motorcycle ride through Europe with Alyce.

In 1973, the Kanpur News, Kanpur, India, wrote an article about Green during his visit there for a yoga conference.

“Through the practice of yoga one can control his physiological processes and thereby control 95 percent of the diseases,” Green said in the article. Green said yoga, which took its birth in the East, has now been recognized as a science in the West. Any kind of mental strain, stomachache, heart troubles and ulcers could be cured by yoga exercises, the article said.

Green was a founder of the Council Grove Conference on Consciousness And The Voluntary Control of Internal States, held annually at Council Grove, Kan., beginning in 1969. The first people invited to the conference included Carl Sagan, Abraham Maslow, Roy Menninger, Arthur Clarke, Sol Kramer and R.E.L. Masters. Early discussions were on the use of LSD in the treatment of mental illness, Christian mysticism, Tibetan Buddhism and hypnotism. The Council Grove Conference still meets annually.

“The convening of this conference was a groundbreaking event in 1969,” Nichols said.

Parks estimated Green taught his biofeedback techniques to several thousands of clinicians, doctors, psychiatrists and therapists in his 30-plus years at Menninger.


                                Elmer and Alyce Green

During his later years, Scripps said, Elmer liked to sit on the deck and look up at the stars.

In 1996, the American Institute of Stress honored Green with the Hans Selye Award, recognizing his achievements in biofeedback research.

Green was an accomplished scientist and mystic. His legacy is likely to live on a long time.

LaVetta Westphal-Rolfs said Green's 100th Birthday Party & Celebration of His Life will be from 2 - 4 p.m. Oct. 8, at The Unitarian Fellowship, 4775 SW 21st. St., Topeka. 

Monday, June 19, 2017

$100,000 For Winning Business Plan in Topeka

The Topeka Capital-Journal and six businessmen have launched an entrepreneurship contest designed after Shark Tank, Morgan Chilson wrote.

I am so impressed with this idea, I want to highlight it on my blog.

The Top Tank idea is the brainchild of six Topeka businessmen who partnered with The Topeka Capital-Journal to create a competition designed to highlight the capital city and, specifically, its downtown, Chilson wrote. Five of the businessmen made a financial investment to fund a $100,000 prize to the entrepreneur with the most compelling idea: Brent Boles, managing partner of Schendel Lawn &Landscape; John Dicus, chairman, president and CEO of Capitol Federal Savings Bank; Cody Foster, co-founder of Advisors Excel; Jim Klausman, president and CEO of Midwest Health Inc.; and Mark Ruelle, president and CEO of Westar Energy. Greg Schwerdt, president of Schwerdt Design Group, has offered to work with the final 10 entrepreneurs to help them put together a comprehensive package on their proposals by providing professional design services.



Top plan

Top Tank officially launches Sunday with a website where entrepreneurs will find an entry form due Aug. 31. Organizers hope to attract people from across the region to the competition.
A committee will narrow entries to 20 by November.


Contest Timeline

June 18th, 2017-Contest launch
August 31, 2017- Deadline for applications
Early November- The Top Tank finalists will present their business
proposal to the Top Tank Panel
Late November- Ten finalists will be notified they are moving on to the finals
February 2018- A Top Tank special event in downtown Topeka will bring
the finalists together with the Topeka community for networking opportunities. 
 A nationally respected speaker will lead to the grand finale: One Top Tank 
winner will walk away with $100,000, energized for hard work and with
 the resources to launch a Downtown Topeka business.

Wednesday, June 14, 2017

My 80% Return In PotCoin


Source: Poloniex
My cost basis was 0.10163820 Bitcoin, worth $276 at the time of the trade. Fee was 25 basis points.
Potcoin recently traded at a price of 0.00006907 BTC X 2770 shares = 0.1913239 Bitcoin, or in dollars $518.00, a return of 87%.
Why did I buy Potcoin? I had a hunch that if pot sellers struggle with so much cash, they would prefer an alternative in a digital currency, which reduces the risk of carrying all that cash.
On its own Web site, PotCoin says, "PotCoin as a digital currency is an alternative payment network for cannabis users, merchants and industry professionals. The PotCoin network allows cannabis enthusiasts to interact, transact, communicate and grow together. PotCoin is a community run effort, by community members for community members."
PotCoins are transferred directly from person to person via the net, without going through a bank or clearing house. This means that the fees are much lower, you can use them in every country.
Why was PotCoin trading up 83% on Tuesday. Well, early that morning Potcoin.com reported it was sending Dennis Rodman back to North Korea. Rodman said he wanted to promote sports and peace. Rodman knows both President Donald Trump and Kim Jong-un.
That's great, but North Korea and South Korea have been enemies for over a half-century. I appreciate Dennis Rodman trying to promote peace between North Korea, United States and South Korea, but I am not confident anything will change as a result of his trip. Even if he does accomplish something over there, his efforts will take time.
Does Rodman's trip sponsored by PotCoin.com justify an 83% climb in PotCoin? This sounds like a selling opportunity.
So I sold all my Potcoin at 0.00006619 Bitcoin, an 80% return after fees.
Shortly after selling my lot, the price of Potcoin fell 10%. I'm not surprised. The market cap on PotCoin is $38 million, and there were $14 million in volume of PotCoin in the past 24 hours, Tuesday's volume accounts for about a third of the market cap. I expect the Rodman news to wear off pretty quickly and by Thursday, this momentum play will be over.
I think PotCoin has a good idea, to serve the cannabis community. I hope it is successful. I will be watching its price, I may buy this cryptocurrency again.
But for now, my trade is booked and I will have to pay taxes on this short-term gain, when I file my 2017 tax return.
Conclusion
Cryptocurrency is the wild west of trading. Sales are completed in minutes, compared with stock trades' settlement in three days. On Poloneix, a person can do margin trading and lending. I could see people getting hurt if you are not careful. Market caps are small on some currencies, meaning a lack of volume could result in price declines. I have put about 1 percent of my wealth in the cryptocurrency space, in Bitcoin and Ethereum. Gains can be quickly taken away by market conditions. PotCoin's sponsorship of Rodman going to North Korea is laudable, but I don't think it justifies an 83% bump in price, so I'm out.
Disclosure: I am/we are long BITCOIN, ETHEREUM.
Additional disclosure: I may buy back PotCoin at a lower price
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Tuesday, June 13, 2017

Legislature Overrides Sam Brownback, Passes Budget

I'm thrilled to see the Kansas Legislature pass a budget and override Gov. Sam Brownback's veto. The voice of reason has won, Kansas now can afford to pay its bills. Brownback's experiment with trickle-down, Reagan-style economics has failed. The Legislature finally stood up to Brownback, whose tax plan was a piece of garbage.