Sailing & Money

Sharemarket Theory for Sailors ©

My dear chap,

A lot of chaps are struggling ever since Upton-Smyth paid Lagonda's Child's fuel bill after the sojourn Med-side for the Thames 24 Europeans without first telling the World Bank. The Pimms account coming in the same week broke the camel's back and world equities have been in a tizz ever since.

Now given that owning a sailboat is about as financially reckless as one can get, it follows that sailors, though curiously wealthy are financial nincompoops under the surface. It is therefore in the interests of the sport's survival that I contribute some wisdom on the topic of portfolio theory in parlance easy for sailors to understand: -

So imagine, if you can, that a yacht race starts with all the yachts hitting the line right on the 'gun' close hauled on starboard. Gradually the yellow boat in the middle pulls ahead and you notice the crew have trimmed the sails better. That's an opportunity to back management - buy yellow! Shortly later, the whole fleet heads 5 degrees as the wind goes left. That's gives an advantage to the left hand boat, but it's too late to buy 'red' - the shift has already happened. And equally its to late to sell 'green', in the left, - they've already lost and all you are doing is locking in the loss. But if 'green' tacks while the rest of the fleet hold on in anticipation of the breeze backing left even more, then there is a chance that 'green' is now cheap if the wind reverts to its original direction.

Therein is the essential dilemma confronting both sailors and investors; - knowing whether a 'shift' is permanent or temporary.

You back green just as everyone else has given them up for dead. You are banking on the wind reverting right and green tacking back to port to cross ahead of the entire fleet.

But instead, the wind continues to go left? Green is hopelessly behind having sailed far away from a permanent header - go back to the marina, wait for next week? But in life the race never stops. Up at the front, 'red' is well into the progressive left shift and well ahead of yellow. You're chuffed at your star performer, (your had a secret 'flutter' on red), when suddenly yellow tacks and shiver your timbers (and margin lending account) they are on the lay line while 'red' is sailing ever onward greedily basking in being left hand boat in a permanent left shift (and forgetting to keep a watch on both the economy and the opposition - they are off buying a corporate jet!). Luckily you also had a little wager on yellow as a mid-fleet 'hedge' and suddenly its outperforming 'red', your best pick.

As the breeze starts to die across the course you pride yourself that notwithstanding your best pick is being upstaged by your hedge, you are first and second. But what's this? In the lighter winds the tidal flow is taking its toll and Roger you senseless if 'green' hasn't emerged ahead at the first mark having hugged the shallows near the headland - if only you hadn't sold!

On the run, one of the bigger boats has come from behind and casts a wind shadow that negates all the hard work of the 'small caps' trimming and picking the wind up the beat, and as it glides majestically through the fleet you abandon the 'colours' and opt instead for sheer size - always a fair bet - until, in the fallen tide, it runs aground on Arthur Andersen sandbank near the bottom mark.

Cutting your losses, but determined to eclipse the humiliation you launch yourself holus bolus onto 'green' whose sheer audacity has made a lasting impression on you.

You preen as green again heads far inshore to escape the tidal stream, but only to sweat in horror as the tide changes and in a dying breeze red and yellow's sails fall limp but are swept toward the mark in the now-favourable tidal stream.

By the rounding it is a two boat race, yellow, who has done nothing fancy, and red who has gone form hero to zero and back. With your now-diminished wager, you back red to 'pull it off' and are cautiously optimistic as they run a slightly 'hotter' angle toward a gently filling breeze while yellow hold deep waiting for the breeze to come to them.

Red are looking famous and you are basking in the admiration of Upton-Smyth's nieces when the unthinkable happens - red has put themselves dead upwind from the finish while yellow have held steadfastly on lay line to the pin. Yellow are going to cross ahead of red who is still two light air gibes from finishing!

So basically its all there; - wind shifts are no more predictable than price movements, the tide is central bank policy (never in equilibrium but always aiming for it), the bottom of the sea is errant auditors, the helmsman is the managing director, the trimmers are 'line' management while the bowman is chairman of the 'bored'. Yachts are companies (or the shares in them) as distinct to the buoys which, like cash deposits, never actually go anywhere). But most importantly, the finish line is your wife and Upton-Smyth's nieces are the stock brokers!

So there you have it, as much as everyone will mock you for having a 'yellow streak', your wife will adore you for it - and she will be there long after Upton-Smyth's nieces have abandoned you for the next crystal ball gazer.

Now on another matter - you'll be pleased to know the whole cunnalinghi affair has blown over so to speak. Of course I'd like to say it was down to my Shakespeareanesquue skills in the latest edition but truth be known a checkout filly put the whole thing to bed when she related to Upton-Smyth's good lady that cunnalinghi left a rather unpleasant taste. Thankfully the women's auxiliary went straight back to rewriting the Beijing welcome banquet menu on a Chinese theme. (They still believe cunnalinghi to be Spanish root vegetable - from down near the bottom). Committee most impressed though, with my grasp on meteorology and dynamic fluids and they've created a coaching/mentorship spot with the British Olympic squad. In my own interests actually as some I've selected put in an awfully poor showing at last week's selection regatta - young Upton-Smyth if I can be perfectly blunt!

I fear that in coaching like the sharemarket, history is doomed to repeat!

Truly truly,

Sir Walter Bard-Arse III
Magazine Editor
Chairman of House
Chairman of Rules
British Olympic Selector RYA
British Olympics Coach
Royal Mega Club and Sailing
Cowes, England. ©

04/02/08

J/24 racing: Like NASCAR, but different.

J/24 Easter Regatta Recap

Columbia Sailing Club was the venue for this past weekend's J/24 racing. The 3-day Easter regatta saw 30 J/24s from all up and down the East Coast and Great Lakes. Friday's conditions were extremely light, and the fleet only completed one race.
We awoke to nice breeze Saturday morning, ranging from 8 to 12 knots for most of the day. Due to the light air friday and the possibility thereof on Sunday, the race committee decided to pack in as many races as possible. 5 races, 7 1/2 hours, and 12-14 beers later, we finished the day ready for some BBQ.
The forecast for Sunday proved to be about as accurate as a Miss Cleo reading, and Sunday morning saw a nice 14 knot westerly and two nice races to finish the regatta.

Friday's light air was a good thing, as Thursday night's festivities included a stop at Billy Ray's barn. A local legend at Columbia Sailing Club, Billy Ray brought out the big guns--in the form of his "Slovakian Moonshine." No doubt whipped up in a bathtub behind the barn, this putrid concoction has the nose of corn-flavored diesel fuel and a consistency not unlike fermented battery acid. Friday morning's hangover was painful even by Regatta standards, and had their been more than 1.1 knots of breeze, I would have probably sworn off drinking forever again.

One interesting feature of the event: Chris Fortin shared his Kattack system with the Fleet. Kattack is a GPS driven system that monitors the position of each boat at any given time on the race course. It tracks realtime position, heading and speed, thus enabling each boat to see in great detail when and where the rails fell off the track for each race.

As to our performance: I will only say this.

Not good. Not at all good.

X to C. No, not like the drug.

This weekend was the annual "X to C" regatta at Lake Norman. I can think of several adjectives to describe my mental state during the event, and ecstasy is not one of them.

Racing was cancelled today due to tornadoes. So, fiancee and I went to go look for wedding bands today. So, it literally took an act of god to drag me to the mall.

Show you how smart I am: I make the following comment when asked about the size of the ring she chose:

"Yeah, since I sail a lot, I probably should get it slightly large. You know, so that it's easy to take off."

That didn't go over too well...

You're an Idiot

In response to a skipper who requires his crew to sign waivers before boarding his boat:

Obviously, there's no document that you can draw up that will protect you if you're high on angel dust and stab your trimmer in the shin with a marlinspike. A carefully crafted "express assumption of risk" statement won't help you if you're 17 beers deep at the helm of your J/105 and run into a well-lit police vehicle. On land.

That said, the reality of the situation is that, Yes, having your crew or guests sign a properly drafted document could very well limit your liability as an owner, including your liability for negligent conduct, but only in the rarest of circumstances. In the end, I see the limited protective value as such that it is certainly not worth the expense/effort/prick factor to have one drafted & implemented, and I wouldn't advise my clients to have one. And, If one were presented to me by some officious boat owner, I'd probably offer to show him how to self-adminster a colo-rectal examination with a couple of wadded up pieces of paper.

The document in question is called an "Express Assumption of Risk." The doctrine of assumption of risk basically says that when a person knowingly and voluntarily chooses to engage in course of conduct (i.e. sailing) that carries a reasonably forseeable risk of harm, and he or she suffers the type of harm, the agent causing that harm shall not be responsible, even if the agent was in fact negligent. In states that recognize it, it is an "absolute bar" to recovery, meaning that if it applies, the plaintiff can recover nothing. Sounds like a great idea--couldn't hurt, anyways, right?

Most courts generally uphold express assumptions of risk when the Plaintiff's conduct is clearly voluntary and the risks are reasonably forseeable, like engaging in dangerous sports like sailing. So, chances are, if your bowman accidentally beans your trimmer with the spin pole during a gybe, and your trimmer sues either you or your bowman, your trimmer won't be able to recover squat. But, the thing to understand is that the above is likely the case even if he hasn't signed anything. A signed express assumption of risk is excellent evidence that the Plaintiff knew the risks, but it's not a slam dunk.

And, contrary to what almost everyone thinks--it's not without risk. A poorly drafted or overreaching document may be disregarded alltogether by the court. The other risk is practical; if the case goes to trial, it will end up making you look like a giant rectum to a jury that may have otherwise sided with the innocent owner.

The doctrine has been narrowed in recent years. In an effort to avoid precluding claims, courts have defined "inherent risks" very narrowly, leading to some dumb rules: apparently, getting hit by a golf ball is not an "inherent risk" of playing golf. And, "gross negligence," a mushy concept, and willful/wanton conduct are always outside the scope of forseeable risk, meaning that you can recover if the conduct transcends garden variety negligence, even with a signed agreement.

Here's some other news: If you get one, everyone on your boat will hate you, assuming they do not already. Ain't worth it, unless, like my skipper, you couldn't give two shits.

Trail Lawyers Endgame

Quoting the below anti-lawyerite:

Well, I hope that Mr. Seagate et al will help you out eventually. A young, broke attorney with multiple vessels? You're phuked, my friend........

Hey, here's a case for ya that could pay off-----Will the $1.85 light bulb that I bought last week really last 2,000 hours? I was planning on scewing it in tomorrow night and starting the timer.............

My response:

wow, now those are tough damages to quantify, even in a class action. should the bulb burn out prematurely, you'd have a legitimate breach of express warranty claim. so, we'd prorate the replacement cost according to how long it actually lasted. if it lasts 1,000 hours, then we can sue for $0.93, rounded up to include pain and suffering.

as your attorney, in order to get you any money, i'm going to need you to carefully follow my instructions:

go sit down in the den with your dog gipper, start your timer, and make sure not to leave. in fact, don't divert your eyes from the bulb--if we're going to assess your damages, i must insist that the timing be accurate.

watch the light bulb intently until it burns out. do NOT divert your eyes, even when the retinas begin to crinkle. it's nothing permanent, i promise. then, when you stand up (in the dark), trip and fall down...hard. and make it look convincing. try to make sure that when you trip, your head goes crashing into that glass-framed glossy of dan quayle that you have in your study. the more blood the better!!

then, as you're screaming and bleeding profusely, have your maid rosalita take pictures--lots of pictures. it's okay, we won't call her as a witness, so she can stay.

so, you've heard of mock juries, right? what i need you to do is post the pictures here so i can accurately guage what the real jury's response will be.

my fee will of course be the standard 1/3, or $.031 of actual damages, and $8.3 million pain and suffering.

we're gonna get you a lot a money! (*wink* and *pat on ass*)

LLC Idea

This was my response to an individual who apparently formed an LLC with one asset: his sailboat. Ostensibly, this was to protect himself from liability in case someone were injured aboard his boat. Dumb Idea and waste of time.


"As to forming a Limited Liability Company for the purpose of protecting yourself from demonic trial lawyers, the discussion up to this point has been amusing. Let me clear up a couple of things.

My take: if you have established a Limited Liability entity whose sole asset is your boat; and you've done so purely to limit potential tort liability; and for no other reason other than you're too cheap to pay for insurance, and you have no other actual business purpose 1.) you're an idiot. 2.) whatever professional advised you to do that is an idiot and 3). you're an idiot.

In North Carolina as with all other states, the formal requirements to maintain the existence of a single-member LLC are graciously few. I have my own LLC, and my shareholder meetings generally take place at the bar or on the crapper. I usually flush the minutes, but not always.

While it was in some early statutes, in NC it is no longer required to "hold one's self out," whatever the hell that means, as an LLC to recive the benefit of limited liability. If you've fulfilled the requirements, you're entitled to the protection.

HOWEVER, having an LLC just for liability purposes and self-insuring is a really dumb idea for several reasons:

One: People seem to forget that you're always liable for your own tortious acts. Meaning, just because you've got your LLC doesn't mean you're no longer liable for negligence, even if you're acting solely in the capacity of the LLC. If you personally do something dumb and hurt someone on your boat, even if it's owned by an LLC, your personal assets may be at risk.

Second, if your "business" has no real legitimate business purpose, that is, it is but a "mere instrumentality" of your personal affairs, you may not be entitled to protection. Courts may apply the "piercing the veil" doctrine. Note that this is not for the IRS to decide, as stated below, but for the Courts, so we don't really know the rules yet. It hasn't been done yet in NC because the statute is so new, but Courts in North Carolina are eagerly awaiting a test case on applying the piercing the corporate veil doctrine to the LLC form, and lots of states have pierced the veil of LLCs just as if they were corporations.

Bottom line: if you're self-insuring, and thinking that just by having your boat owned by an LLC will protect you, here's a tip: After the sheriff hauls your trusty carbon-rigged "corporate asset" off to pay for some experimental surgery on your neighbor's aggravated hangnail, do two things. One, think of me, and two, Sue your lawyer, or whatever other idiot told you to do that. They'll be okay. Unlike you, they pay their malpractice premiums.

Here's an idea: keep proper insurance, take reasonable precautions on your boat, train your crew properly, warn your guests about the possible dangers, and stop trying to get something for nothing...

And stop shitting on lawyers all the time...you may need us one day."

Trail Lawyers, Contd.

Statement of Political Genius:

"I would never vote for a lawyer because all lawyers are against tort reform."

My response:

Never vote for a lawyer because "all lawyers are against tort reform?"

Wow. That's a pretty sweeping generalization about the 1.1 million lawyers we have in this country. I'll be the attorneys and their minions over there at the RNC and ATRA would take issue with your facts...

The irony is priceless! Here's a guy who was injured and then compensated by the civil justice system, who, if he had his way, would deny others that compensation! Holy crap, you could cut that irony with a knife...



Another one of my favorite ironies: It really makes me grin a bit when people use the phrase "First, let's kill all the lawyers" as an indictment of the profession. What most people don't realize is the fact that Shakespeare actually used this dialogue to praise the legal profession. Yes, that's right.


The line comes from Henry VI. It is spoken by Dick the Butcher, who is, as his name implies, a brutal killer and would-be overthrower of the crown. Basically, the dialogue arises during a discussion between Dick and his brother as to what they will do once they have overthrown the King and assumed power--the first thing they'll do is kill the lawyers. This is classic Shakespearean Irony: The fact that they are evil rogues intent on pillaging the nation, in part by eliminating the learned class and the protectors of the rights of the public, shows that what Shakespeare meant is that lawyers are the protectors of liberty and rational thought, and the last line of defense against tyranny.

Nothing has changed to this day.

Just like the movie "A day without a Mexican," people complain and complain about lawyers, but when we're gone, society crumbles.

Trial Lawyers

http://forums.sailinganarchy.com/index.php?showtopic=62365&hl=

This is in response to a guy who posted something ridiculous about how lawyers are the cause of all human suffering:

My response:



Jeez, let's pile on the trial lawyers again...


Full disclosure, I'm taking up for my own kind, here, but here's my .02:


Just so you can get a check?

Would you rather get nothing?

Would you rather multinational corporations be free to commit malfeasance and screw customers out of billions of dollars just because their wrongdoing hurts a large number of plaintiffs a little bit rather than a small number of people a lot?

Speaking generally, and without knowledge or regard to this specific case, Class Action lawsuits are vehicles to bring corporations or other wrong-doers to account for their actions when those actions cause wide-ranging harms to large numbers of people. If someone or some group illegally causes a small amount of harm to a large number of people, their actions are just as culpable as if they had caused great harm to a few people. Surely you agree with that.

But, I gather that your beef is with the Attorney's Fees.

Assuming that a case has merit, Attorney's Fees in civil cases have to represent the expenses, costs, risks, and other factors present in litigating a hugely complicated and possibly moribund lawsuit such as this in order to make it worth the time for someone to pursue the claim. Otherwise, it will go unlitigated as the individual expense to litigate an individual claim will exceed the potential recovery, exonerating a guilty party.


These fees, IF they are awarded, and that's a big if, will likely be spread among a large handful of attorneys that have poured thousands of hours and hundreds of thousands of dollars into litigating this case.


In nearly every case, the awards given to the plaintiff's attorneys PALE in comparison to the fees of the defense attorneys. And, those defense attorneys get paid even if the lawsuit is not successful-not the case for the Plaintiff's attorneys.

The life of your average Plaintiff's attorney is far from glamourous, and nearly always far from lucrative. Yes, some plaintiff's attorneys make excellent money, and some win the "legal lottery" if that perfect case walks through the door. But, all but the luckiest attorneys will go an entire career without this happening.

No one seems to ever mind that the defense attorney sitting across the table is making $1000 an hour defending this poor corporation that has attempted to get away with endangering lives or fleecing the public out of our money.

The sad reality is that hugely powerful corporate interests in this country have largely succeeded in convincing the public that our tort system is in crisis. They've done so by distorting the facts surrounding a handful of exceptional cases and demonizing trial lawyers by playing to the American worker's emotions--envy being the foremost. The true reality is that corporate malfeasance continues to go largely unpunished, the American people continue to be misled and unknowingly victimized, and corporate interests continue to take precedence over the well-being of the public.

This is a really big issue, and certainly reasonable people can disagree, but I really hate to read things like this that continue to perpetuate the perception that greedy trial lawyers are taking advantage of the system and hurting the justice system and the public. The reality is quite the opposite in my opinion. Every day, Plaintiff's attorneys are the spokespeople for the voiceless, the afflicted, and the powerless. And they do this job in the face of great personal and financial risk, much more so that the perpetually "righteously-indignated" defense bar.


But that's just my opinion...I could be wrong.

The NOOD is not dead, and Clean is okay.

A post after St. Pete, in response to the exaggerated reports of the death of the NOOD, and defending Mr. Clean:


"As to Sailing World: Much like a certain website I've been known to peruse on occasion, I know ahead of time that Sailing World is mostly crap, but it's better than reading about gardening.

As to the recent furor about the NOOD: even if participation is down, I would rather spend a couple of days bobbing around in 0.4 knots of wind in 75 degree Tampa Bay than be at work. This is the case even if the B course Race Committee is apparently run by that lady from The Weakest Link.

To those of you who are fired up about the way Clean talks to people: Let's get some perspective on this issue. I realize the effect of verbal abuse on the fragile cognition of developing infants and billionaires is still being debated by the medical community. But while we await their findings, I say this: Deserved or no, we're talking about two grown men here. My guess is that both Ernesto and Sperry-Boy Stu or whatever his name is will likely abide Clean's harangues without serious bodily injury.

To those of you who have direly predicted the iminent demise of our bellweather racing series the NOOD: Using the official name per earlier request, I'll predict that the "Sperry-Top-Sider-Land's-End-Quaker-State-Pillsbury-BC-Headache-Powder-Regattas-as-Jointly Presented-by-Enzyte-and -your-local-AA-chapter® NOOD" regattas will probably not go the way of the square rig, either. My god, some of y'all act like we're Kansas City Royals fans or something here--news flash: the owner of sailboat racing is not going to pick up your local boat race and move to Alabama if the fans don't purchase enough Budweiser and cheap hats. So we're down a few boats...maybe I'll actually crack the top 30 next year, and I could even get the boat out of the water before the start of the following year's regatta.

As to Clean personally: Whatever his motives, and I don't pretend to know them, I say keep stirring shit up. I disagree with the comment that opinion has no place in journalism--that's crazy. All news is to one extent or the other editorial. As long as one doesn't pretend to be unbiased, (*cough* fair and balanced) and I don't think Clean makes that claim, opinion of whatsoever character is a good thing. And, furthermore, it has absolutely zero relevance how accomplished a sailor he is--we don't make Erin Andrews or Stuart Scott put on shoulder pads and play defense, so what the fuck difference does it make how good a sailor he is? Sure, it'd be great to have a Terry Hutchinson providing insightful color commentary at your monthly excuse to get out of the house, but last I checked, most professionals and other really good sailors would rather, I dunno, ^&*^ING SAIL!?

Everyone knows that generally, the people that are always telling you how good a sailor they are usually aren't. This situation is probably similar. I find that those who feel the need to be critical of another's ability on the racecourse are compensating for their own ineptitude.

I learned the bottom line to this argument in 10th grade civics: Free speech is a beautiful thing. More content is always better. More points of view add to the debate. If you don't like Clean, or disagree with him, don't read/watch his stuff, yada yada yada, someone hand me a flag...




Enough Kum-Bay-Yah. I will say this, and this is not just about Clean, but about anyone who gets paid to put words to paper/screen/podcast/what-the-&*^*ever... As the readers, and the people who allow this site to make money, we have the right to know about even potential conflicts of interest, so that we can make an educated evaluation of the content. I'm not saying those conflicts can't exist--capitalism is a good thing, and sponsors pay the bills. But, just like on CNBC, anyone posting who is on SA payroll should come Clean disclose all of his or hers' potential conflicts of interest, even if they do not exist in fact. The nature of SA's relationship with its sponsors and how that may color its reporting should be out in the open. I'm not saying it's not, I'm just making a point.

To me, Clean is like one of those daytime spanish telenovelas on Univision--I can't really understand what the fuck he's talking about 90% of the time, but I still watch, because 1) he's marginally more entertaining (and ostensibly less biased) than Fox News, and 2). his tits are kinda big."


BTW, Speaking of VHF, I thouroughly enjoyed watching an entire 45-boat melges fleet tack at the same time and book it back to the course like as some wiseass radioed "5 minutes to warning signal for the Melges 24 Class" as the entire fleet was headed back to the dock before the N over A flags went up.