Power and Hypocrisy in Tinsel Town and the Media

Growing up in Southern California, and doing my undergraduate work at the University of California, Los Angles (UCLA), I always have been surrounded by the entertainment industry.

I have friends “in the business,” including actors, writers, directors and those in back-office production roles. The people I know in the industry either love their jobs or really like their jobs, since they are well-compensated and help produce a product that the world generally loves.

Yet I have never met a person in the entertainment industry who has ever denied the reality that there’s widespread misuse and abuse of power by those at the top. And, I have never met anyone who hasn’t acknowledged there’s widespread, blatant hypocrisy practiced on the part of so many elitist Hollywood liberals who generally advocate for liberal/progressive ideas, but whose own behavior falls far short of their stated ideals.

Now, abuse of power and blatant hypocrisy isn’t unique to Hollywood. Every industry, and every segment of society has its nefarious practitioners. Yet when it comes to the entertainment industry, the high-profile, worldwide platform it enjoys makes it especially ripe for egregious hypocritical behavior.

The latest example here is that of Harvey Weinstein.

By now, I suspect most people have read about the allegations levied against the mega-producer, which include a decades-long history of sexual misconduct, harassment and even sexual assault.

If you want to get a look into the details of this rather harrowing tale, I highly recommend The New Yorker article by Ronan Farrow, “From Aggressive Overtures to Sexual Assault: Harvey Weinstein’s Accusers Tell Their Stories.”

Warning, however, you may find yourself in need of a shower after reading about Weinstein’s alleged misbehavior.

Yet perhaps not surprisingly, Weinstein was revered by many on the political left, as he was a big donor to many high-profile campaigns, including those of President Barack Obama, President Bill Clinton and two-time presidential loser Hillary Clinton.

Weinstein also was an outspoken advocate of progressive causes, and a harsh critic of conservatives and Republicans.

The hypocrisy here is that Weinstein apparently was the epitome of a smarmy man who used his power and influence to get what he wanted from women — women whose careers he knew he could make or break at any moment.

So much for the progressive values of equality in the workplace, women’s rights, a hostility to the “white-male power structure,” etc.

Weinstein’s alleged sexual misconduct, even sexual crimes, spit in the face of these values, all while his millions were going to help foist these ideals into the public conscience.

Yet what also disturbs me, perhaps even a bit more than even the alleged Weinstein behavior/hypocrisy, is what now appears to be an attempt by NBC News to scuttle the Farrow piece. Surely, NBC News would want to report on a famous, influential, politically connected, and undeniably newsworthy figure like Harvey Weinstein.

But apparently, that wasn’t so. In fact, according to one report, NBC News President Noah Oppenheim made a judgment this past summer that Farrow’s reporting on the Weinstein story wasn’t ready for prime time.

In an interview last night on MSNBC’s “The Rachel Maddow Show,” Farrow disputed that claim, and he did so vehemently. Maddow asked Farrow: “NBC says that the story wasn’t publishable, that it wasn’t ready to go at the time that you brought it to them.”

Farrow retorted by saying: “I walked into the door at The New Yorker with an explosively reportable piece that should have been public earlier. And immediately, obviously, The New Yorker recognized that. And it is not accurate to say that it was not reportable. In fact, there were multiple determinations that it was reportable at NBC.”

In my opinion, the alleged actions of NBC News seem to represent another form of hypocrisy, even a cover up. That hypocrisy is one where you conceal an ugly truth to protect someone in your ideological camp.

Now, to MSNBC’s credit, which is an NBC Universal property just like NBC News, the topic was discussed. Also to Maddow’s credit, the host brought up the subject. I don’t often agree with Ms. Maddow’s political views, but one thing you cannot accuse her of here is hypocrisy, and for that she deserves respect and acknowledgment.

If there’s any good to be taken from the Weinstein episode, and from similar episodes in recent years, it is that sexual harassment and the abuse of power must not be tolerated. It is truly a scourge on society, as it nullifies the victim’s rational pursuit of career, and turns a mutually beneficial employer/employee situation into an ugly sexual power play.

There’s no room for it in America. Full stop.

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ETF Talk: Global Events, Trump Rhetoric Boost Defense ETF

A constant barrage of geopolitical tensions coupled with the forceful rhetoric of President Trump has sent defense stocks and exchange-traded funds (ETFs), such as the iShares U.S. Aerospace and Defense ETF (ITA), soaring.

While the main reasons why defense ETFs are doing well right now are evident if you take a glance at recent world events — tensions with North Korea, the continued threat of ISIS and strained U.S. relations with Russia — they are not the only causes of this surge.

A Sept. 20 article from Zacks entitled “Beyond North Korea, 4 More Reasons to Buy Defense ETFs,” laid out some additional reasons why defense ETFs are a hot item of late. Succinctly, they are:

1) Lots of mergers and acquisitions (M&A) activity in the sector (for example, Northrop Grumman’s $7.8 billion buyout of aerospace company Orbital ATK)

2) The prospect of more U.S. troops being deployed to the Middle East

3) Strong sector fundamentals

4) The passing of a $700 billion defense bill by the Senate for war spending and the production of 94 F-35 Lightning II jets.

As the premier defense and aerospace ETF, ITA has daily fund flows in excess of $3 million and is in a position to take advantage of favorable developments in the defense sector, such as those mentioned above. Of the several major ETFs covering the defense and aerospace sector, ITA probably has the most straightforward investment strategy, as it diversifies by capping the weightings of the biggest securities.

In terms of performance, ITA has amassed an enviable year-to-date return of close to 30%, making it not only the biggest defense ETF in terms of assets at $4.3 billion under management, but also among the strongest performers this year. The fund’s 0.44% expense ratio is not the cheapest in the sector, but also not the most expensive. ITA also offers a small 1.1% yield.

In fact, in my Successful Investing newsletter, we’ve ridden ITA to a near-30% gain for most of 2017!

ITA invests most of its assets in pure-play defense and aerospace companies. Plus, 57% of the fund’s assets are invested in the top 10 holdings, and many big-name defense and aerospace contractors are on that list. Boeing (BA) has the biggest allocation at 10.20% of the fund’s assets, followed by United Technologies (UTX), 7.92%; Lockheed Martin (LMT), 7.43%; General Dynamics (GDI), 6.54%; and Raytheon (RTN), 6.16%. The fund is non-diversified.

Investors who anticipate that global turmoil and President Trump’s agenda will continue to boost defense stocks in the near future could find the iShares U.S. Aerospace and Defense ETF (ITA) a worthwhile choice.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

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What to Do in an Active-Shooter Situation

Most of the time, this publication is devoted to how to protect and grow your wealth. Yet given we are just recently removed from the worst mass shooting in American history, I thought another type of protection message might be in order.

The fact is that acts of violent crime, terrorism and mass shootings are a reality that can happen to any of us, and at virtually any time, and at any place.

Yes, the odds of you being in some kind of violent situation, and particularly an active shooter situation, are infinitesimal. However, that doesn’t mean it can’t happen to anyone at any time.

Reality is what it is, regardless of how we might want it to be, and that means we must be aware of how to deal with reality when it turns violent… especially given the potentially catastrophic consequences.

So, what must you do to maximize your chances of survival?

Well, there are many specific recommendations given by law enforcement officials on what to do, and many of them are certainly good. For example, officials will tell you to have an escape plan mapped out whenever you go to a public place. They’ll also tell you to be aware of your surroundings, and to report anything strange or seemingly out of the ordinary.

According to the Advanced Law Enforcement Rapid Response Training Center, or ALERRT, in an active-shooter situation you should employ three rules… “avoid, deny and defend.”

The first rule is to avoid the attacker by creating that escape plan, which also means moving away from the threat as quickly as possible. Next, you need to deny the shooter access to your location. That means taking measures such as putting up barriers to block doors, turning off the lights to a venue, or taking hardened cover.

As for the third rule, defend, that’s where the real action and preparation needs to take place.

According to Dr. Peter Blair, the executive director of ALERRT and a criminal justice professor at Texas State University, when it comes to defending against an attacker,

“Do not fight fairly. This is about survival.”

The last rule is one that I think people must be aware of, and must take on as a personal responsibility for themselves, their loved ones… and for the rest of society.

And while being psychologically and physically equipped to defend against an attack will vary along the spectrum of individuals, there are some things most of us can do to make sure we maximize our chances of surviving a violent encounter.

First, make sure you are as physically fit as you can be. Train to gain strength, maintain and increase muscle mass in the proper fashion by using high-intensity, progressive resistance exercise.

Eat a healthy diet, and ingest your social poisons (tobacco and alcohol) in a responsible and moderate manner.

Learn some self-defense skills. Here I am speaking about skills such as hand-to-hand combat, and particularly my preferred form of martial art, Brazilian jiu-jitsu.

The next step is to learn some defensive firearms skills from a reputable training organization staffed by professionals from either law enforcement or the military, and who emphasize safety first in their instruction philosophy.

My recommended training group is in Los Angeles, California, and it is International Tactical Training Seminars, or ITTS.

The staff at ITTS is comprised of former and current Los Angeles Police Department S.W.A.T. instructors and team members. As a former member of the U.S. Army’s elite combat schools, I personally can attest to the skill and professionalism of the team at ITTS, as well as its first-rate training facility.

The photo here is me training at the ITTS facility, honing my own defensive firearms skills.

I hope I will never have to use the knowledge and skills I’ve learned from ITTS in a live scenario. Yet I feel I have the obligation to do what’s necessary to maximize my chances of prevailing during a violent conflict, and to help my loved ones and my fellow citizens survive if the unthinkable happens.

Of course, all the preparation in the world can’t ensure you won’t become a victim of violence before you’re able to take any action. That’s certainly the case with the horrific murders in Las Vegas.

Yet being prepared as well as you can be will help increase your odds of surviving an active-shooter situation, and other types of violent situations.

And, to bring it back around to investing, being prepared to act in defense of your own money during a bear market or financial crisis is similar to being prepared to deal with a violent situation.

You may not avoid the negative consequences completely, but by being aware, prepared and ready to act, you will increase your odds of prevailing.

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Nock on Woods

“The mind is like the stomach. It is not how much you put into it that counts, but how much it digests.”

— Albert Jay Nock

The great libertarian thinker is full of wisdom, and a genius at turning a phrase. If you want to learn about how the expansion of the state comes at the expense of society, and not in the service of society, then you simply must read Nock’s classic, “Our Enemy the State.” This is perhaps the most-powerful work you’ll ever read on the subject, and it might just change your way of thinking. I know it changed mine.

Wisdom about money, investing and life can be found anywhere. If you have a good quote you’d like me to share with your fellow readers, send it to me, along with any comments, questions and suggestions you have about my newsletters, seminars or anything else. Click here to ask Jim.