DANVILLE, Calif. -- Dilbert sounded off on cash balance plans last month after his creator, Scott Adams, received e-mails from more than 300 disgruntled IBM Corp. employees.
After IBM's cash balance conversion, they wrote: "You wouldn't believe what they're doing to us here!"
Although Mr. Adams knew nothing about cash balance plans, he decided to investigate.
"I hadn't had personal experience with them (cash balance plans). But after hearing from so many people on this, I asked around and researched them on the Internet. The essence was that they are good for young people and bad for old people. It seemed that was all I needed to know."
He turned his findings into a strip on the subject two weeks ago, which has generated new buzz on the issue.
Dilbert fans familiar with cash balance plans blistered the Internet with illegal copies of the cash balance strip, which Mr. Adams considered the highest form of flattery.
Norman Clausen, principal at PricewaterhouseCoopers LLP, New York, and a specialist in cash balance plans, liked the strip but observed it wasn't completely accurate. "The older guy who is complaining in the strip would probably have been grandfathered into the traditional pension plan and wouldn't have to complain," he said.
"However, the strip did a good job of showing that these plans are creating intergenerational conflict, because the money is being taken away from one age group and given to another age group," Mr. Clausen said.
Before retiring from corporate America in 1995 to work on Dilbert full-time, Mr. Adams held a series of "humiliating and low-paying jobs," he said. None of his employers ever had a cash balance plan while he was there; but his last employer, Pacific Bell, a unit of the former Pacific Telesis Group, San Francisco, adopted one in 1996.
Dilbert, which has focused on the inequities of the workplace since it was launched in 1989, has added investment themes to the mix in the last year. The reason, said Mr. Adams, is his personal focus on investing.
"I have CNBC on a lot when I'm doing things that don't require any thinking, like inking my strip or scanning it," he said. And he has picked up a range of ideas from investment professionals who appear on the programs.
For example, he learned that it's best to invest overseas through a mutual fund and in the U.S. through an index fund -- two strategies he has adopted.
Mr. Adams, who earned his B.A. in economics from Hartwick College and his M.B.A. from the University of California at Berkeley, has been investing since 1980. But his activity has increased considerably in recent years -- thanks to the success of Dilbert, which has spawned an empire that now includes a TV series, a restaurant and even the Dilberito -- a nutrient-filled burrito he developed for supermarkets -- as well as books, licensed products and the daily strip, which is syndicated in 1,900 newspapers worldwide.
The cartoonist has set up his investments so that he manages half and professionals -- whom he declined to name --manage the rest.
"They are more value-oriented and taking more of a long-term approach, so I've been killing them," he said with glee. Mr. Adams estimated he was up 300% during the past two years, while the managers matched the Standard & Poor's 500 index. Of the assets he personally oversees, around 45% are in mutual funds, with the bulk in index funds tied to the S&P 500 and a Schwab product tied to the top 1,000 stocks; the remainder is divided between foreign and small-cap mutual funds. The other 5% is in high-risk stocks that he chooses himself and buys through a Schwab online account.
Mr. Adams trades once a week and spends about an hour a day on his investing -- reading, watching CNBC and researching companies and strategies.
The arrangement is "insanity-driven," he explained. "If I go nuts with my investments, at least half will be handled well. And if they (his professional managers) go nuts, the other half could be spared from disaster."
Mr. Adams said he is addicted to investing because he likes winning. "It makes you feel smart, and that's a good feeling."
He makes most of his riskier investments in his individual retirement account so he can defer paying taxes on the gains. He has done very well with that part of his portfolio, tripling his money last year by investing in fuel cell, Internet and human genome stocks.
"I did better than NASDAQ, which was up (more than) 80%," he said.
Market volatility doesn't bother Mr. Adams, because he's a long-term investor. During big corrections, such as in the summer of 1998, he takes advantage of the dips and buys. "But I have less money when the market is down. So overall, I like the up days better."