Monday, January 28, 2008

Another funeral, of someone who died before it was time. I wept. My wife is more stoic than I.

I have two things to say about death. One has been said before, by the writer of Ecclesiastes. This musical presentation of Ecclesiastes 3 is quite lovely.

The other musing about death comes as a result of reading Peter Koestenbaum, a philosopher who points out that our thoughts about the deaths of others are quite different from our thoughts about our own death. In Koestenbaum's framework, we have choices about everything until we die.

It prompted me a couple of years back to write the following, titled

"Here So Soon?"

What? Here so soon?

I am startled
that the journey ends HERE;
somehow I thought it would be further.

An odyssey of honor and love
demands wise choices, lived full,
right to the only threshold where
I have no further choice.

May my strides to that unknowable door
leave unmistakable footprints
of the true and highest me.

Sunday, January 27, 2008

Thursday, January 24, 2008

Did you know...

...that the word "gullible" is not in the dictionary?


Wednesday, January 23, 2008

Something not right

We drove past the Citrix headquarters in San Jose last month. If you don't know Citrix, it is a company that makes software that allows you to sign on to your work network from a remote location, and (presumably) work effectively.

Imagine our disappointment to discover:
  1. Citrix head office has a parking lot
  2. The parking lot was full

What kind of investor are you?

I admire those who have an investment philosophy that they can actually stick to.

One approach is to be a trader, in and out of stocks based on some technical analysis and hoping to be more nimble than the herd. This takes courage.

Another approach is to be a value investor, waiting with cash on the sidelines for Mr. Market to go through one of his spasms of fear and then scooping up stocks at prices that are well below their true value. This takes courage and patience.

A third approach is to be a little of both, to have favorite stocks that one could see holding onto for a long time, but to trade out of them when they get ahead of themselves, and to buy back in on the corrections.

There is no formula for guaranteed success. What IS part of each of these approaches is the very human emotion of Regret. This emotion accompanies each event where money is lost, naturally, but it also accompanies each event where money was made, but someone else made more money. The fact that stock price information is available in real time amplifies all of the emotional reactions that an investor could have.

Pick an investment style that suits your temperament and polish your skills at the kinds of analysis that support that style. But spend just as much time developing an awareness of your emotions (fear, greed, regret etc). If you have a blind spot about your emotions and the actions that they cause in you, you will never understand why you just did what you did. This is not just stock market advice, of course, it is whole-life advice.

Once you figure out your emotions you can start dealing with them in real time. Until you figure them out, it is best to have some iron-clad rules that you apply to your trading or investment decisions. At least you will have something objective whose influence and performance you can evaluate, rather than sorting through the records of dozens of random emotional decisions to try to figure out what went wrong or right.

Tuesday, January 22, 2008

Investor psychology in action

Wow. We are witnessing a serious selling spree in the stock markets. Once the stampede starts, several factors tend to feed it:
  • Our "herd" instincts take over. (ie the instincts to be part of the herd, not the instincts of a border collie to organize the herd.)
  • People who have bought stocks on margin get a call to cover their margin, and have to sell good stocks to cover their bad investments. Selling pressures drop the price of good stocks, and the cycle reinforces itself downwards.
  • In golf, our worst fear after a bad shot is that it makes us believe that it will happen again, soon and often. Many people view a precipitous drop in the stock market as a sure sign that more drops are to come, and their instincts are to sell early. Those who don't sell early hang on bravely for a couple of days or weeks, during which the prices drop even further. Eventually, there is capitulation selling, which is necessary before a real reversal can occur.
  • When a beaten up stock recovers a bit, some will happily sell holdings to reduce the size of the loss that they have already resigned ourselves to.
  • Prudent investors who had stop limits set, say, 5% below the last closing were stopped out of their holdings before they had a chance to check the markets. This selling adds to the selling pressure
  • As we search for explanations, we turn to columnists and analysts who are human. Those who were doomsayers in the past have the chance to say "I told you so", which usually feels pessimistic. Those whose rosier projections now seem wrong may resort to exaggerating the shock and awe of the purported causes associated with the market drop, rationalizing their previous conclusions as not having accounted for the extreme events of the past couple of trading days.
  • We question why we ever bought stocks in the first place, and consider selling so that we can invest in, say, vacation properties, or just getting out of debt.
Markets may be generally efficient in the long run, but in the short run they distill and concentrate the basic emotions of fear and greed. Benjamin Graham, the father of value investing, writes of "Mr. Market" and his mood swings. When we are at the moment of greatest fear and discouragement, that is the time to buy good stocks that have been pulled down with the bad ones. When we are jubilant that our clever picks are doing better than we ever could have imagined, then it is time to sell. In both cases, the right thing to do is the opposite of what we feel like doing.

Tough game. At all stages of the cycle, just remember 'this too shall pass'. But we can't know the timing, the direction, or the size of the reversal in advance.

Sunday, January 20, 2008

The real, the counterfeit, and the madness of crowds

Several threads to tie together here:
1. The worship of celebrities, as evidenced by the swarms of paparazzi around the unfortunate Britney Spears, or the elevation of George Clooney to "Ambassador of Peace" status by UN Secretary General Ban Ki Moon.

2. The debasement of currencies by decoupling the paper money from a tangible underlying form of wealth, such as gold. A buck ain't what it used to be.

3. The madness of crowds, whether in the pursuit of Salvation by Carbon Reduction or the rare but spectacular rushes to purchase, say, silver.

What does it say about us, that we are so fascinated by the banal, fooled by short term expedience over long term value, and vastly more likely to run with the herd than against it, even to our own destruction?

Why, it says only that we are human. We want things to be easy for us, sooner rather than later, and without much regard for the long term consequences. We need something to believe in, something that lots of other people believe in.

Seems to me that it is like wetting the bed in order to get warm. It works, but only for a moment.

In all this, may we never lose sight of the importance of free speech and vigorous debate.

Thursday, January 17, 2008

Words that should exist


Doctor who is remorseful about how cold the speculum is.

Tuesday, January 15, 2008

UK air quality improves dramatically

UK heavy metal concentrations have dropped 70% in the last 25 years, according to the National Physical Laboratory.

The total average concentration has fallen from 1873 nanograms per cubic metre of air in 1980 to just 568 ng/m3 in 2006 for the nine elements monitored. Lead has seen a particularly sharp decline falling from 556 ng/m3 in 1980 to 19.95ng/m3 last year, a reduction of 96.5%.

The decrease in air pollution reflects a move to greener industrial and household processes and advances in environmentally focused technology such as unleaded petrol. Dr Richard Brown, Principal Research Scientist at NPL explains.

Seems to me that when people urge adoption of limits on CO2 emissions so that we can "reduce pollution" we should point out first that CO2 is not a pollutant, then inform them that real pollution is already being reduced.

Monday, January 14, 2008

Alberta workplace wisdom

Albertans have a way of getting to the point at work. Here are a few examples:
  • Don't waste your time. You can't polish a turd
  • He is all hat, no cattle
  • No matter how much mayonnaise you pour on it, you can't turn chicken sh*t into chicken salad
  • He couldn't pour piss out of a boot if the instructions were written on the heel
  • If sh*t was electricity, he'd be a powerhouse
  • I wish I knew as little about this as you do

Handsome car

Saturday, January 12, 2008

Greetings to my Romanian Visitors

Bună ziua!

Here is another photo of that beautiful AMG 280e.

Spending Fast

I told my wife that I was going on a "spending fast" for January. She agree to start spending fast too.

What a great language...

Friday, January 11, 2008

If Alert, Churchill and St. John's aren't warming global warming happening in Canada?

Read this analysis by Claude Jollet, an Environment Canada information specialist. Note: these are locations relatively unaffected by urban heat island effects. You would be hard pressed to convince me that there is a general warming trend worth worrying about.

Nice work, Claude!

Pretty sure I know how Criss Angel did this...

But it still creeped me out.

Tuesday, January 08, 2008

Haiku U (3)

Waiting for Godot

Act I. "It's hopeless.
My boots don't fit. Where is God?"
Act II. The same thing.

Sunday, January 06, 2008

Announcing the end of Global Warming

A recent change in the sunspot regime will lead to intense global cooling, according to the Space and Science Research Center, an Orlando-based solar research organization. I doubt we'll see this story on the front page of the local daily any time soon.

I still believe that the response to "climate change" (an annoying term that hints there ought to be "climate stasis" instead) is what mankind has always done as the climate has changed, ie choose among the following three alternatives:
  1. Adapt
  2. Move
  3. Perish
Nothing we do about carbon emissions will make the slightest difference anyway. Let's go fry bigger fish, maybe starting with water quality and availability. I can't wait for the debate around the first nuclear powered desalination plant.

Laughter may be the best medicine...

...but it's no punacea.

Sorry. Bad puns amuse me. I blame it on the way I was raised.

The old "juggling in a cone" trick

Betcha haven't seen THIS before.

Haiku U (2)

Haiku U by David Bader

The Canterbury Tales

Pilgrimmes on spryng braecke --
roadde trippe! Whoe fartted? Yiuw didde.
Noe, naught meae. Yaes, yiuw.

Thursday, January 03, 2008

Haiku U

A great book called Haiku U by David Bader, condenses 100 great books into 17 syllable haiku.

A sample: Homer's Iliad
Sing, Goddess, of how
brooding Achilles' mood swings
caused him to act out.

The Best Stock in the World

The perfect common stock would include low risk, with a guarantee the stock could not go bankrupt or become worthless. It would also include a guarantee that new shares not be issued easily.
It would preclude management mistakes and internal financial surprises. There would be no management succession problems or surprises in foreign countries. It would thrive in a growing world economy.
It would be immune from financial and currency upheavals. It would be undiscovered by the great majority of investors. Its value would be misunderstood and under- appreciated. It would be a stock that wasn’t a fly-by-night, and had a long history.
Most of all, it would be cheap, with the potential to multiply many times in value. It would be capable of favorably impacting your financial condition. You can dream of such a perfect stock, or you can just buy silver.
(Read the full article by Ted Butler)