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May 19th, 2010 at 9:30 am » Comments Off
In his MarketWatch article today, Mark Hulbert writes,
Would you be interested in an all-weather portfolio that, despite hardly ever changing its composition, performs creditably in almost all market environments?
Hulbert characterizes the Permanent Portfolio this way:
Browne’s idea was to invest in a basket of asset classes, each one of which has a low correlation with the others. As a result, when any one of the asset classes is performing poorly, there is a good chance that the others will at least be holding their own — if not actually appreciating in value.
He describes Harry Browne’s Permanent Portfolio as an antidote to volatility. He then gives some past performance of the PRPFX fund which somewhat implements Harry Browne’s concept:
This fund over the last 15 years (through Apr. 30) has produced an 8.2% annualized return, which is remarkable given that stocks, gold and bonds did not, individually, do as well: The Wilshire 5000 index gained 7.9% over the same period, the Shearson Lehman Treasury Index produced a 6.3% annualized return, and gold bullion rose at a 7.7% annualized pace.
I might suggest that while the result of the four asset classes is low correlation, that is not the way Harry Browne explained the reasoning. Instead, the portfolio is designed to have one component that does well in each of four different economic circumstances: prosperity (stocks), inflation (gold), deflation (LT Bonds), and recession (cash). Harry said that while you can expect one of the assets to go down, the one that goes up more than makes up for the loser. For example, while one asset may go down 30% or 40%, the winning asset can go up 200% or 300%, more than making up for the loss.
I think the best thing about the portfolio is this: No one can predict the future so we might as well invest in all possibilities.
January 27th, 2010 at 4:42 pm » Comments Off
Just a quick post to review the predictions I made and how well they turned out.
- Name: iPad (Ding!)
- Size: 9.7″ (Ding! I said 10″)
- Form Factor: Basically a large iPod Touch (Ding!)
- Home Button? (Ding!)
- Aluminum back? (Ding!)
- Buttons and holes: headphone (Ding), microphone (Ding), volume (Ding), mute (Ding), sleep (Ding)
- USB port? (Bzzzt!) Only has Apple dock. But that serves to connect to your computer. And it does have adapters for cameras.
- Orientation: (Ding! Both portrait and landscape)
- WiFi (Ding)
- Internet connectivity: (Ding? 3G is optional. Nice surprise that it is easy to get 250MB/mo for $14.95)
- Won’t have a phone (Ding!)
- Software: (“It will be like an iPhone with some iWork apps available for download” DING! DING!) It actually runs iPhone apps like I expected.
- Books: (“They will probably start selling books through iTunes.” DING! DING!)
- GPS and big maps (DING!)
- Cameras: (BZZZZZT!) Not three, not two, not even one camera. Maybe version 2?
- Cost? I said $899 dropping to $699. I assumed it would have a 3G card installed. Their price for 3G? $629 to $829. Plus you want to buy the keyboard, case, and adapters. So I give myself a DING! for the price as well.
So I think I got most everything right. Big misses on cameras and USB port. Bottom line is that the iPad is pretty much exactly what I pictured it to be in my mind. I will own one (or more).
January 12th, 2010 at 10:57 pm » Comments Off
Take your pick of names but we are all awaiting the next holy product to be announced from Apple. After “The Jesus Phone” which had people literally weeping in their seats upon its unveiling, the Apple Table is set to be the next revolutionary gadget that we didn’t realize we couldn’t live without.
I have a small window of time before the official announcement is made before which I can make my own predictions, wish lists, and observations about the new miracle device. Apple is expected to announce it on January 27th at a media event. I guess there is not enough time for them to get all my wish list items incorporated into the thing, but at least they will have my wish list for their 2nd generation of it by 2011.
First, my preferred name for the thing is the Apple iPad. I like the way it rhymes with iPod and it is alliterative with iPhone as well. iSlate is my 2nd choice just because it sounds cool. iBook would be my 3rd choice as it would fit into the MacBook line nicely, but iBook places too much emphasis on this thing being just an eReader and not enough on the other things I want it to do. Read on. iTablet? Sounds like something Dell would call it.
Form factor. The iPad will have the 10” screen everyone is expecting and will basically be a “Honey I Blew Up the iPhone” looking thing. A home button at the bottom and that’s all you see physically. Aluminum back, buttons and holes along the edges. Nice places to put your fingers as you hold it in portrait or landscape orientation.
Buttons and holes will include those found on the iPhone: Headphone/microphone jack, volume buttons, mute switch, sleep button. But it will also include USB. The BIG question is will it include a power hole or a iPod dock hole? You see, it makes a difference in deciding if the iPad will SYNC with a computer or will BE a computer. Will your iTunes library still be on your MacBook and you have to sync it with the iPad, or will the iPad have enough storage to hold all your music by itself? My guess: it will BE a computer and can run iTunes on its own. It could still share music with your MacBook with that family sharing route and it could share photos and files and so forth. So my money is on it having a nice magnetic power adapter with all kinds of neat accessories we can buy like a car charger and external battery. PLEASE let me use the same magnetic adapter as my MacBook. My guess: they won’t! (They make TONS of money on those things!) And make some kind of adapter that lets me plug it into all my various iPod connectors in the car and external speakers.
The USB adapter will allow commonly needed connections like cameras, flips, and, wait for it… iPhones! And yes, i want to be able to charge my iPhone from the battery of my iPad. You won’t need USB for the external keyboard and mouse because those will connect via BlueTooth. And while you are typing and mousing on your iPad, you will need it to somehow stand up, won’t you? So I’m wondering if this thing will have some sort of picture-frame-like stand on its back that lets you sit it on a desk or table either in portrait or landscape orientation.
I keep harping on orientation. For me this is key to the iPad: being able to read books and long pdfs on it in portrait mode. Already it is more useful than a MacBook for that reason alone. I find reading books in landscape to be too small a window into the text. I don’t know how many others are like me, but the first thing I do on a new computer is move all of those dock or taskbar things from the bottom of the screen over to the left side. That gives me a little more reading room on my MacBook. And I try to trim menu bars and status bars away as well. With the iPad in portrait mode I will be in reading heaven even on a smaller 10” screen.
How will this thing get on the Internet is a key question. Of course it will have Wi-Fi. But will it be on the 3G and EDGE networks as well? Will I have to buy more service from ATT Wireless? Will it tether through my iPhone? Will the iPad BE a phone? My hopes are that it will BE a phone that uses the same phone number as my iPhone, that I can talk on either one, that I can switch between one and the other during a call, that I can surf the net on the iPad while talking on the iPhone, that it can let me make and receive calls with my BlueTooth headset, and that it can act perfectly well as a desktop speakerphone. Not too much to ask, right? If iPhone was the “Jesus Phone” then what would this iPad be, the “GOD” phone?
But my guess of what will actually happen is more limited. I think for this first release it will have Wi-Fi and 3G and EDGE DATA networking only. You will have to add some sort of appendage to your ATT Wireless iPhone plan to get remote internet on the thing. No calls, talking is for iPhones and that is the way we say it will be, says Apple. Maybe in a later release they can figure out if it makes sense to add a phone or not. Perhaps too many people will end up using the data plan to make Skype calls and they will come around.
What about software? Is the iPad a small MacBook or a big iPhone? Wow, this is a tougher one to call. I can make a good case for both. You want to be able to run iWork on the thing, right? But yet Apple wants you to buy 10 billion apps for the thing too. So like a flash it hits me: it runs MacOS but with an iPhone mode so you can do BOTH. But the iPhone OS is all about limiting what you can do. Will Apple want to limit what you can do in the iPad? If so, it will be more like an iPhone with some iWork apps available for download. Actually in that case they will probably throw in some iWork apps for free but you gotta buy all the other cool stuff.
How will you use this thing if you already have a MacBook and an iPhone like I do? You will have your iPhone in your pocket, your MacBook on your desk, and your iPad in your hands. On the couch, in a seat, or in bed. This is the “media comes to me” device. Read a book? Sure, the iPhone already has the Kindle app from Amazon so you can buy thousands of books for $9.99 and start reading. Knowing Apple, they will probably start selling books through the iTunes store. Don’t wanna miss a market, right? But I better be able to get pdfs onto this thing easily and freely or it goes in the trash.
You will also of course watch movies, listen to music, surf the net, and make blog postings. Standard fare. It is the book reading thing that makes the iPad so special. And of course it will be the first successful touch screen computer from Apple. The iPhone set the stage, but now we will have pinch and zoom super-sized. We’ll be using our arms more to see those details from the satellite view. Ah yes, GPS. Big maps finally. Would this thing be appropriate on the dashboard? Not unless it has a camera that can show what is in FRONT of the car! And speaking of cameras, it needs at least two: One on back like normal on the iPhone for taking vids of others and one on front for taking vid of you. Maybe one on the side just to be sly. And I’d really love it if the one on the front is actually UNDER the center of the screen, invisible to us but fully able to see us nonetheless. That way on video calls people will be looking AT YOU instead of somewhere off into space.
Finally, the dreaded question: How much will they want for this thing? Remember when the Jesus Phone first came out how much they charged? Same deal here, waayy more than what we want to pay. They will really put it to those early-adopter guys, hahaha! I expect that early price to be $899. Gasp! With netbooks retailing for $399! Yep, but it will drop after a few months to $699 and everybody will be like, “Whew, now I can afford one at last.”
So prepare for the iPad invasion. Prepare for the weeping, shaking bodies to behold not the iTablet being brought down from the mountain but the iPad being unveiled on Steve’s stage. I can’t wait.
February 19th, 2009 at 9:37 am » Comments Off
The Austrian economists anticipated the present crisis. Should we listen to them when it comes to their predictions about what comes next? In one voice they are saying we will experience inflation unlike we’ve seen in the USA in over 100 years. Inflation is defined as the increase in the supply of money and credit. We are certainly experiencing an increase in the supply of money at present. But the draw-down of credit is counter-acting the monetary inflation and we are hovering in inflationary stasis at present.
Fed Chairman Ben Bernanke said the same thing on February 18th:
Some observers have expressed the concern that, by expanding its balance sheet, the Federal Reserve will ultimately stoke inflation. The Fed’s lending activities have indeed resulted in a large increase in the reserves held by banks and thus in the narrowest definition of the money supply, the monetary base. However, banks are choosing to leave the great bulk of their excess reserves idle, in most cases on deposit with the Fed. Consequently, the rates of growth of broader monetary aggregates, such as M1 and M2, have been much lower than that of the monetary base. At this point, with global economic activity weak and commodity prices at low levels, we see little risk of unacceptably high inflation in the near term; indeed, we expect inflation to be quite low for some time.
He acknowledged that they are inflating. But he threw a red herring into the mix by talking about weak economic activity and low commodity prices (Heh, except gold, right Ben?) trying to infer that they are somehow the cause of inflation. No, they are the result of inflation. Next, he went into how they will correct their inflation:
However, at some point, when credit markets and the economy have begun to recover, the Federal Reserve will have to moderate growth in the money supply and begin to raise the federal funds rate. To reduce policy accommodation, the Fed will have to unwind some of its credit-easing programs and allow its balance sheet to shrink. … However, the principal factor determining the timing and pace of that process will be the Federal Reserve’s assessment of the condition of credit markets and the prospects for the economy.
Bernanke recognized that the plane is in a nosedive and at the last minute he plans to push on the stick and go airborne again. I hope it is not a cloudy day when he has to judge how far the plane is from the ground. He wrapped up his thoughts on inflation and how to avoid it:
As we consider new programs or the expansion of old ones, the Federal Reserve will carefully weigh the implications for the exit strategy. And we will take all necessary actions to ensure that the unwinding of our programs is accomplished smoothly and in a timely way, consistent with meeting our obligation to foster maximum employment and price stability.
What do *you* think the chances are that the Fed will get all of the necessary actions right? Have they gotten the necessary actions right up to this point? Let us examine a scenario where they are not able to get it right and we do indeed experience undesirable inflation, which I will define to be anything above 5% annually.
How might the various asset classes be affected in times of inflation? To answer this question, I utilized Simba ‘s spreadsheet for back-testing portfolios (which I imported into Google Spreadsheets) to do a correlation between CPI (Consumer Price Index, the government’s official inflation number) and various stock fund, bond fund, and gold returns. The data in the spreadsheet uses annual returns of Vanguard index funds along with the yearly closing price of gold from the years 1971 – 2008. The spreadsheet already calculated the cross-correlation between each of the mutual funds and it lists the annual CPI index. So it was very easy to drop the CPI into one of the mutual fund slots and instantly see the correlation between every asset class and inflation. Here are the results, sorted by correlation:
||T-BILL (money mkt)
||Long Term Govt Bnd
||Short Term Trsry
||5 Yr T
||Small Cap Grwth
||Large Cap Grwth
||Total Market US
||Large Cap Value
||Small Cap Value
The table shows those asset classes that were most closely correlated with the CPI at the top. Note in the third column that a value of 1 would mean the asset is perfectly correlated, -1 would mean perfectly correlated inversely (it went down exactly as CPI went up), and 0 means there was no correlation: it was random.
So we see that those assets that were most highly correlated with CPI were T-bills, gold, long-term government bonds (inversely), short-term Treasuries, and commodities. Everything else was below 0.25 correlation. Interestingly, micro cap stocks were totally uncorrelated with inflation.
So how did a portfolio of those assets perform during the years 1973-1981 in which CPI was 8.7, 12.3, 6.9, 4.9, 6.7, 9, 13.3, 12.5, and 8.9%?
I constructed a portfolio along the lines of the Harry Browne Permanent Portfolio (HBPP invests 25% each into total US stock market, long-term bonds, money market, and gold) but I added some small cap value, micro cap, and eliminated the long-term bond fund. I then back-tested that portfolio during those inflation years. Here is the portfolio what I came up with:
The Inflation Portfolio:
VISVX (Small Cap Value) 15%
BRSIX (Micro Cap) 15%
PCRIX (Commodities) 10%
VMPXX (Money Market) 45%
The "Inflation Portfolio" had a CAGR (Compound Annual Growth Rate) of 15.5% and a risk (as measured by standard deviation) of 10.5%. Plotting that on a chart, here’s what it looks like compared with some other portfolios and the assets themselves:
The chart shows plots for various portfolios during those inflation years. The plot point directly above HBPP simply substituted BRSIX for VTSMX in the HBPP. The major components of the Inflation Portfolio are also plotted separately showing how volatile gold and BRSIX were themselves. When tempered together with VMPXX, the risk came down considerably while retaining significant returns. You can see all of the rest of the details in the Google spreadsheet that I created for this scenario and you can test out other hypotheses yourself.
The Inflation Portfolio worked from 1973 through 1981. If we see inflation return, would it work again? Some folks are discussing these findings at the Bogleheads forum if you want to chime in.
Please note this is not a recommendation to invest your net worth in the Inflation Portfolio!
February 9th, 2009 at 11:19 am » Comments Off
Amazon announced the upgrade to their Kindle ebook reading device today. Get in line to buy one if you want. I just sold my old one yesterday. I will probably not be buying the new one because I think for $359 I can buy a heck of a lot of books. Or I can buy a netbook and not only read books on it but also surf the internet and get my email.
I owned the Kindle 1 for about a year. I purchased a total of 3 books for it. Yet I had about 100 books on the gadget. How? I used software called mobipocket to convert pdf files to the format the Kindle likes. Many sites on the internet allow you to download free public-domain books. I also didn’t purchase many books because many times the books I wanted to read were not available at Amazon for the Kindle. And if I could get the book from the library, I actually think I prefer the hardback version to the electronic version, possibly because I get immediate feedback of where I am in the book just by feeling it.
I do like the idea that I can carry a stack of thousands of books around on one device. I like that my home is not as cluttered with books. But I’m thinking that if I can find a great pdf reader for the iphone, I’ll just use that instead.
January 26th, 2009 at 8:41 pm » Comments (0)
Read an article by Michael S. Rozeff today in which he describes his approach to investing. The article was called "The Opportunistic Investor ." He says that a year ago he published two articles on buying a diversified portfolio and holding it. That portfolio is down 34 percent. Better than most. He says he actually did not invest according to his advice in that column. Instead, he was in cash.
He goes on to say that buy and hold is not the right approach. And I think the reason might have to do with the notion of "Austrian Investing," though he does not use those words. Here is what he does say about buy and hold:
The problem with that approach was and is government. Government alters currency values, and this alters the value of different kinds of investments. Government creates booms and busts, and that alters investment values. The presence of government forces us to speculate.
Then he goes on to talk about how we need to find value and buy it, be it stocks, real estate, or even timber.
I am on the hunt for more information about Austrian Investing. They’ve been right about the economy, maybe they would be right about investing too.
Oh, and BTW: Mish does a pretty good destruction of Peter Schiff’s approach to Austrian Investing. Good read.
January 25th, 2009 at 11:20 pm » Comments (0)
With the stock market down some 40% last year, many people are asking, "Where did the money go?" Sure there are some stock market losers. But remember the winners, those who sold their stocks in October 2007? They got their money. Remember also that for every share of stock sold, there was a share of that stock bought. But Fannie Mae used to trade for $80 a share and is now just pennies a share. Is the money just totally gone? Where did that market capitalization go? Furthermore, we need to push deeper, past the issues of money and valuations and ask, "Have we really lost wealth?" The answer may surprise. We will get to that last question in a moment. But first, let’s follow the money.
Where did the money go?
The USA Today ran a story that read, "$2 trillion wiped out of retirement funds " so far in 2008. Really? Two trillion dollars is wiped out? Lost? This is a fascinating notion. You wake up one day and wealth is suddenly gone. Vanished. Like some ice cube that has melted on a hot street. Here one moment and gone the next. As we shall see, the ice cube metaphor may be even better than it first appears. Stocks have melted.
The NPR Planet Money podcast a few weeks ago sought to answer the question "What is money?" and recently asked "Where did the money go?" To help us visualize the "loss" of money, they acted out a little skit with three market participants. At the start of the skit it was noted that among them the sum total of money was $400. Russ had $200, Alex had $200, and Lois had a house. (It was a little green Monopoly game piece house.) Russ Roberts (of EconTalk fame) decided he wanted a house. So he offered Lois $200 for hers and she accepted. Russ has the house, Lois has $200. Some time passed and then Russ wanted to sell his house. Alex was the only one who made an offer and it was for $100. Russ took the offer but was obviously unhappy about "losing" $100. At the end of the skit, Alex owned the house and $100, Lois had $200, and Russ had $100. The sum total of money was $400. Therefore, the net amount of money remained unchanged although some of the market participants had varying emotions about their transactions.
Lois was happy to receive the $200 for her house because she said she had originally purchased the house for $100. But she said that she still had to live somewhere and would now have to go and buy another house. Russ was obviously unhappy because he has $100 less than when he started. And still no house. Alex was probably the happiest because he has a nice house and still has $100 of his original $200 remaining. But with the net amount of money remaining the same, they didn’t really ask the question, "Why did the house only get an offer of $100?" Why not a $300 offer? Don’t house prices continuously rise and never fall? It was a fun exercise to walk through, but it still left me unsatisfied. What’s behind the rise and fall of prices? Let’s try to figure that out. But instead of houses, let’s switch over and talk about gold for a moment.
Gold and the Market
Gold is different than houses. We can’t live in gold. Instead, gold is money. Ancient money. Gold would still be money today if the governments would stop prohibiting it from being money. Consider these characteristics of money: money must be marketable, easily transportable, relatively scarce, relatively imperishable, easy to store, easily divisible, and uniform in quality. Gold meets all of these characteristics and has been used as money by default through the ages. Ironically the dollar, the world’s reserve currency, doesn’t meet all of these characteristics. It misses the scarcity test.
So let’s trade two things: dollars and gold. It used to be that a dollar represented a fixed amount of gold, but today we can trade one for the other at different amounts. If you have dollars and I have a one ounce gold coin, you can make me an offer to trade some of your dollars for my coin. I can accept or refuse. If you offer me $200, I will refuse. If you offer me $2000 I will accept. Somewhere in between these two ranges we may reach an agreement (or we may not). The more people there are around to offer bids and ask for bids, the greater the chance that someone can reach an agreement on a fair trade. As an example, say your bid for my gold coin is $600 but Troy bids $800. You may consider increasing your bid to $850 in light of his bid. But before you do, Bill next to me accepts Troy’s $800 bid for his coin. You witness that and decide to limit your bid to me to $800 also. Why pay more, right? Or if you are really trying to game me, you may hold your bid at $600 thinking that no one else is around now that will bid something higher.
This is the workings of the market. Bidding and asking is how we reach agreed-upon prices. This is why stock prices are what they are: dynamic. It is a continuous mixture of people wanting to sell at the highest asking price and people wanting to buy at the lowest bid price. But they know they are competing with other sellers and buyers for those same shares.
Competition is the heart of the market. It is the heart of the gold market and the heart of the real estate market and the heart of the stock market and even the heart of the currency market.
In the NPR skit, Alex was able to buy the house from Russ for only $100 because there were no other offers higher and Russ really wanted to sell. A motivated seller they say. Perhaps he needed to move because of a job relocation. There are motivated sellers in all markets just as there are motivated buyers. Are there more motivated sellers than motivated buyers? Prices will fall as bids dry up. Prices will fall as the number of offers rise and the amount asked for sinks. Are there more motivated buyers? Prices will rise as bidders compete. Prices will rise as owners hold tight.
Presently in our global stock markets our global real estate markets and our global commodity markets we have not just a boatload of motivated sellers but a whole fleet of cruise ships full of motivated sellers. We have banks, brokers, hedge funds rushing for the exits at the same time, needing to sell just to get the dollars to pay off debts and client redemptions. We even have investors motivated to sell simply because they see so many other motivated sellers selling.
As naturally happens when motivated sellers outnumber motivated buyers, prices drop. We might call this an asking war , the opposite of a bidding war. Sellers lowering their asking prices in the face of other low asking prices. Asking prices for stocks go lower. Asking prices for houses go lower. Asking prices for copper goes lower. But motivation in a particular market is only part of the story. We need to also consider motivation across markets. I may want to sell my house not because of physical reasons but because of economic reasons. Perhaps I want to trade house wealth for stock wealth. I may prefer at present to rent and hold 10,000 shares of an index fund rather than owning a house. I probably will not find the exact trade I’m looking for; that is, someone to offer to trade me their 10,000 shares for my house. Instead, I’ll have to trade through money. I sell the house for dollars and then sell the dollars for the index funds.
But the net amount of money in the system doesn’t change as a result of motivations. The buyer gets to keep the net amount that the seller loses out on. Alex has the $100 instead of Russ. When prices kept going up, did anyone ask, "Where did that money come from?" Not likely. We don’t care how we got it. Yet we darn sure want to know how we lost it. But both answers are the same. The net amount of money remains constant among the total pool of buyers and sellers.
[Note that I am for purposes of this discussion ignoring the effect of fractional reserve banking and the creation of money when lent and the destruction of money when a loan is paid back. This effect is indeed serious and makes an enormous impact to the economy as a whole.]
Now we know where the money went. It is still there. Not a satisfying answer to owners of stock mutual funds in their 401K plans who say, "Oh great, more motivated sellers means any bids I seek for my shares will be lower if I were to try to sell today." Penny’s 401K plan may have a cost basis of $100,000. And last year when she checked the bids on her portfolio it may have fetched nearly $300,000. But based upon recent offers, it may only receive bids for $150,000. That seems like lost wealth to Penny. Is it?
It depends. It might not be lost wealth to Penny. We need to look at what Penny would have wished to trade her shares of stock for? A house? If so, Penny is in luck because houses she liked that used to fetch $300,000 bids are now asking only $150,000. So Penny’s 401K plan would buy the same amount of house even though its dollar value has fallen in half. Similarly, Penny may have wished to use her 401K to travel or to eat or to pay her gas bill. Dollar values for each of these things may have fallen, but their values may have stayed relatively close to the value of her stocks over that time.
We are living in a world where bids for practically every asset are lower in comparison to bids for dollars. Many motivated sellers of stuff, many motivated buyers of dollars.
So the problem is the thing we are using as money, which itself is becoming more "valuable." The banks, brokerages, and hedge funds that need to get dollars are not just motivated sellers of stocks and commodities, but they are also motivated buyers of dollars. There are lots of motivated dollar buyers. Prices of dollars rise. Everything else seems more expensive compared to dollars as a result.
But we the investing public with 401K plans are typically not motivated buyers of dollars. We are more typically motivated buyers of the things that dollars buy. Food, travel, cars, shelter, heat, etc. When we trade one of these for the other, we might expect roughly the same item-for-item transaction this year as we did last year. The thing in the middle is what has changed: the money. The demand for the dollar by banks, brokers, and hedge funds has skewed the monetary valuations of both the things that we need to sell and the things that we want to buy. But in the end, it might possibly be that our wealth remains somewhat unchanged just like the amount of money remains unchanged among buyers and sellers.
Which brings us back to the ice cube metaphor. With melting stock prices, melting real estate prices, and melting copper prices, just like a melting block of ice the water still exists — only in a different form. The wealth once stored in stocks is now stored in dollars. Ice melts to water. Stocks melt to dollars. There is one more thing. Something I really don’t want to think about in this analogy. What happens when the water evaporates?
January 24th, 2009 at 8:53 am » Comments (0)
I loved the most recent EconTalk podcast with Russ Roberts interviewing Eric Raymond about Open Source software. Eric explains why it works and why it works better than closed source.
I think we need to take the discussion to the next step and talk about open source Government. One of the keys of open source software is the idea of “forking” the code. If someone wants to go a different way, they can make a copy and do their own thing with it. I suppose the idea of “state’s rights” is like forking the code on a governmental level.
One thing they talked about regarding open source development is that it works best (especially graphical user interface development) when there is a “dictator” who approves the changes. We’ve come to think of dictators in government as being a bad thing. Maybe it is a matter of scale. If the dictator role is moved down the the smallest level of government, maybe the the analogy could work. But certainly not at a national leve.
January 20th, 2009 at 8:48 pm » Comments (0)
Wow, people were really excited today. I must admit, I was getting caught up in the euphoria somewhat myself. I was mostly watching CNN but I also caught the streaming tweets at http://tweetgrid.com/inaug09. As you know, even though I have a Twitter account , I haven’t made much use of it yet. But lots of other people sure have. And when in their Twitter postings they type in a special tag "#inaug09" it helps other people find their tweets. That’s what tweetgrid does. You kinda sit there and watch people posting tweets in real time. Sometimes their links are pretty helpful. Several people post photos in real time. Others post links to major media stories. It was the first place I found out that whitehouse.gov got updated, for example.
But the thing that I got caught up in was the emotion, the joy, people were experiencing at the change of our Chief. They really believe things are going to be different and are going to be better. So far, I have to say they are right. The inauguration itself was indeed a spectacle. Good thing inaugurations aren’t held in June or there would have probably been ten million people trying to get down there. I don’t think I’ve ever seen so many JumboTrons. The media is just fawing over him. He is the rock star’s rock star. He is the Tiger Woods of presidents. BHO is the new JFK.
I believe that joy can be contagious. Like yawning. Like laughter. And with better than one half of our country experiencing sheer joy, maybe the other half can set aside their bitterness, sourness, or skepticism or whatever for a while and give this new executive branch a chance. Let’s see if Obama and his team push the pendulum toward liberty or toward tyranny. Let’s see if it is going to be Austrianism or Keynesianism that gets the upper hand. Let’s see if government does indeed get better.
That’s one of the things I remember from his address. Don’t focus on whether government gets bigger or smaller. Focus on whether it gets better. He will evaluate the effectiveness of each org, and the ones that don’t cut the mustard get dropped. (That could turn out to be a whole lot of orgs!)
So my question is this: After the white tablecloths get balled up and sent to the laundry tonight, will there still be joy tomorrow? Will John Stewart get nasty every night toward this Chief? Or will there be some spirit of civility? Will BHO really bring out the best of the politicians so that they work for us and not themselves? Or is this all just some audacity of hope?
January 14th, 2009 at 4:55 pm » Comments (0)
So Skype emails me and wants another $60 for my phone number for a year. Bah! The way I figure it, this is not just the "Information Age" but the "Free Information Age." I mentioned on show 141 that I was probably not going to pay. Well, leave it to a listener to remind me of a better (free) way. RalfX called on Skype (actually a Skype-to-Skype call too, so I didn’t need the incoming phone number) to say that he wrote a blog post on five ways to get a free phone number . I read it and was reminded that a long time ago I set up a GrandCentral number. I never used it because I already had too many phone numbers in my life. Well, now that I have one fewer number, I can add this one back in. 571-366-7121. Call it and leave a voicemail.
I noticed one feature that GrandCentral has that Skype does not: the ability to DOWNLOAD the audio file! No longer do I have to go through hoops rigging up some audio hijack software to play and record the Skype message. Nice. I also like the fact that I get emailed immediately upon receiving a voicemail. I don’t have to have an application running on my computer to get the voice message too.
Maybe someday I will merge all my numbers to this one number, once I really get my contacts put in there correctly. It supposedly allows you to allow calls through from people you know while routing others to voicemail.
January 12th, 2009 at 8:23 pm » Comments (0)
Remember that new Dell XPS I bought off eBay to help rescue my previous DELL XPS that failed? And remember that it worked, right, I got my data off the hard disks. Whew, that was nice.
Now guess what? The sound is gone. No audio. Mute. I have tried everything that is reasonable including replacing the sound card from my old XPS onto this one, downloading new audio card driver software, and switching things around. No joy. It just ain’t fun watching YouTube videos with no sound.
But the biggest problem is that I can no longer use Adobe Audition on the PC to record and edit my shows. Sure, I’ve recorded and edited shows on the MacBook in GarageBand. But Audition is the super-ultra-supremo-king of audio editing. I’ve got all the keyboard shortcuts down and can whiz through a show faster than real time now. Not so in GarageBand.
And from what I’m reading on the net, nothing on a Mac is as good as Audition. Some say that Soundtrack Pro from the Final Cut Studio 2 is pretty good, but guess how much that want for that sucker? $400? Nope. $800? Nope. Try north of $1500! Yikes. Can I get a TARP for that?
So I hang my head and commit to GarageBand. Hey, I even tried running Audition under Windows 7 under VMWare Fusion on the MacBook. Hardee har har har on that one. Sounds like this, “a. et. ip. o. ot.” Seems to get about every 1/2 second of sound out.
So Mac here we come full force. I have a countdown list of PC-only applications that I’m trying to figure out how to migrate from. Luckily, none of them require sound. So I can still run them for a while until I figure it out. They are: Fidelity Active Trader Pro (don’t chastise ME!), Microsoft Expression Web, Microsoft Excel, Natara Bonsai outliner, and of course my iTunes library. I’ll let you know how it goes.