October 22, 2013 | 1 Comment
I thought this article might be interesting to those of the Randian mindset looking for love. From the Wall Street Journal:
James Hancock wanted to meet a woman who shared his core values. But when you're a strict Objectivist, it can be a little tricky.
Jason and Morgan Kontz, with baby Elliette, met on the dating site Farmers Only.
Mr. Hancock is a proponent of Russian-American author Ayn Rand's philosophy of capitalism and self-interest. At age 30, he had already been "looking for a very specific kind of woman" for three years when Google searches led him to the Atlasphere, an Ayn Rand appreciation site with a dating component.
There, he found his dream date: a woman who also wanted to do logical cost-benefit analyses of every decision.
A growing number of niche dating sites have popped up to serve people who think they know exactly the type of person they want. These includes Farmers Only, whose 100,000 users may have been attracted to the site's tagline, "City folks just don't get it." More recently, GlutenFree Singles launched for love-seeking wheat-free folks.
Atlasphere founder Joshua Zader, 40, of Phoenix, says niche sites are more efficient than broader sites such as OKCupid or Match.com.
"If you assume that maybe 1 out of 500 people is a serious fan of Ayn Rand's novels, on a normal dating site you have a 1 in 500 chance of someone sharing the same basic values," he says. "On the Atlasphere, every profile shows you what you want," he says. The 10-year-old site has seen a spike in membership in recent years—it has more than 16,000 dating profiles—after two "Atlas Shrugged" movies were released, says Mr. Zader, a Web developer. User handles include "Atlas in Arlington" and "ObjectivelyHot."
There are nearly 100 current automotive based television series, with much of the recent growth seen in the restoration, flipping and auction arena. The situation seems similar to the rapid growth in the number of home improvement and house flipping television series coincident to the peak in residential estate, construction materials and contractor prices.
Secondarily, most systems on cars built since the 1990s, are not easily diagnosed or repaired without expensive specialty tools, and a greater knowledge base then that of the typical shade-tree mechanic.
Accordingly, the near future may be a propitious time to unload equities of DIY themed automotive companies, and even the 1970s muscle car project vehicle that you've been sitting on.
Peter St. Andre writes:
Alternative view: more and more people will become interested in vehicles that don't have black boxes and location recorders built in.
Noticed on the news Russia is returning to the manual typewriter for sensitive secret documents.
I still have my Tom Thumb with metal cover from my youth. Also my Tom Thumb cash register. A Royal typewriter that was my Grandfathers and a cased Underwood Olivetti that Grandpa gave me at 12 years old.
Any of you still have an older typewriter?
Peter Saint-Andre writes:
I've been thinking about a return to older and slower technologies as the premise for a science fiction story: typewritten documents, longhand letters, postal mail, printed books, surface travel, pre-GPS vehicles, etc. Not that I've written any science fiction stories to date… ha.
I should add that many people mistakenly come to me to ask for advice on trading. At the junta, where I turned over the moderation to Gene Epstein, he likes to refer to me as a philanthropist. So at the end of each junta, about 20 people crowd around me asking me for philanthropy to them. Another 20 request a meeting with me to get my advice. But I don't have good advice. And I don't have a minute in the week where I'm not trading or parenting with my 7 kids. If one had a minute, it would be nice to say hello to the significant other, especially when one doesn't have a losing position. However, that's so rare that it's not worth talking about.
Many mistakenly see that on occasion I luckily beat the odds and make a small profit and come to me for a little guidance as to how to take out a little profit from the market. It seems so easy and the hourly wage is so great relative to what they make. I note that my average swing from day to day is often greater than my father's total earnings in his life time. That's a terrible lure to many people. But you can't make a profit nor have I ever seen one who could unless you buy and hold, unless you have a tremendous quantified and updated date taking account of all sorts of statistics and randomness and ever changing cycles. Then you have to be there 24/7 to implement it because the swings that are good only last for seconds and if you have job or like to have lunch or dinner, that's incompatible.
Of course other than buy and hold you can always invest with a hedge fund. But… but… but… . By the time, an operator pays his sales force, and his administration, he has to charge 20- and 2. Okay, suppose he can overcome 1- % a year vig, and make 2 % more than the market's 10%. That gives you 12 % before fees and 10% before vig. What's left for you the investor? I reiterate, one feels like telling those who wish to join the fray, come with me to Rockaway or the Hamptons to the ocean. And I'll hold up my hands like King Canute and say, "I am as incapable of helping you, and you are as incapable of making a profit other than buy and hold as I am to stop the waves".
Jeff Watson writes:
I tell people they are better off going to Vegas then trying to trade. At least if you blow a couple hundred grand, the pit boss will give you some comped meals, a couple of shows, a room, hooker etc. The market mistress doesn't even give you a kiss before or after she "takes advantage of you", and you certainly don't get comped.
David Hillman writes:
When people ask me how I make a good living out of my business and appear to work so little at it, I say "If you have 35 years to listen, I will tell you every detail of my career and if you can figure out how to make that work for you, maybe you can do the same." Thankfully, I get no takers.
When people used to ask for investment advice during the salad days when a monkey with a computer could make 30%+ with 'buy and forget', I would say "Oh, here's what I'm doing." I stopped with that and started saying, "Sorry, I don't give anyone investment advice anymore." Now, I say exactly what Blodget says in this piece [forget Task, he's the straight man]. It is nothing really new or different from what many advise, but it cuts to the chase, lays it out and makes the case in a very impactful way. If you have 5 minutes, it's worth a look….I wish every investor could see this.
Peter St. Andre writes:
I don't see that Blodget's conclusion follows from his premises. Yes, the short-term trading game is rigged, but that doesn't necessarily mean that index funds are the right approach for individual investors — maybe long-term / dividend investing is best, maybe permanent portfolio, maybe other things (depending on the investor's mindset, patience, discipline, intelligence, etc.).
David Hillman writes:
I won't debate this, because I'm not here to try to convince anyone of my correctness nor of Blodget's, nor do I care what anyone else thinks, but I will comment.
I don't think it's BS at all. While I can't put the stats on the table, I'd bet something close to the 80/20 rule applies to whom he's speaking when he talks about the "average individual investor" and those who could be investors.
The suggested alternatives, stock picking, dividend investing, etc. require, if not a lot, at least some knowledge and sophistication. Most have little to none of either.
Unlike the astute types here on the list, there's Billy Joe Tireiron, who has an 8th grade education, works second shift at the plant and picks up a few shifts a week at the 7-11 in order to sock a little away. He's not a dummy and may know a little about saving, but knows a nothing about investing.
And, there's the systems engineer who is highly educated, brilliant at his job and spends 80 hours a week at it, but knows nothing about investing and has no time to learn.
There are plenty of individuals like those out there who are smart and good at what they do for a living, they may know about wine, sports, history, art, whatever, but are clueless about investing. I'm sure we all know a ton of them personally, I do.
So, when do these guys have the time to learn about stock picking and/or dividends, and where're they to go to get good advice that is in their best interest? What the heck do they know about investment strategy, short or long term?
When the chair and I first met 11 years ago, I told him the story of a family member, a well-educated person with a master's degree and whose well-educated engineer husband handles their investments, who said to me "We made $1,000 in the market today." I told her they only 'made' $1000 if they sold and took their money off the table. These are very bright people and somewhat market knowledgeable, but still didn't realize there is an important difference between paper money and cash.
Or take a guy who knows very little. He hears dividends are the way to go. So, he buys 100 shares of a commercial REIT at $10/share that's been consistently throwing off a dividend of $1.20 for years. He thinks "well, this is a consistent 12% return, it looks safe, and it's better than the index fund that averages 9%. When the share price falls to $8.00 and the dividend remains $1.20, his yield rises to 15% and he thinks "wow, my dividend is up 25%", but then fails to consider his depreciation of 20% which gives him a net negative total return.
What are the alternatives available to the average guy, one of the 80-percenters, who wants to invest? They can buy into the marketing hype of online brokerages that tell them 'we'll give you all the tools you need', but still have no time to learn and understands half or less of what they're reading. They dive in nonetheless and lose.
Or, they buy some hot stocks or funds because some personality screams a recommendation at them on TV or they read about them in a financial rag a few months after the fact when they're no longer hot. Or, they're sold an annuity by a bank which benefits more than the client from that option, or a whole life insurance policy by an insurer as an 'investment', which we know it is not.
Or perhaps they go to a commission-based financial planner who takes their 6% off the top and they're upside down from the get-go on every dollar they invest. That may be better than the others or not being in the market at all, but why start out upside down? Instead, they can, as Blodget advises, invest in a low-cost index fund, paying 1/30 the 6% entry fee and taking advantage of the long term drift.
Blodget may be generalizing, which is all one can do in a 5 minute webcast, but he does quite clearly make the distinction between the disadvantages of short term trading and the advantages of long term investing for a pretty broad audience. He's making the same case the chair was and has been has made for years.
If one doesn't buy into the drift, fine. But, it's not 'big bad wolfing' nor bad advice to say "hey, average guy……don't swim in a shark tank, don't buy into the hype, instead, play it safer, minimize your costs and go with the drift." Besides, there are some morons out there who should be scared into caution rather than gamble their family's future.
If we want to nitpick, Blodget may fail in saying "the ONLY way for the average guy to make money in the market long term is low cost index funds" rather than to say "there are other reasonable long term strategies that may work for some, but if you have no idea what you're doing and have no time nor inclination to learn, going with low-cost index funds is the best bet to maximize your return over the long term."
And, he probably also should have said "this advice does not apply to the Spec-List where everyone is brilliant and knows what they're doing and many will think this is BS."
March 4, 2013 | Leave a Comment
One of the mantras of those who would convince us individual investors to buy and hold is "you can't time the market". The slogan seems to mean that you can't precisely time the exact bottom and exact top of any given market cycle. But that's a strawman: you don't need to buy on the very day that the market bottoms and sell on the very day that the market tops. Instead you only need to avoid buying when the market is overbought, overbullish, and overvalued, when cyclically adjusted P/E ratios are high, when the Q ratio is high, etc.; and similarly for selling.
Other than broker marketing materials, does anyone here have a good citation for the source of this old bit of market "wisdom"?
George Parkanyi writes:
It's the mantra of the mutual fund industry (a) they want you to stay put so they can keep the fee stream going (they make money whether you win or lose), and (b) don't like you moving the money around from fund to fund because then they have the hassle of redemptions/re-balancing and/or parking your money in lower MER funds such as money-market for extended periods of time.
Ralph Vince writes:
I've met people who can time the market.
And I would also say that it isn't necessary to do so.
There are many ways to be successful at this. It's a matter of finding what works for the individual, to find his groove. And it is precisely THAT which is the hard part.
Once in a while someone asks me how it is that I accomplish so much. (I'm not convinced that I accomplish more than most people, but perhaps my accomplishments are more public.) In large measure I think it's not because of what I do, but because of what I don't do.
Here are some of the things I don't do much of: watch television, closely follow the latest news, hang out on Facebook and other social networking sites, randomly surf the Internet, engage in chitchat with my co-workers, eat out for lunch or dinner, or go shopping. Don't get me wrong, some of these activities are enjoyable and distracting, but I work to avoid them as much as possible.
What I've found is that eliminating these less productive activities frees up a great deal of time for the more productive activities in my life. By avoiding social networking sites and not watching television and not going out to dinner in the evenings, I have time to work on my music, read real literature, do some stretches, and write (I aim to do each of those things daily). By not going out to lunch or chatting with my colleagues or checking the news throughout the day, I have time to complete more high-value tasks at the office. And so on.
Recently on a finance discussion list I frequent, a participant raised a similar point about investing: don't spend a lot of time trying to find a portfolio of perfect companies, but instead formulate a list of strong possibilities and then eliminate the losers (or at least the companies that are less likely to succeed over the long term).
We all have a "portfolio" of activities we could engage in, but, just as in investing, time and money are preciously limited. The approach most people seem to take is to add more and more items to their to-do list. By contrast, I'm thinking that it's more effective to add things to my to-don't list; as a natural byproduct, I will focus more on what really matters and less on what's nonessential.
June 27, 2012 | 6 Comments
I am at a loss why seemingly great athletes — those you would expect to have the keenest kinesthetic awareness — seemingly struggle on the dancefloor (I am not referring to ballroom-type dancing here…..not just shaking around on some club floor). I used to think that they were merely overly-self conscious, and this was causing their seeming stiffness. Yet, these very athletes excel precisely because they do NOT stiffen up and understand perfectly well the necessity of avoiding that, as well as preventing adrenalin surge, or coping with it in beneficial ways.
Peculiarly, the only atheletes-turned-dancers I have seen who can perform the dancing aspect gracefully are those who are boxers or very good standup fighters.
And the more I have watch this, the more evident it has become to me why (this is my hypothesis, which I am seeking feedback on here). A great ballroom dancer, like a great boxer or stand up fighter, has to have his feet under him such that if he were wearing a belt buckle, it would be slightly pointed upwards. In all other sports, be it playing shortstop, returning a tennis serve, a hockey player…..there is a certain, crouched position where the belt buckle is pointed downwards.
Yes, the best boxers, the best standup fighters almost invariably have tremendous footwork, where even their punches come from the balls of their feet (watch a slow right cross from Ali, how the ball of his right foot pivots, the heel up and turning outward, allowing that complete extension through his target). Many of these guys are often even built much like Fred Astaire, light not just in bodyweight, but seemingly light on their feet as well (though, not to the extent of Astaire, who must have been filled half with helium, the man was truly superhuman). Yet, footwork aside, it seems the angle of the belt buckle, in a range of, say, ten degrees, is a hugely discriminating factor in what permits an athlete to go from his game to the dance floor.
Russ Sears adds:
In my opinion, there are at least 2 reasons "great athletes" are not dancers both stemming from your definiton of "great". Most of the highest paid athletes need 2 things extra-ordinary size and extremely high levels of fast twitch mucles.
The size comes at a considerable price to "grace". Extra ordinary increase in growth during teen years happen with increase muscular strength often very awkward years for even more normal sized men. It takes much more to control a large body to make delicate movements. Those needing the speed spend considerable time training for raw speed, to go with that size, not necessarily intricate steps and bends. Those needing delicate touch, likewise spend considerable time to get the hand/arms to move just so.
But perhaps more important is the fast twitch need in most of the highest paying sports leaving the "great" athlete with little endurance. Endurance comes with a more balanced slow twitch combination. A cardio taxing dance last several minutes long.
Dancers have considerable cardiovascular fitness, as do boxers. The middle distance runners I have known often are great dancers and often make great boxers and vice a versa. In the olympics note the events that last 2-5 minutes at a hard pace with no rest and you probably have some great dancers. The longer events suffer the opposite, slow twitchers can't jump but have great endurance but lack the explosive movements ability.
Anecdotally, didn't Apolo Ohno win "Dancing With The Stars" one season?
Duncan Coker writes:
I used to take lessons and compete in some pro/ams back in the 90s in New York, and also got to know a lot of the professionals at that time, mostly British and Russian. Ralph is right about the position of the man's belt buckle as it is quite important. The center helps create a floating style important in ballroom. Also interesting, the term swing as it applies to ballroom dance is not really about 1940s swing dancing. Rather it means to mimic the swing of a pendulum in fox trot and waltz. As the dancers are moving laterally across the floor they are also gliding up and down. Another position technique that was taught was contra body movement (CBM). It means to move the feet and legs in one direction while maintaining contact with a partner in another direction. Most professional couples start dancing in childhood, so the steps and physical attributes are ingrained early. I can see how many of these techniques would be hard to learn by even accomplished athletes in other sports later in life.
Ballroom is a strange and wonderful world. It still amazes me the tv shows are so popular, but I think it is great.
Ralph Vince writes:
Once, in working with a biochemist-turned-programmer, and talking about my pathetically slow running, the Chinaman, the biochemist (who was no runner, not the slightest athletic propensity whatsoever) told me that age, weight, and cellular mitochondria were the limiting factors. The only one I could really change was my weight, in order to get faster.
Now, I don't believe that entirely, because that would mean that whatever training I did only benefited by whatever weight I took off, and clearly there are 02 factors that you can train for, etc. But he did point out that I am not going to cut my average mile time in half — a valid point. He then mentioned that in all creatures, speed is a function of how much mitochondria is in one's cells, with, say, a cheetah having a great deal of it, human beings, in differing degrees, of course, possessing far less.
Now, this has nothing to do with Fred Astaire's ability to beat the living daylight's out of most thugs (I am convinced a man with his feet and coordination could have done that handily, and I say that based on the little thugs I knew in my youth who were physically disposed in similar though far less amazing ways) but I would like to know your take on that given your background in the world of running.
Russ Sears replies:
Despite the popular assertion to the contrary you can not "be anything you want to be." relative to others. No amount of training will get a sprinter to turn into a distance runner and vice versa. I believe it was Flo Jo that after retiring from sprinting tried to become a distance runner. She was very dedicated, hired smart coaches and believed she was going to be great… but never ran a 5k faster than about 21 minutes. Now this is a decent time for the general population. Competitively this would only get her onto most high school girls cross country teams. In most teams even small schools this time would not be the best on the team. In evaluating kids to guide them into the right event to try out for in track in field I have tested for the following.
Sprinters- Fast twitch explosiveness- standing and running vertical jump relative to size. Muscle size relative to strength is important, lean muscles verses bigger more explosive. Bone size is also important.
Stalky - bigger muscles large bones, built for sprinting and short middle distance.
Lanky - Small bones, lean muscles for distance and longer middle distance. Middle distance - repeat 200 meter and 400's times. Distance VO2, max heart rate, and recovery time - Push-up and pull-up counts coordination for most field events - timed box steps up and down in patterns. Weight /Size and arm and leg strength with fairly good fast twitch relative to size for throwing. Small bones but explosive for high jumpers. Pole vaulters - coordination, explosive, stalky, fearlessness- look for trampoline and diving craziness.
You can be good at an event simply by loving it, training for it, have some core athlete talent and being in shape, but to be great you have to have several genetic factors in your favor.
Some of these factors can be changed by type of training, eating and lifestyle while young etc. But you can not completely reverse them by nurture. Most people that run regularly will see their times drop for many years. It takes about 10 years of hard cardio training to fully develop your cardio system. But your body will break down due to training before it could develop someone without the core body type and muscle types into a distance runner.
Peter Saint-Andre writes:
Lessons for traders and investors here? Probably some folks are built for short term trading, others for long-term investing, others for building companies directly, etc…
Nowhere (arguably) has the peer-review system been hijacked more by "the system" than in the area of global warming. As it became essentially impossible to obtain public funding for any research that had an explicit goal of disproving any specific aspect of it, and it became much easier to obtain research funding for any related (and sometimes unrelated) subject by citing its connection to global warming as at least a partial goal of the proposal, "the system" organized itself to defeat any spontaneous or privately-funded challenges by any means necessary.
Ironically, it is the Socialist-leaning Sinclair who captured the phenomenon perfectly in the following quote:
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."
Ron Schoenberg writes:
I'm a econometrician with forty years experience in fitting statistical models. You can google me. The last 22 years I've been involved with writing computer programs for fitting statistical models. I was recently introduced to your web site and I haven't posted anything yet.
But I'm forced to respond to this post.
It's true that the peer-review system can sometimes fail. A better example is the graduate student who proposed that our continents float on tectonic plates. It took years for tectonic plates to be accepted. Global warming however is not a good example. Plate tectonics, Relativity, the heliocentric solar system were paradigmatic. Global warming isn't. A better comparison of global warming is with cigarettes causing lung cancer. Scientists were producing increasingly alarming connections of cigarette smoking with lung cancer. The cigarette companies were freaked out because this hit their bottom line. They funded scientists to produce confusion about the results the scientists were finding. They succeeded in delaying the results from being accepted.
In the same way oil companies are threatened by global warming. The value of their companies depends critically on the oil in the ground they have control over. The implication of climate science is that this oil should be left in the ground. Their valuation shrinks to next to nothing. All they going to have left is plastic (Cf. The Graduate). So they hire scientists to confuse the issue just like the cigarette companies did. The conflict of interest you point out among scientists over public funding is dwarfed by the conflict of interest created by oil companies funding of scientists. I know statistical modeling. The issues about modeling global warming are not paradigmatic. They are not like tectonic plates. And I can assure you the climate scientists are doing it right.
The impact of global warming is happening as we speak. Drought is having an impact on agricultural commodities. This is going to get worse. You need to be paying attention. If you have children who are going to live through this, you need to be paying attention.
Stefan Jovanovich replies:
Global warming and cigarette smoking share a paradigm as political economy. In both cases the reformers end up being the best possible advocates for the people whose economic interests are being threatened. Cigarette smoking was known to have health issues a hundred years ago. The cigarette companies did not "freak out" over Federal regulation; they pushed for it. Those warning labels on the cigarette packages delayed for 20 years any successful class actions challenging the fact that the tobacco companies were selling a product that met all the tests of strict liability - i.e. it was unavoidably damaging to the users.
The global warming advocates are the best friends the international oil companies ever had. Why else would BP have spent millions talking about how green they were? The international oil companies don't own the oil in the ground; the world's oil reserves are owned by state-owned monopolies. What the international oil companies still own are the means of distribution so they have every reason to want to see the oil stay in the ground rather than be pumped and used; high volumes are not profitable for distributors in competitive markets, low volumes are because they create sufficient barriers to entry.
Let's try to be more specific. What is your particular theory of global warming, Ron? Is it man-made CO2 or - as some of the unpopular scientists are beginning to suggest - is it the particulate emissions from wood fires, burning of hydrocarbons (but more importantly, the grinding of rubber tires into tiny particles) that are having serious climate effects?
The problem with conventional global warming advocacy is that it shares all of the nasty habits of 19th century Darwinism (for which Darwin himself should not be blamed); it took only a few decades for Darwin's hypothesis to become the principle justification for the racialism that became the justification for segregation and apartheid and vicious colonialism.
It has taken less time for MMGW to become the justification for preventing the vast majority of the people in the world to have access to the inexpensive energy needed for clean drinking water and cooking fires that do not produce far more lung cancer and other diseases than tobacco smoking ever has.
The science should be open to all opinion; the presumption that a hierarchy of the anointed should be given the power to destroy open markets in the name of progress is a folly that does not bear repeating. We didn't get segregation because street car companies wanted it; we got it because science confirmed the opinion of the all the "good" people that the darkies had to be quarantined - for their own good.
Jaime Klein replies:
Ron proposes the conspiracy theory that oil companies have an interest in fomenting confusion regarding global warming. Maybe it is so, but I can't see why they should be. Global warming, should it occur, will not affect the value of underground oil reserves. Only a tiny fraction of the oil is consumed by heating (6% in the USA) and I dare say the same amount or more is used in air conditioning. My summer electricity bills (in Israel) are the triple of winter ones and we use the same system for heat and cool the palace.
Quote: "Of the 20 million barrels of oil consumed each day, 40 percent is used by passenger vehicles, 24 percent by industry, 12 percent by commercial and freight trucks, 7 percent by aircraft, and 6 percent in residential and commercial buildings."
Computer modellers need no incentive to create confusion. They are quite capable of doing it for free.
Gary Rogan responds:
I'm not a global warming scientist nor someone who is collecting all relevant facts, so I make my conclusions based on the information I come across in my constant search for information. Let me explain how I reach my conclusions.
Earlier today I posted an article illustrated how Global Warming was used as a stepping stone for success by Margaret Thatcher years ago in a cynical (my interpretation) political ploy. This elevated an obscure theory to a politically and economically viable and important concept.
Years ago I observed how Al Gore and James Hansen made sure to introduce their ideas to Congress on what was expected to be the hottest day of the year, and how they also made sure that the windows were open. I've observed how a British Court determined that Al Gore's movie contained eleven material falsehood and the impact that had on using it as a teaching aid in the UK. This was never publicized to any degree in the US and I had to ask myself "Why?". I've seen Al Gore refuse to debate ANYONE on the merits and I also asked "Why?". I've seen Climategate and the length to which "Climate Scientists" would go to quash dissent. I've seen photos of drowning polar bears forged and the realities of their survival as a species "nuanced" in was beneficial to Global Warming proponents. I've heard HUNDREDS of people of good will (or so they appeared to me) question this theory. These were people who displayed uncommon sophistication and knowledge in areas I was more familiar with. The physics of the increase of one molecule of CO2 in 10,000 molecules of air making THAT much difference never made much sense to me, but that was more from imagining this one lonely molecule among 10,000 rather than any calculations, and of course CO2 isn't the only culprit (yet somehow the main target as oil companies seem like much more inviting targets than herds of cows). I've seen the importance of solar flares questioned, and I've seen all kinds of data about global warming stopping in 1998 or current high temperatures being on par with those in the late 30's and 40's. I have no idea really if the increase in droughts may not be caused by local agricultural practices given increasing world population and use of water and all the deforestation and soil erosion that's going on.
Last night I was listening to James Delingpole, a noted British author question this theory with great believability. When asked "How do you respond to someone who says we should not take any chances and shouldn't we spend whatever it takes in case Global Warming is indeed caused by human activity?" his answer was along the lines of "Can we be sure that aliens will not invade the Earth tomorrow? If not, let's spend billions to equip all airplanes and rockets with anti-alien laser weapons".
Let me just say this: the "theory" is being promoted as a hoax would be by a priori evil, dangerous people like Al Gore. Facts are being suppressed by the mainstream press and by the advocates of the theory. Third world hell holes demand all manner of reparations under the guise of being compensated for the damage done by Global Warming to them. It may very well be true, but if it walks like a hoax, quacks like a hoax, and all that, it probably is a hoax.
Mr. Krisrock writes:
It's preposterous that anyone thinks the same collectivists who are trying to run and control our economy through central planning could do the same thing to world weather.
It shows the outrageous arrogance of San Francisco modelers who think a model so large could work…it defies common sense and a response.
This guy is a dreamer, who takes his advice from the AZTECS who worshiped the sun god…that culture disappeared in case he didn't read the history book.
Sadly, the world can't add up its money to balance its debts despite all his silly models but to think there is NO POLITICAL AIM in global warming?
There is, it's all about a small group of power hungry idiots, no different than tyrants in another time, who create false idols …
The same people as him run the state of California…have run it into the ground financially…and refuse to admit their models don't work.
The smoking argument is bullshit…people will still die from something…but millions in Asia will die far happier than this idiot.
And I add this year we had the largest global harvest of RICE…so much for global warming bullshit…
T.K Marks writes:
"It is difficult to get a man to understand something, when his salary depends upon his not understanding it."
As one who defines the notion of salary broadly, that Sinclair quote might be the most succinct and trenchant definition of realpolitik that I've ever read.
Charles Pennington writes:
Climategate demonstrated "peer review" at its worst–faking data and conspiring to ostracize the naysayers. It was a lucky stroke that it was uncovered.
Stefan Jovanovich responds:
Ron: Please accept my sincere welcome to the List. As others will tell you, I am a professional pain in the ass; but I do mean well. What I was trying to convey about the cigarette companies is that their (largely successful) conspiracy was even worse than you alleged. The cigarette companies knew they were selling addiction long before any studies were done on lung cancer. The best cases against them were those that were based on the common law argument that the tobacco companies were knowingly selling a product that was per se harmful. Those cases only had to rely on the fact of addiction - which everyone conceded - and did not need to meet the much harder burden of proof that epidemiological correlation requires. The "reform" that produced the warning labels defeated all that litigation; the tobacco companies now had a safe harbor defense.
Allow me a few last comments before acknowledging the final call to Order from the Speaker of our Parliament.
(1) There is a rather significant difference between Copernicus' situation and that of the global warming skeptics. Copernicus was challenging the established church, which was the international authority on all matters spiritual and intellectual. Your part of the argument already has the international church aka the UN and the holy orders aka the publicly-funded universities on its side. The poor skeptics have to rely on their own money - as did Copernicus.
(2) Isaac Newton was never accused of heresy; on the contrary, he was the author of a number of religious tracts, among them The Chronology of Ancient Kingdoms Amended (1728) and Observations Upon the Prophecies of Daniel and the Apocalypse of St. John (1733). He was not even censured for his dabbling in alchemy even though reasonable minds might not consider that the best of hobby choices for someone appointed warden of the Royal Mint.
(3) Einstein first came to the U.S. in 1921 to raise funds for the planned Hebrew University of Jerusalem. He received the Barnard Medal and was treated like a rock star. After he won the Nobel Prize that same year, American universities fell over themselves competing to have him come join their faculty. Einstein preferred to return to Europe - which was his home; but he continued to visit the United States regularly throughout the 1920s without ever having any problem getting off the boat. Princeton finally persuaded him to accept a faculty position with them in 1932 on the condition that Einstein be allowed to return to Berlin each year for 5 months. What kept Einstein here in America were the Nazis. He left Berlin in December 1932 (the Nazis took power the following month) and never returned to Germany. Einstein became a U.S. citizen in 1940 but he retained dual Swiss citizenship. The only evidence of Einstein's having had any difficulty with visas or his citizenship application is in Fred Jerome's book - The Einstein File: J. Edgar Hoover's Secret War Against the World's Most Famous Scientist, by Fred Jerome. St. Martin's Press, 2002. 348 pages. ISBN 0-312-28856; and its only source is Einstein's FBI file, not State Department records.
NB: Those of us who have FBI files know from direct experience that the Feebies apply the vacuum cleaner theory of information - floor sweepings are given equal billing with birth certificates.
Peter Saint-Andre writes:
Over time I have come to see this phenomenon as controlled not by "the government" in some faceless way, but by individuals or classes of individuals who have used the levers of power (federal, state, county, city, etc.) to their own benefit. I have seen this in the city where I live: few things happen in city politics that do not benefit the real-estate developers, and certainly nothing happens that harms them. The same could likely be said for industries and policy areas that I have not studied as closely: defense, energy, finance, transportation, education, materials, you name it. There are people and companies who benefit, and who always emerge untouched. The rest of us are harmed and suffer, to a greater or lesser extent. Perhaps if one followed the money and influence to identify who precisely makes up the aristocracy of pull, one could indeed build a successful investment strategy. I don't think I have the stomach to do so.
And by the way, looking at things in this way makes me much more sympathetic to many self-styled "progressives" (while I think that their understanding of markets is quite incomplete, they too have a sense that the game is increasingly rigged).
Gary Rogan responds:
It seems difficult to take advantage of observed cronyism while being on the outside. One should only look at trying to invest in solar panel manufacturers, or ethanol producers, or defense contractors (after a certain point). Sooner or later the government runs out of money, and you have to be very close to the action to figure out when the gig is up. The health insurers were quite an interesting story to observe: a very political group that took a huge hit with Obamacare only to recover very nicely. You really have to know who was involved in shaping the legislation, and if possible the real effect. My own solution was to own what Rocky likes to call "world class" companies that seem flexionic, but would persist past any "abandonment" stage, or in companies that have a flexionic component, but that's not dominant (such as a chemical manufacturer with a large biodiesel component). It would be interesting to study if any of Sage's flexionic investments could be taken advantage of after his intent has become public, at least he always knows these days that the company will be saved if push comes to shove.
T.K Marks writes:
Not all variables are created equal. Some are unknown; others, unknowable.
Absent insider knowledge, politics for general investment purposes is but a fiefdom of unknowable variables, where knowledge is lord.
But 'knowledge' in such a sense is illegal, or unethical, or both.
At least it's supposed to be.
So one is better off trying to quantify things played out on fields more intrinsically level than politics.
January 14, 2012 | Leave a Comment
This one is Eddy's fault. She wanted to know about the gold standard.
The authors of the Constitution had two concerns about money - first, they wanted the Federal government to be able to collect taxes to pay veterans' benefits and the cost of future wars; and, second, they wanted no one - the states, private individuals, the Federal government itself - to be able to deal in funny money. They thought they could solve both problems by giving the Federal government a monopoly on legal tender and then requiring Congress to limit the Money used in payment in the United States to Coin - i.e. precious metal. What is fraudulent about our present system is that the Federal government still has its legal tender monopoly but it no longer follows the rules laid out in the Constitution. Instead of using gold coin, the Federal government uses its own bank-created Credit as Money and requires all of us to accept it as the sole legal tender for all debts public and private.
The authors of the Constitution were so suspicious of what Congress might do that they did not even allow it to have a monopoly on Money. They required Congress to allow Foreign Coin to used as equivalents for the United States' own Coin. The authors of the Constitution knew from bitter experience that Congress was capable of being a fraud about money; country had seen the Continental Congress during the Revolution issue IOUs and then require people to take them in payment of the government's own debts. By allowing Foreign Coin to be Money, the authors of the Constitution were assuring that people could refuse to take any funny money that Congress tried to pass off in the future. This is why the Constitution has its specific provisions requiring Congress to "regulate" the Weight and Measure of both U.S. and Foreign Coin. "Regulate" does not mean "make up whatever rules we like" as it does now; it meant "make regular" - i.e. make equal.
Where the authors and the first Congresses made a mistake was in thinking that they could regulate more than 1 kind of precious metal as Money, that they could set by law the ratios of the prices of gold and silver and copper could be fixed, by law. They made this mistake because everyone in the world believed that Money had to have an official Price; it could not be left to the market to decide what Money was worth. (A few oddballs - the Frenchman Cantillon, the Englishman Gresham - knew better. They both observed that Money has to be unitary; otherwise, the smart people will always be swapping the cheaper metals for the more expensive ones.)
Even with this mistake of multi-metalism, the authors of the Constitution succeeded in achieving their aims for U.S. money. Congress was able to be extravagant - to start wars when they did not have the money to pay for them - without permanently destroying the value of the country's savings because no one could be forced to accept anything other than Coin as Money. If Money became short because people and/or the government had used too much credit, the people who had saved Money would find bargains. If people and/or the government became too cautious and hoarded Money, then the rewards for lending and granting Credit would go up. The interchange between Money and Credit would be the fundamental check and balance against future Congresses overreaching their financial authority. Under the Constitution Congress would be free to borrow on Credit like everyone else but it would only be allowed to coin Money or have Coin accepted as legal tender.
What the authors of the Constitution could not imagine is that future Congresses would allow the Federal government to use its own bank-created Credit as Money. That would have seemed to them against all common sense. Everyone in the country had known, from direct experience, that allowing Credit to become Money produced ruin. Savings became worthless, people abandoned work for speculation, and enterprise was destroyed. If the government's Credit was required to be accepted as legal tender, then everyone could go to the government to get their free Money. "Cash" would have no meaning because people could never be required to pay up in Coin. The authors of the Constitution knew that Credit was wonderful stuff. It was easier to use than specie and was flexible; people's ability to promise to pay was not limited by the coins in their pockets. But there had to a limit to how much people could promise and borrow, and that limit was Money; and Money had to be actual stuff that people could demand when they did not want paper, when they doubted that other people's Credit was good. Almost all of the time people would use Credit for trade; they would buy and sell things using Notes because it was the better way to do business. But, in the background of everyone's mind there still had to be the understanding that people could decline further exchange of credit and demand actual payment instead. With Credit there was always going to be the risk that one was getting a devious, suspect instrument of exchange. If people were free, they would trade; and, in trading, they would be certain to deal in all kinds of promises - some of which will be completely ludicrous. These rules would apply equally to the government and to private business. The Constitutional gold standard would not prevent people or Congress itself from committing fraud and folly; but it would assure that they were punished and not rewarded if Money was the stuff that was impossible to counterfeit and impossible to multiply with the stroke of a pen or the turn of a printing press (or, today, the click of a keyboard).
We now live in a very different world of Money and Credit. Foreign Coin is no longer a check and balance on Congress' monopoly authority over legal tender; every government in the world now uses its own IOUs as Money. That leaves only the Constitutional gold standard as a restraint on the government and people's ability to expand Credit without limit. The country has been here before. During and after the Civil War, the Federal government's IOUs - its Greenbacks - were made legal tender, by law. Many people thought this was fine and wanted Congress to keep printing Greenbacks to pay for rebuilding the country after the war. What Ulysses Grant understood was that if Congress kept spending Money as it had during the war, it would turn the country into a nation of monetary alcoholics. The demand for Credit would never be restrained. Almost single-handedly Grant forced the Congress to commit itself to restoring the gold standard, to promising to redeem all paper money in gold Coin. Many people were horrified by the idea; the New York Times (surprise!) predicted that there would be complete panic. Speculators tried to buy up all the country's gold. But, on the actual day when the Federal government resumed the convertibility of all U.S. Bank Notes into gold coin, the world did not rush to the Treasury to swap its paper for specie. The monetary day of judgment failed to appear and was, in fact, a big yawn. The very act of committing the U.S. to restoration of the Gold Standard had sufficiently re-established the credit of the U.S. government that people were content to continue to deal in the credit notes as if they were as good as gold - which they were.
The same result would happen today if Congress adopted a new Specie Act. I know this is a fantasy; but imagine that Congress enacted and the President signed a Specie Act that legisltated that, after January 1, 2013, U.S. Money would be a Liberty Coin of a fixed Weight and Measure of gold and all government Credit Notes - the paper currency called Federal Reserve Notes printed by the U.S. Treasury - would be convertible into Liberty Coin at the value set by the market . The market would instantly value our current Greenbacks at their worth would be in gold. A dollar whose fluctuating value would be fixed by the market's dealings would not, by itself, save the credit of the United States; but it would instantly end the further abuse of that credit by the Congress and the Federal Reserve. That might, by itself, be enough.
A promise to pay can, as the original J. P. Morgan said, only be valued by the character of the borrower. As long as Money itself is solid, people can accept the risks of Credit as the price of its convenience and opportunity for gain. The very argument used against the gold standard - its inflexibility - is true; when one is well established, the price of gold itself becomes monotonously steady. It is the price of Credit that fluctuates. After President Grant's demand for resumption was enacted into law, the infamous Gold Room closed; and stock and bond markets and bank clearings in the United States exploded with a boom that was so real that it produced enough wealth that the country could, for the first time in its history, afford broad "higher" education.
It will not surprise you and it would not have surprised the authors of the Constitution that the first thing the new generation of professors and well-educated (sic) students did was decide that the archaic system of the gold standard had to be improved. The result was the funding of two World Wars and other systematic tortures that the world is still living under in the name of Progress.
Leo Jia comments:
Thanks Stefan. Here are my thoughts on what you wrote.
From economic point of view, the functions of money are: 1) medium of exchange, 2) unit of account, and 3) store of value.
The biggest problem with fiat money (as we experienced) is its obvious inability to store value. On the other hand, commodity money is hard to transport. Recognizing these, many are inclined to accepting some kind of representative money, such as the gold standard.
It is understandable that people put more trust in things such as gold for a better store of value than in fiat money, simply because they are more real and can't be created from thin-air. This might be very true in simple or primitive economies. But is there any false reasoning here for modern economies? It is true that they can not be as easily created, but this in no way could necessarily lead to a conclusion of their better ability to store value or perform other money functions. My observations are as follows.
1) Any real thing (such as gold) changes value vis-a-vis other real things as economy develops through time. This is determined by the varying needs of human activities. In this sense, a lumber producer for instance may have good reasons not to trust gold to reserve his value of work (as gold could get cheaper while lumber gets dearer during some period of time).
2) The economic developments, following technological advancements or wars for instance, come in steps, which at many times are interruptions to old developments. After each step of development, the values of many thingsare largely re-adjusts. With the automobile invented for instance, the horse wagons lost substantial value. On the other hand, with a large gold mine discovered, gold's value vs. other things dive.
3) In the case of a step-up of the economy (due to an important technology break through, for instance), the requirement for capital jumps up. If the money is based on some real thing (such as gold), the money supply seriously lags in a way to hinder the economy development. Gold's supply has its own course of development. Except for a few large discoveries in history, gold's supply has been largely a gradually growing process, and this contrasts the nature of economic development, which often jumps, particularly in the modern age.
4) In the case of gold being a money base, the real question is why people would always treasure gold. Could the attitude change? From the nature that gold is of little real use, this is very likely somewhere down the road. All it needs is one country's abandoning the gold standard to wreck the whole world's economy. Before that happens, is people's pursuit of gold quite similar to a fool's game, where everyone owning gold is just hoping to sell it to a bigger fool?
In the modern world, when we have various developments in fast gears, we don't really have a money that meets the functions we want. It is very unfortunate. Perhaps the desire to have a store of value in something is generally a fallacy. Sure, the modern finance provides some possibilities for that desire, but modern finance is not for everybody.
Question: is it feasible to form a money based on some financially structured instruments?
Stefan Jovanovich replies:
Leo, Thanks for the reply. I don't think you can support the notion that Money is a primary "medium of exchange" any more; it is, for the limited population of drug dealers and others wanting to hide their wealth from "the law", but the volume of credit transactions so completely dwarfs cash dealings now that I am afraid the standard textbook definition of money has to be retired from our discussions, even if it will always remain the correct answer for an Econ 1 class. The "store of value" notion has always been a canard. The notion of "value" itself is one of those Platonic ideas that it is impossible to abolish, precisely because it is never defined well enough to be tested or disproven. It is part of the equally bizarre idea of Capital - the notion that certain stuff and paper (in our age, digital entries) represent a "store of value". Once you accept the circularity of these terms, you never find the exit door into what people are actually doing. (Yes, yes I know about marginal utility, etc. but all of those wonderful theories can be reduced to something the money changers sitting outside the Temple knew - price is always a matter of quantity and time.)
Having endured the interminable sermons of their era (and decided, like Washington, that God existed outside of church as well as in), the authors of the Constitution were well acquainted with the theological approach to discussions about the economy. But, being practical men of business (even the lawyers among them were traders), they knew enough of the world to know that commerce would always rest on the foundation of credit. When counter-parties began to worry, "the economy" was in trouble, no matter how much gold was in the vault. They also knew that Money - specie - would always be the measure of the fundamental economic fact of life - scarcity. They counted on the fact that Money is always in short supply to be the principal limitation on the size of government itself. As the Founders knew, money is the spoil sport - the stuff that is unalterably real and cannot be talked into existence. Americans used to know this instinctively. There is the classic remark of t he real estate speculator in San Diego in the 1880s who got caught long and telegraphed to his partner back East: "Lost $100,000; still worse, $800 was in cash".
What the Founders and a majority of Americans in the 19th century did not think was that the government could somehow protect people from the vagaries of the market itself. They certainly did not think that gold - i.e. Money - could do that. The claims made for gold by the Paulistas - Don Ron made it again last night in the Republican primary debate in South Carolina - are specious. Gold is not a "store of value" and it has never protected people from the fluctuation of prices. As you noted, gold's exchange value fluctuates dramatically even under a Constitutional gold standard. Gold as Money is no more immune to market variation than Credit; both are subject to the vagaries of trade. What Gold as Money is not subject to are the manipulations of the government as ruled by faction. When George Washington warned against "faction", he was not cautioning people about political parties; he was cautioning them about the ability of people to use the government's monopoly au thority over legal tender to create credit in their particular favor. All gold offers is the assurance to the holder of Money that he/she has only one financial risk - the fluctuations of the market - and that he/she is safe from the cheats of government action in the name of the common good.
P.S. Your history about gold mining needs revision. The great discoveries - California in the 1840s, South Africa and Alaska in the 1890s - did not see "gold's value vs. other things dive"; on the contrary, the gold discoveries led to credit booms that saw general prices rise and specie become inexplicably tight. The Panic of 1907 arose because the London insurance companies were unable to pay their American claims from the San Francisco Fire; gold - within a decade of the greatest discovery in history - became so incredibly short that JP Morgan - for the first time in its history - agreed to join the New York Clearing House so that the banks would stop pulling each other down to ruin by acting like lobsters trying to climb over each other out of a barrel.
P.P.S. The notion of a Monetary base is beyond my capacity to argue with. If you accept the illusion that IOUs are Money, that the entries on the ledgers at the Federal Reserve and the Notes printed by the U.S. Treasury are somehow more "high-powered" than other forms of Credit, then the Ptolemaic system of modern academic economics seems to work fine - until, of course, it doesn't. The modern world has no problems with its system of Credit; its difficulties are with the absurd notion that the Unit of Account can be multiplied at will by central banks in the name of stability.
The questions of money and credit were not intellectual novelties for the founders or their contemporaries. They were - literally - the common coin of civil discourse. Hume's Essays - which were in the library of everyone who attended the Constitutional Convention - raised the issue directly:
"It is very tempting to a minister to employ such an expedient, as enables him to make a great figure during his administration, without overburthening the people with taxes, or exciting any immediate clamours against himself. The practice, therefore, of contracting debt will almost infallibly be abused, in every government. It would scarcely be more imprudent to give a prodigal son a credit in every banker's shop in London, than to impower a statesman to draw bills, in this manner, upon posterity. What then shall we say to the new paradox, that public incumbrances, are, of themselves, advantageous, independent of the necessity of contracting them; and that any state, even though it were not pressed by a foreign enemy, could not possibly have embraced a wiser expedient for promoting commerce and riches, than to create funds, and debts, and taxes, without limitation? Reasonings, such as these, might naturally have passed for trials of wit among rhetoricians, like the panegyrics on folly and a fever, on BUSIRIS and NERO, had we not seen such absurd maxims patronized by great ministers,(Robert Walpole) and by a whole party among us (the Whigs)."
Peter Saint-Andre comments:
And hence there runs, from the first essays of reflective contemplation of a social phenomena down to our own times, an uninterrupted chain of disquisitions upon the nature and specific qualities of money in its relation to all that constitutes traffic. Philosophers, jurists, and historians, as well as economists, and even naturalists and mathematicians, have dealt with this notable problem, and there is no civilized people that has not furnished its quota to the abundant literature thereon. What is the nature of those little disks or documents, which in themselves seem to serve no useful purpose, and which nevertheless, in contradiction to the rest of experience, pass from one hand to another in exchange for the most useful commodities, nay, for which every one is so eagerly bent on surrendering his wares? Is money an organic member in the world of commodities, or is it an economic anomaly? Are we to refer its commercial currency and its value in trade to the same causes conditioning those of other goods, or are they the distinct product of convention and authority?
From On the Origin of Money by Carl Menger
Stefan Jovanovich writes:
Menger was the leading figure in the Austrian "Währungs-Enquete-Commission, the Monetary Commission called to deal with the problem of the Austrian currency. (Hayek: "Towards the end of the 'eighties the perennial Austrian currency problem had assumed a form where a drastic final reform seemed to become both possible and necessary. In 1878 and 1879 the fall of the price of silver had first brought the depreciated paper currency back to its silver parity and soon afterwards made it necessary to discontinue the free coinage of silver; since then the Austrian paper money had gradually appreciated in terms of silver and fluctuated in terms of gold. The situation during that period — in many respects one of the most interesting in monetary history — was more and more regarded as unsatisfactory, and as the financial position of Austria seemed for the first time for a long period strong enough to promise a period of stability, the Government was generally expected to take matters in hand. Moreover, the treaty concluded with Hungary in 1887 actually provided that a commission should immediately be appointed to discuss the preparatory measures necessary to make the resumption of specie payments possible. After considerable delay, due to the usual political difficulties between the two parts of the dual monarchy, the commission, or rather commissions, one for Austria and one for Hungary, were appointed and met in March 1892, in Vienna and Budapest respectively.)
According to Hayek, "Menger agreed with practically all the members of the commission that the adoption of the Gold Standard was the only practical course." What the Commission did not do was adopt the approach taken by the Americans a decades earlier. Instead of simply setting the weight and measure for Austrian Coin at an equivalence to the British pound - the reference point for all international transactions, the Commission debated "the practical problems of the exact parity to be chosen and the moment of time to be selected for the transition". That, by itself, did no great harm; but it established the principle - now universal - that the state, not the market, would be the ultimate arbiter of the content of Money. It is foolish of me to expect them to have done otherwise. Even though (or perhaps because) Menger was the author of utility theory, his political economy had an unshakeable belief in "essences", in the notion that political economy could be reduced to laws of motion, just like physics. The result was the Franco-Germanic idea of the "universal bank" - the Creditanstalt that would literally "manage" the economy and do away with the need for those messy people - the brokers and the dealers in stock - and their volatile exchanges.
For Menger there could be no difference between "the disks (and) documents" because all money was a creation of the state's authority. The American idea that you could bring bullion to the Mint and demand that they reduce it to legal tender - for free - was anathema.
December 16, 2011 | 1 Comment
Lots of chatter yesterday about gold breaking through its 200-day moving average. Ron Griess says to consider the 300-day moving average instead. Has anyone done research on the benefits of using non-round-number moving averages, such as numbers slightly lower than 200 or 300?
Phil McDonnell writes:
I have tested them all from about 2 days to maybe 1000 days. Generally speaking there is little difference between two 'nearby' moving averages. If you think about it the 200 day has 190 terms in common with the 190 day average. Generally speaking they almost all work as long as the average is longer than about 100 days or so.
All such methods are weak at best. For example the 200 day yields about .04% per day if above the average. But adding a 50 day/200 day crossover reduces the yield to only .03%. In other words the so called golden cross does not really work.
Have you seen this article about the top 5 regrets of the dying? It is a must read.
Gary Rogan writes:
I really liked all of them, except based on everything that I know I disagree with the statement that "happiness is a choice". Irrational fears are not a choice, depression is not a choice, and neither is happiness.
Gibbons Burke writes:
Well, happiness is dependent on one's attitude, and in many cases, you can choose, control or direct your attitude.
My theory is unhappiness and depression happen when reality does not live up to one's expectations of what life is "supposed" to be like. I think the key to happiness is letting go of those expectations. That action at least is within an individuals purview and control. There is an old Zen maxim: If you are not happy in the here and now, you never will be.
Russ Sears adds:
I think most irrational fears and depression stem from the unintended consequences of one's choices or often, the lack of decisions, such as little or no exercise. However, I believe many of these choices are made when we are children, and we do not fully understand the consequences. Many of these bad choices may be taught often though example by adults or sometimes it is just one's unproductive coping methods that are simply not countered with productive coping methods by the adults in their lives. I think some people are more prone to fall into these ruts, but most of these ruts are dug none the less.
Jim Sogi writes:
The regrets are perhaps easily said on the deathbed but implementing these choices in life is very difficult. Many can not afford the luxury of such choices. When there is no financial security hard work is a necessity. Such regrets are not much different than daydreams such as, oh I wish I could live in Hawaii and surf everyday. The fact of the matter is that the grass always seems greener on the other side. Speak to the lifestyle guys in their old age. Will they say I wish I worked harder and had a career and made more meaning of life than being a ski bum or surf bum?
Gary Rogan responds:
What you say is true about the effects of exercise. But that's just one of many factors that are biochemical in nature. Pre-natal environment, genetics, and related chemical balances and imbalances are highly important in the subjective perception of the level of happiness. There are proteins in your brain that effect how the levels of happiness-inducing hormones and neurotransmitters are regulated and there is nothing you can do about it without a major medical intervention. Certainly some choices that people make affect their eventual subjective perceptions through the resultant stresses and satisfying achievements in their lives, so the choice part of it can clearly be argued. My main point was that by the time the person is an adult, their disposition is as good as inherited. They can vary the levels of subjective perception of happiness around that level through their actions, but they are still stuck with the range, mostly through no fault or choice of their own.
Since a few literally quotations on the subject have been posted, let me end with the quote from William Blake that was used before the chapter on the biological basis of personality I recently read:
Every Night & every Morn
Some to Misery are Born.
Every Morn & every Night
Some are Born to sweet Delight.
Ken Drees writes in:
I believe that you must put effort towards a goal and that exercise in itself begets a reward that bends toward happiness. It's the journey, not the end result. You must cultivate to grow. A perfectly plowed field left untended grows weeds–the pull is down if nothing is done.
Russ Sears adds:
It has been my experience with helping others put exercise into their lives that few teens and young adults have reached such a narrow range that they cannot achieve happiness in their lives. This would include people that have been abused and people that have a natural dispensation to anxiety. Their "range" increases often well beyond what we are currently capable of achieving with "major medical intervention". As we age however our capacity to exercise decreases. While the effects of exercise can still be remarkable; they too are limited by the accelerated decay due to unhappiness within an older body's capacity. Allowing time for our bodies is an art. Art that can bring the delights of youth back to the old and a understanding of the content happiness of a disciplined life to the young.
Peter Saint-Andre replies:
Yes, hard work is often a necessity. But hard work does not prevent one from pursuing other priorities in parallel (writing, music, athletics, investing, whatever you're interested in). Very few people in America have absolutely no leisure time — in fact they have a lot more leisure time than our forebears, but they waste it on television and Facebook and other worthless activities.
Between working 100 hours a week (which few do) and being a ski bum (which few also do) there lies the vast majority of people. Too many of them have ample opportunity to bring forth some of the songs inside them, but instead they fritter their time away and thus end up leading lives of quiet desperation.
It does not need to be so.
Dan Grossman adds:
Jim Sogi has a good point. The deathbed regret that one didn't spend more time with one's family is frequently an unrealistic cliche, similar to fired high level executives expressing the same sentimental goal.
The fact is that being good at family life is a talent not everyone has. And family life can be difficult, messy and not easy to make progress with. Which is perhaps one of the reasons more women these days prefer to have jobs rather than deal all day with family.
Being honest or at least more realistic on their deathbeds, some people should perhaps be saying "I wish I had spent more time building my company."
Rocky Humbert comments:
I feel compelled to note that this discussion about deathbed regrets has been largely ego-centric (from the viewpoint of the bed's occupant) — rather than the perspective of those surrounding the deathbed. I've walked through many a cemetery, (including the storied Kensico Cemetery) and note the preponderance of epitaphs that read: "Loving Husband,"; "Devoted Father," ; "Devoted Mother," and the absence of any tombstones that read: "King of Banking" or "Money Talks: But Not From the Grave."
Notably, Ayn Rand's tombstone in Kensico is devoid of any comments — bearing just her year of birth and death. (She is, however, buried next to her husband.)
In discussing this with my daughter (who recently acquired her driver's license/learning permit), I shared with her the ONLY memory of my high school driver's ed class. (The lesson was taught in the style of an epitaph.):
"Here lies the body of Otis Day.
He died defending his right of way.
He was right; dead right; as he drove along.
But now he's just as dead, as if he'd been wrong."
Kim Zussman writes:
Is an approach of future regret-minimization equivalent to risk-aversion?
Workaholic dads have something to show for their life efforts that Mr. Moms don't, and vice-versa.
If so, perhaps the only free epithet is to diversify devotions — at the expense of reduced expectation of making a big mark on the world or your family.
Between working 100 hours a week (which few do) and being a ski bum (which few also do) there lies the vast majority of people. Too many of them have ample opportunity to bring forth some of the songs inside them, but instead they fritter their time away and thus end up leading lives of quiet desperation.
It does not need to be so.
Chris Cooper writes:
I am lucky enough to do both. I spent a while as a ski bum when I was young. Later I did a stint of 6 years of 100-hour weeks. It paid off as I hoped, enabling me to be a ski bum again. Which I tried, and found that somewhere during that time I acquired some workaholic characteristics. So now I oscillate between taking it relatively easy, and working hard, and at the moment am working hard and wishing I could take it easy — but if I did, I would soon enough be restless again.
After what I heard on NPR this morning I would say the Cards are doomed. It appears to me that they are looking for a great excuse in case they lose.
NPR was gleefully reporting a good excuse. It turns out the bull pen did not warm-up the pitcher for the guy that hit the double, like the coach called for because, get this, they did not hear what Coach La Russa said on the phone. Great excuse! That was painful to hear.
Here is the story
Why does this matter?
In the heat of a grueling marathon I've learned that once you are searching for an excuse in case you lose, you sure will.
George Parkanyi writes:
To your point, one of the biggest chokes ever was the Ottawa Senators going down to the Toronto Maple Leafs a few years back. They were leading the series 3-2, and the 6th, clinching, game 1-0 late in the third period. Toronto had been completely shut down to that point. Toronto got one penalty, and right after, another. What a glorious opportunity for Ottawa -a 5 on 3 power play! What did they do?
They didn't even go into the Toronto zone, they passed it around and just generally wasted time to eat up the clock. But there was still about 8 minutes left to go in the game. I still remember jumping off the sofa and literally screaming at the television "What the ^*&&*% are you doing, you idiots!!!!" Sure enough, playing not to lose, they gave up a late goal to an energized Toronto, who then won the game in overtime and also won the 7th game after that.
That game is etched in my mind as the poster-child example of why you don't play not to lose when you're in a competitive situation. I remember this when I play soccer, and never play more conservatively when we have only a 1-2 goal lead no matter what stage of the game. My philosophy is keep doing what got you there. That's also why I absolutely HATE late-game prevent defenses in football.
Peter Saint-Andre comments:
The Wikipedia page about baseball points out the following:
clock-limited sports, games often end with a team that holds the lead
killing the clock rather than competing aggressively against the
opposing team. In contrast, baseball has no clock; a team cannot win
without getting the last batter out and rallies are not constrained by
time. At almost any turn in any baseball game, the most advantageous
strategy is some form of aggressive strategy."
Some form of aggressive strategy is always advisable in investing, too. You can never simply run out the clock.
Stefan Jovanovich writes:
And, for racquet sports, even more so; they are the only hand to hand combat sport where you cannot be saved by the bell or blame the loss on the manager or the rookie who tried to steal second. Speaking of extraordinary sporting events, did anyone see what City did to Manchester United? Remarkable. Lazio's loss is Manchester's gain.
Scott Brooks comments:
This is not completely true of baseball. In little league, most (all) games have a time limit. So there is a strategy to playing to the clock. The home team always got the last at bat (unless they were ahead) after the cut off point.
So if we were the home team and were ahead and the cut off time is approaching, we would make the inning last as long as we could. We'd have our batters run the count up. We'd have them step out of the batters box between pitches. We'd call time out several times, etc.
All to ensure that the opposing team didn't get another at bat. Sure we'd have gotten another at bat after them if they tied the score or got ahead of us….but why take the chance.
Peter Saint-Andre responds:
So is the lesson that little-league investors think they can run out the clock, but big-league investors know they don't have that option?
Scott Brooks writes:
Whatever league you're in……..
……Know the rules and use them to your advantage so you can win. I don't
care what the rules are, just make'em clear and let me play/coach/invest.
As Vince Lombardi said, "The object is to win, to beat the other guy"
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