When I was a child a little fellow owned a junk yard. The little fellow was a mouse, not Mickey, another little guy. And no Minnie in the picture. Just a little bachelor mouse working his junk yard.
Little Guy lived on the premises, a shack in the corner of the junk yard. Windows were half covered with cardboard, exterior walls scarred by weather, no paint, roof patched with this and that, hell-of-a-looking shack.
Big Cat was always snooping around. Cat was the Tax Collector. Cat suspected Little Guy was making more money than he reported and peered over the fence, through holes in the fence, knocked on the shack door in the middle of the night trying to catch Little Guy with evidence of prosperity.
Finally Big Cat got entrance to shack Little Guy lived in. Cat was surprised because inside was like the outside, a mess, complete chaos. Busted furniture, dirty dishes in the sink, toilet plugged, floor unswept, cockroaches scurrying across the floor escaping Big Cat's large paws.
No evidence of prosperity. But Little Guy had a secret. His real home was in a hidden basement, space which could not be detected from above, by any means. Little Guy entered this space via a trap door in the floor of the beaten-down shack.
In the basement a plush life style was evident. Modern furniture, the latest appliances, luxury carpeting, fine linen on the bed Little Guy slept in. And a bank-size vault where sparkling gold and green cash was laid out in perfect order.
Little Guy was really somebody; hid his real identity. Advertising his status was the last thing he wanted to do.
In this update to my prior post "I Am Not a Number" we will review the wiping of a drivers license magstripe to maintain your privacy. As I mentioned before, the practice of running licenses through card-readers at restaurants/bars/other should always be objected to strenuously, but the removal of magstripe info provides additional protection should the situation warrant it.
Supplies for my experiement:
Magstripe Card Reader from eBay (about $50)
Cheap Rare Earth Neodymium Magnets from Amazing Magnets ($4, or free with purchase)
My Driver's License
The experiment proceeded as follows: Did a test read of my license. Got a string of readable data including name, DL#, Address, etc. Took the largest of the magnet assortment (D125D 1/2" Dia x 1/8") and rubbed the magnet perpendicularly along the magstripe twice. I did this away from my computer. Did another test read of the license — no data. The reader would not read the license.
And that was it! Having read a lot of data on the web saying that high coercivity stripes were hard to wipe, I thought I'd need to buy a larger set of magnets, but it wasn't necessary. As you can see, the magnet used was very small (but these magnets are admittedly very strong).
That got me to thinking about the magnets we have hanging around the house. So, I asked a friend if I could wipe his license with one of the magnets we have on the fridge. These are the little button magnets that are commonly found on the back of LED pins and for other cute uses. So, I ran his license through the reader and verified his data. Then, as before, I rubbed the magnets crosswise across the stripe twice and ran it through again — wiped — no data.
So it looks like I didn't need to buy the Rare Earth magnets after all and could have used the little magnets on our fridge. Oh well — all in the cause of privacy science.
A few days later I wound up in my least-favorite big-box store returning some gifts. Since I didn't have a receipt, the associate asked me for my license. I provided. He swiped. Confused expression. Swiped again. Confused expression. Swiped again, slowly. Finally, he typed in my zip code and gave the refund. Such joy, such delight in keeping my data mine!
Today's action recapped many themes of recent days with the manufacturing index for one month swaying the results, the fight at S&P 1450 that Mr. Sogi has emphasized, the fall below the Dow round of 14000, and the bonds way up with stocks down, and the first day of the month losing its verisimilitude, oil hitting $100, and this being the first down open at the beginning of the year since 1994, among other things. In general, a totally beautiful day to get one off on the wrong foot.
January 2, 2008 | 15 Comments
I have had many blessings in my life to learn and grow. One area that I've been exposed to since I bought my farm in 1999 is the economics of farming. What I've learned over the years, I've learned through osmosis, simply paying attention to what was going on around me.
Recently, the young man who owns the farm north of me approached me about helping him farm his own land. They've been renting it out (to another farmer) for nine years, and now he wants to farm it himself and make some extra money now that he is entering manhood.
There are several reasons that he needs my help. He can't read. He's illiterate. You'd be surprised how difficult something can be when you don't know the "code" (the written word). There's no one else to help him. He's been beaten down (psychologically) his whole life and now he's 21 years old and trapped on a farm out in the middle of nowhere. He can't even go anywhere because he can't get a driver's license because he can't read and no one will help him study for it. So one of the first things we'll undertake is that I'll help him get his drivers license.
But let's get back to farming….
This young man and I have spent a lot of time together over the years and this past week was no exception. We've been driving around going to local farm coops, the local FSA office, local banks, and to talk to other farmers, gathering data and information so that I can help him to become a farmer.
Here's what I've found out about corn.
There are many types of seed corn that you can use. Prices range from as little as $45/bag to over $300/bag. The huge difference in price is in how the corn has been genetically altered. The more expensive the seed, the more things it is immune too, as well as being resistant to many various types of herbicides.
We settled on a seed corn that cost around $115/bag. Quite a bit more expensive than the $45/bag seed. But actually, if you want to grow a real crop with the $45/bag corn, you'd have to spend so much money on different sprays that the price differential isn't much.
Each bag will plant about three acres of land, assuming 38" rows.
Here's what you have to do:
In March, you disk the ground smooth — assuming you didn't do it in the fall, which is actually a good thing to do, allowing the snow and moisture to break down the soil and the water to seep into the soil.
You then spread fertilizer. In this area, on this type of soil, a good mixture is 18-46-60 (N-P-K). This will cost around $44/acre.
Next, you spread anhydrous over the land at a rate of about 120 lb/acre. This runs around $0.41/acre for the anhydrous and $0.01/acre rent for the tool bar, for a grand total of $0.42/lb which works out to be $50.40/acre.
Then, when the soil temperature exceeds 50 F, you will plant the corn. This is usually done in the second week of April or later. When you've planted your corn, you now need to spray. You'll do a run of Atrozine spray mixed with cutworm spray. This will cost around $14/acre.
Here is where speculation really begins. If you plant too early, you're taking a chance on having your corn come up and then getting hit with a late frost, possibly killing it. So maybe it's better to wait to plant. But there are problems with that too. If you wait, then the spring rains come and you can't plant because the fields are too wet, and by the time they dry, it's possibly so late that your corn will be doing its main growing during the dry season and won't get enough rain during its crucial "tassling" stage — when the corn is tassling, it is absolutely crucial that it gets water.
Of course, these spring rains hold problems for the farmer who got his crop in early and didn't get hit with the frost. You see, in the spring, rain has a tendency to come in large amounts and all at once. It is not uncommon to see rainfall levels of 5+ inches in a week, sometimes in only a few days. Just as not enough rain can cause problems, too much rain causes problems.
In the bottoms, where the land is the most fertile, moisture gathers. The creeks fill up and sometimes spill over the banks. The higher ground drains all its moisture onto the bottoms, too. This causes water to accumulate in the bottoms. And in these areas of accumulation (large puddles or overly wet muddy areas) the crops won't grow.
So you not only have to beat the frost, you have to beat the rains and then the dry season. If this ain't speculation, I don't know what is!
But let's assume that you got your crop in succesfully. What you have to do now is check on your fields at least once a week to make sure that everything is going well.
In our area, we have problems with grasses and broadleafs, especially fescue grass. I'm pretty certain that cockroaches and fescue are the only things that really would survive a nuclear explosion. So the farmer will have to spray again, this time with Post, which runs around $6.50/acre. But if there's a break of fescue, the farmer will have spray Round-up again, which will cost another $25/acre.
So if you add all this up and figure in all the different things that could happen, here's what you come up with.
$38/acre for seed (figuring in a few different "extra things")
$94/acre for N-P-K and Anhydrous
$20/acre for spray
For a grand total of $152/acre just to put a crop in. The farmer in question has 133 acres of bottoms. So it will cost him $20,000 just to put the crop in.
Now, keep in mind that we haven't even added in the cost of fuel, which is quite substantial. Our best estimate is that it will cost around $5,000/year for fuel to put the crop in, take the crop out, and deliver it to market. So the cost for 133 acres is $25,000.
Now, keep in mind that it also costs you around $25/acre to spread lime on the ground — but you have to do that only every 3 - 4 years on aveage). But I think we've got enough "fat" built into the expenses above to safely assume that lime will fit in these numbers.
If you think we're done now, you are mistaken. What's missing? Does the farmer need to hire some help? Possibly on a small spread like this the son and father working together may be able to do it themselves. But they may need to hire some help. You see, when it comes time to sow or harvest, there is a very limited window to get things done. What if the fields are wet for a week, then dry out, but a heavy rain is forecast in two days? You may have to hire some help to get the crop out in such a short period. So you need to account for some possible cost for hiring some help.
What about bad things happening? You need crop insurance, too. Sure you can go solo and hope for the best — but, losses hurt you more than gains help you! This is especially true of farming. You're better off insuring your crop and giving up some profit so that you can ensure that you don't get wiped out. Frost, hail, disease and pests can wipe you out. It's always best to give away a portion of your profit to ensure that you don't get wiped out.
Further, we have to take into consideration the cost of equipment and the cost of repairs on that equipment. Farm equipment is really expensive, but luckily, my friend has most of the equipment already. But, unfortunately, it's old and will need a lot of repairs. You simply can't believe how things break on a farm. Farming is really, really hard on equipment.
As an aside, when I was planting my own foodplots, I would spend 3 hours repairing equipment for every 1 hour actually spent sowing. That's on the high side, but you get the idea.
Now, on top of all of this, the speculating farmer has to further speculate with grain prices in the futures market.
Right now, in my area (as of last week) corn futures were trading for $4.10/bushel at the local grain elevator. The elevator operator even told us his spread on the deal (I don't know if that is normal or not). He's selling the contracts for $4.60/bushel on the exchange and buying from his farmer clients for $4.10. I simply don't know enough about grain futures (especially at ground level) to know if this is a good deal or not, but my gut tells me that that's a pretty high vig to pay.
So let's say for the sake of discussion that paying help, insurance and repairs is going to run this farmer an additional $5,000/year. A grand total of $30,000 to plant 133 acres in corn, or just under $226/acre.
Now, lets look on the profit side of things.
First, to just break even, assuming that he gets $4.10/bushel, he'll need to bring to market just over 55 bushels/acre. Believe it or not, that's not to hard to do.
Realistically, this farmer expects to get around 125 bushels/acre on average. Now, note the phrase "on average". Some years, he'll get far less than that. We just had a bad year on my farm this year. My bottom land is right next to his, so our bottoms are basically the same, and we got 80 bushels/acre off my place. So it's fair to say that he'll end up with an average annual range of 80 - 150 bushels/acre.
At 125 bushels/acre, and assuming he'll get $4.10/bushel (of course, we have no idea what grain prices are gonna be in the future), he'll gross around $68,000, which will net him out a profit of $38,000 for 133 acres. Not too bad!
But if we look at the ranges of 80 - 150 bushels/acre, we find that he could get as low as $14,000 in profit to as high as $52,000. That may not seem too bad, except when you take into consideration that he could easily get $100 - $150/acre rent for that bottom land, thus guaranteeing a profit of $13,00 - $20,000/year.
Also, most farm land has some sort of government subsidy attached to it. The person who actually does the farming is the one who gets the subsidy. This amounts to around $10 - $25 acre (more or less depending on the land and circumstances).
And keep in mind that in order to get that guaranteed profit (by renting his land), the farmer has to do absolutely no work whatsoever. So, on the margin, his true profit (profit from work - profit from no work) is much less, since by renting out their land and taking the risk free profit, he could free himself up for other, potenitially, more profitable endeavours.
Why would anyone want to rent the land? Farmers who rent a lot of land usually own a lot of big time equipment and farm a lot of land. Their profit margins are smaller, but they make up for it on volume.
But in the case of my neighbor, he sees this as an opportunity to make more money and springboard himself to bigger and better things.
Now, it may look like being a farmer can be very profitable. Well, it could be. If you're saavy and understand the land, you can make a good profit. But it doesn't matter how good you are, if the weather goes against you.
Plus, since grain prices have gone so high so quickly, you may be thinking that there's a lot of profit potential. There is, except that the other costs of everything listed above are going up proportionally, such that the profits available to the farmer are not really growing that much. Actually, the farmer makes a higher profit when grain prices go up quickly (assuming he can sell some contracts) but the providers (of seed, fertilizer, lime, equipment, etc) haven't yet raised their prices. And make no mistake about it, the providers are raising prices to soak up the extra profit now available from increased grain prices.
Times like this (fast rising grain prices) are great opportunities for farmers. However, there is a much darker flip side to that coin. What happens when grain prices go up real fast, then providers raise their prices, and then grain prices go down fast? That is disaster for a farmer.
Now, if all that weren't enough for the farmer to live through, he still has to become an actual speculator, out in the futures market.
You see, $4.10/bushel is a great price for corn, but the farmer can't sell his entire crop since he doesn't know how many bushels of corn he'll actually produce. So he'll sell some of his crop now, and some later. Many farmers sell 25% - 30% of their average crop (which is around 125 bushels) as long as it's no more than 1/2 of their low end worst crop (which is 80 bushels).
So to do this math, 80 bushels X 133 acres = 10,640 bushels of corn, and 125 bushels would be 16,625. So this farmer would sell no more than 25% of 16,625 (4,156 bushels) but would do no more than 5,320 bushels (50% of the 10,649).
Now, future contracts are sold in 1,000 bushel increments. So this farmer would sell either 4,000 or 5,000 bushels at this contract level. So let's say he sells 5,000 bushels at $4.10/bushel. He has locked in $20,500 of revenue, assuming he can deliver.
As the season progresses and he gets a better feel for how his crop is faring, he may decide it's prudent to sell more contracts. Hopefully the price will have gone up, but you simply don't know.
You see, if he's having a good season and growing a good crop, that means the supply of grain will be good…..and the price will usually go down, so the contract prices will go down too. If he's having a bad or off year, the supply of grain will be less and the prices will be higher, but he'll have less crop to sell.
A good scenario is for our farmer to have a good year while other farmers are having a bad year (because things like drought can be very regionalized). However, a bad year is just the opposite — our farmer has a bad year (say a regional drought) while other area's are doing great!
Of course, the goal is to have your first contract be the least profitable contract you sell all year while having a banner year! But hey, isn't a scenario like that the dream of every speculator!
D. J. Kadrmas remarks:
Anything is better than listening to a boss, even gambling on the weather. Some small farmers have outside jobs, but I notice they usually quit them quickly. The wives, now, that is a little different.
Alan Millhone writes:
In Ohio around Columbus there are currently 50 gas stations that offer E-85 alternative fuel (if your vehicle can use it) at 30-40 cents less per gallon than conventional fuel and it is helping the environment. In the summer in my area we look forward to having fresh picked corn on the cob from from Reedsville, Ohio, along the Ohio River. If the E-85 takes hold the big boys will buy up all the locally grown corn for this fuel.
Michael Ott explains:
This is a common mistake. Corn on the cob is sweet corn. Corn made from ethanol is field corn. They are not the same thing, and the price of one has little to do with the other. Sweet corn is much more expensive than field corn because it is sold in smaller units to mostly retail customers. Field corn is sold in massive quantities to industrial producers, like many other commodities. A farmer gets a much greater return on sweet corn, but the market is much smaller and usually local.
Scott Brooks adds:
The article I wrote is about what Mike refers to as "field corn". In my area we call it "feed corn." Sorry for not being more specific about that. Most of the field/feed corn in my area is used for animal feed. Unlike delicious sweet corn, feed corn is definitely not very tasty, no matter how much butter, salt or pepper you put on it.
Also, keep in mind that the economics of growing and selling corn that I presented pertain to my area, northwest Missouri. The economics are different in other areas. For instance, whereas we expect to average around 125 - 150 bushels/acre, certain areas of Iowa can average 250 bushels/acre. I don't know what the input cost are to sow/harvest corn are in Iowa.
"It is not your money until you sell it" is one of the few tried and true maxims that have withstood the test of time. The other one I have found useful is, "there are great companies and great stocks, and they are not necessarily coincident in time."
The values on brokerage statements or mutual fund reports are a snapshot in time. More importantly, they are merely numbers, although they do reflect real dollars. Until they are converted to dollars the prices are truly ephemeral and deceptive. As investors, we need to be reminded of this.
In July 2007 I sold some shares of Merrill Lynch at $93 per share. This price was right near the all-time high for the stock. I had held the shares long term, therefore there was no reason to continue holding it any longer for tax reasons. Long-term tax is the lowest tax that an individual can hope to pay. I made a conscious decision to sell the shares. In retrospect, I am very happy with my decision. The stock is in the $52 range six months later.
In late 1999, share prices for MSFT, CSCO, ORCL were astronomical. Cisco was priced at $80, Oracle at $45 and Microsoft at $60. These three carried the NASDAQ market for the balance of 1999 and since then the share prices have totally collapsed. Seven years later and they have yet to even come close to their prices back then. JDS Uniphase was priced at approximately $140 per share, falling precipitously to under a $1.
Fast forward to today and the three major stocks that have carried the NASDAQ through 2007 are Google, Apple and Research in Motion. Each is at an all-time high. Without the Big Three, the NASDAQ index would be far lower.
When we step up to a table game, be it blackjack, roulette, poker or baccarat, we immediately convert our dollars into chips. That is for several reasons. The first is convenience. It is far easier to bet chips than it is to bet money. Once the money is converted to chips we tend to lose sight of the fact that we are wagering real money. Psychologically, it becomes play money. In fact, a common phrase in a casino is "I am just passing chips around." Now when we are finished with our gaming session, if we want to cash in our chips, the cashier is invariable located at the far back of the casino. After we cash our chips into money again, we now have to pass by all the gaming tables and roulette machines before we get to the restaurants, the performing hall, or our room. This allows us plenty of opportunity to spend those dollars on other games of chance.
Yes whether one trades stocks, bonds, futures, or forex, one needs to always keep in mind is the price is good for only that point in time and that until you sell those shares or contracts, it is not your money.
'Hearty Eaters' Say Buffet Banned Them
Jan 2 04:22 PM US/Eastern
HOUMA, La. (AP) - A 6-foot-3, 265-pound man says a restaurant overcharged him for his trips to the buffet line, then banned him and a relative because they're hearty eaters.
Ricky Labit, a disabled offshore worker, said he had been a regular for eight months at the Manchuria Restaurant in Houma, eating there as often as three times a week.
On his most recent visit, he said, a waitress gave him and his wife's cousin, 44-year-old Michael Borrelli, a bill for $46.40, roughly double the buffet price for two adults.
"She says, 'Y'all fat, and y'all eat too much,'" Labit said.
Labit and Borrelli said they felt discriminated against because of their size. "I was stunned, that somebody would say something like that. I ain't that fat, I only weigh 277," Borrelli said, adding that a waitress told him he looked like he a had a "baby in the belly."
There's a vegan buffet in my town that I occasionally visit with a similar problem — massive unkempt dude pounds it away. Pretty sure he hasn't been cut off or had a "fat tax" added but his gargantuan size and unshowered visage are awkward reminders to other patrons that "there, but for the grace of G_d, go I…" Could be a good strategy for buffet owners — hire a big dude to dine at peak times to reduce intake of all other patrons.
Breathing brings in the much needed oxygen for helping unlock energy from food. However, oxygenation also is the process which brings in fatigue, aging and breakdown of tissue. Rejuvenation therapies, food supplements, etc., are in vogue for helping de-oxygenate.
There is a belief in certain segments of Hindu spirituality (it's claimed in the Vedas, which are mainly ancient sciences interpreted in different ways during different times and incorrectly included within the spiritual literature) that each living entity comes into existence with a fixed number of breaths to determine its life. This one line has been eating my mind away for years to figure out how each system and its configuration has its internal sense of time as opposed to the commonly defined sense of time as measured by the movements of the Earth and the Sun.
Extending this further, the whole idea of Pranayam (the yogic practice of modulating breathing) is to be able to pace oxygenation such that enough and just enough oxygen should be available to the system but not excess, helping enhance longevity.
Now within markets if oxygen is an epithet for cash and/or cash equivalents that enable risk-taking, one wonders:
1) What pace of cash inflow into a trading state is optimal for maintaining that state? Extend this into a larger generalization, what pace of change of an independent variable is optimal for the maintenance of the relationship that the dependent has with it and what triggers an impairment of the relationship, or cycle changes?
2) What, if any, is the internal time sense of each contract's price behavior? If time measurement is limited in our minds to the delay between completion of a particular event that its repetitive then is a repetitive measure of volatility behaviour the direction to explore for figuring out the internal time of prices? If not, what else is a better characteristic to examine the internal sense of time of a market/contract ?
3) Companies, securities and instruments that have vanished due to business failures, takeovers, mergers, spin-offs, changed regulations, etc., leave another rankling question: Is there anything measurable common to such extinctions and if there, one can those measurable variables provide decisions for predicting such extinction in advance for other existing entities?
I was leaving our local Kroger's grocery this morning and noted a man and his son running through the parking lot toward their vehicle. The father commented that his son was attempting to catch some snowflakes (about two inches on the ground here in Belpre OH today and a blustery wind). I remarked that maybe the boy should catch them and put them into an album! The man looked at me oddly for my remark. Each snowflake has its own unique composition and no two are the same. I wonder it this carries over into picking stocks? Traders chase after stocks and hope to be able to hang onto the good ones and not have them melt before their eyes. Snowflakes are fragile and stocks can be as well!
There is something to astronomics as the sun rises in different countries and their stock markets open, first New Zealand, then Australia, India, China (first it's down, then up), then the SE Asian countries as Japan is closed. Of course this was all predestined by Israel's up 1% eight hours ago, but like a weather map, the stock markets show their form with the sun each day, especially at the beginning of the year.
I was at my Greek friend's home this afternoon looking over some 'back of book' Greek stamps and his wife Kiki came into the room with a Greek drachma (now obsolete). She is making bread and was placing the coin in the loaf for good luck. They go back to Greece on occasion and have commented on how prices went up when the Euro was introduced. He sold a piece of property over there and had the funds from that sale placed in a Greek bank account. When he wants some of that money he has it wired to his USA account. He loathes the Euro when going over there with his US Dollars, but likes wiring money from there back to his US account. I told him he could not have it both ways!
It is interesting to speculate about the results from holding futures for various time periods during the last 11 years. These figures use continuously adjusted futures with algebraic adjustments each quarter, so that the results would replicate what a buy and hold strategy would have realized if the position were established at the beginning of the period and held until two weeks before the end of the quarter and then the existing positions was sold and the next quarters position was bought without any slippage. In honor of chronic bears on stocks and bulls on bonds, bond results are also included.
To clarify the units, a move of 1 in stocks per day is from 1480.0 to 1480.1. A tick in futures is 0.25, i.e. a move from 1480.00 to 1480.25. In bonds the move of 01 is from 113.94 to 113.95. In euros, a move of 1 is a move from 1.4500 to 1.4501.
January 1, 2008 | Leave a Comment
1. If you are too concerned with fitting in, with being well regarded by others, with avoiding public faux pas or highly visible mistakes, then you will have difficulty becoming very wealthy
2. The entrepreneur should try to retain 100% ownership (which, however, raises the question of how to motivate employees) but not be involved in the company 100% of the time (in fact he should disappear from time to time and let others run the company)
A fuller review will be coming soon. For the impatient, this old article on the web summarizes some of the main points of the book.
Here's some scattered observations from my three week trip across the Middle East.
Complete alcohol ban throughout country inducing Melvinian nightmare with realization that nearest Irish pub was two sovereign borders away by land. I had to drink this: Budweiser NA
The currency states, We Seek Gods Assistance, Central Bank of Kuwait
Like most of the region, Kuwaiti leisure time is largely spent at shopping malls in order to keep time spent outdoors to a minimum. In addition to other factors, the inactivity of the locals has pushed diabetes rates to 13% of the population in Kuwait but that shocking figure is less than 20% in UAE, 16% in Qatar and 15% in Bahrain! The Gulf diet is largely to blame for the health figures as well with the large influx of Western favorites like Applebees, Ruby Tuesdays, KFC, Pizza Hut, McDonalds, Krispy Kreme, Hardees, and TGI Fridays.
Its a common saying in the Gulf that the only nationals a visitor will meet are those who stamp your passport in and out. Although it doesn't apply in all cases, that's how it was in Kuwait as 90+% of Kuwaiti citizens are employed in some form by the government. Of the population of approximately 3 million, only about a third are Kuwaitis which is a pretty small pie to split 10% of world oil reserves amongst.
Offers little to nothing for tourists and with exception of visit to Kuwait Towers, most of two night stay was spent anticipating departure.
Its clear that Bahrain has large ambitions to enhance it's position as a financial center in the region with the development of Bahrain Financial Bay . The project remains largely in its infancy although I have doubts about it finishing before the cycle changes.
My basic sniff test of financial integrity failed numerous occasions with just trying to get an honest cab fare. All the taxi drivers are native Bahrainis which makes it worse and I think the experience on a five dollar transaction extends directly to larger sums as well.
Nothing of note to see as visit was over a holiday so it can be considered nothing^2. Made visit to halfway point of causeway linking to Saudi Arabia but only because of lack of other sights.
No Michael Jackson sighting.
The building boom in Doha is as impressive as anything Ive seen in such a concentrated area, perhaps best described as the equivalent of building an entire downtown metropolis in five years. It boggles my mind on how they will fill the office buildings with enough productive workers to justify all the construction but I definitely plan to return in a few years time to follow up once this phase is complete. The entire population of Qatar is just under a million people and of that figure, only about 20% of the population are Qatari citizens so I'm under the assumption that a large surge of professional expats are expected.
As with the prior two countries, I found very little to do for the visitor and I imagine that luring foreign professionals will be an expensive endeavor. Its often been a concern of mine that the talent pool of expats is quite shallow to being with and once the buildings of Doha get completed, finding competent workers is going to be very difficult. However, the region will present great opportunities for young and aggressive professionals to get responsibilities and opportunities far earlier in their careers than they would in their own countries.
Qataris are forbidden to get lower end jobs and perhaps all these buildings are just meant to be part of the great government employment agency. I have no firsthand experience working with Gulf Arabs but have heard from others that they have a terrible work ethic and that is why the government has to absorb the workforce rather than the private sector. An otherwise chatty expat I spoke with clammed up regarding Qatari work ethic, knowing to keep his mouth shut, but prior to that spoke of how family and prayers come first in the workplace.
Tourist highlight was desert excursion but found landscape and tour far inferior compared to similar excursions offered in Dubai.
Qatar has unique alcohol restrictions according to wikitravel: There is one liquor store, Qatar Distribution Centre, in Doha. To purchase things there, you must have a license that can only be obtained by having a written letter of permission from your employer. You can only get a license when you have obtained your residency permit and you will need to get a letter from your employer confirming your salary in addition to paying a deposit for QR1000. The selection is good and is like any alcohol selection of a large supermarket in the West. Prices are reasonable although not cheap.
ABU DHABI, UAE
I was prepared from all the warnings that there's not a lot to see or do but didn't care as I came to stay in the Emirates Palace . The hotel is rated with the mythical seven star status, which I've heard compared to Spinal Tap turning their amps to 11, but enjoyed the two nights I spent there and feel it fully deserves the rating. At a cost of over $3 billion to build, its not at all economical but the government of Abu Dhabi built it as a showpiece which is meant to overwhelm anyone who steps inside.
The journey from Abu Dhabi to Dubai is slightly over an hour by taxi and it was the first time I've made the drive. There isn't much to see between the cities and that was actually a nice break from the orgy of construction taking place all over. The break was short lived however as the first sign we were closing in on Dubai was when we reached Jebel Ali on the far west side of Dubai. In addition to being one of the worlds largest ports, it has a huge future once the new airport gets developed to become one of the busiest in the world.
The real deal! In my opinion, Dubai is the most interesting city to visit in the world and will continue to be for the near future. I think Im getting harder to impress but with my fifth visit in four years, my opinion of Dubai continues to grow. To see Dubai is far beyond description and every effort I've seen others make doesnt do accurate justice to what's unfolding.
The blank slate of desert allowed the ruling clan to create a sort of SimCity and every new plan is bolder than the last. Just driving around and viewing the audacious projects being constructed gave me sensory overload. Ive been inspired on each visit by the city as it challenges every notion of possibility and shows the limitless potential some visions have.
One of the extensive infrastructure projects is creating a metro rail which I find absolutely amazing since Ive never seen that before in a city. In the past Ive encountered horrible traffic congestion but avoided it entirely on this visit.
From what Ive heard, the Jumeriah Palm already has residents on it but as a visitor, I couldnt get past the security gate since the hotels havent been finished on it yet.
I had my first stay at the Emirates Towers and feel that its the definitive place to stay in Dubai. The ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum, has his office in the adjoining tower if that tells you how great the view is.
The country is in a tough spot with accommodating Palestinian and Iraqi refugees, leading to official unemployment rate at 15% but likely double that. Very nice and welcoming people though!
I think Ron Paul is not covered by the media because he is anathema to them. He is the antithesis of what they stand for. The media portray the Dems in a better light than the Reps. The media still cover the "normal" Reps because they know the Reps running now are really just Dems from 20 years ago.
But Ron Paul is a different animal. He is for freedom, and getting the government out of out lives. The media are, for the most part, statist in their politics.
They support the statist Dems and grudgingly cover the Reps because they know that when given power, the Reps become statist in their policies and actions.
But Ron Paul is what they fear the most. His policies are what statists must never allow to see the light of day because they are a complete and total refutation of their beliefs.
January 1, 2008 | Leave a Comment
As Ouspensky argued well (nearly a century ago) in Tertium Organum (following Kant), our concepts of time and space are human constructs based on our conscious experience as members of the human species, and there is no reason to think they have a basis in reality outside that perspective. Laurence Glazier.
It is naive to believe human concepts are merely arbitrary constructs. Oliver Wendell Holmes drew the distinction between the (simplistic) simplicity on this side of complexity, and the (enlightened) simplicity that emerges on the far side of complexity.
The child believes that things are as they appear. The philosopher doubts that things are as they appear. But perhaps, at a more enlightened level still, the child was correct and things are indeed as they appear. (Perhaps as Samuel Johnson, when he could no longer tolerate the "ingenious sophistry" of philosopher Berkeley's "proof" that matter does not exist, said: "I refute it thus" and kicked his foot on a large stone.)
The belief that space and time are arbitrary constructs is, alas, an insight on the wrong side of complexity. Of course they are arbitrary constructs. So are numbers and mathematics, for that matter.
These are 18th and 19th century insights, and far from the final word. The truly miraculous thing, as Einstein always marveled, is that by manipulating these "arbitrary constructs," we can, astoundingly, make accurate predictions and create real changes in the world.
James Clerk Maxwell envisioned electromagnetism as having hydrodynamic properties, and based on this–as it turns out–false model, derived equations that worked.
So if man-made concepts (as if there were any other kind) are merely arbitrary, how then do we explain the miracle that these constructs enable us to do things in the real world?
I liked Larry's point about Ouspensky's never having traded. There's a great chess quote from Emanuel Lasker he reminded me of:
"On the chessboard, lies and hypocrisy do not survive long. The creative combination lays bare the presumption of a lie; the merciless fact, culminating in checkmate, contradicts the hypocrite."
Nothing like the real world of trading to expose, in the long run at least, the weaknesses in one's thinking.
It seems to me that Goedel's "Incompleteness Theorem" proves the limits of reason, and science. That in a system complex enough to do arithmetic, that there either exist:
1 True properties that are not provable,
2. or the system is inconsistent.
If you understand his motives and what he thought his incompleteness theory proves: Platonists were right. Not the Sophist: "Man is the measure of all things", not the rigid scientist/empiricist. Nor the Mystic.
It is said that some of Goedel's decent into madness stemmed from him not understand how others could mis-understand the implications of his proof and what was so clear to him.
Few even understand what the proof, proves, let alone the implications, and fewer still the proof.
Goedel was every bit as much the genius as Einstein according to his good friend Einstein.
Jim Sogi responds:
From my read of Luck, Logic & Whies Lies by Jörg Bewersdorff, rather than the limits of reason, Goedel marked the end of a period in the history of math and the beginning of what I might describe as the probabilistic age. Many of the advances in physics and our own market science rests on probabilistic mathematics and this is the new frontier in the same way that the mathematic fiction of a limit allowed Newton to initiate modern science. To me it is a peculiar type of math with variables representing shifting penumbras, but is what gives an advantage over those relying on linear or fixed systems.
Jason Schroeder exclaims:
Don't drag Goedel into this!
Your Bayesian Vagabond cautions over exuberance concerning Mr. G proves limits.
Moving to probabilities does not remove the problem. Probabilities are deductions taken under uncertainty. Otherwise probabilities, including the famous 0 and 1, are mental fixations aiding the proving/deducing process. Incompleteness holds that that abstract process cannot prove everything. Some things require a different tactic or strategy.
More symbols (limits and penumbras and strings of numerals) do not create more possibilities to defeat incompleteness. We all gotta work for our dinner intellectually. Take the risks and change the rules.
Mr. G proves Hilbert championed a dead-end. The scientific air at the time was using phrase "final solution" voiced by Hilbert and his groupies. The German politicians were just being savvy by bringing the notion to the people. Showing the axiomatization, or encoding, or formalistic pretensions that the averagely clever think they automate mapping out a solutions before taking to the field.
"It should anyway be observed that Gödel's theorem is not the anti-scientist panacea… science is primarily seeking questions" not proving correctness before trying (that is called self-righteousness in another tradition).
Remember Popper's love of falsifiability ignores Goedel's work because it is not falsifiable! Goedel refutes Hilbert and Popper.
More from Girard, a mathematical logician:
It is out of question to enter into the technical arcana of Gödel's theorem, this for several reasons :
(1) This result, indeed very easy, can be perceived, like the late paintings of Claude Monet, but from a certain distance. A close look only reveals fastidious details that one perhaps does not want to know.
(2) There is no need either, since this theorem is a scientific cul-de-sac : in fact it exposes a way without exit. Since it is without exit, nothing to seek there, and it is of no use to be expert in Gödel's theorem.
…never forget Turing's contribution to computer science, a ontribution which mainly rests on a second reading of Gödel's theorem ; the fixed point of programs is nothing more than the celebrated algorithmic undecidability of the halting problem: no program is able to decide whether a program will eventually stop, and no way to pass around this prohibition. This is a simplified version of the incompleteness theorem … loses very little …
Russ Sears concludes:
Not having read "Luck, Logic & Whites Lies", but left to judge by your brief decription.
Much has been written about Goedel's proof and its implications from those that don't really understand it. Or if they do they only give the part of the story they want you to hear. This is part of the frustration Goedel had.
To quote an expert on Goedel, Rebecca Goldstein, "…the second incompleteness theorem doesn't say that the consistency of a formal system of arithmetic is unprovable by any means whatsoever. It simply says a formal system that contains arithmetic can't prove the consistency of itself. After all, the natural numbers constitute a model of the formal system of arithmetic and if a system has a model then it is consistent…In other words, when the formal system of arithmetic is endowed with the usual meaning, involving the natural numbers and their properties, the axioms and all that follow from them are true and therefore consistent. This sort of argument for consistency, however, goes outside the formal system, making an appeal to the existence of the natural numbers as a model"
The goal was "to expunge all reference to intuitions-was most particularly directed toward our intuitions of infinity: not surprisingly, finite creatures that we are, it is these intuitions that have prove themselves, from the very beginning , to be the most problematic." … "This can only be done by going outside the formal system and making an appeal to intuitions that can't themselves be formalized."
In other words, my own this time. Goedel ideas no doubt did help herald in what you call "the probabilistic age". He did so by making scientist question even the subtlest assumptions in their methods and models. But I would suggest that Heisenberg principle had much more of an effect in causing a "probabilistic age" than Goedel, if for no other reason than it came first.
The implications to reasons are that a pure Spock is not possible…that intuition must be a part of the process and hence the value of standing like a tree, running 70 miles a week in cold of December. Or, as Einstein and Goedel both did, going for long walks often together can give increase your scientific output, by giving you a chance to put it in perspective.
While this clearly has implication for a speculator, I would suggest that the bigger implication is that finite creatures that we are we should always remain humble and be open to the idea that we even as "counters" are heading down a wrong path. We do not always have an edge, despite what the numbers say. Not that "counting", reason, or science is wrong… rather we are using it wrong, that we missed something in our model. The limit to science and reason is us.
January 1, 2008 | Leave a Comment
Want to see if you're really committed to keeping a New Year's Resolution?
Step 1: Think of someone in your life who cares about you that you most respect.
Step 2: Go to him, tell him you'd like his assistance and ask him one positive behavior you could start doing and one negative behavior you could stop doing that would increase his and other's respect for you.
Step 3: Repeat back to him those behaviors to make sure you heard him accurately.
Step 4: Ask him if he would be willing to send you an email in two weeks and then a month later to see if you've kept your commitment (after a month's time, there's a good chance it will become internalized and then you ask for another pair of behaviors to improve upon).
Step 5: Thank him and ask him how you can return the favor to him.
The extent to which you will do this is directly related to your true commitment to change. If you hesitate, then you are more ready for change than you are ready to change and you're not going to change.
Yesterday I took the family to Goldfield Ghost Town, a mere 35 minutes, or 25 miles, away from where we live. I thought that my kids were now old enough to visit and appreciate where their grandfather owned a third interest in a mine here in the 1890s. After selling his interest he built the first hotel (21 rooms) in Mesa, AZ (so says family lore, which I can't prove or disprove at present).
Perhaps the Senator would have enjoyed seeing the five fault lines, a few intersecting each other, where the veins of gold were found. One vein was said to be 18 inches wide. The gold vein was exposed by a major flash flood in April of 1893.
I'm the fifth generation of my father's line here in Arizona and I've often wondered why we ended up in this G_dforsaken country. But we love it. And, more importantly, we call it home.
On the margin, buying to rent should become a marginally more attractive investment going forward. A normal real estate decline, caused by a general slowdown in the economy, should affect buying and renting equally.
But in this case: Take a guy who makes 75k per year. He went in leveraged himself in a subprime to buy a 500k house. He can't afford that now, and he is being foreclosed on. But, he still has his job, and needs a place to live, and he will be entering the rental market to find a roof for his family.
James Lackey replies:
My sister is in that biz, and its amazing how far prices have to fall to make deals cash flow positive. Florida wasnt since 2001 and it's now near break even for investment rentals. Close, but not there yet. We are talking nice houses near towns, schools, shopping, roads to beaches etc. — a house a guy that makes 75k would rent. And any nice apartment complex was converted in 2005-06, so rentals are scarce.
Nigel Davies writes:
Professor Haave's point is a good one and I for one will certainly be a real estate buyer when UK rental income rises to decent levels. But I don't think that this necessarily signals a 'bottom' as demand will also be a function of the overall state of the economy and can contract considerably if push comes to shove.
A major argument in favour of a 'strong rental market' is that people need somewhere to live. But there seems to be an assumption that an individual's space requirements cannot possible contract, which is nonsense. It's worth remembering that 100 years ago extended families of 20 or more would live in a houses of the size that are currently occupied by singles, and you still get this in many countries.« go back —
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- August 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- January 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- Older Archives
Resources & Links
- The Letters Prize
- Pre-2007 Victor Niederhoffer Posts
- Vic’s NYC Junto
- Reading List
- Programming in 60 Seconds
- The Objectivist Center
- Foundation for Economic Education
- Dick Sears' G.T. Index
- Pre-2007 Daily Speculations
- Laurel & Vics' Worldly Investor Articles