Here is an actual conversation from work this week. (Len's name was changed to protect his identity for obvious reasons).
"Len": Hey, not to change the subject or anything but what do you think is the scariest monster?
Me: What?
"Len": You know like Vampires or Werewolves?
Me: I dunno, the Loch Ness Monster.
"Len": No, not the Loch Ness Monster, real monsters. I say Zombies.
Me: Zombies? But they are so slow.
"Len": Not in 28 days later...
The next day this article shows up.
Link to Article
Who's a real monster now?
Thursday, May 31, 2007
Sunday, May 20, 2007
Great Book
I love economics. Why was the stuff in school about supply / demand,
guns vs butter so boring and not applicable to the real world?
Here is a great book that I am almost done reading, Naked Economics by Chares Wheelan.
It has helped (maybe not moderate) but at least put some context around some frustrations with our government and politics.
A good example from Karen's recent blog, I love fettucini Alfredo. But I only order it if the servings are small (Fazzoli's etc). If the portions are too big (Macaroni Grill) then I get spaghetti and meatballs because it reheats better for the 2 extra meals I get out of it.
An absolute must read, he also does a monthly blog on Yahoo Finance. His most recent being why the post office should no longer be owned by the government.
Saturday, May 12, 2007
The Verdict
Time for a serious blog.
Which Root Beer Stand is better?
The Jug, Middletown
vs
The Root Beer Stand, Sharonville
Location: The Root Beer Stand
For those living within 275 this may seem to be a no brainer but it is actually closer than you may think. The Root Beer Stand is just of 275 and Reading Rd, while the Jug is in Middletown. Both are well worth the drive.
Speed of Service: The Root Beer Stand
Granted the Jug was much busier when we went, but it was still over 30 mins before we got our food. The Root Beer Stand was under 5 mins but it is pre-cooked burgers.
The Root Beer: The Jug
Boy I hope the Root Beer Stand had a off night when we went, because the
root beer was not good. Flat, and tasted more like a cream soda. The
Jug had good root beer, on par with A&W (my favorite growing up).
The Food: The Jug
Both places have good burgers at good prices but the Jug used grilled rolls that are amazing.
The Atmosphere: Tie
Both have indoor counter seating or outdoor picnic tables (The Jug still has car hops). The Root Beer Stand does have a nice little grassy area in the back. The Root Beer Stand also has TVs inside which show The Price is Right during lunch...except they only face the workers so you can hear it but not see it (how cruel). Therefore it is a tie.
Web Site: The Jug
www.thejug.com is far superior than www.therootbeerstand.com, which looks like it was done as a class project (in 1997).
Overall Winner: The Jug
Both are a great summer stop, but you will crave The Jug.
Which Root Beer Stand is better?
The Jug, Middletown
vs
The Root Beer Stand, Sharonville
Location: The Root Beer Stand
For those living within 275 this may seem to be a no brainer but it is actually closer than you may think. The Root Beer Stand is just of 275 and Reading Rd, while the Jug is in Middletown. Both are well worth the drive.
Speed of Service: The Root Beer Stand
Granted the Jug was much busier when we went, but it was still over 30 mins before we got our food. The Root Beer Stand was under 5 mins but it is pre-cooked burgers.
The Root Beer: The Jug
Boy I hope the Root Beer Stand had a off night when we went, because the
root beer was not good. Flat, and tasted more like a cream soda. The
Jug had good root beer, on par with A&W (my favorite growing up).
The Food: The Jug
Both places have good burgers at good prices but the Jug used grilled rolls that are amazing.
The Atmosphere: Tie
Both have indoor counter seating or outdoor picnic tables (The Jug still has car hops). The Root Beer Stand does have a nice little grassy area in the back. The Root Beer Stand also has TVs inside which show The Price is Right during lunch...except they only face the workers so you can hear it but not see it (how cruel). Therefore it is a tie.
Web Site: The Jug
www.thejug.com is far superior than www.therootbeerstand.com, which looks like it was done as a class project (in 1997).
Overall Winner: The Jug
Both are a great summer stop, but you will crave The Jug.
Tuesday, May 8, 2007
Black Box Investing Update
Sorry this is a stock blog, if you don't like stocks it may be boring.
One day I was listening to CNBC on a report about how far behind the US was in Math vs the rest of the world. The person they were talking to happened to be from a company called Black Box Investing. They were saying how they were donating money to "Math for America" (or something like that). They hire a lot of PHDs in math to analyze stock charts and figure out when to buy and sell them. They say they have trouble finding enough PHDs to work for them so they do a lot of overseas hiring.
Net, I thought the idea was neat so I subscribed to their service. I monitor their suggestions about stocks I already watch but they issue warnings on what stcks you should buy each day so I decided to start a test to see how they do before I take any of their advice. What is neat is they do track historically for you how the stock previuously performed when these conditions have occurred before.
Test Design:
They reco stuff everyday, but I only keep track of things they suggest on friday after the close. I figure I am busy so I could have all weekend to do some homework on these companies and see which I really think will go up. I also take the following monday closing price as my first data point so that you have all day to get into the stock w/o worrying it will jump over the weekend before you can even buy any (see Mad Money).
I am 3 weeks into the test and here are the results of the first batch.
These are stocks that were suggested to be bought on Friday 4/13/07. They are broken into 3 groups based on 3 different models that suggested a buy.
Group #1
Background:
The Stochastic Oscillator is a momentum indicator that shows the location of the current close relative to the stock's recent trading range. The Oscillator is made up of 2 lines. The first is called the %K line which moves between 1 and 100, where 1 represents the bottom of the range and 100 represents the top. The second line, called the %D, is simply a moving average of the %K line. When the Stochastic Oscillator rises above the 80 level, the stock is considered "overbought" and when it falls below the 20 level it is considered "oversold."
Data:
On this day there were no 5 star "buys" so all of these are 4 stars (I will later track 3,4,5 star perfomance once I have more data).
After 1 week:
Average Gain: 5.2% (S&P 500 gained 1.1%)
Median Gain: 3.1%
High: 28.9%
Low: -3.0%
After 2 Weeks:
Average Gain: 4.2% (S&P 500 gained 1.7%)
Median Gain: 4.0%
High: 17.4%
Low: -3.6%
After 3 Weeks:
Average Gain: 4.8% (S&P 500 gained 2.5%)
Median Gain: 3.4%
High: 23.5%
Low: -0.8%
Not bad data but you'd have to do some research to find the 1 or 2 that will jump over 10% out of the 10 stocks I followed. On the plus side nothing got killed, so you could try it w/ low risk and bail if the stock does not move. You'd have to trade this model (and most) you really couldn't buy and hold hoping for a 10 bagger when the model is based on how far above or below the recent average the stock is trading.
I'll keep and eye on this as I anaylze later weeks data.
Group #2
Background:
Developed by John Bollinger, Bollinger Bands are an indicator that allows investors to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security's price action. The middle line is a simple moving average. The upper and lower bands are the moving average plus or minus standard deviations. Standard deviation is a statistical term that provides a good indication of volatility, ensuring that the bands widen or shrink according to the stocks current level of volatility.
Data:
I'm not going to summarize, these 10 stocks lost around 1-2% at each of the 3 weeks. Only 3/10 were up after 3 weeks. It's even worse when you see the S&P 500 gained 2.5% over that time.
Group #3
Background:
MACD stands for Moving Average Convergence Divergence. The MACD is the difference between two exponential moving averages, typically the 26 and the 12. Our Black Box System will often modify this setup to present a more accurate MACD signal. A second, exponential moving average, called the "signal line", is plotted on top of the MACD. A buy or sell signal is given when the first line crosses over the signal line.
Data:
Same as group #2, only 1 of the 4 made money after 3 weeks.
Overall I like the program, they do a lot of the technical work that I do not have to for. But it is a Black Box that treats everything as numbers so you have to do some "Jim style" research on your own to figure out which are good companies.
One day I was listening to CNBC on a report about how far behind the US was in Math vs the rest of the world. The person they were talking to happened to be from a company called Black Box Investing. They were saying how they were donating money to "Math for America" (or something like that). They hire a lot of PHDs in math to analyze stock charts and figure out when to buy and sell them. They say they have trouble finding enough PHDs to work for them so they do a lot of overseas hiring.
Net, I thought the idea was neat so I subscribed to their service. I monitor their suggestions about stocks I already watch but they issue warnings on what stcks you should buy each day so I decided to start a test to see how they do before I take any of their advice. What is neat is they do track historically for you how the stock previuously performed when these conditions have occurred before.
Test Design:
They reco stuff everyday, but I only keep track of things they suggest on friday after the close. I figure I am busy so I could have all weekend to do some homework on these companies and see which I really think will go up. I also take the following monday closing price as my first data point so that you have all day to get into the stock w/o worrying it will jump over the weekend before you can even buy any (see Mad Money).
I am 3 weeks into the test and here are the results of the first batch.
These are stocks that were suggested to be bought on Friday 4/13/07. They are broken into 3 groups based on 3 different models that suggested a buy.
Group #1
Background:
The Stochastic Oscillator is a momentum indicator that shows the location of the current close relative to the stock's recent trading range. The Oscillator is made up of 2 lines. The first is called the %K line which moves between 1 and 100, where 1 represents the bottom of the range and 100 represents the top. The second line, called the %D, is simply a moving average of the %K line. When the Stochastic Oscillator rises above the 80 level, the stock is considered "overbought" and when it falls below the 20 level it is considered "oversold."
Data:
On this day there were no 5 star "buys" so all of these are 4 stars (I will later track 3,4,5 star perfomance once I have more data).
After 1 week:
Average Gain: 5.2% (S&P 500 gained 1.1%)
Median Gain: 3.1%
High: 28.9%
Low: -3.0%
After 2 Weeks:
Average Gain: 4.2% (S&P 500 gained 1.7%)
Median Gain: 4.0%
High: 17.4%
Low: -3.6%
After 3 Weeks:
Average Gain: 4.8% (S&P 500 gained 2.5%)
Median Gain: 3.4%
High: 23.5%
Low: -0.8%
Not bad data but you'd have to do some research to find the 1 or 2 that will jump over 10% out of the 10 stocks I followed. On the plus side nothing got killed, so you could try it w/ low risk and bail if the stock does not move. You'd have to trade this model (and most) you really couldn't buy and hold hoping for a 10 bagger when the model is based on how far above or below the recent average the stock is trading.
I'll keep and eye on this as I anaylze later weeks data.
Group #2
Background:
Developed by John Bollinger, Bollinger Bands are an indicator that allows investors to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security's price action. The middle line is a simple moving average. The upper and lower bands are the moving average plus or minus standard deviations. Standard deviation is a statistical term that provides a good indication of volatility, ensuring that the bands widen or shrink according to the stocks current level of volatility.
Data:
I'm not going to summarize, these 10 stocks lost around 1-2% at each of the 3 weeks. Only 3/10 were up after 3 weeks. It's even worse when you see the S&P 500 gained 2.5% over that time.
Group #3
Background:
MACD stands for Moving Average Convergence Divergence. The MACD is the difference between two exponential moving averages, typically the 26 and the 12. Our Black Box System will often modify this setup to present a more accurate MACD signal. A second, exponential moving average, called the "signal line", is plotted on top of the MACD. A buy or sell signal is given when the first line crosses over the signal line.
Data:
Same as group #2, only 1 of the 4 made money after 3 weeks.
Overall I like the program, they do a lot of the technical work that I do not have to for. But it is a Black Box that treats everything as numbers so you have to do some "Jim style" research on your own to figure out which are good companies.
Monday, May 7, 2007
Velocity of Money
Here is another example of why large public companies aren't always the best for the economy (at least in my opinion).
Scenario #1
In Jan, Dave takes $10,000 Hula lessons from Hula Lessons Inc (probably ticker HULA.OB)
The company pays some expenses but the majority of what I pay them is
profit (or should be). The company socks the profit away for the rest
of the year so that at the end of the year they can say they made
another ~$10,000 in profit. The money is tied up.
The stock may go up a penny or two on the additional money but no one really benefits.
Their main goal is to take as much money out of the economy and into their
pots for score keeping. Kinda like playing Hungry Hungry Hippos
Scenario #2
In Jan, Dave takes $10,000 Hula lessons from Sanjaya.
In Feb, Sanjaya takes $10,000 Violin lessons from Dale.
In March, Dale pays Jim $10,000 to be his wing man during spring break.
In April, Jim buys $10,000 worth of duck paintings done by Karen.
In this case it is the same $10,000 that we pass between us. The net is it
looks like $40,000 on our combined W-2's at the end of the year. At the
end of the year we will all be taxed on it but for right now the money
is moving very fast through our network raising the annual earnings for
all of us.
This example is basic because the idea isn't 100%
efficient. If you notice we are all providing services not selling
actual products because the value of assets transferred makes it more
complicated.
The point is it is much more efficient to move money through people than it is companies. You can argue that the company does have some expenses because it pays some employees who then have some money to spend. But before those employees can spend the money the company must take out their profit, then any salary must go through withholding tax before the employees get any money to spend.
The other option is the company can choose to spend some of its profit. They usually do a few things:
1. They could increase the dividend they pay to investors (only helps shareholders).
2. They could start to buy some of their own stock back (very popular now, but also only helps shareholders).
3. They could chose to spend the money on things like new computers for
all employees etc. (This tends to be slow, does anyone use Vista at
work yet? I was lucky to finally get a flat screen monitor this past
fall).
Scenario #2 probably happened more often in the early
1900's as a mom and pop pizza place would buy cheese etc from the local
family owned cheese shop around the corner. Now a days you get Pizza
Hut (owned by Yum brands) buying bulk cheese from Kraft etc.
If you work out all the details in my 2 examples, the differences probably narrow but the impact of the differences in efficency is significant.
What does it mean for the future?
1. I am convinced more people will be able to work from home (population
growth and traffic congestion are good incentives to find a way).
2. People will also be less likely to need a large company to provide them
with a living since the flow of money will be more efficient if you can
work outside of their economy.
3. But I believe the majority of those who can stay home will provide some form of services / information (consulting) instead of selling products.
Right now 2% of the US population makes their living selling things on eBay. This works because you have 2% selling products
to the other 98% (or whatever % use eBay). If this becomes more popular
it won't work. How could 50% of the population convince the other 50%
to keep buying things from them on eBay. And where would people store
all the things?
Scenario #1
In Jan, Dave takes $10,000 Hula lessons from Hula Lessons Inc (probably ticker HULA.OB)
The company pays some expenses but the majority of what I pay them is
profit (or should be). The company socks the profit away for the rest
of the year so that at the end of the year they can say they made
another ~$10,000 in profit. The money is tied up.
The stock may go up a penny or two on the additional money but no one really benefits.
Their main goal is to take as much money out of the economy and into their
pots for score keeping. Kinda like playing Hungry Hungry Hippos
Scenario #2
In Jan, Dave takes $10,000 Hula lessons from Sanjaya.
In Feb, Sanjaya takes $10,000 Violin lessons from Dale.
In March, Dale pays Jim $10,000 to be his wing man during spring break.
In April, Jim buys $10,000 worth of duck paintings done by Karen.
In this case it is the same $10,000 that we pass between us. The net is it
looks like $40,000 on our combined W-2's at the end of the year. At the
end of the year we will all be taxed on it but for right now the money
is moving very fast through our network raising the annual earnings for
all of us.
This example is basic because the idea isn't 100%
efficient. If you notice we are all providing services not selling
actual products because the value of assets transferred makes it more
complicated.
The point is it is much more efficient to move money through people than it is companies. You can argue that the company does have some expenses because it pays some employees who then have some money to spend. But before those employees can spend the money the company must take out their profit, then any salary must go through withholding tax before the employees get any money to spend.
The other option is the company can choose to spend some of its profit. They usually do a few things:
1. They could increase the dividend they pay to investors (only helps shareholders).
2. They could start to buy some of their own stock back (very popular now, but also only helps shareholders).
3. They could chose to spend the money on things like new computers for
all employees etc. (This tends to be slow, does anyone use Vista at
work yet? I was lucky to finally get a flat screen monitor this past
fall).
Scenario #2 probably happened more often in the early
1900's as a mom and pop pizza place would buy cheese etc from the local
family owned cheese shop around the corner. Now a days you get Pizza
Hut (owned by Yum brands) buying bulk cheese from Kraft etc.
If you work out all the details in my 2 examples, the differences probably narrow but the impact of the differences in efficency is significant.
What does it mean for the future?
1. I am convinced more people will be able to work from home (population
growth and traffic congestion are good incentives to find a way).
2. People will also be less likely to need a large company to provide them
with a living since the flow of money will be more efficient if you can
work outside of their economy.
3. But I believe the majority of those who can stay home will provide some form of services / information (consulting) instead of selling products.
Right now 2% of the US population makes their living selling things on eBay. This works because you have 2% selling products
to the other 98% (or whatever % use eBay). If this becomes more popular
it won't work. How could 50% of the population convince the other 50%
to keep buying things from them on eBay. And where would people store
all the things?
Friday, May 4, 2007
Presidential Debate
I DVR'd the latest debate and watched a bit tonight.
The problem I have with the presidential campaign is that it is very similar to Survivor. In the end the winner is never the smartest, the strongest, or anything else remarkable.
On survivor the winner is often someone who stays quiet at first hanging onto others coat tails, then they backstab enough people to get ahead but not too many to be the jerk.
In the future our elected officials will have almost no power as their voting will be determind by text message votes like American Idol:
"If you think the previous motion should pass, text Idols01 to 53465..."
While he has no chance of winning, one guy I did like was Ron Paul, not only does he look like Ross Perot but he will give you real answers instead of buzz words when you ask why Iraq is such a mess.
Questons I would ask the next President during my bi-weekly:
1. What part of the Boston Tea Party convinced you we need more taxes?
2. Have you considered going on House Hunters to find the next White House?
3. Are you not interested in fixing social security and medicare because you know you get 40% of everything I own when I die?
4. Can we no longer half-ass Columbus Day? I don't care which way you go but make a decision. Me having to go to work but not get any mail isn't working.
5. Have you seen the HD special on the supervolcano under Yellowstone? Any thoughts on this?
6. Should a country with a huge debt be run by someone who spent millions to land a job that pays $400,000? Show your work.
Feel free to add your own
The problem I have with the presidential campaign is that it is very similar to Survivor. In the end the winner is never the smartest, the strongest, or anything else remarkable.
On survivor the winner is often someone who stays quiet at first hanging onto others coat tails, then they backstab enough people to get ahead but not too many to be the jerk.
In the future our elected officials will have almost no power as their voting will be determind by text message votes like American Idol:
"If you think the previous motion should pass, text Idols01 to 53465..."
While he has no chance of winning, one guy I did like was Ron Paul, not only does he look like Ross Perot but he will give you real answers instead of buzz words when you ask why Iraq is such a mess.
Questons I would ask the next President during my bi-weekly:
1. What part of the Boston Tea Party convinced you we need more taxes?
2. Have you considered going on House Hunters to find the next White House?
3. Are you not interested in fixing social security and medicare because you know you get 40% of everything I own when I die?
4. Can we no longer half-ass Columbus Day? I don't care which way you go but make a decision. Me having to go to work but not get any mail isn't working.
5. Have you seen the HD special on the supervolcano under Yellowstone? Any thoughts on this?
6. Should a country with a huge debt be run by someone who spent millions to land a job that pays $400,000? Show your work.
Feel free to add your own
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