Monday, March 30, 2015

The Haiku of Finance for 03/30/15

Greece still needs a deal
Can't sell off Acropolis
It's too big to move

Sunday, March 29, 2015

The Limerick of Finance for 03/29/15

Tech conferences tempt one to snore
Not all events need be a bore
Take risk and provoke
It's okay to joke
Promoters should push edge some more

Startup And Tech Mixer With A Silver Statue For March 2015

Startup and Tech Mixer did it again in March 2015.  They pulled off an edgy conference last week with an immersion lounge, double-powered cold coffee, and a silver statue of a stark naked woman.  I like coming to STMixer in San Francisco because it's a thought-provoking break form the normal tech conference circuit.  Here comes my reaction to the spectacle.

I had a few minutes to wander the exhibit floors before the lectures started.  The billed "6D immersive experience" looked too decadent for my tastes, and it wasn't something I could capture on camera anyway due to its mature theme and dark enclosure.  The actors involved were allowed to interact with participants in ways that required both discretion and consent.  If I wanted that kind of experience I would have gone to one of the gentleman's venues on Broadway instead of a tech conference.  Oh BTW, I have attended such classy places in the past for exactly the right reasons, and I always got my money's worth.

The exhibit floor featured some really powerful cold brewed coffee.  The brewers said they focus on office deliveries but I would buy their stuff if they distributed through Trader Joe's.  Another vendor had some iPad case that doubled as a keyboard, but I've seen keyboard apps on the iPad that don't require the purchase of a specialized case.  The babes running all of the booths were certainly attractive enough for my tastes.

I headed back to the conference room with my fill of power coffee and healthy snack bars.  The MC said success often takes thirteen failures to get something right.  I am still short of that number so more failures are always in store.  He also said unwavering commitment matters.  You betcha, dude.  Plenty of people tried to talk me into abandoning Alfidi Capital for entry level jobs in unskilled labor.  I told them all to take a hike.

The first cluster of speakers knew something about marketing revolutions.  Their cited stats showed that entrepreneurship is an aspiration for only a minority of people.  Everyone else on the planet would rather hand control of their fate to someone else.  The marketing technology landscape is very crowded due to low entry barriers.  The "question mark" box of the BCG growth-share matrix for companies like Hootsuite and Marketo will eventually narrow down once they buy smaller rivals.  The most compelling marketing innovations reduce customer acquisition cost (CAC).  The panel's comments on difficulties in branding convinced me there's a disruptive opportunity for creating metrics that assess brand image and awareness.  Expect to see those metrics on a social media dashboard at some point.  The moderator described "analytical overoptimization" as an unneeded narrowing of the marketing funnel that doesn't identify new customers.  I would have called it the "paralysis of analysis."  I would also refer marketers to Google's suite of list marketing tools that recapture parts of a digital marketing funnel.  Whatever marketing tools we end up using must drive improvement in a product's growth-share matrix position.  The marketing tools that break out of "question mark" status themselves deserve acquirers' attention.

Marco Cochrane and Julia Whitelaw shared the stage to talk about art and society.  The silver-colored sculpture above is called "R-Evolution," the third and final piece in the Bliss Project featured at Burning Man.  The model who posed for all three pieces is Jamie Deja Solis, one awesome-looking babe who has no objection to showing the world her natural form.  The sculpture had many of the people here transfixed while it was on display.  The beauty of female nudity has an incredible power.  Marco's work emphasizes the humanity of female nudes and Burning Man's pervasive nudity makes for a suitable showcase.   I used to have a naively innocent view of Burning Man as a laid-back, temporary art colony.  Lately I have heard so much about the event's massive mind-altering substance use that I'm glad I've never attended.  Marco and Julia noted that sexual assault has also been a serious problem at Burning Man.  I am not optimistic that conditions will ever improve.  Anyone fascinated by anarchy should examine what really happens when a community with no formal governance or norms tries to suppress dangerous behavior.  I hope Marco and Julia keep making great art, because I really like to look at naked women.  I also hope that any women attending Burning Man to admire art do everything possible to protect themselves from drug-addled predators.

The third panel taught us how to channel the failure, anger and shame that are common in tech entrepreneurship.  This subject is right up my alley and I've got all the answers.  I fail when corrupt people steal my work; I no longer work with corrupt people.  I get angry when I think of all the stupid people I've met who succeed despite their incompetence; I channel this anger into my blog articles.  I have been shamed by spoiled trust fund babies who demanded that I depart social events in San Francisco; I now get invited to so many events that I don't have to worry about the small-minded people who don't want me around.  The panelists don't need therapists; they need to get hard core about sticking it to stupid losers.  That's the Anthony Alfidi solution to nonsense in the human race.  I also suggest that any attractive woman who feels shame should take after Deja Solis' example and pose nude for artists.  That gal has every reason to be proud of her toned, athletic body.  Pride comes from satisfaction with the self, once discomfort and shame are expelled.

I have to object to some of the coping tactics the failure panelists advocated at STMixer.  I'll mention the "fake it until you make it" attitude that so many entrepreneurs feel they must project.  I think it's a mental trap that will eventually lead to lots of anger and shame.  I am unable to fake anything, especially a false image of success.  Admitting the lack of progress I have sometimes experienced in life invites insults from successful people.  I would rather take the insults than live with the cognitive dissonance of a success picture out of whack with reality.  I also do not agree with the panelist who said that admitting vulnerability builds trust.  A whole bunch of people stopped trusting me at times when I admitted I was having career problems.  Furthermore, I do not agree with the panelist who said we should find experienced greybeard advisors.  Folks, greybeards are a dime a dozen and most aren't even worth that one dime.  The greybeards I've sought in San Francisco have either given me fraudulent advice or told me not to have a career.  That is why I no longer need or tolerate mentoring.  I'll close by saying that the "quantified self" movement in modern health care should also apply to mental health.  I'll bet wearables can make a huge impact developing biofeedback methods that improve mental well-being.  The Google Glass modality would be perfect if it included sensors that monitored the wearer's mental state.  Speaking of health care, that's the perfect segue into the next panel.

The final panel covered medical technology and health care innovation.  My friend Robin Farmanfarmaian did an awesome job discussing some of the advances we can expect.  She's the gorgeous blonde woman in the photo above.  Her own experiences with inefficiencies in health care give her enormous credibility.  I can't wait to see the m-health revolution come to the smartphone, because it would give me an excuse to actually buy a smartphone for the first time.

Patient empowerment is the name of the game.  Merging Big Data from the health care system with patient data from mobile devices means changing some privacy protocols, but I think most consumers will accept privacy tradeoffs if it means optimized patient self-management.  Our society will eventually reach a decision point where the benefits of sharing patient data will obviously outweigh privacy concerns.  The irony is that patients will not be the ones making that decision.  I am certain that federal government officials in DHS administering the Affordable Care Act exchange will make that decision on their own with no Congressional oversight.

Truly personalized medicine awaits more tech advances in mildly intrusive delivery modalities.  Robin mentioned a few applications in tissue engineering that won't be in the realm of science fiction for much longer.  Growing replacement organs from your own stem cells eliminates the rejection problems of transplanted organs.  It also allows growing test cells for customized drugs designed exclusively for one patient's unique biochemical pattern.  Artificial intelligence (AI) will probably be a necessity in patient management if the projected physician shortage in America's future becomes reality.  AIs can diagnose people remotely and keep routine cases out of expensive emergency rooms.  The panel could have spent more time discussing mental health but I'm sure an entire conference could cover that subject and still not be exhaustive.  Insurance coverage for non-traditional treatments is coming once ACA auditors have enough data on the costs it will save.

The STMixer people put on a great show.  I am always entertained when I come.  Every tech conference needs more women to attend.  Maybe a female-themed STMixer would attract them.  They may be turned off by statues of completely naked women at a conference, but the babes at Burning Man are highly tech-savvy and they don't mind getting nude at all.

Saturday, March 28, 2015

The Haiku of Finance for 03/28/15

No spending control
Blow cash on lifestyle folly
Head for the poorhouse

Friday, March 27, 2015

The Haiku of Finance for 03/27/15

Event promotion
Key to lucrative outcome
Keep overhead low

Thursday, March 26, 2015

The Haiku of Finance for 03/26/15

Build property wealth
Do not exceed risk control
Landlording's no game

Alfidi Capital Inaugural Visit To Bay Area Wealth Builders

I have been on the Bay Area Wealth Builders (BAWB) email list for years.  I have never visited one of their events until this month.  I had to go check them out because real estate writer John T. Reed was their headlined guest speaker at the March 2015 monthly networking meeting.  The photo below has my reflection in the window to prove I was there, way up north in Corte Madera.

The host started with a rundown of the macroeconomic forces affecting real estate valuations.  I totally agree with him that the Federal Reserve faces a very complex interest rate environment, completely of its own making.  I have not located a public source for the relationship between interest rate basis point changes and changes in a borrower's qualifying minimum income for a mortgage, but banks know how to calculate the relationship.  Real estate professionals track the Standard and Poor's Case-Shiller Home Price Indices both nationally and for their metro area.  The St. Louis Federal Reserve Bank's FRED has a convenient Case-Shiller data series for the San Francisco Bay Area.  Crunch that data until your heart's content.  You can also crunch the California Association of Realtors' data and statistics to see if any realtors' predictions about perpetual home value increases ever panned out.  The CAR's Housing Affordability Indexes on that website show how San Francisco properties are much less affordable that those in the rest of the state.

Property owners had time to pitch their investments.  I noted that most of the properties seemed to be outside California.  I don't get the appeal of out-of-state properties for most real estate investors.  I respect sophisticated investors who can afford to research and visit distant locales but most beginners will find it easier to perform due diligence closer to home.  I won't even think about buying real estate outside the nine county Bay Area because I'm not willing to travel any farther than I can drive in a couple of hours.

The most unique financing method BAWB discussed involved using an IRA as a source of funds.  I would not use my own IRA to advance a loan to a third party investor.  There are other ways to capture the value of a mortgage note within a tax-advantaged retirement account, such as by simply buying shares in a securitized mortgage loan product.  There are even ETFs tracking mortgage-backed securities.  Owning liquid, registered, exchange-traded securities eliminates all of the headaches real estate investors face from IRA-funded renovations that add Unrelated Business Income Tax (UBIT) liability.  Owning publicly traded mortgage securities in an IRA also avoids scrutiny of mortgage originators under Dodd-Frank and the Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act.  Playing around with loans in IRAs is not the game for me.  My IRA is not a bank and I am not inclined to impair its value with some third party's credit history.  I am also not inclined to fiddle around with wrap-around mortgages; thanks but no thanks.  I guess some real estate investors prefer to tempt fate and play with fire just for the thrill of ownership.

John T. Reed spoke at length about the most common mistakes real estate investors make, with the main ones listed on his website.  I learn something new every time I hear this guy talk.  Real estate investors can read John's free articles so I don't have to recap his main points here.  I am sufficiently impressed with the voluminous legal requirements for landlords that I am deterred from ever investing in physical domiciles for live tenants.  Humans are an inconvenience and most amateur landlords must be masochists if they underestimate the risks John identifies.  I will never ignore PITI components and how they impact ROI.  I always have an exit plan; that's why I would rather own a REIT or ETF than a physical building.  If poor cost accounting fails to identify poorly performing projects, then the multiple derelict buildings and empty lots I see around San Francisco must reflect a whole bunch of landlords who flunked managerial accounting.  John closed out with a recap of his approach to liquid hard assets and other parts of his hyperinflation hedging strategy.

The BAWB session was a success for me because I came away more intelligent about real estate.  I don't envision any physical property ownership in my future but the animal spirits moving real estate investors are compelling.  I would return if BAWB wants me as a guest speaker.  I am certain I could speak at length about REITs and related securities that don't require retail landlording.  I could also talk the audience's ears off about economic statistics that drive markets and investor behavior.  Real estate investors will then bask in the glow of the glory that is Alfidi Capital.

Full disclosure:  I paid $20 to attend this BAWB event.  I usually attend business events for free but I relaxed my cheapskate rule just this once.  It was the correct decision because I got my money's worth in wisdom.  No one paid me to make this disclosure.

Wednesday, March 25, 2015

The Haiku of Finance for 03/25/15

Automate investing choice
Pre-chosen finance

Saving For No Future

Study after study bemoans Americans' disinterest in saving money for their future lives.  Behavioral finance academics are looking for an explanation.  I've already found an explanation consistent with our evolutionary biology.  People don't save because the future is an abstract concept.

Consider how poor people open bank accounts and forget they have money deposited there.  They also think money isn't real unless it sits in their pockets as cash.  The digits in their accounts are an abstraction.  If something physical isn't readily available, it may as well not even exist for most people.  The vast population of stupid Joe Sixpack Americans remains poor because their monkey brains cannot process abstractions.

Americans who do prepare adequately for their futures are small in number.  The smallest number are autodidacts like me.  We can literally see the future because our brains process information much more rapidly and in larger quantities than most humans.  Desire for knowledge feeds this process, so one could say that strength of character is a factor in successful financial preparation.  Another portion of well-prepared Americans may not be so smart or driven.  These people succeed because someone in their bloodline who once possessed those characteristics set them up with inheritances and trust funds.  A well-oiled deus ex machina does the hard work of investing for these idiots.

Digital versions of the deus ex machina are now rapidly proliferating.  Robo-advisors are coming.  Charles Schwab's automated portfolio rebalancing system debuted this month.  The robo-trader is a decent solution for the bulk of Americans who are too dimwitted and unmotivated to grok the importance of financial preparation.  Government mandates to enroll every working proletarian in a robo-balancing 401(k) are probably in our future.  They may have to wait until after a hyperinflationary explosion sweeps away the detritus of the last three decades' malinvestment.

Human beings are largely incapable of imagining their future selves.  The masses of humans wandering about this planet's surface are in dire need of preprogrammed solutions that will lift the heavy burden of abstract thinking from their lumpen shoulders.  Robots are arriving to do physical human labor.  Robo-traders can take care of financial work for people who cannot believe in the future.

Monday, March 23, 2015

The Haiku of Finance for 03/23/15

Read income statement
Always on the bottom line
Look for the earnings

Sunday, March 22, 2015

The Limerick of Finance for 03/22/15

Creating content is a breeze
New portals collect it with ease
They don't pay a cent
That's no way to meet rent
Curators will fall for such sleaze

Saturday, March 21, 2015

The Haiku of Finance for 03/21/15

Pigovian tax
Target some market outcome
Assume social cost

Friday, March 20, 2015

The Haiku of Finance for 03/20/15

Insider buyout
Borrow against expertise
Take it all private

Thursday, March 19, 2015

The Haiku of Finance for 03/19/15

The price of friendship
Time lost versus wisdom gained
Always so human

Wednesday, March 18, 2015

The Haiku of Finance for 03/18/15

Long pharma pipeline
Phase Two cannot take too long
Funders lose patience