Sunday, November 30, 2014

The Limerick of Finance for 11/30/14

Precious metals just keep getting slammed
Lots of traders have really been rammed
No love lost for gold
Shiny story gets old
Paper contracts left room to get scammed

Friday, November 28, 2014

The Haiku of Finance for 11/28/14

Same boring meeting
Hot babe entering the room
Get her phone number

Thursday, November 27, 2014

The Limerick of Finance for 11/27/14

Thanksgiving meal cost on a chart
Turkey is the costliest part
Pricing holiday plan
Compare fresh food to can
Save now for next year's shopping cart

The Haiku of Finance for 11/27/14

Thankful for genius
Women worship Alfidi
Top financial stuff

Alfidi Capital Smack Talk for Thanksgiving 2014

Thanksgiving isn't just about turkey.  It's about women going shopping and men being lazy, for most Americans.  It's really all about Alfidi Capital laying the smack-down on everything that does not comport with extreme genius.

I give thanks for not living in some smelly dirt-hole country like the ones at the bottom of the Transparency International and Heritage Foundation indexes.  Those are the filters I use to sort out the resource sector companies I evaluate, much as a master chef uses a strainer to drain the brine away from a pot of pasta.

I suppose I should be thankful for living in San Francisco but sometimes this town does try my patience.  The idiots I see at the Commonwealth Club disprove the common assumption that education enhances intellect.  The views of the Pacific Ocean, downtown skyscrapers, and the Golden Gate Bridge make up for the periodic nonsense emanating from over-educated humans.

I am not thankful for activists determined to make all levels of our government less responsive to citizens and more of a burden upon the economy.  This goes for both the Left and Right.  Busybodies can take their health insurance mandates, sunset-exempt regulations, and faith-based initiatives to one of those loser countries at the bottom of the Transparency International and Heritage Foundation indexes.  People who enjoy living in unfree nations are welcome to move away from me.  I would be thankful for their absence.

The University of Notre Dame and University of San Francisco do not deserve my thanks.  I have degrees from each of those schools and those parchments have never helped me in life.  Several fellow alumni have gone out of their way to harm me professionally because I have spoken negatively about the schools in public.  I couldn't care less.  I remain unscathed.  Bring it on, haters.  I will outlast all of my detractors.

I continue to thank myself for cutting off relations with people who turned out to be losers.  Former acquaintances who revealed themselves as idiots were putting me at risk with their drama.  I sometimes see them in public and I have reminded myself to keep them at a distance so I'm not infected by their insanity.  Yes, fellow members of the financial services community, I mean you in particular.  Craziness is contagious in San Francisco and I don't need to catch it.

You should all be thankful that I am the greatest financial analyst you've ever read.  Don't waste your lives trying to outperform me because that's impossible.  Spend your time wisely, basking in the glow of my eternal wisdom.  Women in particular should be thankful that I am so extremely handsome.  They usually find me irresistible but they will have to wait until after Thanksgiving.  They can send me hot photos of themselves to tide me over until we meet in person.  That would make for a very happy Thanksgiving.  

Wednesday, November 26, 2014

The Haiku of Finance for 11/26/14

App life cycle work
Certify knowledge support
Process meant for growth

Data Supply Chain Needs KCS and ITIL

I have blogged before about the data supply chain and I'm pretty sure I'm still way ahead of other analysts covering this emerging topic.  Data sector professionals need to talk more about defining the life cycle management of apps and their supporting data products.  I'll offer two existing constructs that should help data people move toward a more mature life cycle.

The Consortium for Service Innovation (CSI) publishes the Knowledge-Centered Support (KCS) process.  It governs the ongoing revisions and interventions in the life cycle of supporting knowledge for any process.  The engineering approach to refining knowledge management easily supports a data sector product.  Standards for an iterative programming process make revisions easier when an API needs a version 2.0 update.

The Information Technology Infrastructure Library (ITIL) is an established system for optimizing IT service management.  It complements KCS and it should be especially valuable for data sector pros in the documenting and archiving phases of life cycle management.  Understanding ITIL makes implementing ISO/IEC 20000 easier.  Broad architectures aren't just for large IT departments in big enterprises.  Apps will more frequently aim at capturing Big Data, and an ITIL approach in a small app maker keeps it aligned with the needs of larger enterprises who will shop for data packages.

Data sector people who care about managing highly regarded APIs and SDKs should look seriously as the KCS and ITIL architectures.  Having a "KCS Verified" business is like having a Good Housekeeping seal of approval.  It may not be a product differentiator when app reviewers make their best-of-breed assessments in app stores but taking the process seriously should lead to building better apps.  Using ITIL in a data sector business process keeps the life cycle efficient.  Both KCS and ITIL together will help entrepreneurs turn their app idea into a real business.

Tuesday, November 25, 2014

3 Crucial Skills for US Military Veterans Seeking Corporate Careers

I served in the US Army after my studies at the University of Notre Dame.  Some of my ROTC program classmates stayed on active duty for the long haul, longer than I thought would be sane.  They are now approaching their 20-year service milestones, which means some of them are considering life on the outside.  I have them in mind when I think about the references I used years ago when I started my own transition to civilian life.  The published works available to help military veterans make career transitions could fill a whole library shelf.  Most of that material is general and repetitive.  Hardly any guidance is tailored for someone with a more technical career goal.  Fear not, senior veterans, because Alfidi Capital is here to fill the knowledge gap.  

I have identified three skill sets germane to a large corporate environment.  These skills are portable to any corporation and are particularly useful in very technical fields.  Acquiring them requires mastery of peer-reviewed bodies of knowledge.  These qualifications are vastly more credible with corporate recruiters than any military-specific skills a veteran possesses.

Six Sigma certification is the first skill set that veterans should acquire if they want corporate careers.  Completing a Six Sigma project within the US Department of Defense confers a resume bullet more valuable than experience with real bullets.  The American Society for Quality (ASQ) maintains extensive references on Six Sigma and related topics.  The International Association for Six Sigma Certification (IASSC) lists options for completing the qualifying exams.  Completing the appropriate training and exams is not cheap but is absolutely necessary for official qualification.  

Knowledge management (KM) is the second skill set.  Practitioners become the go-to people when an organization translates the DIKW Pyramid into real operations.  Experts read KMWorld for the latest developments.  The American Productivity and Quality Center (APQC) defines many KM best practices.  The KM business discipline does not yet have a universally recognized body of knowledge and several organizations have emerged with competing certification standards.  I believe that mastering the APQC material through independent study is sufficient at present to claim expertise.  

Operations research (OR) is the final skill set.  The Allied Powers in World War II invented the modern field of OR, and today select US Army officers maintain qualification in the operations research / systems analysis (ORSA) specialty.  The Institute for Operations Research and the Management Sciences (INFORMS) is the US governing body for the OR profession; they have all the resources needed for someone seeking qualification.  

Mastering these skills enables a veteran to compete for corporate jobs that have prerequisites beyond entry-level experience.  Combining them with certification as PMI's Project Management Professional would make a veteran's resume very compelling.  Lacking these hard skills can be a serious handicap.  It is an unfortunate fact of modern life that business skills have diverged far enough from the generalist "soft skills" of military leadership to disqualify many veterans from white collar occupations.  Veterans who wish to avoid confinement to the low-income ghetto of permanent entry-level career paths should master widely accepted business knowledge.  This means hitting the books all over again.  

I recently attended a talk by US Marine Corps combat veteran David Danelo about his book The Return:  A Field Manual for Life After Combat.  The audience at San Francisco's Marines Memorial Club recognized that veterans' passion for a meaningful life should carry over into a civilian career once they leave the military.  Passion hits a brick wall when civilian employers find a veteran's resume devoid of recognizable prerequisites.  Veterans who master the three disciplines above prove they have the passion to carry on as relevant civilians.  

The Haiku of Finance for 11/25/14

Big health care loophole
Illegal workers get through
Free care from clinics

The Health Insurance Liability of San Francisco's Illegal Alien Invaders

I attended the Commonwealth Club's "Undocumented and Uninsured" talk last night.  The entire evening was a one-sided advocacy of health care policy solutions favoring illegal aliens.  Every one of the experts on stage owed their livelihoods to government handouts.  I expected a serious debate about the impact of illegal immigration on the cost of health care.  I should have known better; after all, this is San Francisco.

The San Francisco Community Clinic Consortium serves as many illegal aliens as it can handle thanks to subsidies from the federal government.  Illegals can also apply to Medi-Cal and Covered California for health insurance, and since they often hold off-the-books jobs their artificially low incomes qualify them for plans that higher earners subsidize with inflated premiums.  Well, that's just great, isn't it?  Actually, it's not great, but I needed to throw the sarcasm out there.  They can also get free treatment through Healthy San Francisco, funded by a surcharge on restaurant meals.  It's ironic how lots of these illegals work under the table (pun intended) in restaurants and go without employer-based coverage, yet restaurant surcharges enable them to get free health care.

Employers have very powerful incentives to keep illegals off their books and out of employer-sponsored ACA-compliant health insurance plans.  Businesses avoid a $3000 penalty per employee for ACA noncompliance if they hire illegals who are not required to enroll in an ACA plan.  In turn, ACA funds handed to community health clinics like SFCCC pay for illegal aliens' health care.  This loophole is a dream for pro-lawbreaking DREAMers, because they stick it to law-abiding Americans several times over.  Illegals earn unreported income, get free health care, and overload a health care system that cannot anticipate their needs because it can't legally account for their existence.  Law-breaking aliens become a financial tapeworm sucking funds from the health care sector while remaining hidden from financial and actuarial discovery.

Leading sources of health care reporting are not helping clarify this bad situation.  Reading the California Health Report, the California Healthcare Foundation's Center for Health Reporting, and the Health Dialogues of the California Report results in perpetual obfuscation.  Their breathless headlines report endless policy tweaks and suggestions for additional subsidies, with the overarching goal of helping plan participants game the system any way possible.  The progressive mindset has thoroughly infected the California health care sector now that ACA has made it an oligopoly for providers and an entitlement for an illegal constituency.  The California Endowment's Reporting on Health project might help clear the air if it sticks to data analysis.

San Francisco's reputation as one of the most progressive cities in the state is not doing much to help the illegals who end up in Medi-Cal or Healthy San Francisco.  The state's Office of the Patient Advocate has report cards that tell the tale.  The Medi-Cal managed care report card for San Francisco says it all, with most of the health care options scoring average or lower compared to the rest of the state.  Way to go, San Francisco.  Being a "sanctuary city" promising safe haven for illegals facing deportation sure doesn't do them many health care favors.

The one panelist at the Commonwealth Club who self-identified as a DREAMer never expressed any remorse that he had lied to various legal authorities his entire young life to obtain benefits that are reserved for citizens.  His sense of entitlement to break the law was breathtaking to behold.  I thought about contacting US Immigration and Customs Enforcement but I now realize that would be an exercise in futility.  The Immigration Accountability Executive Actions announced last week now prevent ICE from capturing lawbreakers like that DREAMer panelist.  He is now free to pursue his medical degree in the place of a law-abiding citizen whose academic enrollment he stole.

I will not maintain the polite fiction that an invading horde of squatters constitutes an aspirational class of future immigrants.  Advocates for illegal aliens' health care policies have no clue how the economy works.  They do have a very good understanding of how electoral maps work.  More illegal invaders crossing an unsecured border mean more votes (not checked with identification cards, of course) for politicians who promise these free handouts.  San Francisco's public policy elite continues to plan more giveaways to alien invaders, with no thought to the law-abiding US citizens they impoverish.

Monday, November 24, 2014

The Haiku of Finance for 11/24/14

Mobile mapping app
Tracking terrain for drone flight
Three dimension cash

AlwaysOn Hosts OnMobile 2014 in Palo Alto

I am getting addicted to AlwaysOn events, and OnMobile 2014 this month was worth my time.  Tony Perkins' new Cuckoos Nest Club in Silicon Valley attracts big shots and naturally my presence completed the scene.  KPMG was a prominent sponsor and I was looking for their representatives on site.

Mr. Perkins' description of Millennial buying patterns got me thinking past their preference for sharing over privacy.  The Valley's fixation with Big Data isn't over because enterprises are still figuring out how to package it for resale.  I await the first startup that captures some network effect of Big Data aggregation.  We also have not seen the full maturation of AIs and machine learning that can magically generate video on demand, although a couple of startups in the AlwaysOn pipeline have some promising early solutions.  Fit all this stuff into mobile interfaces and watch the gross margins multiply into a bonanza.  

It's now a truism that apps count for more in the mobile UX than a mobile-optimized Web interface.  I heard that at countless conferences in 2013 and OnMobile drove the point home.  Big venture investors still chase early stage mobile companies but the biggest dumb money has barely arrived in the game.  I have sovereign wealth funds in mind when I think of dumb money.  They have no clue which technologies will win.  Startups with poor prospects may think that is good news if they get cash to burn.  A lot of corporate and strategic investors who are late to this game stand to lose a lot if they don't track sources like AlwaysOn.  

The fireside chat with Magisto was a classic showcase for how a first-mover advantage creates a network effect.  Magisto's video-editing AI already has peer credibility, a user base, and prominent investors.  A user base is still not the best traction metric in social media, especially with a freemium model like Magisto.  Sharing frequency should matter more because each sharing instance generates an ad impression.  Geographic segmentation of a user base matters in content creation for many reasons.  Not all alphabets read left-to-right like the Roman alphabet, for example.  The back-to-front visual narrative structure of Japanese manga is one geo-specific example that will pose a challenge to Western content creators.  

I won't repeat specifics from the startup pitches because some of what they shared is undoubtedly proprietary.  I will share my totally subjective general impressions.  Validation as "best app of the year" in the Google or Apple stores is certainly a worthy milestone.  A killer app would integrate AI auto-generated content with embedded data in its video and images, but I have not seen a good example ready for a market.  I can see using mobile apps for on-premise payments after service calls, but retail payments are integrating their POS proximity interfaces with links to apps for bank accounts and credit cards.  I expect service call support systems to simply adopt credit and debit card apps rather than reinvent the wheel.  

I'm seeing more startups in an emerging Silicon Valley archetype.  This archetype addresses only upper income market segments in developed countries who face lifestyle inconveniences.  They chase a lucrative but crowded segment whose disposable income enables price inelastic consumption for the time being.  The end of central bank intervention in asset markets will destroy that inelasticity.  More startups should at least try to address lower income segments and developing markets.  The world needs more than another lifestyle management app.  

The investor roundtable for B2B mobile predicted apps that could handle internal workflows, so the next hype cycle for enterprise workflows hasn't started until Gartner publishes something on workflow migration to mobile.  Real-time data flows will add value in fraud detection and micro-ad targeting but I doubt Gartner will get that specific.  Mobile ad attribution is complex and B2B trends are not making it any easier.  The roundtable people noted surges in mobile backend services and data rationalization for middleware.  Those two trends are IT-specific and I haven't yet seen how either one will help marketers understand ad attribution.  A rise in demand for APIs in those stacks should tell us whether marketers are using them to parse ad data.  

Another fireside chat with showed how mobile is finally disrupting a real sector in the economy rather than layering another form of interaction on top of existing commerce portals.  Real estate sites are rapidly disintermediating traditional gatekeepers like banks and real estate agents.  Widely available online content de-risks deals by making due diligence easier.  I still think the potential for mobile to democratize access to real estate ownership is overestimated simply because REITs already exist and the economic barriers to owning them are very low.  

Enabling tech for B2B platforms warranted a separate panel.  Transaction sites obviously monetize from fees, but they can also display ads and sell their Big Data.  The startups that haven't figured that out are not getting the most out of their enabling tech.  I repressed a LOL when the panel said cryptocurrency enables a distributed trust environment for e-commerce.  The logic that a blockchain somehow enables a roving identity for shipping addresses is simplistic.  Clueless people underestimate the ability of determined cybercriminals to spoof or hijack a blockchain.  I'd rather go with layered standards as an industry-wide architecture for competing B2B tech solutions.  Personal identity is one layer and shipping address is a separate layer.  Different payment mechanisms (debit, credit, Apple Pay) get separate layers.  That's my end-run around blockchain weaknesses.  

I'll wrap up my analysis by suggesting a way ahead for mobile startups seeking attention at AlwaysOn and other Silicon Valley forums.  Startups appearing at pitchfests like OnMobile can build credibility by earning cloud computing awards.  There are too many to name here.  Ambitious startups should hit the Google search button and find ones they can earn.  They can do the same search for cloud sector metrics that bolster their business cases.  Cloud providers touching health care must be HIPAA compliant and mobile startups pitching workflows to the health care sector must also meet that standard.  If a blockchain approach is to have any place in a business model, it may be useful as a basis for identity management only if it is built once for reference and not expanded every time the identity holder makes a transaction.  Minimal coding means more rapid deployment, especially as iterative models replace SDLC waterfall models.  Entrepreneurs who talk more about their product than their business model will not connect with investors.  The path to monetization via a pricing model must be clear, and it must have an exit strategy.  Expected revenue growth models are becoming standardized thanks to Y Combinator and other accelerators, so startups can present more realistic estimates.  Anyone launching location-based services should first check with Gigaom Research to see who has done it before.  

I need to close with one big observation, and it segues from the 2D photo of the Olga Show host above.  Map APIs should enable 3D views.  The coming drone revolution means plotting air routes over short flights must account for altitude, terrain elevation, artificial obstructions, and other hazards to aviation.  Rotary-wing drones at higher altitudes won't generate as much lift in thinner air, so real-time information on air currents and other weather factors will be essential in next-gen 3D mapping.  The mobile startup that masters 3D mapping will own a big chunk of next-gen commerce.   You heard it hear first at Alfidi Capital.  I get my inspiration from AlwaysOn.  

Sunday, November 23, 2014

Friday, November 21, 2014

The Haiku of Finance for 11/21/14

Next cleantech pivot
Bring Big Data into mix
Venture cash will flow

Startups Shine at Cleantech Open 2014 Global Forum

The Cleantech Open held its 2014 Global Forum on San Francisco's Treasure Island and I had a first-hand view of the action.  My direct involvement this year culminated with the previous day's final pitches and investor connect speed rounds at a Financial District hotel.  I stayed for the Global Forum because thought leaders invariably have insights that make my day.

I won't disclose anything proprietary from the pitches and speed connections on day one, but I do have some random thoughts to share.  My general impressions of this year's startups were very positive.  Most of the startups I directly observed presented business models that were mature enough to deserve investor due diligence prior to funding.  That is a high bar to pass and it speaks well of the program's volunteers who helped the startups refine their plans throughout the year.  The most thoughtful startups recognized how their business models leveraged something beyond their core technology, like marketable Big Data or the potential for extended servicing.

Here is the singular cautionary tale.  One participant I encountered seriously expected the financial model of any business focusing on a developing country to need a liquidity buffer, but not for the usual unforeseen problems.  He envisioned the buffer to accommodate payments under the table, as if he expected Foreign Corrupt Practices Act (FCPA) violations.  The people around him chuckled but I do not consider that to be a laughing matter.  One startup had a savvy strategy to leverage a local culture's shaming traditions if a corrupt official stood in their way.  I would suggest a mitigating strategy of anti-bribery clauses in legal agreements for franchises and joint ventures.  This means pulling the franchise agreement of any local partner caught bribing an official, and reporting the incident to both the US and local governments.  I have a low opinion of American business people who suggest that FCPA noncompliance is excusable.

The CTO's corporate partners pitched their support services prior to the speed dating round on the first day.  Wells Fargo is stepping up with its Innovation Incubator.  I also discovered the Wells Fargo Startup Accelerator for financial technology ideas.  I'm glad I bank with the Wells Fargo stagecoach.  I missed the NREL Industry Growth Forum this year but it will go on my calendar in the future.  These sponsors are careful to structure their services and partnerships in light of recent IRS rulings on open source innovation,  Corporate sponsored non-profit incubators must share their results with the public to preserve the sponsor's preferential tax treatment, in a nutshell.

The Global Forum introduced Stanford's Energy Transformation Collaborative.  The courses look challenging but the research grants available are more immediately relevant to startups.  One speaker mentioned how policies should address different technology readiness levels (TRLs), with research for earlier stages and market incentives at later stages.  I grok the appreciation for innovative business models that made it big, like Tesla Motors and SolarCity, but they still have not proven any consistent profitability.  The cleantech sector can gain credibility with less blind worship of innovation and more respect for a Warren Buffett-style durable competitive advantage.

Former Baywatch actress Alexandra Paul spoke to the CTO crowd about her environmental activism.  She looks rail thin in person, as you can see from the photo I took just above.  I was thinking someone needs to get her a cheeseburger ASAP before a strong wind blows her away but she's a committed vegan.  She wore this black pantsuit that was practically transparent, showing off her toned figure.  Her body of film work is as memorable as her physical body, especially in many scenes where she's in her birthday suit.  I would have preferred to see her take that transparent suit off at the Cleantech Open but we had to keep things clean (pun intended).  Her talk was full of data-free emotional connections to environmentalism that offer classic insights into how laypeople approach cleantech.  I'll bet a bunch of publicity-hungry media types in Hollywood and Beverly Hills would be pushovers as early adopters for any high-priced cleantech product they could show off to their peers. 

Venture investor Steve Westly gave a version of the talk I heard him give at SVIEF months ago where he touted his portfolio investments.  It's perfectly okay to pump your successes and I do it all the time on my blog.  Steve wants next-generation cleantech innovations that offer higher gross margins at lower capital requirements to launch.  I totally agree with his expectation that stress on the Himalayan watershed will drive conflict in Central Asia, but IMHO cleantech innovation isn't going to prevent that conflict.

The investor panel was stacked with experts from Cisco, Band of Angels, Sidley Austin, and Roda Group, and Wells Fargo.  If I had been on the panel, I would have opined that private investors won't fund basic research without a clear path to commercialization.  Well, I wasn't on that panel, so I'm saying it here.  Federal and university labs should do that basic research.  I also suspect that venture funding trends are driven by media headlines and peer pressure, not market fundamentals or deep insights.  I am starting to see this in cleantech, as the VC and IT obsession with Big Data will soon spill over into other sectors.  Big Data's unfulfilled promise lies in capturing events at the edge of the network where Internet of Things devices will reside.  I believe cleantech solutions for energy efficiency, demand management, and microgrid optimization are in the best positions to apply Big Data.  Cleantech startups will adjust those pitches, pivot to Big Data, and chase the VC money that drops out of the mobile / social sector.

My second year as a Cleantech Open mentor is over and I have a big list of promising startups to watch.  I shall return next year to whip another batch of entrepreneurs into shape.  Alexandra Paul was certainly in good shape, and perhaps she will return to give us another look at her body (of cleantech work).  

Thursday, November 20, 2014

The Haiku of Finance for 11/20/14

Do-gooder elite
Raising awareness for cash
Not solving problems

Pachamama Alliance is Clueless About Sustainable Development

I attended the Pachamama Alliance annual luncheon today in San Francisco at a friend's invitation.  The Fort Mason Festival Pavilion was filled with well-dressed do-gooders determined to feel great about keeping poor people in poverty.  I am about to prove that they think too much of themselves.

Several things about this organization make me wonder what its donors are thinking, or if they can think at all.  Pachamama's financial statement for 2013 shows that it spends 12% of its budget on fundraising and 7% on general administration.  That 19% is a high figure just for overhead.  Charity Navigator gives them a high rating for accountability with a moderately high financial score, which surprises me given that large overhead.   Pachamama does not participate in Guidestar's non-profit rating scheme, which makes its effectiveness more difficult to ascertain.

Indigenous Amazonians were on parade at this luncheon, playing pan flutes and dispensing blessings in an incomprehensible language.  The organizers played several videos about the alliance's work.  These were slickly produced mashups devoid of narrative structure or accountable details.  No one in the audience seemed to mind.  They were too enthralled with the "human petting zoo" of the visiting indigenous people to realize they were being manipulated.  This organization proudly introduced some kind of online training course designed to do . . . something or other, like raise even more awareness than they've already raised.  All of this raising awareness is of course designed to raise money.

Even a teenager got into the act, bragging to the audience about her monthly donations to Pachamama (apparently from her parents' money, since she mentioned no income stream of her own).  I marvel at the indulgence of affluent Bay Area parents, encouraging their children to be irresponsible with a generous sponsor's money.

I ignored the maudlin spectacle and tried very hard not to applaud the banal statements from non-thinkers on the podium.  I gave in to brief applause a couple of times because bad habits are hard to break.  I am results-oriented and I needed to see Pachamama's results.  Those results are mind-numbingly bad.  Pachamama has lobbied the Ecuadorian government to stop an oil company from exploring in two blocks of the rainforest.  Never mind that this development would bring millions of dollars to the region and lift indigenous Amazonians out of poverty.

The founders bragged that they they were developing eco-tourist programs as an alternative to petroleum production.  It's easy to do the math with their program details.  One dingbat volunteer claimed that they charge about $4500 for one eco-tourist ticket, taking ten people per trip, with about ten trips scheduled per year.  That's about $450K in gross revenue per year, compared to the millions the local tribes could earn if those oil blocks are open to foreign direct investment.  Pachamama's intransigence keeps their erstwhile clients impoverished.

Pachamama's promoters claimed with pride that they built an airstrip to facilitate these eco-tours, supposedly mitigating the deforestation that paving a road through the Amazon rainforest would have required.  They failed to calculate that moving human passengers by air uses far more petroleum and produces far more air pollution than moving them by bus on a road.  This nearsightedness is lost on social justice warriors.  I must have been the only attendee to grok the irony of eco-tourism that accelerates the local consumption of petroleum.

Ecuador already subscribes to the United Nations Reducing Emissions from Deforestation and forest Degradation (REDD) program for developing countries.  It does not need a bunch of Bay Area do-gooders complicating its search for sustainable development in the Amazon rainforest.  The Ecuadorian government shut down Pachamama's operations in its country last December precisely because it was so disruptive.  The bleeding hearts in the Festival Pavilion were getting teary-eyed at their inability to keep low-income people locked into prehistoric lifestyles.

Multinational energy companies know they are under scrutiny for their environmental practices, which is why they spend lots of money to get the projects right.  The obvious solution to sustainable development in the Amazon basin is to allow energy supermajors the ability to manage their onshore production blocks like timber REITs, giving shareholders a stake in the forest's sustainability.  Anti-development nuts won't like it because they could no longer gawk at poor Amazonians during eco-tours.

I will not attend any more of these stupid events, despite the enticement of free food and hot babes.  The free lunch of greens and sweet potato cakes was a vegan's dream.  I barely noticed it going down and I spent the rest of the afternoon longing for glorious meat protein.  The dessert tables afterwards were full of cookies and brownies that were definitely not from a rainforest.  Those natives don't know what they're missing by spurning development for boutique eco-tourism.  The young babes in attendance caught my eye because I can't ignore tight skirts and shapely legs.  My objection is that those hot body parts were tied to non-functioning minds.  One gal held up two potted plants in front of her well-rounded mammaries and asked me, "Aren't these beautiful?"  She meant the plants, but I focused on her more important natural goods.

I consider Pachamama Alliance to be an exemplar of the Bay Area's lamest natural impulse.  Dimwitted busybodies with more money than they deserve elevate feeling over thinking.  The other pressure groups present at the luncheon shared the same cognitive flaw.  Citizens Climate Lobby demands a halt to the economic development and energy use that makes their outreach possible.  The "anti-corporate personhood" movement failed to recognize that a wealthy elite has directed America's institutions since the Founders put pen to parchment.  The attendees themselves arrived at this event mostly in private automobiles burning hydrocarbons!  I did more to conserve energy use than any of them when I took the SF Muni bus to Fort Mason.  I have once again demonstrated my intellecutal and moral superiority over the Bay Area's non-thinking elite.  The world needs more Alfidi Capital and less Pachamama Alliance.  

Wednesday, November 19, 2014

Tuesday, November 18, 2014

The Haiku of Finance for 11/18/14

India calling
Cheap telecom call centers
Build a middle class

Jerks of Silicon Valley Startup Culture

One of the hottest memes running the distance between San Francisco and Silicon Valley right now isn't the latest round of LOLcat pics or celebrity nonsense.  It's the evolution of bro-grammer frat-boy culture into openly misogynistic attacks on women in tech.  The revelation that Uber's top dogs planned to smear female tech journalists who criticize their taxi service is the latest manifestation of this downward spiral in civility.

Immaturity is nothing new among San Francisco Bay Area tech startup founders.  The dot-com crash in the '90s left a lot of ruined amateurs wondering why their poor work ethic did not translate into market success.  Venture capitalists should have learned not to give millions of dollars to Gen-X clowns but they all wanted to find the next Netscape and Yahoo.  Everyone promptly forgot those lessons a few years later when Google and Facebook made it big.  Now VCs are funding jerks just for the sake of being cool all over again.

One of the most closely held secrets in Silicon Valley is that founding billionaires who still run the biggest tech companies will pay billions to acquire stupid startups just to protect their net worth.  Disruption threatens their wealth piles and they are willing to spend other shareholders' money - forgetting their fiduciary duties - to keep what they have.

The VC lament that "it wasn't always this way" reveals the Valley's short memories.  It has always been this way, through every boom and bust cycle in tech.  The arrival of jerks who are given a free pass on abuse is usually a market top signal.  It comes when VCs have run out of good ideas to fund and the founders of bad ideas realize they need to burn other peoples' money to get headlines.  This self-feeding ego frenzy always ends when the public equity markets crash and destroy both the IPO and acquisition exit strategies.

It will soon be time for a change of pace.  I suggest VCs look for the following traits among the startup teams they say they love to fund.  Integrity is number one, and is hard to judge without watching someone under stress resist the temptation to do something wrong.  Prior success in growing a small business is next, and it has a lot to do with building teams that operate on trust.  VCs who have been ignoring such things these past few years will have a hard time pulling back from rationalizations that jerks had what it took to build successful companies.  I assume that these misguided VCs will be out of business and not be able to pollute the Valley with funding for the next round of jerks.

Market cycles flush out failed businesses.  The jerks who could not build tech startups into profitable businesses will not find the exit events they expected.  They will instead exit the tech scene for entry-level jobs in sales or customer service.  We won't have to put up with bad-boy behavior for much longer.

Full disclosure:  Alfidi Capital routinely heaps tons of verbal abuse on stupid people and liars.  This qualifies as jerk behavior in the minds of morons who don't understand justice.  Our CEO also holds women in high regard, high enough at least to see up their skirts if they're willing exhibitionists.

Monday, November 17, 2014

The Haiku of Finance for 11/17/14

Hedgers fleeing gold
Dumb money hates a decline
Not a bottom yet

Financial Sarcasm Roundup for 11/17/14

A month of nothing but haiku and limericks needs some sarcasm to bring the old routine back.

Halliburton and Baker Hughes are getting hitched.  The longstanding independence of Howard Hughes' business legacy is ending.  One legendary drill bit sure had long legs.  Halliburton can now busy itself with the weekly US oil and gas rig count.  Political campaign contributions sometimes determine the outcome of antitrust scrutiny.

High speed traders are playing with fire in the Treasury market.  One fat fingered trading error could easily give the bond market a flash crash that would jeopardize the solvency of several major banks holding government bonds.  A lot of hedge fund managers are going to have their rear ends handed to them on a silver platter because they can't adjust their portfolios to new "regimes" in volatility.  It serves them right.  It also serves the Fed right for digging itself a hole by becoming the world's largest bond hedge fund, and the emergency gates they plan to slam shut will catch a lot of individual bond investors with illiquid securities.

Other hedge funds are cutting their long bets on gold.  It's like they couldn't have messed up more if they had planned to fail.  Exiting long positions in a commodity with a falling price won't look good in their annual reports to shareholders, but hedge fund investors are too dumb to read those reports anyway.  I wonder what hedge funds consider to be a safe haven asset if they are so easily spooked out of precious metals.  Oh BTW, bullion redemptions from gold ETFs haven't broken those instruments' paper hedges just yet, so the retail investor has more breathing room before being locked out of trading this instrument too.

Lots of people won't be able to catch a break when things start breaking down.  I'll watch the multi-lane pileup from the roadside cafe, someplace where a Halliburton truck is mounting a Baker Hughes rig.

Full disclosure:  No positions in any companies mentioned.  Long GDX, not gold bullion or bullion instruments.  

Sunday, November 16, 2014

The Limerick of Finance for 11/16/14

Japan's heading back down a hole
Abenomics played dominant role
Recession restarts
It's in all the charts
Sales tax did not achieve its goal

Saturday, November 15, 2014

Thursday, November 13, 2014

Wednesday, November 12, 2014

Tuesday, November 11, 2014

The Haiku of Finance for 11/11/14

The price of freedom
Unlimited cost in life
Vets pay forever

(special Veterans Day edition)

Monday, November 10, 2014

Sunday, November 09, 2014

The Limerick of Finance for 11/09/14

The euro is taking big hits
Its value has gone down the pits
Draghi's stimulus pledge
Pushed it over the edge
Investors deserve to have fits

Saturday, November 08, 2014

Friday, November 07, 2014

Thursday, November 06, 2014

Sunday, November 02, 2014

The Limerick of Finance for 11/02/14

A strong dollar beats all the rest
More currencies put to the test
Precious metals went down
Causing gold bugs to frown
End of easing was not done in jest