The Haiku of Finance for 08/15/13

Brief my seminar
Impress all with my wisdom
Score free booze later

The Haiku of Finance for 08/14/13

Speak at MoneyShow
Show off brilliant thinking style
Impress attendees

Alfidi Capital Slides For MoneyShow SF 2013 Seminar

I have published the PowerPoint slides I will use tomorrow during my seminar at the MoneyShow San Francisco 2013.  The slides and notes are available at the Alfidi Capital main site in the Special Reports section.  I will focus on small cap stocks in the natural resource sector with mining stocks as my primary examples.

They gave me 30 minutes for my seminar.  I plan to talk for at least half that time and leave time for questions.  I don't like being interrupted when I give talks but some people will probably do it anyway.  I will try my very best to be polite.  I expect my attendees to behave the same way out of courtesy for everyone.

I want my audience to admire my extreme genius and leave inspired to be better human beings.  I do not want any troublemakers.  I will be more than happy to call venue security and law enforcement to handle anyone who is disruptive.  My enemies need to stay home tomorrow.

My sacred mission in life is to display my genius in public and that is why I am speaking at the MoneyShow.  I will be available afterwards for congratulations and for photos with attractive women.  Ladies, wear your best attire to get my attention and have your phone numbers ready.  

Throwing Conceptual Darts After a Startup Pitchfest

This will be an unstructured blog article written in stream-of-consciousness style.  I just got home after a lively startup pitchfest sponsored by TiE Silicon Valley right here in San Francisco.  The business principles I collected are the darts I'm going to randomly throw at my invisible dartboard.  I'll boil down the VCs' most oft-repeated requirements for a fundable startup:

Already generating revenue
Traction from users
Clear value proposition
Differentiation from competitors
Scalable revenue model
Disruptive to existing sector
Well-defined channels to market
Serial entrepreneurs with successful exits
Product safety

The first one about proven revenue is the most important one; that's why it's in bold type.  Sales solves everything.  I will also add that VCs like to see enough granular details on the business' functionality to make them comfortable with the execution.  VC firms hire partners who have a mix of startup and big business experience.  The successful entrepreneurs who become VCs know how a high-functioning team should look.  The former corporate VCs know how multiple systems work in mature markets and how those systems can be disrupted.  They can also boil complex execution metrics down into simple templates.  I'll define a few of these templates below (most specific to social media and e-commerce models):

Social graph:  how people are connected to each other through relationship networks.  This tool is useful in measuring the viability of a P2P strategy.
Machine learning:  the way AIs transform data into knowledge.  Startups building Big Data solutions adapt machine learning into their analytics.
Use case:  a model of how an engineering process accomplishes a goal.  Use case data demonstrates the viability and scalability of a startup's business processes.
Cost per action / Pay per action / Cost per conversion:  a measurement of an Internet advertising campaign's effectiveness.  VCs like startups that know their CPA and can make it pay off in driving revenue.
Computer form factor:  the physical specifications of a PC motherboard.  This also matters in SaaS solutions because the solution must be compatible with common server configurations.

Entrepreneurs must really know their stuff if they want to impress VCs.  The next hot thing after social media will bring out a whole new slew of definitions and metrics.  I'm confident that the next big thing will be physical things and not more social media or e-commerce platforms.  The Internet of Things will have VCs singing the praises of Arduino and IPv6.

The Haiku of Finance for 08/13/13

Wearable device
Track your health for Big Data
Full control in hand

Wearable Devices At Mobile Monday In San Francisco

I attended the Mobile Monday networking series for the first time last night. This one was "Challenges in Innovating Mobile Devices and Wearables" in San Francisco.  I'm not a tech developer but it behooves me to keep up on developments in this sector. My site and blogs need to be visible on mobile platforms if I'm ever going to capture the attention of tribal elders in emerging markets who play Angry Birds on their smartphones.

You never know who you're going to meet at these shindigs over pizza and booze. I got into a conversation with one dude sporting a Google Glass who claimed to be an IT developer.  I didn't question his insights until he started spouting off about Bilderbergers meeting at Bohemian Grove.  Whoa, back off, dude.  Those folks are my kind of crowd and I don't want them bad-mouthed by someone who has no understanding of the social hierarchy in advanced civilizations.  I searched the Internet afterwards for this guy's purported track record in tech.  It turns out he's nothing of the kind.  Success in entrepreneurship means separating the fakers from the makers.

I wanted to see real wearable hardware but the only examples present were some Google Glasses.  Anyone can sign up to be a Google Glass Explorer (i.e. a test marketer) but applications are currently closed.  I never thought wearing glasses would be so cool.  Mario Tapia kicked off the formal program with an introduction to Mobile Monday and its Momentum Mobile Accelerator.  They're always looking for hot startups, so get your application in ASAP if you're building a hot product.

Ubuntu was the featured presentation.  Their Linux-based real-time operating system (RTOS) is designed around user-selected content rather than a hierarchical menu.  It seems intuitive but I'm an old-fashioned menu kind of guy and old habits are hard to break.  I still don't have a smartphone so I can't do my own testing.  The good news is that Ubuntu is totally free, just like the financial research I publish.  I thought better of my plan to announce on Reddit that "today I learned (TIL)" about the XDA Developers community, because that would be too simplistic to say.

The expert panel didn't show off any gadgets but their shared experiences fired my imagination.  They mentioned that telecom operators often use their control of switching networks to dictate smartphone features.  Mobile developers should thus test market their beta devices with telecom carriers.  I can see the value of third-party data validating a new device that way if it attracts VC investment.  I recently advised an entrepreneur protege to get third-party data to show his environmental thingy invention worked.  He then broke off my relationship as his mentor because I told him something he didn't want to hear.  Oh, he also expected me to do all of his work for him at zero pay.  Forget that nonsense.

Okay, back to the panel on wearables and mobile tech.  You can't just make a wearable device in a vacuum, don'cha know.  They must be consonant with other devices in WiFi, IP, and other protocols.  They must solve problems, especially those faced by early adopters.  They generate contextual data, so they must "talk" in digits to other things.  Medical wearables will need FDA approval.  Some panelists actually thought fashion and social norms would be the biggest obstacles to user adoption of wearable mobile devices.  I totally agree.  Going on a date with someone wearing Google Glass would be awkward if you think they're recording your first kiss.  Wearables may be confined to a social context that inhibits their use with anyone other than the primary user.  People who feel perfectly comfortable sharing devices on social media may balk at sharing personal space with someone who looks like a cyborg.

I think a major conceit in the developer community is their belief that they can steer the device ecosystem of apps, network, and services in ways that influence OEMs to build devices.  That all depends on how successful the community is in getting developers to adopt standards based on the most portable programming languages.  HTML is a pretty successful language but I've noticed that the comments blocks on many blogs and media sites don't allow HTML tags.  Even a widely-adopted language like HTML is disallowed for some user-generated content.

The panel was seriously stumped on ways to monetize wearable tech.  They stumbled over nebulous concepts like P2P and energy until someone mentioned health care.  I can totally see preventive health monitors becoming mandatory for health insurance policyholders who enroll in plans under the Affordable Care Act's state-run exchanges.  Here's a brief sketch of how the flow of information would work:

Wearable health monitor
> Data on nutrition intake and fitness output
> Big Data collection through IRS to HHS
> Big Data analysis by health insurers
> HIPAA transfer to providers

The wearable can resemble a wristwatch, a device every human being has long been conditioned as an acceptable thing to wear next to one's skin.  That eliminates any contextual or social barrier.  The overall effect of wearables is much more significant than enabling more precise delivery of health care services.  The mandated wearing of these monitors for vulnerable populations like the elderly and new parents will eventually become a norm for the entire population.  Fear will drive adoption.  Vulnerable patients will fear adverse health outcomes that wearables could prevent.  The rest of the population will fear being shut out of health insurance altogether.  Wearables using an RTOS can be enabled with GPS, making instant geolocation of every citizen a real possibility.  The total surveillance society will be complete as soon as personal location data passes the HIPAA barrier to law enforcement and the intelligence community.  Your data could even go to environmental regulators who can decide whether you're using too many resources.

We don't even need to stop at wearable tech.  I've got the next logical step:  drinkable tech!  Yes, I'm serious.  Drink a milkshake blended with thousands of nanobots that will embed permanently in your body tissues, particularly your brain and nervous system.  Your body's natural electrical field will give them power.  Enough of them in your brain could enhance your intellect and make you telepathic with another similarly enhanced human.  Of course, connected to Big Data, they could also fill your head with the uncontrollable desire to perform as instructed.  The total surveillance society will become the total control society.

There's no looking back.  Put the protocols for wearable tech in the public domain now.  Arduino standards allow us to design our own device control systems.  Lets use Arduino to design wearables that allow for individual defense against unwanted external controls of cognition.  

Financial Sarcasm Roundup for 08/12/13

If I were a comic book superhero, my superpower just might be sarcasm.  I wouldn't need a disguise at all.

Germany has resigned itself to the likelihood of a new Greek bailout.  Even the stern German psyche has crumbled in the wake of the IMF's pivot away from austerity.  The Davos clique must be clucking with delirious excitement that their fixed-income investments and hedge fund debt arbitrage strategies are going to be preserved in amber.  No worries about hyperinflation for this crowd, no sir-ee.  I'm really going to enjoy watching the euro's hyperinflationary demise wipe these idiots out.  They can beg me to explain to them at Davos why they ended up broke.

Big Data changes everything.  I knew this from attending many conferences here in the Bay Area and now the middlebrow mainstream media feels comfortable introducing the concept to the masses.  The hot careers of the future will require Big Data masters of operations research with Six Sigma certifications.  Former hedge fund managers will be perfectly suited for these jobs once their funds implode.

More Americans are deciding not to be Americans anymore.  The folks whom FATCA has most inconvenienced are precisely the types of sophisticated, worldly job creators the US needs to keep.  Some version of the DREAM Act may negate this outflow by attracting highly educated immigrants, provided they aren't elbowed aside by illiterates grabbing welfare benefits.

I've attended some tech events lately where the participants think the social media train will never lose steam.  They need to read the news covering VC investments showing a collapse in funding for social media startups.  The next big trend in VC will be the funding of real things, especially things that plug into the Internet of Things (IoT).  I'm going to check out some of these tech things tonight.

The Haiku of Finance for 08/11/13

Bitcoin lawsuit rule
Digits are securities
Even at zero

The Limerick of Finance for 08/11/13

New construction all over this town
Blighted areas all coming down
Frisco grows and renews
Hiring skilled worker crews
Top developer deserves a crown

Defining The American Lumpenproletariat

Every civilization is ultimately defined by the goals and cohesion of its ruling class.  Their lives and deeds become the stuff of legend and their visages are fit for monuments.  Let's not forget the lower orders, who get no monuments.  The term "lumpenproletariat" has a bad reputation.  Forget its Marxist origins.  Karl Marx was wrong about collectivism replacing capitalism but his class definitions are still convenient descriptions of society.  George Orwell's proles actually existed in his day.  America has its own prole class.

The low-information voter is a prole.  These are the folks who vote for politicians based on charm, dress, hobbies, and family image.  They don't have time to read position papers or party platforms because some ball game or reality show is on TV.  They don't read news commentary because they're too busy clicking "like" on some Photoshopped meme going around.  Political operatives generate memes that supplant critical thinking and the best memes win elections by swaying the low-information voter.

The welfare queen is a prole.  This part of the American caste system has grown by several orders of magnitude in my lifetime thanks to SNAP/EBT, SSI, and other forms of the dole.  Their planning horizon extends precisely to the collection date of their next benefit, no farther.  They may be goaded into performing marginally useful labor from time to time if benefit collection is conditioned on said performance.  Some of their number are habitual criminals and must always be monitored.  The rest are a source of amusement.

Unsophisticated country folk are proles.  I won't repeat their more derogatory synonyms here.  They escape the attention of the bi-coastal ruling elite because they inhabit the farms, woods, and mountains of this great country of ours.  Most of them grow our food and fix our machines.  The best of them have given us American roots music and other styles of entertainment.

I for one am grateful that the proles exist.  Someone has to do the hard work and mindless consumption in society and it might as well be the unfortunate folks at the low IQ end of the bell curve.  Automation may change that within a generation.  Elites need to start thinking up something for all these proles to do to keep them occupied.  Social safety nets are insurance against the proles' revolt but their lack of class consciousness is their primary inhibiting factor, as George Orwell correctly assessed.  

The Haiku of Finance for 08/09/13

Startup mixer night
Noisy pitchfest chaos gang
All seeking funding

The Haiku of Finance for 08/08/13

Oracle trade show
No free entry to Expo
Pays for racing yacht

China Downturn Accelerates

You won't read a headline like "China Downturn Accelerates" from mainstream financial news sites just yet.  Some content programmers are still sold on the China bull story and are slow to learn.  The facts of China's incongruous economic drivers are in plain sight.

The Chinese stock market has its down days, but concern about inflation is not the whole explanation.  Inflation is staying in its cage for now despite China's interest rate liberalization policy, which I consider to be inflationary as it makes lending easier within that country's shadow banking system.  China's problems right now are deflationary.  Europe's recession is killing demand for China's manufacturing exports.  Saturated consumer markets for smart phones and automobiles will keep basic input prices down.

It is no surprise that China is threatening to curb overcapacity in its manufacturers and cut the production of some rare earth producers.  It is easy for Beijing to make such noises because lack of external demand is doing the dirty work of forcing productivity numbers down anyway.  It's also noteworthy that China is fining foreign firms for price fixing in violation of anti-monopoly laws.  I'll believe they're serious about fighting price fixing when they fine state-owned companies.  There's an abject lesson in the central problem non-Chinese firms face when they source production inside China.  Asian businesses and their regulators have a long tradition of presenting a different face to foreign businesses than they do to domestic businesses.  Western companies foolish enough to open production facilities inside China should expect to be ripped off at some point.

China can stave off its implosion about as long as the US Federal Reserve can keep the yield on our 10-year Treasuries under four percent.  I believe that will be the tipping point that crashes the value of the US Treasuries in China's national reserves and forces them into panic selling mode.  China's replica of Paris is a ghost town.  No one can afford to live there until property prices crash.  China's urban migrants won't have long to wait for bargains.  

The Haiku of Finance for 08/07/13

Old stereotype
Get past bias for success
Grow up and move on

Stereotypes And Pathologies In Business

We are supposed to live in a post-racial age.  Ethnic minorities have broken barriers and obtained America's highest elected and appointed offices.  The destruction of prejudicial obstacles to advancement is cause for celebration.  What remains to be destroyed are self-imposed pathologies that still hold people back.

I attended a Commonwealth Club event in June featuring Latinas who had succeeded in business.  The problems they had faced during their climbs to the top in several professions were not outright discriminatory.  I did not get the impression that any of their Caucasian bosses or co-workers had ever mistreated them because of their ethnicity.  The event could have replaced the word "Latina" with black, white, old, young, or whatnot and the lessons would have been the same.  I came away from the event thinking that career events aimed at ethnic demographics may do more to perpetuate stereotypes than teach people to overcome them.

One good takeaway from that CW Club panel was the difference between a mentor and a sponsor.  A mentor is someone who just gives you advice and they're pretty easy to find.  A sponsor is someone who actively promotes your career, partly because they want to look powerful by expanding their influence.  Those are harder to find because they must see your work history.  I've never had a sponsor because the senior people who saw my work history in large organizations tried to steal my work from me or suppress me out of malice.  The few mentors I've had usually gave me the kind of advice that was so simplistic or just plain bad that I would have been better off not taking it.  I now listen to no one but myself because I'm tired of losers steering me in the wrong direction.

I've digressed from the subject of self-imposed stereotypes.  There are large cottage industries that cater to people who need to feel victimized before they can feel good about themselves.  Check out The Oxford Handbook of Feminist Multicultural Counseling Psychology.  I guess this is for folks who think Jung and Freud were biased.  Equal treatment before the law and in the workplace presumes human beings are innately equal in potential ability and moral worth.  Our Declaration of Independence implies that such innate equality is what makes America great.  Constructing a "separate but equal" psychological paradigm defeats every gender and racial equality movement that strengthened America.

Organizations like the National Latina Business Women Association do good work if they can help Latinas move up in the world.  The risk of perpetuating stereotypes lies in organizations outgrowing or outliving their chartered purpose.  Here's a story from my youth.  My parents were long-time members of the Order Sons of Italy in America, which was originally chartered to advocate for the well-being of Italian immigrants at a time when those folks were the headline-grabbing minority in America.  That ethnic sub-group is now fully assimilated but the old-timers in OSIA still won't disband it or merge it with more mainstream Italian-American cultural appreciation societies.  I remember the old OSIA coots from my youth who refused to speak English during bocce ball tournaments and always referred to themselves as "Italians" rather than Americans.  Their pathology was a lifelong affliction and they had only themselves to blame.

No one in OSIA ever encouraged me to seek upward mobility.  They preferred the comfortable ignorance of a shared identity as outcasts on the margins of American society.  They aren't the only group that revels in a marginal status.  I completely abandoned the San Francisco veterans' community because I got sick of its collective bottom-feeding mentality advocating permanent victimhood.  Today's unassimilated ethnic minorities face the same hazard.  Staying too long among people who love being victims will turn even the most ambitious strivers into a new generation of victims.  Don't let it happen to you.