moneyFYI - Organized Common Sense

Suppose you own a business and you are fully committed to it financially. You know your family relies on income from it as do your employees and some of your suppliers. The community needs you. Your customers might be hard-pressed to replace your products and service.

As with many other entrepreneurs, you own it, and you run it. Details are a burden, but you have grown accustomed to them. For…

When Chaos Is Your Friend

A friend asked me why the stock market is up 10% when the world in the US is nearly chaotic. I told him I didn’t know but on thinking about maybe there is an answer.

People value predictability

Each of us likes to be able to estimate our future. It gives us satisfaction and peace to know or think we know what is going to happen. Business like that too.

So given the election, we should…

What’s Money For?

We all like money and we all use it. We intuitively get what it is for because of our upbringing and the world around us. Understanding it a bit better will help explain what you could do with Gold, silver, or Bitcoin.

Money has three uses and we take advantage of one of them nearly exclusively, but with a passing awareness of the other two.

Money is a medium of exchange

Money is a store of…

The Value of predicting

By itself, the value of predicting is zero. What matters is what you do about your prediction to make your life better, more secure, or more joyful.

Because the value is in the doing and because we know predictions are of unknowable value in the present, having a rigid method of attack is futile. Perhaps not so futile as doing nothing, but futile nonetheless.

That’s why system solutions to…

There are subtle rules that govern effective organizations

We live in a complex world. A little better understanding can help us understand some future possibilities and guard against their harm. “Self-organized criticality” is such a thing.

The easiest to think about example is a sand pile. Physicist Per Bak observed the possibilities and outlined them in a 1987 paper. If you build a sand pile, as you add more grains of sand it self-organizes…

Mark Zuckerberg is worth about $100 billion. The company he founded, Facebook, is worth over $750 billion. Could he explain how that happened?

Of course

In retrospect alone though.

Zuckerberg could tell you the history in some detail. Who invested. who contributed code, who organized hardware, who promoted it, and of course, when it happened. The problems, the successes, the surprises,…

Thought For Today Be a skeptic.

There is no certainty.

That’s why people have trouble with the scientific idea and the scientific process. We recognize science as important and useful, but we don’t enjoy uncertainty or ambiguity very much

Science is about change

NO scientist believes everything that can be known is known. No scientist believes everything we seem to know is as it will be found to be in the future.

S…

AI and Machine Learning are both a blessing and a curse

Most of us have no training and little more than an awareness of the the names of these subjects. It is puzzling and so I suppose threatening when things we don’t understand begin to dominate how we find information.

The problem at the root is the idea of an algorithm. An algorithm is a set of rules to be followed in accomplishing some task. The algorithm can be good, as in efficient, or bad…

Always Notice Your Context

Money is relative. It would be harder to manage $1,000,000 for someone with $1,000,000 than it would be managing $10,000,000 for someone with $100,000,000.

Money is what it means to you. What it is for.

A story about context

There is a story in Quora that may be true about Kerry Packer, the late Australian media magnate.

The point you can draw from it is that money is about what it…

Systems optimize the output not optimize the steps.

To get what you want and need out of life, do you use goals or do you use systems?

On the surface they may look alike but they are quite different.

Goals are specific

Things like a I want to pay off the mortgage in ten years, or I want to save $500,000 in my retirement plan, or I want an MBA from Harvard. Things like these are helpful but they represent a choice that has structure and…

How To Be Good With Money

How is it that some people seem to have the ability to acquire and look after money? Is it a special skill, or is it luck, or maybe a way of thinking?

I submit it is a way of thinking.

Luck tends to even out over the long run and the rest of your life is the ultimate long run, so not that.

There are no special skills. With a little practice, anyone can do the mechanical things. Budgets,…

Politics is about power to pick the way not about governing effectively

Between the Liberal government and thei shenanigans in Ottawa, the provinvcial government and their Covid management, the US federal election with its immense hypocracy on the Democrat side and its blundering rhetoric from the Republicans, I am distressed.

Has nothing else of importance or even interest occurred in the last 90 days or so?

What is politics for?

A quick look on Google…

Deversification is more subtle than people think

Every investor who wants to narrow the band between best year and worst year for their portfolio diversifies. They want predictability more than the the best possible yield. They know the best possible yield is something that is unpredictable. So they accept some investments that produce less to protect themselves from potential catastrophe.

The trick is to actually do it

Do you think you…

If you don't show your work no one can assess the validity of your conclusion.

How many can recall while taking math, or physics, even chemistry, most test questions added the proviso – “Show your work.” How much more difficult was the question? It was not enough to know the answer, you had to know how you knew it.

From the teacher’s standpoint, knowing the answer without the how you know part was the basis for remedial effort.

In the end everyone came out ahead.

Conspiracy Theories are exciting. Pay attention to the boring.

I chanced upon this article on Monday. It seems people actually think about and understand conspiracy theories. There evolves a theory of conspiracy theories. You can find it here. Conspiracy Theories.

There is a link to an interesting podcast to be found at the end. If you have the time, (45 minutes or so) it is worth the trouble.

The theory of conspiracy theories

We “know things” based…

Friction requires more input for a given output.

If you are in business you must understand what your customers and prospective customers see when they see your offering. You cannot fully understand things that matter from just your own viewing point. The biggest mistake in business is to listen to insiders alone, to believe your own message, and to act as if it is true.

The thought that covers that point is“It’s impossible to read the label…

What you lose matters more.

The essential of winning pool is simple. “It doesn’t matter what you make; it matters what you leave”

Investing is like that too. What you make is not as important as what you lose. The chances of one investment making everything work is tiny. On the other hand it is possible to lose big by refusing to quit. If you keep your losers and even invest more as the price falls, bad results are not…