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Common Sense, Uncommon Wisdom

Updated: 2018-03-08T06:30:50.763-08:00




I offer my sincerest apologies for not posting as regularly lately as I have been able to previously. However, for your wait, I am releasing a paper which I have been writing for recent college courses geared towards a degree in finance.

The paper describes the seven fundamental tools that can be used to determine movement in a stock--one which makes money. I am using it as a proof of concept for a program that makes investing accessible by any investor, extremely, and very foolproof.

The paper is in Adobe's Acrobat formatter. The free Adobe Reader or compatible software is required to read the software.

Download the paper here!

Please Take My Survey


As part of a required paper I must write for my forthcoming degree in Finance, I am needing to have a survey completed.

Please take a few moments to fill out my survey.

Please take my online survey here!

Nature or Nurture?



The age-old question: What affects a person’s behavior more: Nature—a person’s genes and other physically intrinsic characteristics; or Nurture—the environment with which a person interacts? While the general population loves to put a “this or that” perspective on things of this sort, I have long believed that it is, in fact, a combination of the two. Science has now vindicated that position.

Daniel Nettle, Reader in Psychology in the Centre for Behaviour and Evolution, Newcastle University, offers some research presented in the London Times:

Today, personality researchers almost uniformly agree that the things that make you the way you are consist of a combination of your genes, your peers and the idiosyncratic, chance experiences that befall you in childhood and adulthood. Your parents influence your relationship with them – loving or contentious, conflicted or close – but not your “personality”, that package of traits we label extroverted or shy, bitter or friendly, hostile or warm, gloomy or optimistic. Your genes, not your parents, are the reason you think that parachuting out of planes is fun, or, conversely, that you feel sick to the stomach at the mere idea of doing such a crazy thing voluntarily. You can’t do much about your personality, though you can tweak it a bit with cognitive therapy.

The Lipstick Economy


Interesting story determining the measure of how well or how poorly the economy is doing, courtesy the reporters from the New York Times.

Not only is the lipstick theory plausible, “it’s perfectly consistent with all kinds of economic theory,” said Richard DeKaser, the chief economist with National City Corporation, a financial holding company and bank in Cleveland.

Emotions, On the Face of It


When I was in high school my biology teacher said, very early on in the class, that the human face can give away what a person is feeling--no matter how well we can control our body language, our face can show our emotional state at any one time.

Well, recent research from Canada proves my former Biology teacher correct.

From the Reuters article:

Researchers at Dalhousie University's Forensic Psychology Lab in Halifax conducted the first detailed study on the secrets revealed when people put on a false face or inhibit various emotions, and found their faces told the truth.

Maximizing Utility and the Brain: Cash or Status?


(image) Scientific American has an article regarding a study of the brain that indicates the brain places a high value on money, but a higher value on social status. From the article:

"Our study shows that both behaviorally and in the brain, people place an importance on social status," says Caroline Zink, a postdoctoral fellow in neuroscience at the National Institute of Mental Health (NIMH) in Bethesda, Md., and co-author of one of studies. "It's hugely influential even [when we're not] in direct competition with someone else."

The Power of the Banana


Excellent article over at regarding the power of the banana.

Economics and the Common Man


Have you ever seen those polls where John Q. Public is asked about questions of a general economic nature? How many of them have, at the very least, a basic understanding of economics? Yeah, me too; I think such an exercise is akin to asking a medical doctor about auto repair, an auto repair technician about quantum physics, or a particle physicist about literature: It makes about as much sense as, well, insert a colorful metaphor here. Before Warren Buffet was interviewed that one Monday morning on CNBC and said that we practically have a recession, though we may not be in one technically, many people can only say as much when they’re asked about the “R-word.” In addition, I’ve noticed that the public tends to insert more emotion into their economic analysis than such things warrant. Let me say this first: There is room for emotion in economics. When, however, a person’s opinion regarding the nation’s current economic state is based more on emotion than well-founded rational thought. Henceforth, my point: John Q. and Jane Public don’t know enough of a darned thing about economics to offer their opinion; at least not enough for it to be meaningful. In the spirit of that I’m going to point out a couple of economic concepts that might help to alleviate the problem. Gross Domestic Product, otherwise GDP, once taught as Gross National Product, or GNP, is the number that sums all of the products and services rendered in the United States (or any country, for that matter). Right now GDP is around $13 Trillion or so, give or take a few hundred billion dollars. GDP is calculated as a combination of many things: GDP = consumption + gross investment + government spending + (exports − imports) While there are several nuances associated with each variable, there are a few things to point out. · Consumption is the largest driver of the economy; essentially that is all of the dollars that you and I spend. · Investment is nearly as powerful as consumption · Government spending is relatively valued at one quarter the effect of investment spending. This illustrates exactly the reason why it would be great for government to curtail spending, lower taxes, and help the marketplace—government spending doesn’t do nearly enough for the economy, lowering taxes allows for individuals to have the option to save or consume more (marginal propensity to save or marginal propensity to consume, respectively) –driving consumption and, perhaps, helping investments. This makes sense to me, but I consider myself a fiscal conservative. There will be the contingent out there that says that paying taxes is good because it funds essential services that the government must supply to people, and there’s the whole debate about which rights one has in regards to healthcare and such—that is not within the scope of this article—but if government were forced to act like business in their daily management then we would be able to get a lot more value from our investment in government than not. Put another way, we allow government to spend too much and, I think everyone can agree, that we get too little from it. Wasteful government spending becomes something four times as bad when you have this understanding. So, in an ideal world there is a happy medium between extreme government spending and extreme tax breaks for everyone. We don’t live in an ideal world, however, and economics works in cycles. The best thing to remember is the economy will go up most of the time, but will go down every now and again. Panic is not something that needs to happen when it goes down. Markets correct, stocks fluctuate, and indexes do the same. It’s nothing to worry about. Why do I say this? I say this largely because of my believe that our most recent economic downturn in 2008 has been worse than it n[...]

All That Lies Between


Once upon a time there was a man named Schrodinger and he had a cat. In his own words: “One can even set up quite ridiculous cases. A cat is penned up in a steel chamber, along with the following device (which must be secured against direct interference by the cat): in a Geiger counter there is a tiny bit of radioactive substance, so small, that perhaps in the course of the hour one of the atoms decays, but also, with equal probability, perhaps none; if it happens, the counter tube discharges and through a relay releases a hammer which shatters a small flask of hydrocyanic acid. If one has left this entire system to itself for an hour, one would say that the cat still lives if meanwhile no atom has decayed. The psi-function of the entire system would express this by having in it the living and dead cat (pardon the expression) mixed or smeared out in equal parts. It is typical of these cases that an indeterminacy originally restricted to the atomic domain becomes transformed into macroscopic indeterminacy, which can then be resolved by direct observation. That prevents us from so naively accepting as valid a "blurred model" for representing reality. In itself it would not embody anything unclear or contradictory. There is a difference between a shaky or out-of-focus photograph and a snapshot of clouds and fog banks.” Meant to be a thought experiment about quantum physics: “When does a quantum system stop existing as a mixture of states and become one or the other? (More technically, when does the actual quantum state stop being a linear combination of states, each of which resemble different classical states, and instead begin to have a unique classical description?)” A question that can be derived from this and/or the Heisenberg Uncertainty Principle is one of observation: What happens to a situation once it is observed. The short answer is that the mere act of observing something changes everything. When I first started using computers in a serious sense, my school’s library had a 2400 baud modem which could connect to various bulletin board services, BBSs, which one could use for pen pal-style rudimentary communication. In the early 90s this is one of the things which I found myself doing. Though I did not know it, I was networking in my early teen years. I began a lengthy correspondence with a Lutheran pastor from somewhere in Michigan or Wisconsin, I believe (the actual location escapes me), through which we began discussing quantum physics. He posed the ageless rhetorical question to me: If a tree falls in a forest, does it make a sound? I always like bringing this question up as an introduction to the general strangeness of quantum physics. The answer is that if there is no one to perceive—observe—the tree, then it is not there: It does not exist. If no one is there to observe the forest, it does not exist. Therefore, if there is no one able to perceive the action of the tree falling, it does not fall because it does not exist. It took me some time to reconcile this notion, but eventually came to terms with it. Over time I came to find the universal truth in this notion that anything and everything changes with observation. In our classical world which we can see, feel, taste, touch, and hear on a daily basis we can express the question of “have we observed that?” as a binary function—yes or no, or “1” or “0,” the fundamental essence of a “bit,” or binary digit. Does my cat exist? Yes! (“1”). Is the moon out tonight? No! (“0”). What about if you can’t answer these questions? Herein lies what makes quantum physics so creepy to many. The notion of Schrodinger’s Cat dictates that while something hasn’t been observed it can exist in a state of “superposition,” that is a position that is not necessarily natural and exists ou[...]



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Monkey Mondays: Mars Monkey!


(image) Russia testing monkeys to send them to Mars!

Read all about it here!

The Surreality of the Real


“We spotted the ocean at the head of the trail,Where are we goin’, so far away?Someone told me that this is the place,Where everything’s better, where everything’s safe.”—Toad the Wet Sprocket, “Walk on the Ocean” We all find ourselves doing it: Our mind sets a stage for a place and we paint a mental picture about what we think a place that we have not yet been is going to look, feel, and smell like. The color of the ground, the heat emanating from the sun, the taste of the wind, and the feel of the culture all fill in a “paint by the numbers” portrait in your head. What is it like, though, when you finally see that which you’ve been imagining for all those years? I did much of my substantive growing up on a farm just a mile south of the North Dakota-South Dakota border around the small communities of southwest North Dakota. There, the hills tend to gently roll with the occasional butte or larger hill; vegetation greens in the warmer months and browns in the colder ones. With the exception of a handful of state highway traversing through the county seats, smaller paved “farm to market” roads and less significant graveled stretches weave across the region along section lines and there can generally be the classic upper-Midwest town (a bar, a church, and a gas station) every 13 miles along the routes that mirror the railroads. Much like the character of Luke Skywalker in the original Star Wars movie knew that there was something else out in the galaxy for him, I left the farmstead to spread my wings and see the world. Though the last decade has taken me halfway around the world and back—I have seen the Atlantic Ocean from Amsterdam, and the Pacific Ocean from Washington State—I have never been to California or the southwestern United States. So, recently, I decided to take that step. Taking the better part of a week vacation from work, a trail was made towards the border with Mexico where I waved back at the “waving cacti,” saw the Border Patrol, well, patrolling, the beaches of San Diego, and the lights of Las Vegas. While your mind paints pictures of places where you have not yet been, I have found that rarely the mind’s eye can ready you for the experience of being someplace new. Living in the high desert of Colorado, it tends to be very dry here: That was contrasted with the humid wind blowing in off the Pacific. I grew up in small towns where the lights let out a gentle glow in the winter sky; contrasted with the constant stream of headlights on a Friday night traveling into Las Vegas—and the daytime-at-night conditions of that city. The rolling hills of green contrasted with the rolling hills of sand of southeast California, between Yuma, Arizona, and Calexico, California, was absolutely something else. What is the most surprising of all, though, is what I surmised about the people along the route of the trip. Sure, a person speculates that different geographies have varying cultures to an extent, but what a person might not realize is that, regardless of culture, everyone is simply trying to make their way in this world. While culture might dictate myriad ways of going about that, we can forget that our fellow person is merely trying to make it through this day onto the next. Some have small goals, some have larger schemes, and everyone has an agenda—and sometimes that agenda is just to make it to the next day, alive and breathing. This inalienable truth is coupled with what I refer to as the “Tapestry of the World.” Having been as many places as I have, and having seen as many things as I have, I’ve come to realize that every single place on the planet is unique in its own right, while still retaining a relationship with everyplace else. For instance, [...]

Friday Funny: Fight Club


Every now and then something that really strikes me as profoundly humorous strikes me:

"Fight Club" Busted at Local High School

What is so funny about it? "The first rule of fight club is that you don't talk about Fight Club."

And the second rule?

"The second rule of Fight Club is that you don't talk about Fight Club!"

Evidently, they talked. Kids, these days...

World Fastest Processor


(image) Science keeps chugging along. When I was in high school I recall one of my teachers saying that the progression of science isn't an arithmetic progression; instead, it is a geometric progression. In other words, it isn't linear in the 1 to 2 to 3 to 4 fashion, instead it is 1 squared (1^2) to 2 squared (2^2) to 3 squared (3^2), so on and so forth.

And now, one of my favorite research operations in the world has developed the fastest processor in the world. Watch for the part in the block quote to see just how fast this thing is:

"The 5-billion-instructions-per second Power6 processor from IBM would beat such rivals as the 3.73 gigahertz Pentium Extreme and the 2.4 gigahertz UltraSparc T2 from Sun. 'It's hard to make the average person understand just how fast this is,' said IBM Chief Technology Officer Bernard Meyerson, offering an example meant to explain his company's baby that still leaves the listener awed with the speediness of the two laggards. 'Hold your index finger out in front of your face,' Meyerson said in a telephone interview from IBM headquarters in New York. 'In less time than it would take a beam of light to travel from your knuckle to your fingertip, the new IBM chip would complete one task and start looking for the next, he said.'"

Original IBM text here.

News article here.

There is Nothing Worse in Life than Being Ordinary



I watched, again, an interesting piece of cinematic work, “American Beauty.” Kevin Spacey plays a man telling the tale of him and his family near the end of his life. A tapestry of events weaves itself together to a conclusion which brings about revelations in the lives of everyone involved. During the arc which Mena Suvari’s character makes from point A to point B, she says that “there is nothing worse in life than being ordinary.” I got to thinking about this.

There is a bumper sticker out there that reads that “well-behaved women often make history;” the intent of which is such that the people—in this case, those of the female variety—who stand out are the ones that people remember, that are written about in the history books. It means that you want to, whether you are a man or a woman, should want to make history and leave your mark upon the earth in a way that sets yourself apart from others. As it is oft-said, if you take the road everyone else takes, you end up where everyone else does—instead, if you take the road less traveled you will supposedly do much better.

Let us look at this through the eyes of an economist: The “total cost of ownership” perspective. For everything there is a cost to be paid. The questions resulting from this notion bring a person to ponder what the cost to be paid is, what are the set of results to be had, and so on and so forth. Think of it this way: What is the cost of expending some capital—be that physically, mentally, emotionally, or financially—in the current time and let the fruits of this investment compound over the years…or pay the cost of not even trying and regretting that decision down the road. A wise judge once mentioned, as I paraphrase it: “The cost of utilizing discipline on a daily basis far outweighs the cost of not doing so.”

While ordinary is fine with some people, this blog is not of the ordinary. Throughout history several a notable figure have confronted a place in their life in which they needed to choose to be ordinary or to strive towards greatness. You have the choice to do so, and you will never know quite what it is like until you are there.

In closing a thought by one of the most famous writers of all time, William Shakespeare; his perspective: Be not afraid of greatness: some are born great, some achieve greatness, and some have greatness thrust upon them.

A Tribute to Charlton Heston


A man who was larger than life has, unfortunately, passed.

As a tribute to him, a video depicting his position on climate change.

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Life Economics


Home economics is a dying discipline. When I went through school the classroom existed, but not the corresponding class. Much like civics it is being relegated to a niche of society in such a manner that it is being forgotten…at a price. For years I have lived by the philosophy that I manage my life like I manage a business. On the surface it may seem cold, perhaps even callous—but that isn’t necessarily the case at all. In fact, improved efficiency and effectiveness makes for a better life. A few examples: 1. The Budget. Face it—you stand to get rich if you suddenly run into a large sum of money, but the chances of that happening aren’t such that you should count on it. Instead, the world of finance stresses the time value of money and leveraging your current assets. Your income is the best wealth-building tool which you have and by reducing your debt obligations you effectively increase the power of your income to produce wealth. You do this most efficiently by producing a budget and watching and managing every dollar that flows through your household. By taking this approach you can “make every dollar scream.” What to do after you get to the point where your debt is paid off and you have extra money lying around? Invest! 2. Buy Like a Business. Once upon a time we’re all financially struggling people—whether that be as a poor college student or in a period of personal financial contraction—but we’re not in that position forever. It is rarely a static condition, however, and we progress onto better financial times. At this point in time we can move from buying-to-survive towards purchasing-to-thrive. We learn to buy in bulk—and start to think like an accountant. Price items on a per-unit basis, for instance. When I worked in a grocery store, once upon a time, I noticed that the tags that accompanied stock on the shelves would always have a “price per ounce” or related entry on the tag. By making some observations a person notices where the “sweet spot” is for purchase of a particular item: To buy the smaller box of cereal or the larger, “value-sized?” The larger the package—think bulk— usually the better value per unit. Take this concept one step further and develop a product mix of products that are economical and meet your personal utility or that of your family. For instance—I purchased the specific Rubbermaid containers meant for cereal and have no problems with purchasing the “bag cereals” which are often very close to the recipe of the corresponding name brand “box cereals.” On the other hand, I am very picky about the hot dogs which I purchase. Another step in which to take this notion relies upon you realizing that sometimes you pay more in up-front costs to save money across the lifespan of a particular item; a concept which accountants like to refer to as “total cost of ownership.” A good example is the typical inkjet printer: Cheap and comes with some ink; it may or may not come with a USB cable, and certainly comes with a notorious “power brick.” Sure, you may spend $30 on the machine, but you will likely end up purchasing a lot of ink cartridges—just black and color, if you’re lucky—over the course of your time with the printer. On top of this these ink cartridges are fickle in such a way that the printheads can easily become non-working if they aren’t treated right or used correctly. Although they can have great resolution—past 1200x1200 dots per inch—they do so by spitting small ink blobs onto the paper; this makes for a very dirty process. By contrast[...]

Two Weeks is Too Long


Too weeks is too long for a new post. More this weekend, but in the meantime proof that a different perspective can increase your effectiveness or efficiency by...a single move.

Taken from

"A scrambled Rubik's cube can be solved in just 25 moves, regardless of the starting configuration. Tomas Rosicki, a Stanford-trained mathematician, has proven the new limit (down from 26 which was proved last year) using a neat piece of computer science. Rather than study individual moves, he's used the symmetry of the cube to study its transformations in sets. This allows him to separate the "cube space" into 2 billion sets each containing 20 billion elements. He then shows that a large number of these sets are essentially equivalent to other sets and so can be ignored. Even then, to crunch through the remaining sets, he needed a workstation with 8GB of memory and around 1500 hours of time on a Q6600 CPU running at 1.6GHz. Next up, 24 moves."

Zen and the Art of Server Maintenance


(image) There was no regular blog post for this weekend, largely because I spent much time re-vamping my home network to include a special version of Windows Server 2003 quickly becoming adopted by the market as Windows Home Server. It’s a great thing, and as an early adopter once I got through paying the premium in the form of a learning curve with adding a degree of magnitude to the sophistication of my home network it had been 13 hours between Friday evening and through the first cartoon on Saturday morning. The rest of the time was spent configuring, tweaking, organizing the hardware, and the like. If what they say about adversity building character, then I can add some.

The situation reminded me of something that a gentleman that came into the printer-computer-office equipment repair shop I work at 40 hours a week said: “Troubleshooting is the epitome of understanding a discipline.” I’m not the best when it comes to printers and computers, sure, but I guess I’m better than 97 percent of the general public—I can take apart most any Hewlett-Packard printer, certainly, usually fumble my way through most other printer (certainly, with a service manual at my disposal), can make many a piece of computer hardware bow to my whim, and do quite a number with a multitude of a piece of software.

Information Technology—computers and the sort—just happens to be how I earn the bulk of my living right now. I don’t consider it my best skill set, or much more than a hobby. Still, I am challenged with it on a daily basis, some days better than others, and it helps to keep my mechanical and troubleshooting skills sharpened.

Discussion: Economics of Technology Early Adoption


(image) An interesting discussion over at Slashdot regarding the premium that people pay for being early adopters of technology. The discussion is done through the filter of the HD-DVD format which was recently declared dead; the casualty of the infamous "next generation format wars" between HD-DVD and Blu-Ray.

They Ought to Call Me Hercules


Over a cold slice of coconut cream pie and warm conversation recently a good friend of mine paraphrased an old adage that, probably, most of us have heard: “That which does not kill us makes us stronger.” Originally a Nietzsche quote it has been adapted to fit a plethora of situations from the warrior to the clerk that works in the local convenience store 40 hours each week: It has become a modern-day ethos of the person just trying to make it through, longing for something better as a sum result of their experiences. The more strengthening experiences which they have to make it through, the better that it will make them: Someday these situations will make them Hercules-like. So it stands to reason: Why do bad things happen to good people, vice versa, and other permutations of either in between. The short answer: Free will. The longer answer: Start with a leaf that falls from far atop a high tree. Physics can tell us the individual forces affecting it—wind resistance, gravity, acceleration due to gravity, various factors of aerodynamics, and wind velocity and direction. It cannot, however, tell us where the leaf is going to land. Just as the physicist which can describe what is happening to the leaf has only a finite perspective of the universe ahead of him or her, each of us lack anything more than the finite perspective we allow ourselves. A good way to reach this understanding is to first understand what the physicist does about the falling leaf: Understand the specific ways we are interacting with the world around us and how the world is interacting with us on a daily basis. Learn the general principles which guide you forward and figure out how you can make each better. When we worked together at one of the major wireless companies in resolutions the same friend that I mention above taught me that problems a person has with the outside world usually originate from inside that person. In other words, if you are having problems with your spouse it is best if you look inside yourself before placing blame with them. Even though animals have what resembles free will, the human sense of free will, combined with our problem solving skills and how the greater mix of those traits which make us human all falls into line making us, as humans, special. As humans we can choose. We are not programmed for any specific behavior, lest that which we have or allowed ourselves with which to be programmed. We are driven on a daily basis because we find specific utility in them. This utility manifests itself as pain, pleasure, morality, or one of many other things. Because we have the choice in deciding the value which our behaviors have, it is meaningful. On the other hand, if we were simply programmed to do something, lacking the choice to do it, the meaning that it would otherwise have is lost. You have the choice to do good things; you have the choice to do evil things—whichever path you choose then has all the more significance to you…and, through you, it has increased significance to the world around you. As every child learns, however, each choice has consequences—either positive or negative. Let’s go back to the leaf for a moment: Even though it doesn’t have free will, it has a path from the top of the tree to the ground below it, through the space between the two. Every location through which it passes, each moment which it passes through that location, there are consequences. Since leaves are responsible for photosynthesis on the tree, the lo[...]

Monkey Mondays: Monkeys and Economics


Scientists examine the circumstances under which chimpanzees, our closest relatives, will exchange one inherently valuable commodity (an apple slice) for another (a grape), which is what early humans must have somehow learned to do. The researchers found that chimpanzees often did not spontaneously barter food items, but needed to be trained to engage in commodity barter.

Why Don't Chimpanzees Like To Barter Food?

Perspective of the Giants: Warren Buffett


(image) The name of the blog is Underground Value; and they have a great quote from second-richest-man Warren Buffett as part of an interview with him.

The difference between potential and output comes from human qualities. You can make a list of the qualities you admire and those you despise. To turn the tables, think if this is the way I react to the qualities on the list, which is the way the world will react to me. You can learn to turn on those qualities you want and turn off those qualities you wish to avoid. The chains of habit are too light to be felt until they are too heavy to be broken. You can’t change at 60; the time to look at that list is now.

The Power of the Down Market


Adam Smith, often dubbed the father of economics, is best known for his magnum opus, The Wealth of Nations. What is lesser-known about his writings, though, is what he wrote about prior to Wealth; The Theory of Moral Sentiments. Between these two works it can be argued that Smith was trying to describe the morality of humankind by superimposing economic theories onto it. Since 1776 social science has come a long way in understanding much of the behaviors of individuals: And we have finally come to the point in human history where we can recognize that markets, such as the stock market, and human behavior have many parallels—and form a symbiotic relationship with one another. Take, for instance, the current behavior of the stock markets. Right now, as I look at the Dow Jones Industrial Average, I see that it is down 315 points; Standard & Poor’s 500 Index is down 37 points itself. When many people look at the numbers which we have been seeing in the stock markets lately they fear a word that is often brought up in the evening news, “recession.” Words like “inflation,” “stagflation,” and such are used. Perhaps some people would either categorize the behavior of the markets as overly complex, perhaps even irrational. Just as people require corrections, controls in their behavior, to move forward and progress, the stock market requires the same. Just as risk is necessary to be in any system in which there is reward, so must there be correction. These corrections are a reflection of human nature inasmuch as people exhibit both rational and irrational components in behaviors. In his column in Forbes magazine, Paul Johnson writes an excellent column depicting the mechanics behind what is happening in the stock market right now and an impetus that helped to cause it. Pointedly: “All the same, markets are determined by moral strengths and weaknesses, and it is useful to identify what those are at each major episode. The state of the present market is the consequence of undue patience combined with excessive greed.” He continues to weave the intricate tapestry of morality, impatience, greed, and how they all tie into one another and become progress. The theme of rational components to seemingly irrational things, and how the up and down sides of each turn into our tomorrow, better than our today. Mr. Johnson has some very brilliant insights. No matter what we do, we exist as components of a much larger system: As people, we form communities; as workers at firm or a shop we put together a product, provide a service, or otherwise add value to something. Because we are part of something, and everything changes, we will eventually need to cope with change. Chinese philosopher Lao Tzu once wrote about life that it “is a series of natural and spontaneous changes. Don’t resist them - that only creates sorrow. Let reality be reality. Let things flow naturally forward in whatever way they like.” Management theory dictates that we survey those things around us and formulate plans to manage them and control systems to put situations back where they need to be should they fall outside of the tolerances which we set for them—this is something business students are usually taught in their first semester of school. However, anyone who has had management experience understands that no good plan survives combat intact and that no amount of control systems will hedge agai[...]

Nothing Risked…


I recently had a brief conversation about risk with a client and friend of mine that leads the Information Technology Department for a nearby Ritz Carlton. One of the sum results of that conversation was that there are two kinds of risk: The stupid kind and the smart kind. There are countless individuals in the world who behave in such a way that they don’t factor risk much into their actions and behaviors. There are, however, those who calculate risks into their activities and understand the dynamics of this powerful thing. Drive somewhere in the town or city in which you live. I will bet that the larger the municipality in which you live, the worse the drivers are: It appears that they use minimal, if any judgment. Maybe they have a cell phone to their ears; maybe they are exhibiting poor driving skills; maybe it is a combination of factors. At any rate, professional drivers are often taught the art of “defensive driving” which dictates that you, as a driver out on the roadways, must drive with the anticipation that someone is going to use poor judgment and that you must be able to drive in such a way as to be proactive or react accordingly to these drivers whom have increasing amounts of risk factors piling up on them. I’ve once heard it said, or read it on a bumper sticker, that life is difficult; more so if you’re stupid. Stupidity has often been equated to ignorance. Think of the driver while you are out and about that is ignorant of the traffic laws, or (worse yet) ignorant of those around him or her. Those who aren’t aware of risk often overlook the power that it has in their lives and the world around them. Perhaps I could even go as far as saying that they are more apt to be “victimized” than the alternative. I’ve often equated risk management and the world of insurance as one that assigns numerical values to behaviors and calls these information sets “risk factors.” For example, take a driver who fails to use their blinker all the time. This driver has a higher probability of getting into a collision with another driver by not notifying those around them as to their intentions on the roadways. If they also fail to use their mirrors properly, the earlier risk factor adds to this new risk factor. Additional factors only add to the mess. While one can easily apply this to any part of life, not just driving, there are ways to minimize your exposure to such risk factors. For a few years I lived in the Rapid City, SD area. Just as the schools were heavy into “character counts” campaigns with their students, a local television station ran a series of advertisements much to the same effect geared towards adult audiences. One of these public service messages included a judge discussing the merits of discipline. Essentially the message was that even just a daily investment in self-discipline works wonders for hedging against. If you are self-disciplined enough that you can take a walk or do another sort of moderate exercise you decrease risk factors that would otherwise influence you becoming obese, becoming depressed, getting diabetes, or otherwise becoming physically or mentally unhealthy. Think of the things that you could do less of or do more of on a daily basis that would make your life better, increase your value, or otherwise might make you or those around you better. With that being said, there is absolutely no [...]