Archive for June, 2008

Iranian Hostage Crisis, Part 2?

Back in 1980, 52 U.S. diplomats were taken hostage in Iran. This incident, during the Iranian revolution, was a major blow to foreign policy and intelligence in the Middle East. After a botched extraction attempt (I personally know people who flew on that mission… disaster), the Algiers Accords were signed.

The incident was a major blow for the reelection campaign for Jimmy Carter. The very second after Regan was elected, the hostages were released. It also helped strengthen the Islamic revolution under Khomeni and showed vulnerabilities of one of the major superpowers at the time.

Is Iran doing the same thing with oil?

Persian Gulf
As of this writing, there were Iranian supertankers in the persioan gulf that hold about 5 months worth of extra crude oil. Why the stockpiling? Of course, you can use it as economic leverage against any attack on their coun

try, but what if the oil is being held hostage until a new president takes office?

The cost of oil, among many other reasons, have dropped the president’s rating to unprecedented levels. Bringing that sort of supply onto the market would create some serious turbulence in the commodities markets, possibly causing a correction in prices.
There are some hidden paralells that come to mind when comparing the two events. The major underlying theme may be that the Iranian government is trying to garner political and economic influence in the West, albeit indirectly.

Buy and Hold is a Myth.

So you’ve set up your Roth IRA and are ready to start plowing money into the market. What’s your plan? If you’re like most people, you don’t have one. You think that you should just buy and hold certain stocks or etfs and wait until retirement.

You’re wrong.

From: Bespoke Investment Group

Case in point: the banks. If you have been averaging in the bank etf $BKX for the past ten years, without taking profits, you would be losing money. The etf doubled from it’s lows five years ago and in the past year has taken back all of these gains. Do you see why having a strategy is important?

Of course there is a difference with trading and investing, but there’s one thing that the two have in common: risk management. If you’re investing for the long haul, you still need to have stops in place and contingincies written out. Your set of rules should tell you when to take profits, move your stop, add on more of a position, and when to pull off when you need cash in more valuable places. You also might want to consider option strategies (selling some stock and buying protective puts, or selling calls).

Even if you’re rules are based off strict asset allocation, it still requires you to take profits. Say for you to have a properly diversified portfolio, you want to allocate 5% of your investment account to the banks. If the etf doubles like it did (and all things being equal), your allocation is now up to 10% and too much for your portfolio. So you have to take some profits in order to keep your portfolio in balance. You would still give back some gains, but not as much if you didn’t look at it.

Wealth management is not an easy job. If you stay disciplined in your investing approach, however, then you will have a distinct edge over 80% of the people in the market.

How to Save Twitter

This is a follow up to my thoughts on the advent of microjournalism and how Twitter could become a bellweather in the news media if it positions its brand correctly.

I’ve been diving in deeper into these ideas and I realized that the way Twitter is percieved will be a major hangup if they want to continue further. Currently, Twitter is set up as a many-to-many application, in which you try and get as many to follow you and reciprocate the same. This is the status quo in social media (blogging, facebook, etc).

A new shift, particularly in online media, is the few-to-many application, in which a select “high value” producers generate content for the masses. This is only the natural evolution of online media; noise eventually gets filtered out until you find producers that create real value. The problem with Twitter is that currently there is too much noise, and until you find the proper filters, it will not be able to retain a sustainable user base.

Twitter needs to become a few-to-many application, in which they recruit high-value targets to write random thoughts to their Twitter feed. I gave several examples in my previous post, but I’ve realized there is a much more valuable target for them to reach: the Olympics.

Right now, they need to start getting in contact with as many athletes and coaches that are participating in the Olympics (U.S. participants as well as others) who have access to internet and cell phones throughout their competitions. Explain to them that it would be a great way to vent their feelings and show the rest of the world what it’s like to be a world class athlete.

This will provide Twitter with access to information that NBC can’t have. If NBC takes notice, Twitter can then license out the Olympics content out to them or try for an all out acquisition.

Clock’s ticking.

Twitter Can Reshape the News Media (aka Microjournalism)

In a continuation of the previous article, I attempt to look further for ways in which Twitter can expand beyond the TechCrunch crowd and start to hit the mainstream.

Yesterday, water was found on Mars. Who broke it? CNN? AP? Ah, no. It was the twitter feed for the mars lander who gave its audience a riveting story in tiny little pieces. Technology has now allowed the primary sources to become the media outlets, rather than being sanitized and processed for the masses, and this story may have saved Twitter.

This event will mark a new trend into Microjournalism.

Picture the scenario: you have all the major networks and their respective talking heads, well, talking. They sit their and speculate about every nuance of a major story. And their waiting…. for the next Tweet.

Imagine the countless opportunities for this! Howard Lindzon (investor in Twitter) brought up a good idea that Twitter should start paying for “inside reports,” with his example being Tiger Woods’ caddy. Imagine the traffic that would have came to their website, people grabbing onto every word… and then the mainstream media gets a hold of it. That’s critical mass.

Other possibilities:

  1. Texting information from a closed courtroom where media isn’t allowed.
  2. Celebrities Twittering about working in a movie. Think about Will Smith complaining about the heat in his suit for “Hancock.” This would be a tremendous promoting tool for the industry.
  3. Have the lead scientists at the Large Hadron Collider funnel their thoughts into Twitter.

It’s coming to the breaking point for Twitter. There are scalability issues and rumours about management leaving. However, they are in a prime position to go critical mass, and they are lucky they are in an election year. If they want to get a ton more exposure, they need to start recruiting major political players, correspondents, and embeds to engage in MicroJournalism. Once they have a substantial number of power players, then go to the media and show that they have the quickest sources out their. For the 24 Hour networks, this is like bringing them a purer form of cocaine… they can’t resist. Start to establish deals with the networks and expand from there.

Twitter will only survive with product verticals. They have been dismissed by the TC crowd as unnecessary. I believe that if they execute properly they will become a new form of newsmedia, that once established, will become a necessary architecture to provide up-to-date news.

Why Offshore Drilling in Florida is a Good Idea

Hear me out. Just give me 2 minutes to explain.

The Florida Coastline: untapped resource

In the next 20 to 30 years the state of Florida will experience a deep local recession (think Detroit). The Baby Boomers who bought up all those retirement villages will start to die off. Also, it’s becoming prohibitively expensive to get a decent house due to the insurance premiums. The real estate market will come into significant overhead supply. The decline in population will reduce sales tax receipts, cut retail spending, and economic growth will slow. Seeing this, people will leave, exacerbating the situation.

The tourism industry won’t save them. With newer (and closer) developments throughout the world being built, Orlando’s strong growth will slow. When it’s cheaper and more fun to go to Dubai for a week, Europeans will stop showing up.

It just keeps coming: the educational system is not graduating good workers, and businesses will have less of incentive to bring their business to the state. In the long term, the state will run out of water.

And the voters don’t notice the problem. They just put in a constitutional amendment to reduce property taxes, which will hurt the state in terms of tax receipts when the housing crash finally ends. This November, they are looking to cut state taxes to schools by a significant amount. Unless we privatize the Florida school system, this will be a bad move.

The solution is offshore drilling.

Offshore Drilling will save the environment. By leasing the land to the oil/nat-gas companies and taxing their profits, you can use that money for 3 major things:

  1. Environmental Insurance in case of a disaster
  2. Tax breaks for green energy (solar and tidal, not wind)
  3. Development of a high-speed rail system

You will also get an increase in jobs. You could also use the tax receipts to subsidize household insurance. We need a combination of solar-heat and desalinization plants to get the water we need to the state.

The solutions to the energy crisis must not only come from long-term renewable energy; it must be subsidized by the energy that is immediately available to the country.

5 Reasons Baseball Isn’t A Sport

This is part 1 of an ongoing series of why baseball is categorically not a sport. It doesn’t fit the guidelines of what defines a sport. Yeah, sure, you can complain about how you think I’m wrong and baseball doesn’t suck.

But that’s not what I said. Baseball sucking is a completely different topic. This is the discussion of how we ought to dismiss it as a sport altogether.

1) Bonds hits record homerun, isn’t pissed that team lost

A lot of news has been generated, along with a lot of controversy, with Barry Bonds and his home run record. Obviously, the whole steroid thing comes to mind, as it does with anyone that can rub two brain cells together, but that is not the point here.

What was the end-game score? Anyone? Anyone?

They LOST. They lost their game. 8 to 6 against the Nationals. And noone cares.

And this one reason why baseball should not be taken seriously as a sport, much less a team one. The game didn’t matter. That hasn’t hit anyone on the head yet? I have yet to find one instance in which any player, manager, or owner said “Well yeah, that was great and all, but we still lost the game.” That doesn’t happen. Look at historic competitors in any other Big 4: broke a record, yeah, big deal, but we still lost the game.

2) Babe Ruth did it on Hot Dogs and Cigars

One of the most celebrated players of baseball was unhealthy and out of shape. You can’t say that about other sports (offensive lineman may be a counter-argument, but I’ll get to that in reason 4)

3) Baseball is America’s pastime

Yes. A pastime, not a sport. It’s more of a hobby, like craft sticks or scrap-booking.

4) You can be obese and still succeed at this game

There are athletes in baseball, but not all baseball players are athletes. Look at David Wells: he’s a fatty, and still pitched a perfect game.

Now don’t go off and talk about lineman in the NFL. They *have* to be obese in order to play their position. There’s a difference. They’re like sumo wrestlers, who have to gain weight in order to participate in their sport. There is no position in baseball that requires that.

5) Anyone can play well in a pickup game

Get a couple people and hit the ball around. How hard can that be? Baseball is an event that you can play drunk. Liability issues normally require companies to play slow-pitch softball, but the concept is the same.

You can’t get some overweight middle manager at Dynetech to play a pick-up game of rugby. He’d die. But baseball… piece of cake.

I’ve got about 40 more reasons lined up, so subscribe to my feed and I’ll keep you posted.