40 Things You Should Know.

“That’s a short list. That can’t be everyone you want to kill. Are you sure you’re not forgetting someone?” – Game of Thrones

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The W3 stands for Wilder, Wealthy, and Wise.  Get it???  Thanks, Dawn!

So, I’ve not done a list.  But, why not?  Jordan Peterson did one (reference LINK and LINK and LINK), so I figured I could do one, too.  Enjoy!

  1. Tell the truth. This will have the beneficial added benefit of changing your behavior so you’re not ashamed of what you do.    The whole truth.  Even about that.  And that.  People might not like you, but they’ll respect you.
  2. Showing up on time is important. It shows respect.  It also is easy to track, if you’re a boss wanting to get rid of people.  Even if you do a great job, you’ll be the first to go if you show up late.  Unless you bring doughnuts, and, honestly, that wears thin after a while.
  3. Don’t give up. How close were you to break-out success when you gave up?  Even Johnny Depp succeeded, which proves that anyone can!
  4. There are no friends like those formed in youth. There are no pretenses.  The cruel calculus of testosterone and estrogen has yet to set in.  Greed is not an issue.
  5. Be nice. Life is already really hard for some people.  Don’t be their villain, unless it pays really well, and even then karma is . . . tough.
  6. When you speak, you own the space between the words. You have the ability to turn your words into something amazing, since infinite possibility lies between one word and the next.
  7. Don’t do things you hate, or things that make you feel like a failure. Putting yourself in situations like that is a self-fulfilling prophecy.
  8. Apologize.  But only when you are wrong, which, if you read this blog, is rarely.  Never apologize unless you were clearly and completely wrong.
  9. Be of value. If you don’t contribute, you’re part of the problem.  Which problem?  All of them.
  10. Don’t make yourself into a victim. Almost everybody is where they are because of their choices.  Own your choices, and own your outcomes.  No one likes victims.
  11. If you really are a victim? Act like you’re not.  Because even if deserved?  No one likes victims.  And if you have enemies?  They’re mad because you’re living well.
  12. Opportunity is found where responsibility is neglected.
  13. Solve someone else’s biggest problem – that’s the road to wealth.
  14. Remember, giving someone something creates a debt in their mind. The larger the gift, the bigger the debt.  And nobody likes someone they owe a lot of money to.
  15. If you don’t want to go to bed because you don’t want to get up tomorrow? Fix your life.
  16. Have children and have them early. But only if you have a spouse.  And can keep your spouse.
  17. Cooking your own food is cheaper. And it gives time for conversation.  Some of the best conversations occur around the barbeque grill and the deck late into the night.
  18. Be tough when you have to be. To be kind when toughness is required results in tragedy.
  19. A pleasure repeated too often becomes a punishment, unless it’s Game of Thrones®.
  20. Beware of ignoring public opinion. Public opinion resulted in witch burning, the guillotine and Hula Hoops®.  You don’t want to be on the wrong side of opinion at the wrong time.
  21. Don’t see conspiracy when simple laziness, plain stupidity, or normal greed would explain the situation just as well.
  22. Schools used to be run by school boards. Now they’re run by unions and lawsuits – none of these groups have the students in mind.
  23. You don’t win ‘em all. If you’re the Cleveland Browns®, you lose most all of them.
  24. You are the sum of your experience, your intellect, your body, your surroundings, and the people you interact with. You also control your own change.  So, get up.    The you of today isn’t ready for tomorrow unless the you of today is changing to meet those challenges.
  25. Betrayal of trust is often unforgivable. Never trust someone who betrays you.  Forgive?  Maybe.  Trust?  Nope.
  26. Real changes don’t happen until an emotional experience occurs.
  27. You have your shot – would have and could have don’t exist. (Unless the Many Worlds Theory of quantum mechanics is correct, in which case all things happen, so have another beer.)
  28. The best (and maybe only) way to win at gambling is to own a casino.
  29. No matter how awesome your idea, it has no value unless you make it real. This takes risk, execution, and work.  Which is a lot more difficult than talking about your wonderful idea.
  30. Unless your boss is a good boss, your being younger and smarter than him won’t impress him, it will make him jealous or fearful. Neither of those things are good.
  31. Know the strengths and weaknesses of your (biological) parents. You’re not too much different than them.  At best, you can avoid their weaknesses.  At worst, you’ll follow every one if their downsides.
  32. Tip well, if you can afford it. Waiting on tables is tough work.  And if you do tip well?  They’ll remember you and take care of you.  It’s nice to show up and find the right bottle of wine waiting for you.
  33. You’re not going to win the lottery. Unless it’s the one that Shirley Jackson wrote about. (LINK)
  34. If you’re travelling in winter, travel on the top half of your gas tank. It doesn’t cost any more.
  35. Keep your napkin in your lap while at the dinner table.
  36. Always use deodorant.  And if in doubt?  Have a breath mint, too.
  37. Keep in touch with people who have helped you, so you can help them. And because you’re a person.
  38. If you have too much stuff – your stuff will own you. Except books.  You can have as many of those as you want.
  39. The only way that you can know another person across centuries is to read what they’ve written. Have you written anything worthy of reading by your great-great grandchildren?  No?  Get to work.
  40. You’re going to die, and we all die alone.  Understand that the only person with you throughout your life is . . . you.  Be prepared to keep yourself alive in any emergency you can imagine.  Otherwise you’ll never see the end of Game of Thrones®.

The Cold Equations, 1973, Alice Cooper, and Government Debt

“We’re doing him a huge favor!  And do you realize how extreme this is to go from no debt to good old fashioned American debt? That’s the way to do it. Plus, I’ve been envisioning someone else paying for this thing the entire time.” – It’s Always Sunny in Philadelphia

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This was before a hurricane in Houston, almost all the shelves were bare.  Not the last hurricane.  So, after the Apocalypse?  You can still get food from Weight Watchers®.

The Cold Equations is a short story (you can find it here and read for free (LINK) on .pdf so you should read it today) that I remember reading as a young lad up on Wilder Mountain.  I think I read it in an old, moldy paperback from the Junior High library on a long bus trip.

The story sets up a moral choice, and a tough one.  But don’t we face those every day?  Don’t we look at the short term, the now, and not realize there are vast implications for our future actions?  Like if I eat all the PEZ® now, there’ll be none left for later?

I’m guilty of not looking at the big picture, too.

When I think about personal finance, most of the time what I’m thinking about are smaller strategies:  what mix of bonds and stocks should I have?  Index funds or mutual funds?  Managed funds?  How much of my net worth in real estate?  How much car should I buy?  Do I really need the signed Battlestar Galactica helmet?  (Answer:  YES!!!!)

And these are meaningful questions, and really have been the most meaningful questions for essentially all of my life:  these were the right questions to ask.  And, even though the economy has had ups and downs, for the most part, we’re like ships in pretty calm water.  Storm from time to time?  Sure.  But we’ve never see a hurricane.

Outside of technology (which I’ve discussed here (LINK) and which I will likely revisit soon) probably the two biggest factors in determining your personal financial future are government debt, which we’ll discuss in this post, and future payments that governments must make, which we’ll discuss next Wednesday.  I was originally going to discuss it today, but like government debt, this post got bigger faster than I was expecting.

Government Debt and Why 1973 is Important:

I’m picking a start date for my look into government debt as 1973.  In my opinion 1973 was a pretty big year for debt.  Before 1971, if a country, say, France, had a $100,000,000 in dollars, they could back up the semi and trade those dollars for gold at $35 per ounce.

This really happened.  France decided that they had a lot of dollars, but they decided that they liked gold even more.  So, like a kid at the arcade with 5,000 Skee-Ball® tickets, they brought all of their dollars up to the counter and asked for gold.  And a gummy eraser.  And a set of the glasses with the nose and fake mustache.

Nixon decided he liked his gold more than he liked France, so put out an emergency order that the Skee-Ball© window was closed, and that France could keep their tickets.  This set in a chain of events that determined just how many dollars could even exist . . . .

In 1972, Nixon ordered that the dollar be devalued from $35 per ounce of gold to $38 per ounce of gold.  I’m not sure anyone listened because we’d stopped converting dollars to gold.  And, in 1973 the decision was made to allow normal American citizens to own gold, something that President Roosevelt had made illegal in 1933.  The gold/dollar link was severed, so the US could print as many dollars as they chose.

(Roosevelt had confiscated all of the gold coins and bullion in the hands of Americans in 1933 at the price of $20.67 per ounce and made it illegal for Americans to own gold.  After he had all the gold?  He said it was worth $35 per ounce.  Nifty way to make an instant 70% profit, if you’re the government.  If you or I did that, they would just compare us unfavorably to Bernie Madoff.  And that’s just the hair!)

So, I picked 1973, because that approximates the date when the US dollar was completely free of any constraints put on it by a gold standard.  And also, coincidently when Alice Cooper released his classic album Billion Dollar Babies.  Or is it really a coincidence?  Regardless, my choice of 1973 as a starting point isn’t arbitrary.

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A fine album – you should buy six or so.  Album Picture via Wikimedia – © believed to be with Warner Music.

DANGER:  FALLING DOLLARS AND GRAPHS AHEAD

In the graph below, I’ve listed the Debt of the United States over the years since 1973.  I first converted the annual figures into 2017 dollars using magic the Bureau of Labor Statistics website, so we don’t have to worry about pesky inflation in this graph.  H/T to The Balance (LINK) for pointing to all the appropriate websites for the data.

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When I first started inputting the data, I was surprised at how familiar the shape of the curve of the debt was – and when I tried a fit of the data to an exponential curve it matched very nicely.  You can see it on the graph.  The exponential curve is a pretty standard formulation.  I’m not going to get all mathy, but the R2 =0.97 shows that a large amount of the variation you’d expect to see is explained by the curve that’s fit to it.  An R2 =1.0 is perfect.  Thanks, Excel®!  More on the curve fit later.

The dashed line represents the ratio of the national debt (how much the US owes as a country) divided by the Gross Domestic Product (how much the country produces in a year, both goods and services).  It uses the right side scale, so you can see that now the national debt is more money than all the goods and services the United States produces in a year are worth.

Hmm.  Oddly, Japan leads the list of countries that have a high debt to GDP ratio, primarily because no matter what the government does, the citizens just won’t take on debt, so government takes it on for them, in order to fund more comic books, vending machines, and seven-eyed fish.

Perennial economic basketcases Greece, Lebanon, and Italy have higher debt to GDP ratios than the US, but the United States is 12th out of 100 or so on a list where you really don’t want to be at the top.  Admittedly, most of the countries on the bottom of the list don’t actually use money, but rather trade goats for transistor radios and nine-volt batteries so they can listen to 1970’s disco music, which is all the rage now.

But let’s get back to the overall debt.  If it is a good fit for the past, I can try to use that same curve to project 10 or 20 years into the future, as I did in the graph below:

Debtintofuture

If the projection holds, in 2027 the debt will be above $30 Trillion dollars.  That’s $30,000,000,000,000.  Some people work a whole year and don’t make that much money!  And in 2037, the debt will be a little higher at $55 trillion dollars.  But those are 2017 dollars, and we live in world where inflation exists.  Here’s that graph:

debtplusinflation

This graph shows we’ll be facing a debt of $55 TRILLION dollars in ten years, and a tidy $135 TRILLION in twenty years.

For grins, I deleted the last 10 years of data, back to 2006, from the projection from the inflation adjusted numbers.  Result?  It projected the current level of US debt almost exactly.  That equation seems pretty accurate:  it’s good at predicting the future.

But when I deleted 10 years’ worth of data from the graph where inflation exists?  Yikes!  It would have projected a current debt of about $28 trillion versus the $20-ish trillion we’re at right now.

The last ten years have produced inflation that is very low, and interest rates that are at all time historic lows (like all of recorded history low).  Both the low inflation and low interest rates have acted to keep the debt much lower than it would normally be.  This tells me our debt is very sensitive to inflationary swings (as a first year economics student would figure out and give me a resounding “duh” after thwaping me in the forehead).  The ultimate rate of inflation will eventually determine the final shape of the debt’s growth, but we can get to the right range with these estimates.

The Cold Equations don’t lie.

I don’t know about you, but these numbers seem . . . impossibly large.  And large in such a fashion that I can’t really see how the system can work.  Ben Stein’s dad was famous for saying, “If something can’t continue forever, it won’t.”  Interest on that $55 trillion in ten years or so at 5% would be 70% of today’s entire federal budget, for just one year.

This is Ben Stein.  Anyone, anyone feel like getting me a beer?

The interesting thing to me is that everyone thinks that there is a choice involved, and that every aspect of the current system in the United States isn’t baked into that equation.  But I tested the equation with data from before the housing crash.  With data from before Obama.  Hate to tell everyone, but we could have elected John McCain or a bowl of quivering strawberry Jell-O® (but I repeat myself) as president for the last eight years and we would be in exactly the same place.  It’s not parties, it’s not individuals.  It’s the system.

And what are the consequences of trying to stop?

$1.1 trillion was added to the debt in the government fiscal year ending in 2016.  This amounted to around 5% of US GDP.  US GDP grew by less than 2% that year.  Remove the deficit?  The US economy shrinks by 3% in that year.

The “Great Recession” saw the economy contract 5.1%.

So, yes, addiction to government debt is bad.  The only thing keeping the country out of recession is adding more debt.  But the Cold Equations indicate that exponential growth can’t continue forever.

The Part Where Wilder Answers His Own Question

So, why does this continue now?  Why doesn’t somebody jump out in front of the speeding train and yell, “Stop!”  (I think I answered my own question there.)

It’s convenient.  The United States creates dollars out of either paper or electrons, and then ships them halfway across the world to buy something real, like a car, underwear for Johnny Depp, or a barrel of oil.  They take our made-up dollars as payment, and ship us the stuff.  Then they take the dollars and recycle them into our system and buy the debt through Treasury Notes and Bills.  If that’s not a tax, I’m not sure what is.  It’s really an awesome deal if you’re the United States.

Eventually someone will create a currency or mechanism to compete with the dollar.  China is desperately trying (LINK) having created a mechanism to trade oil not in terms of dollars, but in terms of gold.

Will that system take down the dollar?  Likely not.  The sheer size and psychological trust the dollar has accumulated over the past hundred and fifty years won’t go away with just one alternative Afghan (the people not the blanket) herdsmen trade actual dollar bills.  In Zimbabwe when they turned their currency into the equivalent of a mathematical joke, they traded US dollars to actually buy stuff.  And inertia plays a big part.  You don’t tear down Rome in one day, week, or month.  And, as the Romans showed (LINK) a strong army goes a long, long way to having whatever you say is money be accepted.

The second thing that keeps this system going:

It’s that the system has evolved to grow continually.  Jerry Pournelle (who may have been the architect that brought down the entire Soviet Union while writing entertaining science fiction), (1933-2017) described it well in his Iron Law:

Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people”:

First, there will be those who are devoted to the goals of the organization. Examples are dedicated classroom teachers in an educational bureaucracy, many of the engineers and launch technicians and scientists at NASA, even some agricultural scientists and advisors in the former Soviet Union collective farming administration.

Secondly, there will be those dedicated to the organization itself. Examples are many of the administrators in the education system, many professors of education, many teachers’ union officials, much of the NASA headquarters staff, etc.

The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.

This is why NASA can’t launch spaceships, the Department of Education doesn’t teach, and the Department of Energy doesn’t produce power.  It’s not that these bureaucrats are bad people, they’re simply focused on personal preservation – they want to have a job until they retire, and enough petty power to make them feel that they’re important.  The best way to ensure that is to surround themselves with a staff of fifty.  And all of this is in harmony with the equation.

If you notice, both sides pick things to fund, and both sides will defend the other side’s projects to the death.  Republicans complain about Obamacare, and then add more funding.  Democrats complain about the military, and then add more funding.  Each side is careful to preserve the one thing that Washington is good at . . . spending.

What’s the favorite baby in Washington?  Billion Dollar Babies!

But I feel that the Cold Equations will point to a place where this cannot last.  And when you violate the Equations?  Your choices dwindle . . . to zero.

The Fermi Paradox, or, Is There Life In Other Fridges?

“Morty, there’s nothing dishonest about what we’re doing.  Now slap on these antennae.  These people need to think we’re aliens.” – Rick and Morty

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What an alien might look like.  Perhaps a bit too subtle in the orange suit?

“Where is everybody?”

That’s the simple question that Enrico Fermi asked at lunch in 1950 at the Los Alamos National Laboratory.  Everybody laughed, because on the walk to lunch, these eminent physicists (Edward Teller, father of the hydrogen bomb was one) had been talking about UFOs, and his comment a half hour later seemed to capture the idea that all of them had.  To my knowledge, none of these eminent men (except for Teller) lived in Mom’s basement or wore tinfoil underwear to bed, so it was a serious question asked by seriously smart dudes:

Where are the aliens?

Eventually this question became the foundation for what’s known today as the “Fermi Paradox.”  Stated simply, the Fermi Paradox says:

  1. The galaxy has been around for billions of years so,
  2. It’s unlikely that we’re the first civilization,
  3. A civilization should be able to move across a galaxy in millions of years, so
  4. Why don’t we hear them or see them? Why aren’t they in our solar system?  Is the food that bad here?

Thankfully, a large number of people (some of whom also live in their Mom’s basement) have spent a lot of time thinking about this.  Per Wikipedia (LINK), here are the best answers:

  • Extraterrestrial life is rare or non-existent: This is the first explanation.  But it’s lame.  Really lame.  Everywhere we look in interstellar space, we see signs of chemicals that are clearly precursors to life.  And life showed up pretty quickly on Earth, and perhaps even earlier on Mars.  I don’t buy this one.  If you’ve seen the inside of my fridge, you know that life is everywhere.
  • No other intelligent species have arisen: I have to give this one a possibility.  As far as we know, intelligent, tool making life has existed only for 0.01% of the lifetime of the planet.  That’s not a lot of time.  Could it be that intelligence beyond a certain point actually results in an evolutionary disadvantage?  Maybe all the intelligent lizard-people were eaten by Tyrannosaurus Rex while arguing that the means of production should be shared by all dinosaurs, and that T. Rex was a greedy member of the 1%?

From XKCD.

  •  Intelligent alien species lack advanced technology: I can see lots of ways this could be.  A planet with low metal content so no circuits.  It’s pretty hard to build a bamboo radio telescope that works.  For that you also need kelp, and an electric eel.
  • It is the nature of intelligent life to destroy itself: Are you talkin’ to me?  Hmm?  Well, I’m the only one here.  I thought so.  I looked up the main causes of death in the world in 2015.  People killing people was not in the top 10.  So, while it might be fun to beat up on yourself and on how bad humanity is, that’s simply not the case.  Mankind rocks.
  • It is the nature of intelligent life to destroy others:   With a sample size of zero, it’s hard to say one way or another.  Even a small number of alien species bent on destruction of all other species would be significant.  But wouldn’t we have seen a sign of that, like a big moon gun shooting at us?
  • Periodic extinction by natural events: It’s undeniable that happens here on Earth.   There have been five mass extinctions, with the most recent being 65,000,000 years ago, which is longer than many people live, so you might not remember it.  It’s the one that killed all the dinosaurs, remember them?
  • Inflation hypothesis and the youngness argument: This one is bogus.  Even the author (Future Nobel Prize Winner Dr. Alan Guth) argues that in his paper (LINK).  I don’t suggest you read it, since he gives away all the spoilers in the Abstract.  The relevant quote about the Fermi Paradox is:

Thus, if we know only that we are living in a pocket universe that satisfies Eq. (12), it is extremely improbable that it also satisfies Eq. (13). We would conclude, therefore, that it is extraordinarily improbable that there is a civilization in our pocket universe that is at least 1 second more advanced than we are. Perhaps this argument explains why SETI has not found any signals from alien civilizations, but I find it more plausible that it is merely a symptom that the synchronous gauge probability distribution is not the right one.

Translation:  This result makes no sense.

  • Intelligent civilizations are too far apart in space or time: Yes, but they can cross the entire galaxy in a few million years.  Unless no civilization ever does this, we should see something.  An interstellar Outback® or Jimmie Johns™ on Mars.  Something.  I’m calling this unlikely.
  • It is too expensive to spread physically throughout the galaxy:   Time is on your side, and something like a self-replicating robot could easily get through the galaxy in a million years and spend time creating “My Robot Went to Cygnus X-1 and Only Got Me This Lousy T-Shirt” t-shirts for the inevitable tourist trade.  This is nearly within our ability, so, unlikely.
  • Human beings have not listened long enough: This is a good point.  We’ve only been able to listen for the last 80 years or so, and most of the time we weren’t listening.  Unless the aliens bought commercial air time during the Super Bowl®, they could have been broadcasting instructions on how to build an interstellar drive for a space ship or how to make creamy PEZ® and we would never have heard.
  • We are not listening properly: My first grade teacher accused me of this.  In writing.  On my report card.  “Johnny likes to talk and can’t sit still.”  That’s because I was a boy, silly.  That’s on the warning label, along with the bruises, cuts, and torn jeans.  But back to aliens.  We listen on the radio spectrum, mostly.  And mostly on a particular spectrum, as defined by the Search for ExtraTerrestrial Intelligence (SETI) Institute’s website (below).  What if that’s just a convenient place to look, and not the one aliens have settled on?  What if they use lasers, or the even more potent laser/shark method?  What if they text?  What if they use fundamentally different timescales (much slower or faster)?  This is likely, in my opinion.

For interstellar communication, a particular range of radio frequencies, “microwaves” from 1 GHz to 10 GHz, are particularly good choices.  At lower frequencies our galaxy emits prodigious amounts of radio waves creating a loud background of noise.  At higher frequencies the Earth’s atmosphere, and presumably the atmosphere of other Earth-like planets, absorbs and emits broad ranges of radio frequencies.  The result is a quiet “Microwave Window” through which efficient radio communication is possible.

From XKCD

  • Civilizations broadcast detectable radio signals only for a brief period of time: This was (kinda) my theory in 2000 when I emailed Frank Drake (LINK) and asked him – (his equation-The Drake Equation-is used to estimate the number of civilizations communicating in the galaxy).  In short, my hypothesis was that civilizations must have sufficient excess energy to spend the time and effort to broadcast to space and to listen for signals from space, and that having that excess energy from (like us) hydrocarbons like oil and natural gas and coal only last for a while.  And fusion is hard, and fission has waste problems.  A related post of mine is here (LINK).  Drake responded, and, sadly, that email account is no longer or I’d quote the response.  In one word, his answer was, “maybe.”  The other concept is that civilizations are “noisy” for a while until they learn to move on from high powered radio to lots of smaller low-power radios.  Earth has gotten a lot quieter since the 1970’s.

From XKCD

  •  They tend to isolate themselves: It could be that the alien species are all introverts that like spending time in their room listening to music, or standing in the corner at a party until they sneak out and go home and hit the Playstation®.
  • They are too alien: Aliens might be so different than us that we cannot mutually communicate – ever.  It would be like meeting a civilization composed entirely of ex-wives (or ex-husbands, your choice).  Hey, maybe that was why they called it the eX-Files®?
  • Everyone is listening, no one is transmitting: Like us.  We’re not actively sending signals out, or at least not very often.  If someone did hear us, they’d look back to see if there was a signal, and they wouldn’t find a thing.
  • Earth is deliberately not contacted (zoo): We’re like the hippos in the zoo.  People look, but you’re not supposed to disturb the display.  Oh, look what happens when you throw a hurricane at them!  Silly people!  Possible, but seems like a lot of work.
  • Earth is purposely isolated (prank): Let’s take a civilization, and make it look like nothing’s going on outside their solar system (snicker).  And let’s magic marker their face.  Seems very unlikely, and way too much effort.
  • It is dangerous to communicate: Maybe everybody looks out and says . . . “Where is everyone?”  Since there’s no good answer, they assume everyone before them got smashed by . . . something out there.  So, they shut up.  Maybe?  It’s what Hawking is suggesting as our best strategy now.
  • The Simulation Theory: We live in a simulation, and they didn’t program in any aliens.  Very possible.  Our current level of technology could almost produce a realistic simulation, so it’s not too far off to expect that another million years of tech advancement would produce not only SuperUber with cabs that all driven by clones of NFL® legend Howie Long, but the ability to live your entire life in your Mom’s basement in a virtual reality.  And we’re all non-player characters.
  • They are here undetected: They’re sneaky, and are all over, like tourists, and we just don’t know it.  Some silly Prime Directive or something.  I believe this is unlikely, because Kirk always ignored the Prime Directive whenever it was even remotely convenient.
  • They are here unacknowledged: This is the true X-Files® X-Planation.  Government knows.  SETI™ knows.  Nobody will tell us.  This is one of the most popular with the tinfoil-wearing basement dwellers.  It’s solidly possible.  Blue Oyster Cult certainly thinks so:

1980’s at its best:  men in black, bad special effects, girls in furs, weird beards, and Flight 19 references.

What about . . . we are the aliens?  If you look at life . . . it’s got great computational power.  It’s got amazing resiliency to everything from meteor bombardment to super volcanos.  It has amazing memory storage capacity (think the amount of info in DNA alone).  It’s complex, but resilient.  Perhaps the galaxy has been seeded, with us and the things that live in my fridge.  And we’re the replicating critters that are supposed to send copies out into the cosmos.

When we manage to get out of Mom’s basement.

 

Warren Buffett’s Investing Secrets, F-Troop, and Amazing Bigfoot Investments

“Well if there were no Gods then anyone can do anything and nothing will matter.  You could do as you like and nothing would be real.  Nothing would have meaning, or value.  So even if the Gods don’t exist, it still necessary to have them.” – Vikings

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Even Bigfoot appreciates the climate in Margaritaville.

It was reported (quite a while ago) that Jimmy Buffett of “Margaritaville” fame and Warren Buffett of “Having All the Money” fame were related.  However in 2007 they spit into a tube (well, separate tubes, one tube would be gross) and had their DNA tested.  The results showed that if they were related, it was more than 10,000 years in the past, as Warren Buffett was related to Scandinavians and either Iberians or Estonians.  Jimmy Buffett was related to the Dutch, sunscreen, tequila and salt.

I’ve always regretted that they weren’t related, since my ideal restaurant would be the Buffett Buffet™.  All you can eat cheeseburgers (from Jimmy) and Coca-Cola® from Warren (who owns a large chunk of the company Coca-Cola™).  The television screens would alternate between surfing, bartending shows, and a stock ticker.

But this post is all about Warren, and only slightly about Cheeseburgers in Paradise©.

Warren Buffett is smart.  You don’t start with (relatively) small amounts of money and end up with billions by luck, unless you’re Mark Cuban, who is the only person on planet Earth who sold a company with 330 employees for enough stock to make him a billionaire.  Thankfully he has a billion dollars, so he can hire people smarter than him.   (Yes, he has more money than me, but, really – aside from being so lucky?  He’d be a wonderful bartender.)

One data point in my favor in stating that Warren is smart would be that he graduated from the University of Nebraska at the age of 19, and then went off to Columbia (the college, not the country).  Why Columbia (the college, not the country)?  He knew that Benjamin Graham taught there.  Ben Graham is known as the “Father of Value Investing,” and Buffett wanted to learn from him, and took his class.  After finishing at Columbia, he wanted to go to work for Graham, but Graham said no.  Buffett went back to Nebraska to be a stockbroker.

One day, Graham called and said that Buffett could come to work for him – he was being called up to the big leagues.  The next day Buffett killed all of his customers (no witnesses that way) and went to New York to work for Graham.  Okay, Buffet didn’t kill anyone.  That we know of – this isn’t Game of Thrones.

So, when Buffett got the job with Graham, he learned a lot.  Eventually Graham had enough money and wanted to spend the rest of his life on, well, whatever he wanted to spend it on (PEZ®, pantyhose and elephant rides?), so he shut the company down.  Buffett was, by most standards, pretty well off, and decided he wanted to move back to Omaha and open his own value investing shop because he missed all of the corn and the corn smells.  Buffett’s various ventures were pretty small – in 1990, his company (Berkshire Hathaway) was worth $7175.  Per share.  Recently that same share would cost over $260,000, and Berkshire Hathaway’s total value is over $440 billion dollars.

Warren Buffett has done okay.

He’s also known for being pretty frugal.  I know you’re happy I added frugal to that last sentence, because otherwise you’d just think that I thought that Warren Buffet was pretty.

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I personally think that this picture is pretty, even if Game of Thrones® has made dragons the good guys.

Warren has lived in the same house since the 1950’s, (it is a nice house, but not that nice), drives a car for years at a time (rumor is he bought a hail damaged one because it was cheaper), and recycles Pringles© canisters into air conditioning ductwork for his house and saves the trays for TV dinners to use to microwave Oscar Meyer® hot dogs.

Me?  If I had as much money as he does, I’d probably buy a new car every time mine ran out of gas (I kid, I drive my cars forever (LINK)).

I was watching a video while exercising (I work out for only for you and I study for only for you, Internet!) and heard Warren state “ . . . if I could invest as a small investor today I think I could . . . I know I could make a 50% return.”

That was a pretty powerful statement, since I certainly count as a small investor by Mr. Buffett’s standards.

Why can’t he do that?  He’s got billions of dollars he has to invest, so he has to do big deals.  There are a lot of good deals you could do with a few million dollars, but very few good deals in the billion plus region.  Turning the company’s $440 billion into $660 billion in a year is hard.  He could turn $10 million in to $15 million in a heartbeat.  Small deals are easier since there are so many of them.

Warren’s advice to investors is simple:  buy a low overhead (low fees) index fund (an index fund is a fund that is created to match an index, like the Dow Jones Industrial Average or the S&P 500).  If you can’t do what he does and value invest, this is the best way to get a good return.  And that’s good advice (in my opinion) for any small investor that doesn’t have the time to do the required research.

Let’s repeat that:  Warren Buffett says you should buy an index fund.

But me?  I know Warren didn’t get all of those Pringles® cans by investing in an index fund.  What did Warren Buffett do to get really rich?

What research did Graham and Buffett (reminder:  not Jimmy Buffett, but Warren Buffett) do prior to investing?

  1. Good Leadership, Good Business – Graham and Buffett were looking for leaders that had experience, capability, and great integrity. Warren can call CEOs and talk to them and give them the sniff test.  You can’t, so this is harder for you.  The business also has to be a good one. (More on this later.)
  2. Low Price to Earnings Ratio – The price to earnings ratio (P/E ratio) is how much you have to spend to get a dollar of the company’s earnings.

Before the 1980’s, the rule was a company that had a price to earnings ratio of over 20 was ALWAYS overpriced.  But the rule back then was to take the P/E and subtract the current prime interest rate.  Today the prime interest rate is ~1%, so using that old rule, a P/E of 19 would be acceptable.  Right now it’s difficult to make a return on capital because so much money is flooding everywhere . . .

Why was the rule like that?  It was assumed that you could either get returns from saving your money or from investing it.  Currently there is no benefit from saving it with historically low rates, so the P/E has continually wandered higher.

Alone, however, P/E tells you nothing.

  1. Low Price to Book Value – The book value of a company is how much all of its “stuff” is worth. In theory, if a company has a price to book value of less than one, you could buy the company (price), sell all of its stuff (book value), and come out ahead.  In theory.  If you have ever driven past a boarded up factory (and you have) you know that the book value just might be overstated.

Again, like P/E, Price to Book tells you nothing.

One video I watched while climbing on an infinite staircase to nowhere showed a screening method for value stocks that was alleged to have come from Warren Buffett:

  • Pick the Price to Earnings ratio,
  • multiply it by the price to book value, and
  • if the number was less than or equal to about 30,
  • the stock was a candidate.

Simple, right?

It is (and it’s overly simple).  Because what stocks have low P/Es and low Price to Book?

  1. Great, Undervalued Companies in Great Markets and
  2. Failing Businesses in Crappy Markets.

How do you tell the difference?  Sometimes you don’t.  Buffett will go on at length, if you let him, about all of the failures he’s had in picking companies.  But he had a consistent strategy that he followed for years that obviously resulted outstanding returns.  And he didn’t pick only small companies – Coca-Cola® was one of the companies he picked that produced amazing gains for Berkshire Hathaway.

So, how does a company like Berkshire Hathaway measure up on the value score?

  • It has a P/E of 20, and a Price to Book of 1.5. This would result in a score of about 30, so it would be within Warren’s window.  According to Warren, Warren is a value!  Also, Berkshire Hathaway has a credit rating better than (really) most countries.

What about . . . Tesla?

  • Tesla has never made any money, so its P/E is infinite. Its price to book is 12, so, 12 times infinity is  . . . still infinity.  Probably not a Buffett candidate?

And Honda?

  • Honda, maker of the best-selling electric car has a P/E or 8.6. It has a price to book of 0.77.  That means it scores an amazing 6 or so on Warren’s scale.  Wow!

So, let’s also look at a company that no one understands, Amazon:

  • It has a P/E of 120.  A price to book of 20.  That’s an astonishing 2400.  Again, probably not a “buy” rating from Buffett.

But is Honda a good buy right now?  Or not?

The only way to tell is to go back to Buffett’s first point.  But you and I can’t call up the CEO of Honda and expect to get real answers.  Warren probably could.

But we have help fortunately:  Joseph Piotroski, an accounting professor at the University of Chicago came out with a list of criteria that are objective and that anyone can find in the annual report of any publically traded company and named it the F-Score, which I really hope was based on the 1960’s show “F-Troop.”  I’d go through the list, but it’s much easier to pop up a link.  So here’s the (LINK) to Piotroski’s criteria.

ftroop

I think that Agarn was a horrible value investor . . . did you see the episode where he traded the blankets for a handful of small marbles that were supposed to bring Custer back from the dead?

Source- mycomicshop.com

Profitability

  1. Return on Assets (1 point if it is positive in the current year, 0 otherwise);
  2. Operating Cash Flow (1 point if it is positive in the current year, 0 otherwise);
  3. Change in Return of Assets (ROA) (1 point if ROA is higher in the current year compared to the previous one, 0 otherwise);
  4. Accruals (1 point if Operating Cash Flow/Total Assets is higher than ROA in the current year, 0 otherwise);

Leverage, Liquidity and Source of Funds

  1. Change in Leverage (long-term) ratio (1 point if the ratio is lower this year compared to the previous one, 0 otherwise);
  2. Change in Current ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  3. Change in the number of shares (1 point if no new shares were issued during the last year);

Operating Efficiency

  1. Change in Gross Margin (1 point if it is higher in the current year compared to the previous one, 0 otherwise);
  2. Change in Asset Turnover ratio (1 point if it is higher in the current year compared to the previous one, 0 otherwise);

The lower the F-Score, the crappier the company.

And it, when combined with the screen above the Piotroski F-Score produced a return 7.5% higher than any other Value Investing test.  So, does Honda suck or not?

I don’t know.  But I’m going to check with the help of Dr. Piotroski.

But the biggest failure in Value Investing is to allow your emotions to rule.  Markets are driven by emotion:  Elon Musk is awesome, so I’ll buy Tesla!!!!!

Tesla might be awesome, but there are way too many Tesla fans for the price to be rational.  Part of finding value in the market is understanding that you want to buy at the lowest prices.  When are the lowest prices?  “When blood is running in the streets.”  When people have given up.  When people are running scared.  At that point, amazing companies can be picked up at incredible values.

In April of 2000 I was thinking of buying Microsoft®.  I had generally been a pessimist, but, at a certain point, I was finally ready to give up being a pessimist.  I was talking to a broker and then . . . the Dotcom Bubble burst.  If I had bought Microsoft© back then?  It would have taken thirteen years to be at breakeven.  And that’s not including inflation, which ate away at the buying power of the dollar.

But can I still get a Cheeseburger in Paradise?  Sure!  Jimmy Buffett will even have a Margarita with you if you have the proper parrot apparel.  But don’t expect Warren Buffett to pay for it.  But he will take your discount coupons so he can use them to get some suits he bought in 1983 altered.

 John Wilder has no positions in any stock mentioned, and won’t take any for the next week or so, until he can calculate the F-Score of Honda.  Especially Tesla – he’s not buying that though he loves Elon.  John Wilder is NOT a financial advisor.  And he’s had wine tonight.  Don’t trust him.

End of Empires, PEZ, and Decadence

“We shall fight in the hills; we shall never surrender.  And even if this Island or a large part of it were subjugated and starving, then our Empire beyond the seas, armed and guarded by the British Fleet, would carry on the struggle, until, in God’s good time, the New World, with all its power and might, steps forth to the rescue and the liberation of the old.” – Dunkirk

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A marker of the change from Conquest to Commerce.  Hey, we have Porto Rico!

Sir John Glubb had the unfortunate luck to be born with a name that is most frequently associated with near-drowning experiences, but from his title of “Sir” it looks like he did okay.  He first was commissioned as an officer in the British Army in World War I (World War I was the one without the Japanese).  After that, like the United States, he spent the next 30 years meddling in the affairs of the Middle East.  He first went to Iraq, then was in charge of the fighting force of Jordan.

No, not Michael Jordan’s personal army of ninja warriors – they’re called the JNB, or Jordan Ninja Brigade, but something called the “Arab Legion” of Jordan (the country) that was considered for a time the most effective army in the region.

Eventually Sir Glubb and King Hussein of Jordan came to an agreement – Sir John would stop coming to work and the King would stop paying him.  Glubb retired to England where he did a LOT of writing.  What brought Sir Glubb to my attention was one essay, called “The Fate of Empires and Search for Survival.”  You can download the .pdf here (LINK).  It’s pretty straightforward.  I’d first read this several years ago, but was more recently reintroduced by a link from The Patrick Henry Society (LINK).

As we’ve discussed before, there are others that predict history on a cyclical basis (Fourth Turning – LINK), and there are various ways to look at a significant societal change, from the articles on the Roman Empire (LINK), how Collapse Happens – Seneca’s Cliff (LINK), to a general theory of the Collapse of Complex Societies (LINK).  These are interesting stories – life goes on day after day in a continual sameness until . . . everything changes.

Now, that’s not to say that everything changes all at once.  We study the French Revolution in school (or at least I did) and went from the:

  • French Revolution to the
  • Terror to the
  • Rise of Napoleon to the
  • Fall of Napoleon to
  • Friday the 13th Part II Rise of Napoleon to
  • Napoleon III, Final Chapter

It takes (at most) a week to go through that period of history.  And it’s pretty exciting stuff, if presented well.  An entire stable society is tossed into an upheaval that results in massive change.  And when confined to a school desk it seems that if you lived in France, that all of this change was happening at warp speed!

But the Bastille was stormed in 1789, and Napoleon died in exile in 1821.  The events we covered in a week played out over 32 years, which is more than a generation.  If you were born in 1789, you could have fought at Waterloo with Napoleon.  This change would have seemed natural to you if you were in France, and the only way you can observe it (beyond freshman world history class) would be to take time to look at the events of the world in a bigger-picture way.

So, Glubb, being fired and all, spent his time in study of the rise and fall of the world’s empires.  (All quotes that follow, except where noted, are from Glubb’s essay.)

However this may be, the thesis which I wish to propound is that priceless lessons could be learned if the history of the past four thousand years could be thoroughly and impartially studied.

-Glubb

Glubb then pulls out a table and points to start and end dates for several empires and makes the assertion that empires have a maximum lifespan of about 250 years.

Empire Span
Assyria 859-612 B.C. 247
Persia 538-330 B.C. 208
Greece 331-100 B.C. 231
Roman Republic 260-27 B.C. 233
Roman Empire 27 B.C.-A.D. 180 207
Arab Empire A.D. 634-880 246
Mameluke Empire 1250-1517 267
Ottoman Empire 1320-1570 250
Spain 1500-1750 250
Romanov Russia 1682-1916 234
Britain 1700-1950 250

Okay, my criticisms first.

  • He’s cherrypicking Western Civilization and the Middle East. What about Japan?  China? The Disney® Empire?
  • How did he pick the dates? There is a degree of subjectivity there.
  • He totally had to make up something to explain Rome. Rome doesn’t really follow his 250 year model.

That being said, you could make an argument that his dates are sorta right.  And he produces anecdotal evidence to back up his assertions in his text.

Likewise, Glubb notes that these durations appear to be roughly tied not to technology (it varied) communication speed (varied widely for the world-spanning British Empire and the Greek Empire), or contiguous nature of the empire (see Britain again).

I can even (sort of) support his dates on the cases I’m familiar with.  Everyone would agree that the British Empire was gone by 1970.  1960?  Probably most?  1950 might be a bit early.

DSC02988

Possibly, this statue knows (nose?) that he doesn’t help Glubb’s thesis. 

So, if this 250 maximum life (*Rome Not Included) isn’t related to technology or geography, Glubb reasoned it was related to human longevity, and his theory was that it represented 10 human generations.  Differing generations of people in the empires reacted in different ways based upon their experiences in the progression of empire.  He even broke down the empire’s phases:

  • The Age of Pioneers/Outburst – In the US, Glubb argues, the age of the Pioneers was spent conquering the continent. Other places, a dominant culture takes over the nation.  This is the era of television shows involving guns and bears.
  • The Age of Conquests – Immediately after the energy of the Outburst, the nation forms a military that leads to conquest. Television?  Guns, no bears.
  • The Age of Commerce – On the newly conquered land, per Sir John, every factor is in place for massive expansion of commerce as new systems are established and older trade barriers fall. “The proud military traditions still hold sway and the great armies guard the frontiers, but gradually the desire to make money seems to gain hold of the public.” Television? Not much.  It’s like an accounting show.  Some railroad robber baron shows.

“The ancient virtues of courage, patriotism and devotion to duty are still in evidence. The nation is proud, united and full of self-confidence. Boys are still required, first of all, to be manly—to ride, to shoot straight and to tell the truth. (It is remarkable what emphasis is placed, at this stage, on the manly virtue of truthfulness, for lying is cowardice—the fear of facing up to the situation.)”

  • The Age of Affluence – All the commerce leads to wealth. Television:  Soap Operas and shows involving women in bikinis.  The wealth leads to a change in values:

“The first direction in which wealth injures the nation is a moral one. Money replaces honour and adventure as the objective of the best young men. Moreover, men do not normally seek to make money for their country or their community, but for themselves. Gradually, and almost imperceptibly, the Age of Affluence silences the voice of duty. The object of the young and the ambitious is no longer fame, honour or service, but cash. Education undergoes the same gradual transformation. No longer do schools aim at producing brave patriots ready to serve their country.”

  • The Age of Intellect – A few great schools are the hallmark of the early Empire. By the Age of Intellect, every Podunk town has a community college.  Television:  Community®.  And the effect isn’t good:

“Thus we see that the cultivation of the human intellect seems to be a magnificent ideal, but only on condition that it does not weaken unselfishness and human dedication to service. Yet this, judging by historical precedent, seems to be exactly what it does do. Perhaps it is not the intellectualism which destroys the spirit of self-sacrifice—the least we can say is that the two, intellectualism and the loss of a sense of duty, appear simultaneously in the life-story of the nation.”

  • The Age of Decadence – This passage I found striking in Sir John’s essay: “The word ‘celebrity’ today is used to designate a comedian or a football player, not a statesman, a general, or a literary genius.”  Certainly Johnny Depp would be a celebrity in any age, right?  Television here?  Men in bikinis.

The characteristics of the Age of Decadence is given particular emphasis by Glubb:

  • Defensiveness – (Here Glubb means the country doesn’t care about duty or honor, just keeping luxury and comfort.)
  • Pessimism
  • Materialism
  • Frivolity
  • An influx of foreigners
  • The welfare state
  • A weakening of religion

Decadence is due to, per Glubb:

  • Too long a period of wealth and power
  • Selfishness
  • Love of money
  • The loss of a sense of duty

I’d argue that Glubb’s “reasons for” Decadence are subject to argument, but they’re not out of the question.  I’d argue to add the increasing coddling of children so that we don’t ever let them experience true hardship, at any costs.  My parent’s playground had a merry-go-round that cut a kid’s legs off when he fell down.  My playground put planks over the spot where he fell through.  My kids?  Soft fluffy pillows are under the swings, and games like “tag” are unapproved, whereas games like “competitive sitting while quiet” are looked on with approval by the school’s cadre of lawyers.   I could take live ammo to school and once found a live tear gas grenade on school property.  Today’s kids?  Plastic knives are out of the question.

But I think that there are few who would argue that the United States isn’t (currently) the biggest empire the world has ever seen.  The United States has 800 military installations in 70 countries.  The United States has convinced the world to use the dollar as the world currency.  When Nixon took us off of gold-dollar convertibility (a “temporary” measure) it amounted to the United States being able to tax the entire world.  How?

We used to send them dollars that we printed up, in exchange for cool stuff, like iron ore, oil, and other raw materials.  They took these dollars that we just made up.  Profit margin for the government?  100%.

Nowadays, printing up those dollars is just too painful and expensive.  We now just exchange electronic information so that electronic dollars that we “create” are shipped via the Internet to other countries.  And, for whatever reason, everybody agrees that this is a good deal, and they keep sending us stuff, like cars and other finished products.  But we have our standards.  We still make our own Pez®.

pez

PEZ®, it’s what does a body good.  Like Brawndo©, which has what plants crave.

So, I’d call the United States an empire, both economically and militarily.  And while the world has benefited from the peace, the United States has benefited economically to an unprecedented degree.

And if you look at the points that denote Glubb’s “Decadent” stage of empire, I’d say that there is empirical, scientific evidence for at least six of the seven points.  Now it should be noted that Glubb noted these points in other civilizations as well.  He noted that in the Arab Empire, Arabs becoming a minority in their own capital and women studying for and being allowed in what they considered traditionally male professions, like being lawyers.

What happens on the other side of Empire?

It seems like Britain is still there.  They went through a very rough patch as the British Empire crumbled.  Economic output dropped, and children were required to wear gloves without fingers, be grubby and put soot on their ruddy cheeks.  But as it adjusts to a new role in the world.  At the start of World War II (the one with cool tanks) the Royal Navy had 1400 ships, and it was the largest navy in the world.  Now Wikipedia claims they have less than 70.  And most of those are used to haul lime, rum, and fish and chips to their sailors.  And, as of this writing, the Royal Navy has zero aircraft carriers.

And, it’s understandable – their empire, like Paula Abdul’s career, is over.

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This is what a Royal Navy Ship of the Line looks like in 2017.

I think that, economically, Britain has gotten a temporary reprieve due to the North Sea oil reserves, plus their sales of merchandise related to Lady Di.  Otherwise, I think that their trajectory remains on a downward arc.  Recently I read a story that indicated that infrastructure (roads, bridges, etc.) was in pretty bad shape outside of London, which would again be indicative of the end of empire – constrained resources can no longer support the infrastructure created at the peak of empire.

What does this portend for the United States?

If the Roman model is in play, we’ll end up with a Caesar – a ruler that will follow many of the previous forms of government, but also be a more despotic ruler.  The courts and legislature will exist to support him.  A leader of this type would reinvigorate and replace the current pessimism, materialism and frivolity with a renewed focus on maintaining and expanding the power of the empire at the expense of freedom and liberty.  After a rough patch, most people will be okay with this.  Good points?  Cool buildings and triumphal arches.  Bad points?  Purges of people who believe that President for Life Carl XV isn’t tall enough.

It’s possible that we head the other way, the soft slipping into fractured irrelevance that other empires (like Britain and Spain) have undergone.  The bigger cracks would be the fall of the currency into irrelevance . . . be like how, in Hemingway’s The Sun Also Rises, Mike went bankrupt: “Two ways,” Mike said. “Gradually and then suddenly.”  At least we have all that cool stuff we got from China, right?

There would be big disconnects on the way down, but then long periods of uninterrupted economic and social malaise.  But the end of empire isn’t horrible.  At least we’ll send our version of The Beatles® to the new empire.  My bet is that it will be into the new world capital of our Canadian Overlords.

Greater Ottawa, anyone?

Jordan Peterson, Success, Bruce Campbell, and Roman Emperors

Discovery Channel© has Shark Week™, and at Wilder, Wealthy and Wise® we are lucky enough to have Dr. Jordan Peterson Week©.  This is the third of three posts on Dr. Jordan Peterson – his website is here (LINK). My first post on Dr. Peterson can be found here (LINK), and the second post here (LINK).

 

“Jamie, how many 29 year old record company presidents operate out of their mom’s trailers? Know what I’m sayin’?”- J-Roc’s Mom, “Trailer Park Boys

DSC04463

Oil Tank Dennis Quaid (playing Sam Houston) knows a little bit about Oil Tank success, starting his own Oil Tank country and all.

I had intended on just doing three posts this year on Dr. Peterson, but will probably do updates from time to time, since his ideas are stone-cold interesting and I think I could do six weeks of posts on those ideas without repeating myself, but if I did that we’d just have to hand over the reins to Jordan, and I own the domain name, and I don’t think he’d share the revenues.

Elon Musk almost always has something going on, too.

Monthly updates about these guys?  We’ll see.

(By the way, Elon, GOOD JOB dumping Amber Heard, she’s really not worth a Prius®, dude.  I’m telling you – she is trouble and likely a Terminator® sent by James Cameron from the future to mess with your Mars (LINK) plan.  You dodged a bullet!!!)

The_Man_Who_Sold_the_Moon_Shasta_Ed

Now a 100,000% better with no Amber Heard. (image, Wikipedia)

But this is Wealthy Wednesday, and Dr. Peterson has a lot to say about success (and, it seems, almost everything else), which is reasonable given the unreasonable amount of success that he’s had, especially recently.

Today we’re going back to those forty points that Peterson laid out on Quora (LINK) in response to the question “What are the most valuable things everyone should know?”  In the analysis on Truth last post (LINK), Dr. Peterson had 16 out of 40 points that related in some way to Truth (I know, we could quibble, was it 15 or 17, but why quibble, since we’re friends?).  Are there any of the 40 points that speak to success?

Yes.  Dr. Peterson speaks on things I consider to be huge when it comes to a deep, meaningful success that combines significance with economic success.  I mean, why would you want a Justin Bieber-level success if you could have success that mattered, like Bruce Campbell?

Bruce

A perfect gift for any occasion!

Peterson has several videos on YouTube® that directly tackle important personal development points that lead to success:  fear (and how to overcome it), the importance of having a routine, where to find the freshest and plumpest Pez®, and how success leads to even more success.  I encourage you to watch the videos.

But going back to the 40 points.  Many relate to behaviors (behaviours in Canada, eh) that lead to success.  These are quoted below (bold) with Dr. Peterson’s gracious permission.  My commentary follows.

  • Pursue what is meaningful, not what is expedient. – There is always the opportunity to do things just for the moment, but when you work on what matters? That leads to long term success and value.  This means that, no, eating only appetizers doesn’t make a good dinner.  You need cake, too.
  • If you have to choose, be the one who does things, instead of the one who is seen to do things.   Do them so you how to do them.  Do them because they are meaningful.  Do them because it’s right.  Doing them just to be seen?  Yeah, we wedgied that guy in High School.  That’s the worst kind of smarmy dude.
  • Pay attention. Sorry, dozed off.  Oh, yeah.  People notice when you take them seriously, when what they say matters to you.  If you’re not present in the moment, those that are will notice.  And you’ll miss important things.  “Hang on, honey, I have to tell Google that they should lower their price to $750,000.  They want a million bucks!  Stupid college kids.”  (Yes, that really happened, and he did not get the deal.)
  • Assume that the person you are listening to might know something you need to know. Listen to them hard enough so that they will share it with you. There is an implied Trustworthiness in this statement.  Be worthy of their trust.  Realize that Truth is not where you look, it’s where you find it.
  • Be careful who you share good news with. Bad bosses get jealous, and even good people get jealous.  Similarly, don’t appear too good to your boss.  A boss that’s intimidated by you is not generally a rational boss.  If you have to make that calculation, beware.  Likewise, sometimes your friends get a bit tired of hearing of an endless sea of victory.  Be real to them.
  • Be careful who you share bad news with. People who don’t like you (or to whom you just represent a tool) can use that news against you.  Similarly?  Don’t share your weaknesses.  Hey, Clark Kent – your boss does NOT need to know that you’re nearsighted and break out in hives every time you’re near a little kryptonite©.  Also, your bad news might be insignificant compared to someone else’s bad news.  Your very worst day might be better than the best day of the person you’re talking too.  “Oh, my, and the caviar was nearly off!  I made do, however,” won’t go too far if the other person can barely afford to pay their chauffer and their private pilot.
  • Make at least one thing better every single place you go. The right people generally appreciate this.  They see it, and it’s obvious.  If they don’t see it?  You know, deep inside, it was the right thing.  A guy was working really hard on making a concrete footer smooth.  I pulled aside his great-great-grandboss.  “You know that’s going to be buried, right?  I’m good if it’s a bit rough.  Heck, it’s really even better if the concrete is rough.  More friction.”  Boss’s response?  “It’s his work.  The man has pride in it.  I’ll let him own it.”  What a good answer.
  • Imagine who you could be, and then aim single-mindedly at that. How many days do you want to spend being the you that isn’t the best you?  The first step is imagining.  Once you’re there, Von Mises (LINK) will take over.  If you see a better you, a path to get there, and believe that your action can take you there?  Nothing can stop you.  Unless you told your boss about the whole kryptonite® thing.
  • Do not allow yourself to become arrogant or resentful. Good things will happen to you during your career.  Bad things will happen to you during your career.  People will step on you (if they can) to elevate themselves over you.  You’ll forget the contributions of great team members.  Focus on this:  You’re never as good as people think, or as bad.  You have had amazing help through your life.  “Don’t spend time hating the situation.  The situation doesn’t care.” (Marcus Aurelius, probably)

Marcus

Unknown Sculptor, Pierre-Selim (Self-photographed) [CC BY-SA 3.0]

Why is it that when I wear a toga to work that they think I’m a little off?  Marcus rocked his!

  • Work as hard as you possibly can on at least one thing and see what happens. This implies that you’re going to get rid of the fear of failure.  If you try, really hard, and fail, what will happen?  Mainly, nobody notices, except you.  And you get stronger.  It has been my experience that the harder I work at something, the better I get.  And sometimes I achieve results that are beyond anything I ever could have expected.  And other things fail, but I learn a little bit more each time.
  • Maintain your connections with people. Outside of graffiti artists, The Mrs., and Keanu Reeves, most of us don’t work alone.  Most of us depend on others to make us better, make us stronger.  There’s a natural pull for certain people (introverts and those under stress) to pull back, mainly when they need other people the most.
  • Do not carelessly denigrate social institutions or artistic achievement. The stupid form you just filled out?  Yeah, somebody had to design it, and they had a reason.  See if you can make the form better, after understanding why it even exists.
  • Nothing well done is insignificant. There is the possibility of beauty in the most mundane and base of tasks – cleaning a microwave oven can be significant, especially when it’s done well.  I can show you the fulfillment you will get from cleaning a microwave.  See you at my house on Saturday?  Only a minimal charge for this lesson.  (H/T M. Twain)
  • Dress like the person you want to be. True enough.  Some days I’m Homer Simpson.  I would just love to be involved in those wacky adventures!  Danger point:  If you work at a construction company and dress like an investment banker you will be mocked.
  • Be precise in your speech. Meaning is important, and certain people follow only concrete statements.  Precision in a concrete fashion is especially important to them – their brains don’t understand exaggeration for effect.  Likewise, when someone asks you a yes or no question?  Answer yes or no before you explain the answer.  They might not care why.  And precision in speech leads to truth.
  • Stand up straight with your shoulders back. Posture feeds directly into mindset and emotion, and in guys pumps testosterone up when done right.  Standing tall and strong like a superhero, hands on hips?  Yeah, you’ll feel like a superhero, and being a superhero is a great way to get important things done.  Especially if “things” is slicing up people with metal claws.
  • Don’t avoid something frightening if it stands in your way — and don’t do unnecessarily dangerous things. Bosses hate fear and like courage (good bosses).  They also understand risk.  They like it when you take appropriate
  • Notice that opportunity lurks where responsibility has been abdicated. There will be times when you will see something undone.  Do it.  It will be noticed.
  • Be grateful in spite of your suffering. Nobody likes a whiner or wants to spend time with a whiner.  Nobody wants to hear a whiner whine except his enemy.  Everyone suffers.  To repeat myself, your worst day is better than someone’s best day.  Act like it.

Dr. Peterson is doing more than writing about success, he’s quarterbacked creation of a software suite called “Self Authoring,” (LINK).  Note that I am not as of this writing date getting paid if you sign up.  I’ll let you know if that changes.

The concept behind Self Authoring is to work through issues – fix yourself – by revisiting and writing about events in the past that were particularly difficult for you or in some way may be holding you back.  Additionally, there’s a focus on writing a future as well to create a meaningful goal or set of goals to work for, sort of an anti-nihilism pill.

Bill Gates probably doesn’t need this.  Those who are able to be pretty clear of their past and are able to perform at a high level already based on solid future goals are probably not the target market, though Dr. Peterson did say that one driving factor in designing and creating this tool was from requests by companies for ways to help their high performing employees perform on an even higher level.

When people write about their painful past, people experience long term positive impacts (compared to a control group).  Likewise, another group constructed and wrote about their future, and had similar impacts (when compared to the control group).  I have theories about everything, but I wonder if confronting past trauma made them braver?  I wonder if it allowed them to really examine what happened in context and they were able to trace the impacts to their present state?

In the end, Self Authoring is consistent with Peterson’s maxim – you have to fix yourself.

I wonder if that’s part of the mission of this blog?  I know that Orthodixie (LINK) (another blogger from my past, an Orthodox Priest with a Carolina accent, and no, I’m not making that up) and I would talk about how blogging let us mentally, “take out the trash,” and how much better we felt after we’d gotten something out on paper, even something unrelated to the things that were bothering us.  I’ll probably give the Self Authoring program a try.  I’ll let you know how it works out . . . but get yourself a Priest as a drinking buddy if you can.  It always amused The Mrs. when I engaged him in theological debate after wine.

Me, I’m still cleaning on my room, making it a little better each day.  I know that The Mrs. is very much looking forward to me being done with that.

Dr. Jordan Peterson, Truth, and Even More Truth

This is the second of three posts on Dr. Jordan Peterson – his website is here (LINK). My first post on Dr. Peterson can be found here (LINK).  The third post can be found here (LINK).

“J-Roc raps about gangsters and guns, pimps and hos and Compton.  The guy’s not from Compton.  He’s a white kid from a trailer park.  He should rap about what he really knows which is living in his mom’s trailer eating peanut butter sandwiches.” – Trailer Park Boys

DSC02040

When I think that society is too complicated, I then remember that I couldn’t even take this picture without the help of the millions of elven technicians that live in my camera.  Then I cry.

As a reminder, Dr. Peterson is a psychologist that teaches at the University of Toronto, but don’t hold that against him:  he seems to be one of the good Canadians at this point, though a bit fixated.

On what is Peterson fixated?  Dr. Peterson seems to be obsessed, and not with Pez® or Japanese tentacle pudding cups like a normal man.  No, Peterson is obsessed with the truth.  Earlier this year in response to a question on Quora, (LINK): “What are the most valuable things everyone should know?” Dr. Peterson didn’t come back with a 250 page book priced at $43.50 (I’m talkin’ about you, Dr. Tainter (LINK)) but rather a fairly simple 40 item list.  I’d suggest you go over and read it – it’s not bad.  My list would be different, but you’ll have to wait for a new post for my list – this post is all about Peterson.

I’ve often heard it said, if you want to know who someone is, just ask them.  I was reading an article on the web where these psychiatrists were attempting to figure out a test to give people to determine if they had narcissistic personality disorder.  The best test they’d yet determined was to ask them, “Are you a narcissist?”

Narcissists seem pretty proud answering, “Yes, I am!  Because I’m so awesome!”

Nice.  So, with that in mind, let’s listen to Dr. Peterson.

Dr. Peterson’s first rule is:

Tell the truth. 

Simple.  I think we all learn to lie about stuff as soon as we learn about consequences.  We all start out as horrible liars, since being three years old doesn’t exactly pop us to the top of the “able to make up good, convincing lies” chart unless your parents are very, very stupid.

After playing with lies, if we are very, very, lucky we learn that lies are really, really bad.

I’ll tell you my story, because I’m just enough of a narcissist to think you might be interested.  Because I’m that interesting.

I’ve been divorced, and can attest that divorces are very expensive because they’re worth every penny.  My first wife and I didn’t have personalities that really matched very well.  To top that, neither one of us was very good at telling the truth to each other – it was like a US-USSR arms race where, instead of stockpiles of nuclear weapons, our Cold War involved an ongoing series of falsehoods aimed at one another.  She was relieved to move out.  I was relieved when she moved out and was replaced by Boris Yeltsin (for a short time).  It took tanks and a promise of vodka to get Boris out of the house long enough to change the locks.

Regardless, I could see the impact that lies and distrust had made in my life, and I made a personal vow that, no matter what I did in the future, I would always tell anyone in a future relationship the Truth.  No lies.   And I have told the Truth, regardless of the outcome to The Mrs. since we met.  One time I called home, late, while I was still at work.  I whispered into the mouthpiece, “Can’t come home right now.  Governor of the state is in the office right next to mine, surrounded by news media, talking to my boss.”

The Mrs. only reply was, “Okay.  See you when you get here.”

By this time, we’d been married almost eight years, so, based on my constantly telling the Truth during that time, plus during every interaction before we got married, I think I could have called up and said, “Honey, been picked up by a UFO, and they have Elvis and we’re going out for ribs and beer.  Be back before 11pm.”

This may or may not be what happened to me.

She might have believed that was what was really happening, but she would certainly have believed that I thought it was the Truth.

And this has paid off during my entire relationship with The Mrs., in dividends, though certainly she knows better than to ask my opinion on anything where she doesn’t really want a True answer.  Has it caused friction?  Very rarely.  It did today, because I told her my opinion, and was told (essentially) that she didn’t want that right now.  Sometimes Truth is not what we want.

But in every case, it has led to harmony and trust.  If you have a partner who always tells you the Truth, you know you have someone who is on your team, always.

But back to Dr. Peterson.

In response to the Question on Quora, he listed 40 points.  By my count, 16 of them (40%!) dealt directly with Truth.

Here they are, quoted with permission, with my commentary:

  • Tell the truth. Discussed above.  The core of Dr. Peterson’s points.
  • Do not do things that you hate. If I were to quote Shakespeare, I’d quote Hamlet here: “To thine own self be true.”  Oh, I guess I just did.  This is Truth to self.  Your hate (if everything else is set right) will be based on the dissonance of what you’re doing and your best self.  You’re avoiding Truth by doing things you hate.
  • Act so that you can tell the truth about how you act. Directly related to the above, the idea of having to tell someone, Truthfully, what you did prevents you from doing things you would be ashamed of.  Which would include eating a whole bag of Ruffles®, unless it saved an orphan in some way.
  • Pursue what is meaningful, not what is expedient. Again, this is more “Truth to self.”  As my coach in high school said, “Wilder, when you cheat on those pushups, you’re just cheating yourself.”  I kid.  I never cheated on pushups in high school.  I cheated on squat-thrusts.  But, when cheat yourself from the Truth of the meaningful, you end up with the never ending squat thrusts of the expedient.
  • If you have to choose, be the one who does things, instead of the one who is seen to do things. I had a boss who was always seen doing things.  In reality, he mainly was responsible for ensuring we had a constant Internet connection, mainly by surfing for things that amused him.  But if there was a way to be seen by his boss doing the “right” thing?  He would move faster than a miniature poodle on a porkchop to get in the credit zone.  I’m pretty sure he’s never been happy, especially since his strategy is to always look good, but he has none of the skills to create great outcomes.  My corollary:  Do things, and be seen doing them.  You can have both.  But never stop doing things.
  • Imagine who you could be, and then aim single-mindedly at that. Again, the theme of being Truthful to oneself continues.  But this is aimed at being Truthful to the long term you.  If you cheat that you, you’ll always have regrets, and probably termites, too.
  • Try to make one room in your house as beautiful as possible. “Who says that fictions only and false hair become a verse?  Is there in truth no beauty?”  Okay, I stole that from the poem “Jordan (I)” by George Herbert, 1593-1633.  And that’s creepy, because I only learned the poem’s name or author tonight – to me it was just the title of a sub-par Star Trek episode (the one where Spock goes temporarily blind).  But outside of the creepy factor of researching a poem to find that it has the same name as the person you’re writing about, beauty is truth, and truth is beauty.  The elegance of pure math.  The sudden discovery of a True thing.  The Wilder corollary to this one:  ugly things around your house steal your energy.  Fix them.
  • Work as hard as you possibly can on at least one thing and see what happens. Again, Truth to self.  I have seen people with amazing skills and talents just stop on their way upward – because they are afraid to fail.  I’ve done that myself, until a very visionary leader told me, after I’d explained what he wanted was hard to do, “Wilder, just do it.”  Nine times out of ten when he told me that, I achieved it.  The tenth?  He got fired.  But he got a severance package worth about $1.4 million.
  • Do not carelessly denigrate social institutions or artistic achievement. There is truth in beauty.  There is also truth in the stable social constructs that have created wealth, peace, and Pez® for thousands of years.  Tear them down?  It’s easy.  But can you tear them down and put up something even better?  Probably not.  Can you make them better?
  • Make friends with people who want the best for you. Again, Truth is your primary commodity here.  Friends who want the best for and from you will tell you the Truth.  Others won’t.  One time I saw the head of operations for a company walk down the hall with about three feet of toilet paper trailing behind his waistband, top center behind, like a big, white, fluffy skunk tail.  Nobody else saw him.  I didn’t tell him when he walked out of his office, somewhat flushed and embarrassed.  He made small talk until he realized I wasn’t going to say, “Hey, saw your toilet paper tail and I’m going to tell everybody!”  And I didn’t tell the office.  He was a nice guy.
  • Set your house in perfect order before you criticize the world. How is it possible that you have the answer to world peace, and there’s a towel on the floor in your room?  Or your son hates you?    Thought so.  Fix the things around you so you understand the Truth required to fix the world about you.  I’m still working on cleaning my room, so, my advice is suspect.
  • Be precise in your speech. Precision in speech means . . . you say exactly what you say you mean.  Which is?    The Truth.  And if you go back to Orwell, removing words, or making them mean things they don’t removes the ability to even make certain arguments through language, so at some point the Truth isn’t even possible to utter anymore.
  • Do not let your children do anything that makes you dislike them.  By not teaching Truth to your children you cripple them to find Truth on their own. And finding Truth by yourself is harder than finding a clean spot on Johnny Depp’s sink.  As smart as your children might be, they are not wise, and need you to guide them through Truth so they might find Wisdom, and through Wisdom enough money to pay for your retirement home some future day.
  • Do not hide unwanted things in the fog. We try to hide Truth from ourselves every day.  We look in the mirror and manage to not see what anyone else in the world can plainly see.  While there is no reason that you have to tell the world your deepest regrets, you should at least be able to see them and understand that they are True.
  • Read something written by someone great. Great people write Truth, that’s why what they write is great.  The more profound the Truth, generally, the simpler.  But a great writer can, in 200 pages, take you on a journey that wraps you around and through a path where you walk to Truth.
  • Remember that what you do not yet know is more important than what you already know. As much as we search for the Truth, we learn more every day.

Here is a Peterson theme:  Truth in a Post-Modernist context is always relative and always the product of the culture that created it.  It ceases to be objective Truth, and becomes a relative truth.  From the points above, you might predict that Peterson would reject Post-Modernism because it denies the very existence of Truth.  And you would be right.

The battle lines are set: Modernism vs. Post-Modernism and the very existence of Truth.

What amazes me is that it is clearly explicable in our world that there are objective facts that are True, yet in a Post-Modernist viewpoint, nope, not so.  Therein lies the ultimate fight between Peterson and Post-Modernism – Peterson is on the side of Truth, and his opponents deny that Truth even exists.

There are too many points, too many places where Truth is not the relative product of a culture to even begin to argue that truth doesn’t exist.  (If you must have an example:  there is a force we call gravity that causes mass to clump together.  Truth.  Gravity is not a social construct.  There are cultural Truths as well, but I’m not going to open that can of worms with this post.)

So, I’ll allow that the narcissistic side of my personality is pretty sure that you’ve enjoyed this, but the Truthful side knows that you did.

As for me?  I’m with Dr. Peterson.  Go with the Truth.  It’s a winner.