Category: Big Thoughts

Bitcoin, Satoshi, and Belief

“Violent ground acquisition games such as football are in fact crypto-fascist metaphors for nuclear war.” – Back to School

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Does this look like the Bond villain Satoshi Nakamoto who put together the million 7 bitcoin fortune???

As a family we often go out together for Friday night dinner.  It’s a nice way to close the work week prior and get together as a family and talk.  We (generally) have a strict policy of leaving the phones at home (LINK).  A corollary rule is “no talking about computers” at dinner, mainly to keep The Boy and Pugsley from entering a nerd mind meld where they talk to each other in binary:

The Boy:  0101 1001 110010 10011 0111?

Pugsley:  10010!

Both:  Laughter.

On this particular Friday, The Boy would not shut up about bitcoin.  (฿ is one suggested Internet symbol for Bitcoin.)   He told me how bitcoin was a cryptocurrency – a currency that uses cryptography to verify transactions and make sure that some people don’t just counterfeit a bunch more of them.

You prove that you have a bitcoin via mathematical checks that only work if you have the “magic number” – your key to your money.  Again – secret codes – cryptography – is used to access your money.  Lose the code?  Not only can you never use your money – no one can ever use it again.

Bitcoin is also unique in that it’s mined.  Not in a real mine, but by using computer processors to break yet more codes through trial and error.  It’s not like all the bitcoins were available on day one – the inventor of bitcoin designed the system so that code breaking the next bitcoin is harder than code breaking the last one, so it gets exponentially more difficult to crack the bitcoin codes.

When people first started mining the coins, they used a computer processor.  Then someone came up with the idea to use graphics cards, like the ones in your computer that generate the images you see on the screen to do the processing.  Sounds crazy, but the graphics card is an order of magnitude better at doing the math than the processor.  Right now, most bitcoin mining is done on purpose-built processors, and a lot of it is done in cold places (Iceland) to make it easy to dump the heat from the processing with cheap electricity (Iceland has cheap electricity from geothermal).

Bitcoin started not only with a set number of bitcoins in the future, it was introduced in tandem with something called “blockchain.”  Blockchain is an open ledger system where people look at and record transactions.  If everyone looks and sees the transactions (not the details, mind you) then everyone agrees that a transaction happened.  There are multiple copies of this ledger, so it’s redundant and decentralized.  There are some people who think that blockchain might be the real innovation that will long outlive bitcoin.

I looked at The Boy as his tutorial on bitcoin came to an end.

“How many bitcoins do you have?”

“Five.”

I was astonished.  The Boy was 12.  He had, in his bedroom, concocted a scheme where he mined an alternate cryptocurrency (litecoin) and traded it back and forth between different currencies until he (finally, at peak wealth) had seven bitcoin.  When he had seven bitcoins, his net wealth was several thousand dollars.

“Okay.  The computer comes out of your room.”  I had no idea he was a budding day trader.

Eventually his trading losses ate all of his bitcoins, besides a few he used to register a domain name.  He even gave me 0.5 bitcoins for my birthday in 2012, but, I gave it back to him.

Yeah.  He gave me something that is worth about $8500 today.  Biggest birthday present to me, well, ever.

But don’t feel bad, at least I didn’t trade away $123,060 (today’s value) worth of bitcoin.  Like he did.

Even stranger is the origin of bitcoin.  It was created by a shadowy internet figure who used the name Satoshi Nakamoto.  Since he originated it, he also mined the first million bitcoins – worth $19 billion dollars today.

Yeah.  And they’re just sitting there.

Did he lose his secret code?  Is he dead?  Is he waiting to buy New Zealand?  Was Satoshi the CIA?  Was he a time traveler from the future?  What if it was created by the first sentient AI as a plot to crash the economy?  No one really knows if he is even a he, or if he is alive or frozen in nitrogen next to Walt Disney.

Yeah.  Weird.

But bitcoin exists.  And now it’s recognized as a commodity like pork, oranges, or PEZ® and traded in futures markets, which are regulated by the Securities and Exchange Commission.

What’s going to happen with bitcoin?

I’m not sure.  Predictions are pretty hard, especially about the future.

In the past, every single currency that’s not based on something like gold which prevented wanton printing (called a “fiat” currency, after the Italian car) has eventually failed.  Bitcoin isn’t based on gold, but it is based on the mathematical certainty of scarcity – once it’s all mined out in a decade or so, there won’t be anymore.  Ever.  In fact, the amount of bitcoin in circulation will end up getting smaller over time as people lose the secret code for their wallets (this happened to The Boy – he has a wallet with about 0.001 bitcoins in it.  About $180.  But can’t get the code.  And if he can’t?  Those coins are lost forever.  Theoretically, we could divide bitcoin forever.  And the losses mean it will go up, not down in scarcity.

Additionally, bitcoin has no government backing, and is outside the control of central banks like the Federal Reserve Bank or the International Monetary Fund.  They don’t like that, but they can live with it because it’s small.  If it gets to be of any size, they’ll kill it.  China has already made bitcoin trading illegal, and it’s possible that more countries could do the same.  Could they kill it entirely?  Bitcoin buffs say “no.”  But they could make the penalties so high and make exchange into hard currency so difficult that it’s effectively the same.  Other countries besides China will ban bitcoin.  Expect “terrorism” to play a part in this.

Currently, like a Dutch tulip bulb (LINK), it’s gone too high, too fast.   I have to think that it will come back down.  And back up again after that?  Yeah.  Probably.  The difficulty is that bitcoin is based entirely on what people will believe about it in the future, which is very hard to predict.  If people don’t believe in it, it will go to zero . . . but if people see a continually inflating dollar, a deflating currency will look very good.

All the gold in the world is worth somewhere around $1.9 trillion.  Bitcoin is worth about $300 billion.

Someone estimated “all the stuff in the world” is worth about $400 trillion, which surprised me because there is so very much PEZ© in the world.  So, bitcoin is pretty small compared to  . . . everything.  It still has plenty of room to grow.

Bitcoin is real, and it’s around to stay, especially when governments start printing money like it’s going out of style – bitcoin will provide a non-inflationary alternative – Gresham’s law (LINK) says that bad money will drive out good, and people will get rid of their currency that’s becoming worthless, and save the currency that’s becoming more valuable.

So, I wish that The Boy had not frittered away his seven bitcoins.  And I wish I knew who Satoshi was.  I could certainly help him look under the couch cushions for his code . . . for a small fee.

But . . . what if . . . The Boy is Satoshi?

I’m not a financial advisor.  I don’t have bitcoin and won’t buy any this week.  Disclaimer, disclaimer, disclaimer.

Just-In-Time Production, Hurricanes, and Road Ice

“Wait, let me guess. You want me to fly the Maru into the teeth of what amounts to an interstellar hurricane just so that I can shut down yet another Seamus Harper science experiment thereby saving all of our butts from certain doom?” – Andromeda

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So, here’s “Just in Time” food inventory . . .

Since the first industrial revolution, businesses have been on a relentless drive to create additional efficiency.  This has resulted in a lot of wealth creation since the “stuff” that we consume becomes cheaper.

How does it become cheaper?

Over time, production processes have been automated.  To give an example, it takes less than three equivalent people working less than a day to turn 1800 parts into a car.  Sure, the parts were produced elsewhere, so more days were taken than that – but to me it’s astonishing – less than 24 hours of labor to produce a vehicle.

Part of the reason for the efficiency is that so much of the process has been automated.  Hundreds of robots are on the factory floor, which allows the car to be built with so few hours.  Imagine if the same level of productivity went into the construction of a house . . . .

Focus is spent on elimination of waste at every part of the process – it’s that destruction of waste that allows industry to focus on production.

One (relatively) recent initiative to reduce waste is to create “just in time” production.  It’s been a driving force since Toyota popularized it in the 1970’s in factories (and in business) across the world.  The way this concept works is beautiful in its simplicity.  Let’s say you’re producing 1000 cars a day.  And you want to put steering wheels on those cars (I know, a crazy luxury).  That means that you want to have enough steering wheels to build the cars you’re building today.  Which also means you have to have the right steering wheels (not one that turns only right, but the correct steering wheel that goes with the car) since one model of the car might not take the same steering wheel as another.

So, of the 1800 parts that make up a car, you have to deal with a MILLION of them each day.  And not every car is the same – there are different carpets, stereos, seats and any number of variations for each car.

So, do you keep a 60 days’ worth of inventory?  No.

In fact, in your best possible world, the company that manufactures the steering wheel that you need shows up and puts it in your hand right as you’re ready to install it into the car.  In practice, that doesn’t happen exactly like that, but it’s close.  The company that manufactures the seats, for instance, knows which ones you want on Tuesday.  It delivers them to the line in the order required for your production run.  Your effective inventory of seats is zero – you let the seat supplier deal with the hassle of getting the seats ready and in place for when you need them.

Likewise, the seat manufacturer doesn’t want a month’s inventory of foam in the place, so they order it to arrive . . . just in time.

The genius of this idea is that you can reduce inventory across every manufacturing system . . . everywhere.  You eliminate bins and shelves and racks of stuff and all of the difficulty in counting it and keeping things dry that should be dry, while not forgetting you have 75 tons of leather for seats in the back corner where the lights are out.

Great idea, right?

Well, it is.  Until something goes wrong.  It is the manufacturing equivalent of going bumper to bumper at 80 miles per hour.  That space between cars is like inventory – it gives you time if someone makes a mistake to correct before catastrophic damage occurs.  So, if a seat isn’t there, I’m sure it’s painful to pull the car off the line, but you can make do.  If all the seats aren’t there?  The factory will have to shut down fairly soon – you’ll just have piles of seatless cars, which are only popular in Southern California.  “Just in Time” makes the factory more efficient, but also less resilient, more prone to catastrophe brought about by the simplest shortage.

But in real life . . . where else are we using just in time philosophy?

Gas stations.  There’s about 28 gallons of gasoline for each person in the US.  My family uses that much in a few days (three cars).  But if production went down for whatever reason?  The US would run out of gasoline in short order.  See, it’s all fun and games when we’re just talking about steering wheels . . . .

Food stores.  The average food store turns over their entire inventory . . . 19 times a year.  Oddly, that’s nearly the square root of 365, so the average inventory turnover is  . . . 19 days.  But that includes things that don’t move as fast, such as sponges and nosehair trimmers.  You can imagine food, especially perishables like meat, frozen foods and vegetables are probably at a week or, more likely, less.  And if there’s an emergency?  The inventory is measured in hours.

We were in Houston prior to Hurricane Ike hitting.  I was out of town on business, but got back in time to ride the storm out (no, not with REO Speedwagon) with the Wilder family.

Oddly, we were completely prepared.  We had food for weeks, a gas grill, canned goods, matches, candles, wine, cigars and pantyhose and chocolates for trading.  Oh, and fifty gallons of drinking water.

I went by the local Target® store that night and found . . . everything gone.  The place was picked clean, even the wine.  I think people went into a frenzy and bought extra hairbrushes because . . . hurricane hair?  You can read about the Wilder experience in Hurricane Ike in more detail here (LINK).

Why did I go to Target™?  Really, just for grins.  It’s a nice feeling knowing that you and your family are protected.  That night as the storm set in, we lost power early on.  So we sat, drinking wine, smoking cigars (yes, The Mrs. joined me) while we roasted hot dogs over the candle (not recommended) and watched John Adams (the HBO® miniseries) on a laptop until the battery died.

The next day?  Power out, so time to eat the steaks. Mmm.

The next day?  Pretty hot.  Oppressively Houston hot.  This wasn’t good, but I got my hands on a battery operated fan, which was worth approximately a million dollars.  I noticed people were selling ice for $8 a bag on the roadway.  Was I mad at them?  Heck no!  If you really needed ice, you could get it from these people, and nowhere else since the every store was still closed.  These people were doing humanitarian work.

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Road ice.  Ain’t capitalism grand?

We were ready – we were practicing the opposite of “Just in Time” – we have stuff around our house all the time so that little interruptions won’t ruin our lives.  But a reasonable question to ask yourself is . . . how ready are you when the car in front of you taps on its brakes and you’re going 90 miles per hour?

Washington: Musk, Patton, and Jack Daniels all Rolled into . . . the ONE

“I, George Washington, born in 1492, freer of the slaves, and the first president of this, our country, though savagely impeached for the shooting of Abe Lincoln, I will lead us into the demise of all humans!” – Home Movies

Washington

General George Washington, 1776, when he was about 44 years old.  44 years old, a billionaire, a war hero from the French and Indian War, and now commanding a rebel group fighting the largest superpower in the world.  Hmmm.  Maybe that’s why all that stuff is named for him?

There is a time for fighting valiantly and dieting.  Then there exists the Thanksgiving/Christmas nexus.  I’ve been generally trying to minimize the carb content of what I eat, but Thanksgiving?  Yeah, I’m having pumpkin pie.  And stuffing.  And mashed potatoes.  And might drink a bit of gravy.  Just a quart or two.  Not from the gravy boat – I have standards.  I have standards . . . and a mug.  A great gravy mug.

Yes, I have willpower, but Thanksgiving and Christmas are more difficult times to stick to diets.  So, I don’t.  And I don’t spend a lot of time feeling guilty about it, but it’s also a good time to reflect that eating different things changes my mood.

If I’ve had enough potatoes to feed the Soviet Army, I know that I’ll feel differently both physically and mentally.  Sugar is similar. Ditto with bread.

So, how do I feel different physically?  For me, when I eat carbs I tend to retain a LOT more water.  It’s my theory that it’s used to think out my blood so it flows better than maple syrup.  When I jump back into the low carb regimen, I know that for the first few days I will dump water faster than the democrats dumped Al Franken.

I’m pretty sure that the extra water does NOT do anything really good for me.

How do I feel different mentally?  Again, for me the low carb (very low, like none) zaps me into a state of clarity and stability.  Stuff just doesn’t bother me as much.  And I seem to get better sleep.

But one thing that’s wonderful about the Holidays is . . . George Washington.

George was really tall for his time and place, and strong enough that he could crush walnuts in his bare hand.  British walnuts.  And he was known to party (from teachingamericanhistory.org):

First Troop Philadelphia City
Cavalry Archives, 1774		 City Tavern
George Washington
Entertainment of		 15 Sept., 1787

Light Troop of Horse, September the 14th 1787

To Edwd Moyston .. Dr.
To 55 Gentlemans Dinners & Fruit
— Rellishes, Olives etc………………………………………..  20  12   6
— 54 Bottles of Madera……………………………………….  20   5
— 60 of Claret ditto……………………………………………  21
— 8 ditto of Old Stock…………………………………………   3   6   8
— 22 Bottles of Porter ditto………………………………….   2  15
— 8 of Cyder ditto……………………………………………..  16
— 12 ditto Beer…………………………………………………  12
— 7 Large Bowels of Punch………………………………….   4   4
— Segars Spermacity candles etc………………………….   2   5
To Decantors Wine Glass [e]s & Tumblers Broken etc..   1   2   6
To 16 Servants and Musicians Dinners……………………   2
— 16 Bottles of Claret…………………………………………   5  12
— 5 ditto Madera……………………………………………….   1  17   6
— 7 Bouls of Punch…………………………………………….   2  16   
£89   4   2

 

If you study the above, you’ll see that George Washington and 54 of his best buddies had 114 bottles of wine, plus cider, beer, and 8 bottles of hard alcohol.  I’m thinking our Founding Fathers were knee-walking drunk at this point – you can see that they got well into the “smashing the bottles and glasses” part of the party.  And it was the equivalent of something between $15,000 and $20,000 that he spent on the party.

George liked to party.

And he liked to party at Christmas, which brings us to eggnog.

Now, I must tell you that I really, really hate eggnog.  Hate it with a passion.

Or I did, until I had George’s eggnog.  And it just so happens I’ll share his recipe with you (this will be the 306,001st place on the Internet that you can get it):

“One quart ye cream, one quart of ye milk, one dozen tablespoons of ye sugar, one pint of ye brandy, ½ pint of ye rye whiskey, ½ pint of ye Jamaica rum, ¼ pint of ye sherry—mix liquor first, then separate yolks and whites of 12 eggs, add sugar to beaten yolks, mix well. Add milk and cream, slowly beating. Beat whites of eggs until stiff and fold slowly into mixture. Let set in cool place for several days. Taste frequently.”

And it’s amazing.  It tastes just like Christmas.  And George was right – making this stuff and drinking it on day one is NOT advised.  It tastes . . . strong.  But after three days in the fridge?  Amazingly smooth.

So, not only was George a billionaire president general that defeated the world’s largest and best trained armed forces?  He knew how to party.

Here’s to you, George!

Seneca, Stoics, Money and You

“My heart attack didn’t kill me, so why act like it did?  See, Tim, it was the Roman philosopher Seneca who said “if we let things terrify us, then life is not worth living.” –  Home Improvement

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Seneca could definitely use a makeover, but would probably be the last person who cares about a makeover, since he’s willing to be dead and made of marble.

Source- I, Calidius CC-BY-SA-3.0  via Wikimedia Commons

What is stoicism, and why does it matter for your money?

From Wikipedia’s definition of Stoicism . . . “the path to happiness for humans is found in accepting this moment as it presents itself, by not allowing ourselves to be controlled by our desire for pleasure or our fear of pain, by using our minds to understand the world around us and to do our part in nature’s plan, and by working together and treating others in a fair and just manner.”

What on Earth does that have to do with money?

Everything.

Let me explain . . . with a story I’ve used before:

When I was young, we had a subscription to Reader’s Digest (which, really, might have been influenced by the CIA for a time – google it).  For those that haven’t heard about it, it’s where they take articles (and even books!) and edit out the boring bits and republish them.  It’s like someone printed a tiny bit of the Internet.

Pop Wilder always said, “I can read my own articles and decide what’s important.”

And yet?  I always found an issue of Reader’s Digest in the bathroom that only he and I used, and I know that I wasn’t carting them in there.

But in Reader’s Digest they had features as well as the articles, one of which was “Laughter is the Best Medicine.”  In it were nice, clean stories that were, well, funny.  Some of them were even taken from real life.  My favorite was about a five year old girl and her eight year old brother.

They were playing in the backyard (which kids used to do prior to the Internet).  The boy was holding a tin can on top of the little girl’s head and smacking it with a rock.

Mother:  “Tommy, what ARE you doing????”

Little Girl:  “Mommy, it’s okay.  He’s almost done.”

I keep coming back to that image.  It’s like life.

Sometimes the problems we go through are pointless.  Sometimes they are downright silly.  Life keeps smacking a rock into the top of your head.  And when it stops, you feel so good.

Another example:

A friend of mine went through Army Ranger School (a long time ago).  There were two out of their class that passed.  Two.  The other guy was a chaplain.  The last ordeal had been an extended duration hike with little food.  They had survived.  They had made it back to base.  But . . . it was five hours until they would be released from training, and couldn’t go to mess hall (cafeteria) to eat.

They climbed into a dumpster.  They found Doritos® covered with ants.  They brushed the ants off and ate the Doritos™.

His thoughts?  “Best Doritos© I’ve ever eaten in my life.”

And this relates back to money, too.

Seneca was a Roman.  I use the word “was” because he’s dead.  Nero ordered Seneca to kill himself (spoiler, Seneca totally did kill himself) back in moldy old 65 A.D. (Not “Common Era” but good old Anno Domini).

Seneca was rich.  How rich?  Rich enough that he could have purchased six hundred million loaves of bread.  And that didn’t count his real estate, which included at least six Sonic® drive-ins and three strip malls in Omaha.

I’m not even sure where I would put six hundred million loaves of bread.  Certainly my pantry would fill up after 2 million or so.  But outside of bread (food), the man had a lot of bread (money).  And thought a LOT about it.

Seneca:  “He is a great man who uses clay dishes as if they were silver; but he is equally great who uses silver as if it were clay.”

In the end, a dish is a dish, and as long as it comes out of the dishwasher without last night’s Kraft® Garfield® Macaroni and Cheese, well, deal with it.

And a car is a car.  I went to a stand-up comedian one night with a friend, his wife, and a blind date. (Yes, this is you, Chris – the friend, not the blind date).  The comedian was making a joke about cars.  The reason, he thought, that we had so many traffic fatalities was that we didn’t make cars out of Nerf® stuff.

He looked, from the stage, down at me.

“You sir, you look like you drive a big-ass truck.”

Me:  “No, it’s a Toyota® Tercel™.”

Him, loudly into a microphone with everyone in the room listening:  “Well, you must be the world’s BIGGEST pussy.”

Needless to say, the blind date ended right there since I didn’t go and beat him up.  And, yes, I probably should have answered “yes” when he asked if I drove a truck.  But . . . like Seneca, a car to me is  . . . just a car.  The first virtue of a thing is in its utility.  Does it do the job?  Sometimes duct tape is the proper solution.

From the standpoint of a Stoic, even a wickedly rich one like Seneca, taking pride in personal possessions was to be looked down upon.  And, yes, his wife had earrings that cost more than a house.  And he had solid silver nose hair trimmers.  And we know this because he wrote about them.  But, did he care?  I don’t think so.  He bought the stuff because he could, not because the stuff had power over him.  I’m certain that he understood that he didn’t own the “stuff” but just had it until he died, so it had no power over him.

But we let stuff have power over us.  Does the neighbor have a nicer car?  Do they have a better stereo?  It’s normal, natural to envy that.  It’s totes Stoic if you go, “good for you!” and not want to go and buy an even better car because you’re good with the one you have.

When I was in Houston I would be stopped at a traffic light, surrounded by cars much nicer than my 2006 Ford® Taurusdadcar™.  And I would wonder how many of them owned their car.  And I wonder how much heartache was caused by that REALLY BADASS Mercedes® next to me when monthly payment time came around.  And, truthfully?  If it was being driven during work hours by a girl, I wondered how long she’d be with her husband after the money ran out.

So, for me?  Being Stoic about the stuff I own is a sanity preserver.  If I had to worry that The Mrs. would leave me if I didn’t have an awesome car, or, honestly, cared at all about what my neighbors thought, life would have a stress it doesn’t need at all.

But Seneca went further.  He said, get rich all you want, but don’t do it in a way that’s “stained by blood.”  My interpretation?  You got you money honestly, without forcing it out of other people.

How does this play out?  Well, let’s look at . . . Obama phones.  Regardless of how you feel about them, the money that comes to purchase them, and to provide monthly service is forcefully taken from others.  Don’t think that it’s forceful?  Try not paying your taxes and then you’ll learn that the IRS is not your benevolent aunt who bakes cookies.  Unless your aunt works for the IRS.  In which case, please tell me the rule on deductibility of capital losses from a prior year against current year capital gains.  Just kidding, I use TurboTax®, which is probably nicer to me than your aunt.

I digress.  But I think Seneca would think it was wrong to take money from one person (me) without their consent to give to another (Obama phone users) and taking a cut in the middle.  It’s wrong.  Unfortunately, it’s our government’s current business model (LINK) and Elon Musk’s (LINK).

Last?  Seneca thought you should be generous.  Bill Gates is certainly living up to that, shooting money out like a lawn sprinkler at causes he likes.  And I tip well at the restaurant.

But the biggest danger of generosity?  It has to be moral.  Give a man money and he will take it.  But he will resent you, because you didn’t give him more.

Let a man (or, I guess we let women earn money nowadays, and even own property and vote) earn money?  That will provide both support for him (or her or it, whatever the cool kids say nowadays) and self-worth.  So, generosity is good.  Charity is corrosive.

The really cool thing about being a stoic is realizing the beauty you can find in the weird, small bits of life that you often ignore.  The smoothness of a straw.  The stark sharpness of the edges of the clouds on a crisp winter night.  The wear marks on a keyboard you’ve typed a million words on.  The ability to take satisfaction out of nearly every experience you have is there.

If you let it.  And if Tommy will stop pounding the tin can on the top of your head with a rock for a moment.

How I Met Your Internet

“I told him that I had a daughter and he told me he had one, too. And he said, “Never give up on family.” And I didn’t. I took his advice. My God, the universe is random, it’s not inevitable, it’s simple chaos. It’s subatomic particles in endless, aimless collision. That’s what science teaches us, but what does this say? What is it telling us that the very night that this man’s daughter dies, it’s me who is having a drink with him? I mean, how could that be random?” – Breaking Bad

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The Mrs. took this picture during a particularly pernicious rainstorm.  They tell the kids to stay inside during a thunderstorm.  Meh.  If I get hit by lightning I’m buying a lottery ticket.

So, this is the 100th post.  I think the best way to deal with this is to skip the structure of wealth, wisdom, and health for this post.  The discipline of structure is nice, and I’ve learned a lot of things by doing it, but it’s nice to vary from that structure from time to time to be spicy, like taco-flavored kisses.  So, here are some random bits of fog from my brain.  Some of these may end up as posts at some point . . .

  • If someone is cloaking a concept in really, really confusing language, they’re lying or trying to cover something up.  The desire to create an impression contrary to truth requires that they twist the language to the point of ripping.  Using bigger words and confusing, academic phrasing are just camouflage for the lie.  For example:  At a dinner party, a gentleman was talking about overpopulation.  His solution?  Reduce the population by a billion or so through “caloric restriction.”  He was confronted by another guest . . . “You want to starve a billion people to death?”  Yup.  Really happened, according to the article.
  • If you depend on someone to give you money or things so you can live, they control you.  This is why welfare is control.  This is why parents get to make the rules.  This is why bosses can be arbitrary, and the Hollywood predator gang could stay so safe, for so long.
  • There is no objective morality without a belief in a higher power.  Without that, we’re all just meat and cells.
  • Children need enough privacy to grow, enough structure to grow well.
  • Youth is rarely wise, but it might be smart.  My brother, John Wilder (yes, we have the same name – just different parents – my family tree looks like an inkblot) talked about how his company had hired a 30 year old CFO.

Me:  “He won’t last a year.”

Bro:  “He’s smart.”

Me:  “Yeah, but he’s got a LOT of growing up to do.”

The guy flamed out in a year.

  • I don’t know why wisdom costs us so much pain and difficulty in life.  Is it because, like divorce, it’s worth it?

Rorschach, Copyright DC Comics

How my family tree would look as a superhero. © Certainly DC Comics, Fair Use Claim, Will Remove on Request

  • Liars lie.  The only thing that stops them is when they get caught and something tragic happens, and mostly not even that.  I’m not sure why they do it.
  • Cowards are the most dangerous of men.  They will quickly befriend you even when you don’t deserve it.  They will desert you at the first sign of an angry mob.  And they’ll join the mob.
  • Being close to a coward is bad.  But you can always count on a coward being a coward and acting like a coward.  Having a liar close to you is worse.  They might tell you pleasing lies for a time, and you might forget their nature.
  • You are the average of your five closest friends.  Choose wisely.
  • People say, “Kids tell the truth!  It’s natural.”  Oops, I meant people who never seen an actual child say that.  Kids lie as soon as they can figure it out, as any parent can tell you.  No, I didn’t eat that cookie.
  • Between the ages of 10 and 14 are the only times you really have to parent.  Before that, it’s teaching.  After that, it’s supporting.  Something happens between the ages of 10 and 14 that determines whether or not the kid goes bad.  They’ve learned how to inflict pain and but haven’t learned empathy or kindness or responsibility – they’re a group of snotty acne-covered psychopaths.  This is why middle school age children are such miserable creatures, and once you win the battle as a parent you can hit the autopilot once they hit high school.
  • Underarm hair grows back.  A reputation doesn’t.  In other words?  One drop of snot ruins all the eggnog.
  • Always take an offered breath mint.
  • We waste a lot of time.  (I include me in that.)  Ben Franklin said, “If thou loveth lifeth, wasteth noteh time, for that is what life is made of.”  And a big part of that waste is in pursuits that produce . . . nothing.  I’ve been accused of being a “hillbilly” for fixing a faucet rather than buying a new one.  In my defense, my name isn’t Billy.  And I could fix the faucet for $5 and an hour of time, and some cussing and bruised knuckles.  And I know how to fix a faucet now!  A faucet that was last manufactured in 1980.
  • Buy new faucets instead of fixing them.
  • You can’t reason with someone who’s acting out of emotion.  And you ESPECIALLY can’t reason with a crowd of people who are rioting.  Fight reason with reason.  Emotion with emotion.  And rioters with force and/or Optimus Prime®.  Thus the following is the best thing to wear to a riot (LINK) (and no, not getting paid for this link):

optimus-prime-costume-hoodie.main

  • Reason is something we use to convince ourselves that what we want is wise and, well, reasonable.
  • Cultures aren’t all equal in the output they produce.  Some cultures produce much more violence, less wealth, and much less freedom, and some even create all three negatives at once (Venezuela).
  • I invented a gravity cannon.  It consists of two huge counter-rotating cylinders of the matter from a neutron star (this stuff is denser than a Kardashian at 900 pyramids of weight for a single teaspoonful).  Thick cylinders, but hollow.  I think it would only require a dozen or so neutron stars to build.  To shoot it, you have to jam the inner cylinder into the hollow outer cylinder.  The result is a vortex of gravity that might stay stable enough (if the cylinders are rotating fast enough) to slam into your enemy – an invisible ring of gravity death travelling at them at whatever speed you slammed the cylinders together at.  It would also create a massive black hole and a huge gamma ray outburst that would roast a turkey from 100 light years away.  Is it impractical using a dozen solar masses and the approximate energy put out by our galaxy in any given year for one shot at an enemy?  Possibly.  But maybe I need a government grant to study it?  We wouldn’t want Russia to have one and us not.
  • There is bacteria growing on the space station.  On the outside of the space station.  While it’s in space.  I sense a 1950’s B-Movie:  The Fungus from Mars.
  • Tip well.  Show gratitude when it makes sense and when you can afford it.  Give a hard working waitress a $10 tip on an $8 dollar bill?  They’ll mention it for days.  Where else can you make someone so happy for so little?

Hope you’ve enjoyed the first 100 as much as I have.  See you Monday!

Soviet Genetics, Mangoes, Your Momma, and Swedish Weight Gain

“The only difference between Señor Chang and Stalin is that I know who Señor Chang is.” – Community

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This duckbilled dinosaur could have been a kitten, if only it had been loved.

When I start a blog topic, most of the time I know where I’m going, and, generally where I’m going to end up.  Most of the time.  Sometimes I end up learning something completely unexpected that changes my conclusion.  Sometimes I learn that we, as humans, are only scratching the surface of how really, deeply weird the world around us is.  This post is deeply weird.  Hang, on, buckle up and enjoy my favorite health post ever . . . .

Trofim Lysenko was born in Ukraine in 1898.  Apparently the baby name books in Russia includes the name “Trofim” even though to me it sounds like a fitness product advertised on an infomercial at 3AM on The Discovery Channel® – get fit with new Trofimâ„¢!  Frankly, Lysenko sounds like a bathroom cleanser – so poor Trofim was destined for failure, right?

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Would you buy a used economic theory from this man? – photo of Lysenko, public domain, via Wikimedia

Trofim studied agriculture, and, apparently came up with a bunch of ideas about how plants could better grow around the time the Soviet Union was starting up.  His theories included the idea that cows that were treated well would give more milk, and that plants could cooperate somehow to make more wheat.

Joseph Stalin LOVED Lysenko.  His theories dovetailed exactly with Stalin’s Communism – the importance of genetics went to zero.  With proper nurture, you could create a True Soviet Man – people weren’t just created with equal rights – they were BORN equal.  If you could create the right conditions, everyone would BE equal, just like George Clooney, Brad Pitt, and me.  Oh, wait, that’s observably false.  Brad Pitt could never get my SAT score, even if he studied.  Clooney?  Let’s see him go bald, huh?

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Unrecorded in the West is the fact that Stalin’s giant head was carried in local parades by men in white suits up until 2003, when it was retired to a farm outside of Minsk where it now lives with gently treated cows and monkeys. – photo of MegaStalin, Bundesarchiv, Bild 183-R78376 / CC-BY-SA 3.0

Lysenko singlehandedly destroyed genetic research in the Soviet Union for forty years, as well as being responsible for the jailing (and sometimes execution) of everyone who disagreed with him.  Certainly no one in the West would do that about people who dissent scientifically . . . right?  Anyway, Lysenko set the standards for political correctness in research, and yes, the Soviet Union is where the term Politically Correct came from – the idea that ideas themselves couldn’t be discussed unless their politics were in vogue at the moment.  And if you brought up politically incorrect ideas?  Gulag for you, comrade.

Mao Zedong proved that this point could be taken to extremes when the Pakistani ambassador gave him a case of mangoes.  Mao didn’t like mangoes.  So  . . .

In the afternoon of the fifth, when the great happy news of Chairman Mao giving mangoes to the Capital Worker and Peasant Mao Zedong Thought Propaganda Team reached the Tsinghua University campus, people immediately gathered around the gift given by the Great Leader Chairman Mao. They cried out enthusiastically and sang with wild abandonment. Tears swelled up in their eyes, and they again and again sincerely wished that our most beloved Great Leader lived then thousand years without bounds … They all made phone calls to their own work units to spread this happy news; and they also organized all kinds of celebratory activities all night long, and arrived at [the national leadership compound] Zhongnanhai despite the rain to report the good news, and to express their loyalty to the Great Leader Chairman Mao.

August 7, 1968 People’s Daily

Yes.  The Chinese people worshiped (for 18 months) mangoes so they didn’t disappoint Chairman Mao.  And it had lasting consequences for some.   A dentist was executed for saying the mango touring his village looked like a sweet potato.

Don’t believe me? A lot more about it here (LINK).

But, we were talking about Lysenko.

He killed genetic science because of the laughable idea that everything was nurture, not nature.  We do know that there are lots of things that are totally genetic:  intelligence, likelihood of being criminal, eye color, hair color, blood type, et cetera.  For example, you can stunt a smart person’s intelligence through poor nutrition.  But their overall capacity to be intelligent is about 70%-80% genetic.

So Trofim (snicker) Lysenko was entirely wrong?

No.

We’re learning a lot more about something called epigenetics now.  Epi in this case means “over” or “over-genetics.”  If you remember, DNA is a double helix molecule that stores all of the information about how to make a copy of you.  One gram of DNA can, according to folks at Harvard, store 700 terabytes of data, or about as much information as 14,000 Blu-Ray® discs of Geostorm© when it comes out.  Which will also be 13,720 more discs than Geostorm© sells.

DNA stores lots of information, but at a cost.  DNA is information dense, but it is looooooooooong.  Each cell has about 2 meters of DNA if you stretched it out.  Take all of the DNA in your body and lay it end to end?  (Do NOT try this at home, it’s kinda messy – if you’re going to do this, at least use the garage.)  There’s enough DNA, laid end to end, which would be roughly diameter of all of the planets in our Solar System.  That includes Pluto – we’re gonna take it back.

DNA is long.  And since our cells aren’t 2 meters long, something happens to the DNA in your cells.  Rather than tossing the DNA into the cell like The Boy and Pugsley throw extension cords onto the garage floor, the cell has little cord winders that wind up the DNA so it’s not all tangled up like Johnny Depp’s finances.  So, the DNA is tightly wound around the cord winders.  In my garage.  In your cell.

But it turns out that the cord winders themselves (I know this analogy is getting a bit stretched) are very much impacted by your behavior.  And, the scary part?  Potentially your mother’s behavior.  Scarier?  Even your grandmother, and we all know what a tramp she was.

I recall reading a story about a Native American tribe in Arizona that experienced famine that killed off a significant portion of the tribe.  The result?  A bunch of really, really fat Native Americans two generations later.  My theory had been that the people with the skinny genes had all died out, and that the remaining Native Americans had all had genes that were really, really efficient with calories.  And liked Twinkies®.  Makes sense?  Sure.

But then?  Epigenetics.  Turns out that this phenomenon was repeated in Sweden, where in some really northern town, named “Rejëllyfaarnøørthernplåcedüde” there was a periodic starvation, because they didn’t live where any food was, except seals.

All the kids from Rejëllyfaarnøørthernplåcedüde got fat.  Really fat.  Turns out the operative theory is that the environment that the mothers grew up in changed not the DNA but the cord winders and how the DNA was wound up.  Because of the changes to the cord winders (which are really enzymes) certain parts of the DNA were exposed that changed the way the cells work.  This is entirely necessary, because when you’re a baby, your eye cell needs to know that it’s an eye cell and not a lung cell, otherwise you could see your guts and have to remove your glasses to breathe, which would make dating . . . complicated.

The end result of this epigenetic change was it made the kids more likely to burn off energy slowly – which is a great adaptation if you’re starving.

But it looks like there are a whole host of other adaptations that may be driven by epigenetics:  addiction, depression, anxiety, fear conditioning, and that’s just the bits we’re beginning to understand.  Yes.  What scares you might be related to what scared great grandma.  One experiment with mice shocked the feet of the mice when a cherry blossom smell was introduced.  The mice babies from the mothers . . . who had never been shocked . . . were scared when they smelled cherry blossoms.  The impact on the baby mice from the experience of their mothers was transmitted . . . without genetic change.

So, Lysenko was not totally wrong.

The health implications are stunning.  Can there be a pill that you take that switches “on” a weight loss enzyme?  Maybe.  What other conditions can we change?  Can we make Kardashians attractive?  Sadly, no.

But beyond that, it may go to explain weird things . . . motherly love?  The baby’s DNA is floating around inside the mother (you can determine a baby’s sex through a blood test of the mother, so, the DNA is there).  How does this impact the way a mother bonds with a baby?

What about surrogate moms?

What about all of the things that we can change?  We can’t make ourselves smarter through epigenetics, but . . . can we make ourselves better?

Like I said – this is weird territory, and we have a LOT more questions than answers.  And, fortunately, we have plenty of mangos to worship.  Just don’t compare epigenetics to Johnny Depp’s sweet potato.

Creative Destruction and the Fight For Your Eyes

“You know what it is?  You’re always attracted to someone who doesn’t want you, right?  Well, here you have somebody who not only doesn’t want you, doesn’t even acknowledge your right to exist, wants your destruction! That’s a turn-on.” – Curb Your Enthusiasm

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Behold, the chainsaw of Creative Destruction. This one will take care of those pesky optometrists!

There were vast periods of human history where . . . absolutely nothing happened.  If they had a newspaper, it would be blank for decades at a time.  Our Neanderthal (many of us) and other cave-dwelling hominids (all of us) ancestors lived for tens of thousands of years with little or no innovation, and that innovation that did show up was not all that exciting.  My bet is that most of them were fairly stupid, and it took generations of stupid people not having kids until humans were smart enough (and eloquent enough) to make an attempt at civilization.

Even with that first civilization, things changed only very slowly.  A thousand years of Egyptian dynasties (the pharaohs ruled Egypt for three thousand years) could pass and no one invented Cool Whip®.  You an Egyptian forward in time a thousand years and the only thing that had changed was that the music the kids listened to these days was too loud and just plain awful.  To put how very stagnant these civilizations were in perspective:  Jesus is closer in time to the people living today than He was to the time of the construction of the pyramids.  This statement will be true for another FIVE HUNDRED YEARS.

The Egyptian empire lasted a really long time, and since nothing changed, like a televised baseball game, it seemed even longer.  But then?  The Romans began to change the world, with a much shorter period of dominance.  And things keep changing faster, and faster.  More perspective:  an 85 year old has lived through 37% of the history of the United States.  An Egyptian 85 year old would have lived through less than 3% of the total length of the 3000+ year span of the pharaohs.

But scientific progress undid the pharaohs in what economist Joseph Schumpeter would call “Creative Destruction.”  Schumpeter originally derived Creative Destruction from his readings of Marx (Karl, not Groucho).  Creative Destruction is predicated on technological innovation coupled with entrepreneurial spirit in an effort to make money by disrupting previous economic structures and replacing them with new, more efficient structures.  An example:  Live performers were replaced by records.  That were (briefly) replaced by 8-Tracks.  That were replaced by cassettes.  That were replaced by compact discs.  That were replaced by .mp3 files.  That were replaced by . . . streaming music.  Each innovation replaced and (mostly) eradicated the previous iteration, making music more easily and reliably available.  Unless you have our mobile phone service:  streaming doesn’t work so well, since our wireless phone provider uses a series of wire coat hangers where we live to broadcast signal.

On Friday (LINK) I wrote about the coming Optopocalypse™.  This is another example of Creative Destruction in action.  Records destroyed local bands – you could hear better at home anytime than the local talent.  mp3’s destroyed record companies.  And 75%+ of optometrists will be looking for work soon enough because technology will have made most of what they do irrelevant.  And, outside of their families, the “Destruction” part of Creative Destruction results in greater value to all of society – more people will be able to see, since there’s hardly anyone that won’t be able to afford the low cost of the EyeQue®.

Another example is Zenni Optical (LINK).  I got great glasses from them (via my new prescription from EyeQue™).  I was testing out that prescription, and wanted to get some glasses.  I put my order in, and was even allowed to pay via Amazon, so they didn’t get credit card information.  I ordered my glasses on a Thursday, and got them the following Saturday (nine days later).  They were perfect in every way!  I then put in a new order for three more pairs.  Total cost, including express shipping?  About $200 for the three pairs, with the best lenses they offered, plus extra slip on sunglass attachments (and bifocals).

I ordered them on Saturday, and tracked progress.  By Sunday they were complete.

Here’s the shipping:

Origin Scan
CN
10/25/2017 9:49 P.M.
Order Processed: Ready for UPS

Shanghai, CN
10/25/2017 11:16 P.M.
Departure Scan
Arrival Scan

Anchorage, AK, US
10/25/2017 3:26 P.M.
Brokerage released the package. It will be processed through a clearing agency before final release to UPS.

Anchorage, AK, US
10/25/2017 4:46 P.M.

Departure Scan
10/26/2017 2:54 A.M.

Arrival Scan
Louisville, KY, US
10/26/2017 5:32 A.M.
Departure Scan

10/26/2017 5:51 A.M.

The glasses hit my hands about 2pm that day.  And, just like the first order, they were perfect.

If you look, it appears the package goes back in time a bit, but remember about the whole date-line thing.  Regardless, I’ll go with the story that my glasses came from the future.

Well, they did come from China.  Express, for $18.

This is certainly a great way to add value, and it (by definition) changes the price that many people will pay for glasses.  It’s Creative Destruction on a grand scale – Zenni will make billions.  But it cuts off another revenue stream that will add to the Optopocalypse™.  If you look online, optometrists are out in droves complaining about both EyeQue™ and Zenni®, some of which take the form of reviews that I think are less than honest.

And the optometrists are also fighting by trying to make innovation illegal – at least innovation that hurts their profit margin and their monopoly over information about your eyes.  They typically will call the bill a “patient protection act” or something similar, so it makes it sound like it’s really for the benefit of the patient.  I’m picking on optometry not because they’re unusual – they’re much the same as everyone else who is facing having their entire life and livelihood replaced by a disruptive app or Silicon Valley startup.

These regulations and laws actually end up hurting the economy – they make it more likely that companies like Zenni manufacture outside of the United States and not subject to US or state law rather than creating an eyeglass factory in . . . Kentucky, or Illinois.  I’m not unsympathetic to the 55 year old optometrist – and I don’t have a good answer for what he should do.  Becoming a roustabout in North Dakota in the oilfield is probably not a reasonable answer.  In times past, however, people displaced by technology and Creative Destruction have found new things to do.

Maybe they could ascend to that highest throne of prestige and power.

Blogging, anyone?

EyeQue, Tom Cruise, Ben Franklin, and the Coming Optopocalypse

“J-Roc, I’m not a pessimist, I’m an optometrist but you gotta keep your eye on Randy, he’s doin’ stuff. I don’t trust that guy, I don’t.” – Trailer Park Boys

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The Boy with his first pair of glasses.  He might be ready to be an NFL® referee. 

If I were an Optometrist, I’d be afraid, very afraid?

Why?

The Optopocalypse is coming, and it’s coming fast.

What’s the Optopocalypse?

To get to that, you have to start at the beginning . . . .

Optometry was originally the practice of figuring out which glasses went with which eye.  The first pair of glasses for corrective vision were most likely used in Europe about 700 years ago.  They were Ray Bans®.  Tom Cruise (who never ages) may or may not have been the first customer.

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Tom Cruise, circa 1284 AD.  You should see this movie if you’re 18 and haven’t.  (Image via Wikimedia, ©Warner Brothers) 

Books mentioning how to fit people with eyeglasses date at least as far back as 1623, with nary a mention of Johnny Depp, who, to be fair, only smells that old.  And Benjamin Franklin saw that there was a LOT of real estate left on the eyeglass, and he invented bifocals so he could stare at the ladies both far away and up close.  Franklin was a genius, and his invention (probably around 1784) was the most significant invention in optics up to that time.  All so he could see the ladies.  And the Constitution and stuff.

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So, ladies, swipe left or right? (Image Courtesy Federal Reserve)

And that brings us to the most significant innovation in optometry since Franklin’s bifocals.  EyeQue™’s Personal Vision Tracker®.

I might be overstating it, but I don’t think that I am.  EyeQue™ is a system . . . and it’s a pretty cool one.

I have worn glasses since I was about 20.  My original pair were round gold-rimmed glasses, because Indiana Jones® wore those, and it partially made up for the fact that they wouldn’t let me carry a bullwhip and a pistol around the college campus.  It was amazing (the glasses, not the lack of bullwhip, that sucked).  I remember looking out over a valley in winter the day I got them, the outline of the mountain was so crisp in the winter air.  And trees!  They had individual branches that had edges and everything!

My prescription hasn’t changed much since then.  It’s been stable for decades.  Most recently I’ve been wearing glasses that were made before Pugsley was born (Pugsley is 12 now).  They work fine, but they’re twelve year old glasses that are scratched a bit.  I’ve been to the optometrist more recently, but my glasses were getting pretty bad.  One pair was eaten by a puppy (you could still use them but the lenses had little teeth craters in them), one was scratched up and the nylon that kept the lens in place broke.

I’d been meaning to go to the optometrist two years ago (just for a new prescription, no other problems) but she had cancelled my Saturday appointment.  My choices?  Take a day off of work to go see an optometrist, or . . . wait.  Waiting always works.

I waited.  And then one day I saw the ad for EyeQue™ (LINK) Personal Vision Tracker©™®.  Hmmm.  It was available on Amazon®.  The reviews were mixed, but at $30 and at least half a day of my time?  Worth it to take the risk.

Second day air brought me the EyeQue™.  It’s pictured.  It consists of a small plastic cylinder with a rotating eyepiece.  It straps to your phone screen.

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After you get the physical diagnostic piece (which I’m assuming contains prisms, mirrors, elfin magic and a small piece of dark matter) you have to download an app.  Once you’ve done that, you use the serial number that came with the EyeQue™.  The app, curiously, asks if you have a screen protector, but doesn’t ask you to remove it.

I tried it on my cell phone, but since I’d not updated my Android operating system since 2015 (really), I used The Mrs.’ updated phone and logged into the app.

The device/app combination is ridiculously easy to use.  The eyepiece is dialed between 1 and 9.  You start at 1, and use the + and – keys on the screen to make a green line and a red line merge into a gold line.  Most boring video game ever.  The only difficult part (and it isn’t very difficult) was to make sure that you could see both lines at the same time.  After you merge the lines, you tell the app that you’ve done it.

You then turn the eyepiece on the EyeQue™ to 2 (I assume this rotates the elfin dark matter, but if you don’t rotate the eyepiece it won’t work.) . . . and repeat until you’ve gone through all 9 settings.  Then Gandalf’s voice comes on and says, “You shall not pass.”

That’s one eye.  Repeat for your left eye.  Unless you’re a cyclops, in which case Odysseus would like a quick word with you.

Done, right?

No.  You might be not very good at easy tasks, or drunk or something.  EyeQue™ makes you do the same nine measurements at least three times on each eye, for a total of a (minimum) of 54 measurements.  I’m pretty sure this is to make sure that your readings are consistent, as you have to have a minimum cumulative score prior for it giving you the measurements of your eye required to order eyeglasses.  I got the max score each time, so only had to repeat the process three times.

I wrote my EyeGlass™ Number (that’s what EyeQue™ calls it) down.  They looked pretty close to my last prescription, but my last prescription had probably been through the laundry, eaten by prescription-moths, or taken by Russian operatives to be included in the Trump dossier.  Whatever.  It was gone.  But the numbers looked right.

I got online.

I went to Zenni Optical (LINK) and bought a relatively inexpensive pair of glasses to test out the numbers (I won’t call it a prescription) that I got from the Personal Vision Tracker.  I waited nine days, and got my new glasses.

Wow.

Wow.

I’d never had a prescription so good.  My go-to test required the stars to be up . . . I looked at Orion, and, boom, you could see that the third “star” in his sword was really two stars.  I’d read once that this was a test the Sioux had used to see if a young man could be a hunter – he had to be able to see the two stars.  And I could!  Even the bifocals were awesome!  Now I must get ready for the hunt.

I’ve since ordered three more pairs of glasses from Zenni (more on that on Monday).  All of them work stunningly well.  All of them are amazingly inexpensive.

The Boy is similarly nearsighted, and has a fairly recent prescription, but is pretty sure his isn’t as accurate as it could by – he thought my glasses were better than his.  I can buy another subscription to the Personal Vision Tracker® for him (LINK), and will do so tonight so he can get some better glasses.  The cost of the subscription is a bargain – and is fair, reflecting the tremendous amount of time, research and effort put into programming this wonderful App.

The idea that I can, in twenty minutes or so of easy work in my home, get a stunningly accurate set of numbers that I can order cheap glasses online is amazing.  It is revolutionary, Ben Franklin level (but with less time in France).  Let’s be honest – the only reasons anyone goes to the optometrist is:

  1. Because they need glasses,
  2. Because they have other vision issues/symptoms, or
  3. Because they are married to the optometrist.

And you should go to an optometrist regularly for b., because going blind isn’t a laughing matter.  But there is no reason to go (anymore) just for an eyeglass prescription, which is the revolutionary part of what EyeQue™ has done.  (Contact lenses are different – and the Personal Vision Tracker® is NOT calibrated for those.  And you people who stick your fingers in your eyes make me shudder.)

Right now there are only 23 colleges that graduate optometrists in the United States.  That’s probably too many.  If you take the ENTIRE population of the United States and say they should get a checkup every four years (young people longer, older people more frequently) and it takes 15 minutes for a checkup, you only need . . . (working 40 hour weeks) 3,500 optometrists.  A visit should cost a little more than $25 for the fifteen minutes for $200,000 of revenue per optometrist.

Currently there are 40,000 optometrists, and they’re trying to sell you expensive glasses, and vision data that you can get very accurately now for a fraction of the cost of even the $25 visit, I can see this profession going down by 36,000 in the coming years.  Maybe if I’m off it will come down a bit less, but even a reduction of 30,000 at an average total compensation rate of $120,000 yields a savings to the economy (and consumers!) of $3.6 billion every year.  And people will see better!  It’s a win-win, unless you’re an optometrist.

So, the Optopocalypse is coming – and I predict a 90% attrition rate.  This type of dislocation always happens with professions where technology changes a profession, just like Ned Ludd (LINK) leading the frame-breakers in response to the industrial revolution.  You can’t stop the tech.

Ned Ludd

Yup, this is a drawing of Ned Ludd.  Great fashion sense.  Also, a giant.  (wikimedia, public domain)

I’ve not been compensated (yet) for any relationship with EyeQue™ or Zenni Optical®.  And I might never be.  But any link that gets me compensation will be noted as such on the page, should that ever happen.

Also, I’m a blogger, NOT A DOCTOR.  THIS IS NOT MEDICAL ADVICE.  The only thing “blogger” has in common with “doctor” is that they end in a similar sound.  Do your due diligence on this or any other advice you get from the Internet.  Heck, there’s one site that says you should avoid setting yourself on fire! 

Stock Bubbles, Tulips, and Toilet Paper

“There’s only two things I hate in this world:  people who are intolerant of other people’s cultures and the Dutch.” – Austin Powers in Goldmember

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Read this blog or this man will shoot that car.

People can be stupid.

People in groups are almost always stupid, and they can remain stupid until they do quite a lot of damage.

Let’s take a trip off to Europe (unless you already live in Europe) and back in time to 1636 A.D. (unless you already live in 1636 A.D.) and review the price of . . . flowers???

The Dutch (at least I think that’s what they call the people from the Netherlands, but you can call them Sven or Maria or whatever suits you) in 1636 were a  seafaring bunch, who made money trading all over the world and had colonies in North America, South America, South Africa, India and all those islands between Asia and Australia.  One thing that a Dutch guy brought back (and I don’t think this one was lost) in addition to the most efficient way to remove hair and lint from your bellybutton was the tulip.

In a parallel development, the Dutch were big on trading stocks in companies, like the Dutch East India Company, or in commodities like sugar or pancake mix.  The markets were sophisticated.  In 1632, you could buy sugar for delivery in 1633.  This was nice if you wanted to guarantee your sweet tooth, but you could also trade that contract to somebody else for a higher price if they decided they needed the sugar to make PEZ® or Fruit Pies.   Nowadays we call those “futures” contracts.  Yup, the Dutch were doing this 400 years ago.

But a slight change in laws made those contracts different.  The buyer could buy the right to buy sugar.  The seller had to fulfill the contract, but the buyer had no obligation to buy it.  It was his or her (yup, plenty of Dutch female speculators) option to buy the sugar.  This is what is now known as “futures options.”  And you could buy them on . . . anything.

Even tulips.

In November of 1636 something must have broken in the minds of a batch of silly dead (now, not then) Dutchmen and women.  They started bidding up the futures options contracts on . . . tulips.  And various colors and varieties became more valuable, especially one that that had a virus that changed and made a tiger-striped pattern.  They looked awesome.  But one tulip bulb went for the same price as ten years’ worth of a typical laborer’s wages.  That’s $250,000 or $300,000 today.  For a tulip bulb.

There appears to be little record of people going broke in big numbers when the bubble burst, but certainly there were some people who came out a bit poorer, and the entire reputation of traders was ruined.  Not that it was that great in the beginning, but Jan Brueghel the Younger painted the fine painting below, Satire on Tulip Mania, depicting the traders as monkeys.  If you look closely you can see the nifty tiger-striped tulip in the left corner.  Myself?  I’d pay much more for a monkey that traded futures options contracts, even if he did a lousy job.

1024px-Jan_Brueghel_the_Younger,_Satire_on_Tulip_Mania,_c._1640

Yes, it’s public domain, being nearly 400 years old, unless Disney® wants to try to make a movie about it….

This was the first recorded financial insanity of this type, and it was fairly benign.

What other manias occurred during history?  Well, lots.  But researching them all would take quite a lot of work, and far more wine than I have in the house right now.  So, let’s just look at the ones that I want to talk about:

  • Salem Witch Trials – 1692 to 1693. Twenty people executed when a bunch of kids played a prank.  Or there were real witches.    This is still a bubble, but it was just teen angst magnified a zillion times.  Fortunately, they had awesome wood floors, like in the picture below.  Are those oak?  I’m so jealous!

Witchcraft_at_Salem_Village

  • The South Sea Bubble – in 1720, the price of shares in the British South Sea Corporation went from £100 to £1,000 (the £ is the funny symbol that British people use for money). Sounds like a great deal, right?  Well, the records seem to indicate that the South Sea Corporation spent most of their time issuing stock and very little time on actually, you know, making money.  So why did so many people (including Isaac Newton himself) shove all of their spare £ into a company that just made stock?  Isaac Newton is reported to have said:  “I can calculate the movement of the stars, but not the madness of men.”  Apparently Newton couldn’t manage £1,000-£100=£  Below is a public domain picture by dead artist Godfrey Kneller of Isaac Newton when he was in his “looking like the guitarist from Queen” phase.

800px-Sir_Isaac_Newton_by_Sir_Godfrey_Kneller,_Bt

  • Radium – 1920’s to late 1930’s. Everything had radium in it or was named after radium.    Drinking water.  Watches with glow in the dark faces.  My college mathematics classroom (yeah, after I took Calculus I, Calc II, Calc III and Differential Equations in the same room?  Enough radioactivity to power all of North Korea and a lot of corpses that are technically nuclear waste.  I have a straight razor case from the era.  You guessed it:  “Radium Straight Razor Company.”
  • 1920’s Stock Bubble – The classic. Fueled by post World War I enthusiasm and the rise of new technology (radio, the automobile, phones, and PEZ®) people went . . . insane.  Everybody was investing in the stock market, including a shoeshine boy, who famously gave Joe Kennedy (father of President John F. Kennedy) a stock tip.  Kennedy then decided if shoe shine boys were involved in the stock market, too many people were in the stock market.  He then proceeded to smuggle a bunch of liquor and manipulate a senator or two, then lunch.
  • Hula Hoops™ – Watch The Hudsucker Proxy to see exactly how this was invented. Okay, I kid.  But the Hula Hoop® hit when Hawaii was just becoming a state, and there was a large mania about the place, even though it had been a part of the US for nearly a century.  100 million were sold within two years, despite the US population being only 180 million at the time.  Sales fell off when people were finally told that there wasn’t a limit on the number of times a hoop could be hooped prior to it wearing out.
  • Johnny Carson’s Toilet Paper Run – in 1973, Johnny Carson (a late night television host back when there were only three channels and who was very popular) noted that there was a toilet paper shortage, but was referencing commercial grade toilet paper. He used that to make a few jokes.  (Toilet paper is just plain funny).  People took him seriously, and pretty soon there were shortages and rationing of consumer grade TP in several cities.  Shortly after the commotion, Carson told his audience he was joking.  People in the US could again poop without fear.
  • Pet Rocks® – A rock. As a pet.  For money.  Broke sales records, until people figured out that they’d paid $3.95 (plus tax) for a rock.
  • Cabbage Patch Kids© – A really ugly doll, but middle-aged women jumped out in droves to fight each other in a series of battles that would have made the gladiators of the Colosseum in Rome proud, if they had been middle-aged women with purses the size of four year old children fighting each other for dolls in the aisles of K-Mart®, Montgomery Ward™ and Sears©.
  • Beanie Babies™ – A really cute doll that spiked in popularity in the late 1990’s. The creator of the company decided to make special “limited runs” of a cheap, plush doll that looks like a dog’s chew toy.  Middle-aged women fought each other in the aisles for these as well, but it was the 1990’s so they all had greasy ham-hair like Kurt Cobain.  After a brief spike of popularity, most Beanie Babies are worth . . . dog chew-toy value.  There are a very few that might be worth some change, but don’t hold your breath.
  • Dotcom Bubble – The thing I wrote about Beanie Babies™ above? Just replace “Beanie Babies®” with “stocks” and “Middle-aged women” with “greedy but stupid baby boomers.”
  • Tasers© – At one point in 2004, Taser™ the company would have had to sell three Tasers® to every person in the United States to make the profit the stock $150 stock price implied. We didn’t buy the Tasers®, and neither did you, so you can buy the stock for $20 or so.
  • Housing Bubble –House prices never go down. It’s a fact!  Except when it’s not and imperils the entire economy of the world.
  • Tesla® – I’m not saying it’s a bubble (LINK), but it’s a bubble. Tesla© is not worth more than Ford™.

Most of the bubbles or manias I’ve listed above share a similar pattern –

  • Start – The guy started making Beanie Babies®. They only sold a few.
  • Spark – A reviewer mention in an article that some are “valuable” and “rare”.
  • Information Spread – Engage middle-age lady network.
  • Publicity – News stories show up in newspapers, television.
  • Mania – Nobody wants to be left behind, so everybody buys all the Beanie Babies®.
  • Market Collapse – Somebody writes an article questioning paying $10,381 for a dog chew toy. “Bubbles burst when fools run out of money.”
  • Regret – Closets of Beanie Babies© sit in closets, since one day they’ll be valuable.
  • Next Mania – Well, maybe next time I’ll be in first and make all the money…

And financial markets work exactly the same way, but with less dog chew toys.  People want to seek a return on their money, and when there’s enough money just lying around, stupid investments get made.  And some of those investments pay off in a huge way, especially for those that got out early.  The Dotcom crash?  Plenty of people sold as it was on its way up, and made huge amounts of money.  The housing crash?  One guy predicted it and put in place investments so that he made hundreds of millions off of the crash.

But sometimes what looks like a bubble . . . isn’t a bubble.  It’s a trend, and a real trend based on sound, rational economics.  The guy who was sure that the smart phone was a fad (me), the guy who thought that credit cards would never catch on with a rational public (my dad), and the guy who thought that Europe would be plunged into a horrific war (my great, great grandfather).  Oh, wait, the last guy was right.

And sometimes there are bubbles, and sometimes there are trends.  One person working to figure out the difference is a geophysicist named Didier Sornette, who has an amazing Wikipedia page (LINK), and looked at the mathematics that surrounded earthquakes and compared it to stocks or other financial assets in a bubble.  Turns out that the bubble was analogous to a really stressed mass of rock.  He made some predictions after the Dotcom bubble, and was right enough that he got hired to just study financial crises in Zurich (LINK).  Tough duty.

When you think a deal is too good to be true, or you see a group of people jumping on a bandwagon, think twice (cough Tesla® cough).  You want to avoid the Hula Hoop® Witches™ without Toilet Paper.

This blog is NOT stock advice, I don’t own any positions in anything mentioned, and don’t plan on any for the next month or so.  

Deals: How George Lucas, Bill Gates, and Almost Every Other Rich Person Got Rich

“I guess the only other fair way to go about this would be that one of us deals with the body situation while the other one of us deal with the Krazy 8 situation.  In a scenario like this I don’t suppose it is bad form to just flip a coin. Heads or tails?” – Breaking Bad

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Who would have guessed that George Lucas would have his own Lego™?

Some small group of people become wealthy due to savings.  Some other small groups of people get wealthy by growing their business slowly over time.  Besides being born rich (which is the easiest and surest way to get rich), what do the majority do?

The Deal.

There are good Deals, and there are bad Deals, and I’ve been involved with both kinds.  So have you.  Anyone who has done a Deal (and, really, that’s everyone – two year olds start bargaining for candy and to stay up late as soon as they can speak) has likewise done good and bad Deals.

Let’s start with bad Deals.  One of the worst Deals I ever did was when I traded in my first car at a car dealership.  I traded for a pickup that was older than the car.  Six years older than the car.  Plus I gave them a big wad of cash to do the deal.  After that Deal was signed, the store manager played a recorded sound of a bomb dropping and exploding over the store intercom.

I innocently asked why they had played the explosion sound.  The car salesman said it was, “just a thing the manager does.”  Of course, it was in honor of the horrible Deal I’d just done.  I suppose it was fair.  Several years earlier I had sold them my used car.  After several hours of negotiation, they offered me a pretty good price.  I asked, “Do you need to know if there’s anything wrong with it mechanically?”

The salesman said, “Nah.  Just the body.  They can fix any mechanical problems.”

The car had a cracked engine block.  Hint:  seeing steam coming out of your tailpipe is never a good sign.

Well, I did ask.  Actually, several times.  I’m not sure they really liked that Deal . . . I guess I wish I had a little bomb sound that I could have made . . . “oh, no, that’s nothing.  Just something I like to do.”

But they got the last laugh with the pickup.  A year later it threw a rod (this is very bad) through the engine block and oil pan while I was driving seventy miles per hour.  Pretty impressive, actually.

What are some examples of other famous Deals/decisions?

  • George Lucas got the merchandise rights for a little film he did called “Star Wars®” for $20,000. I think that one little afterthought deal earned him over a billion dollars – and that’s after taxes.  Nerds who live in Mom’s basement can afford a LOT of Boba Fett® figurines, since they can avoid that whole “dating” money sink.
  • Bill Gates bought DOS® for $50,000. It formed the basis of MicroSoft™.  It became really valuable because IBM® said, “Who wants to own software, am I right, Brandon?  The money is in the hardware.  Let’s go get some martinis, cigarettes and blow dry our feathered hair, maybe play some Pac-Man™.”  Or whatever IBM© dudes said at lunch when Reagan was president.
  • Peter Thiel bought 10% of Facebook® for $500,000. He now only owns 2-3% of Facebook© due to dilution and share sales.  Don’t cry, he can still afford to buy lunch out once a week.
  • The Internet Bubble was probably the greatest mass insanity since the Dutch sold tulip bulbs for the price of a house (yes, this really happened, and I’ll talk about it in a post somewhere during the next week or two). I had a friend who got caught up in a website during the Bubble.  He ended up selling a company (he owned about 20% of it) to Alta-Vista©.  Who?  Alta-Vista™!  They were the Google™ before Google®.  How much did they sell the company for?  Fifty Million Dollars.  Immediately, my friend was worth Ten Million Dollars.  Unfortunately it was in Alta-Vista stock, which, by agreement he couldn’t sell for six months.  Six months later?  His Ten Million in stock was worth Two Million.  He got out, but he was a 36 year old with $2,000,000, which I guess is a pretty cool consolation prize.  Why did Alta-Vista™ want his company?  It had huge growth – heck, it made $2,000 a month!
  • AOL®-Time™ Warner©. Investors lost $8 billion on this merger.  Who could have predicted that dial up internet wasn’t the wave of the future?
  • Invading Russia or Afghanistan. Repeat after me:  no land wars in Asia.  Oh, we’re involved in two of them right now?  Yikes!
  • Nathan Rothschild had early information on the result of the Battle of Waterloo where Wellington defeated Napoleon in “Friday the Thirteenth Part 4: Napoleon Strikes Back.”  Even from the Rothschild archives we find:  “I am informed by Commissary White you have done well by the early information which you had of the victory gained at Waterloo.”  So, knowing the outcome of the battle, it seems certain that Rothschild made some money as the markets were agitated with the uncertainty of the war.  How much did Rothschild make that day?  History does not record, but Rothschild built a fortune that is estimated at $450 billion dollars in today’s money.  That’s five Mark Zuckerbergs.  Nathan didn’t make many bad Deals . . . .

What characterizes a Bad Deal?

  • Missing information: When I made my stupid truck deal, I had no idea how to get car value information.  This was pre-Internet.  Mismatched information leads to one-sided Deals.
  • Failure to understand potential: Star Wars® merchandise might have been a few posters and t-shirts.    Biggest movie merchandising Deal ever.  This is similar to what Bill Gates saw.  He figured that DOS® was worth much more than the owner did, and used it to leverage into everything MicroSoft™.
  • Taking advantage of circumstances. Thiel originally lent money to Facebook® that they needed badly.  He ended up with the 10% equity stake in the company.  Nice timing, good Deal.
  • Stoned-Level Euphoria: The Internet Bubble was characterized by wisdom of a mob all high on PEZ® and thinking that a website that was clearing $2,000 a month was worth $50,000,000.  Like toddlers with checkbooks making Deals.  Trade a Bugatti® for Cadbury Cream Eggs®?
  • Invading Russia or Afghanistan just shows that you have no ability to learn from either history or The Princess Bride®.
  • Rothschild bet on bad Deals made in a hurry under pressing circumstances. Never make a Deal under pressure, unless you have to.  Really have to.

Nature of the Deal

I’ve seen company take long, agonizing looks at acquisitions and mergers that amounted to far less than 1% of the company’s value.  I’ve also heard that Warren Buffett has bought many a company on a one page contract.  He says his lawyers make them longer now, but the Deals that made him rich (well, richer) could be written on a single page.  And nobody argues that Buffett does bad Deals.

But are there really Win-Win Deals?

Whenever I hear “win-win” I think of those zombie adult over-enthusiastic motivational speakers.  You know the ones I mean – the ones that are always insufferably happy?  Them.  They talk about win-win.  But win-win deals can be real, and here’s an example:

I was working at a multi-billion dollar company when a multi-billionaire decided he wanted to buy it.  He offered 30% above the current stock price, which was six times what I had gotten my shares for.  I took his offer (for my shares, not the company) in a second.  The billionaire then structured his payments from the profits so that his original purchase was paid off in about three years.  Plus he still owns the company.

So, I got more money out of the stock than I ever expected, the billionaire got more billions, and he still employs thousands of people daily to make products that millions of people use.

That’s a win-win-win-win.  Yay capitalism!

What was my personal best Deal?

When taking a job at a company, I requested as part of my offer that if they ever asked me to move, they’d pay me at least what I’d paid for my house.  Since house prices always go up, this was an easy calculation for the company, right?  Sure!  They agreed, and I said, “yes.”

Eleven months later when they asked me to move, the housing bust was in full swing.  Thankfully, they cut me a check for the difference between the appraised value of the house versus my original purchase price.  Had I not asked for that simple clause, I would have been out $45,000.  The upside?  The company also paid the mortgage, insurance, and property taxes until the house sold, a year and a half later.

Don’t feel bad for the company . . . they still got the better end of the deal.

They got me!