Maybe You Should Choose The Opposite of Easy?

“Look, you two guys are just guys, okay? Mr. White, he’s the devil. You know, he is smarter than you, he is luckier than you. Whatever you think is supposed to happen, I’m telling you, the exact reverse opposite of that is gonna happen, okay?” – Breaking Bad

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Yup, that’s a real, live open Blockbuster©.  You thought that all the Blockbusters® moved to Paris to live with a Frenchman named “Louis” in a dingy apartment above a bread shop in a sort of shabby, Bohemian artsy life that involved a lot of angst and cigarettes, but here is one that’s still open.

Pop Wilder was at the peak age of life, 45 or 46, when the big bank in the Midwest called.  They’d met him at a conference, and they liked him.  A lot.  They’d like him to move from being President of his small farm bank into the big leagues.

Taking the job would mean moving away from the small (population at when he got the job offer was about 750 people) mountain farming town where he lived since his birth to a larger Midwestern town (population zillions).  He and Mom discussed it, and he decided he would take the job.  After all, they were shoving his face full of more money (salary comparison in 2017 dollars:  $310,000, and those are American dollars, not those cheap Canadian dollars) than he had ever expected.  And the future was wide open – this was a BIG bank.  He might even be called up to New York if he did well with the Midwest bank, where the money could be even more.

He went in to quit, and called the majority shareholder, Mr. Potter (we talked about him earlier, here (LINK)).  Potter told him to stop and think about this – he’d be leaving the town he was born in, the town where he’d grown up.  “Why, Pop Wilder, you know everyone.  In a big city, you wouldn’t know anyone!  And the risk, what if you didn’t do well?  Then you’d be fired in a big city!  To make it easier, why, I’ll match their offer.”

Pop Wilder stayed.  One night, 17 years later, he would bitterly remark that he’d had the last raise of his life 17 years earlier.  Mr. Potter had no viable replacement for Pop, and had been a shrewd and manipulative businessman – playing off of Pop’s fears.  But Pop (and Pop’s name) was what he wanted, but he wanted it only at the lowest possible price.

To give you an example of what kind of a gem Mr. Potter was:  Mr. Potter owned a gold mine, and fired his mining engineer every two years.  He didn’t want the mining engineer to know more than he did about the mine.

Great guy, huh?  I met him once.  I felt like I was in the presence of something H. P. Lovecraft wrote about – some evil eldritch abomination from beyond time.  Or just an evil old dude.

Fast forward a very long time . . .

I was living in Alaska with The Mrs.  We loved it.  We had given birth to Pugsley up there (well, to be honest, I was present, and wrote the checks, so I gave birth, too, right?).  Our house was the right size.  The lifestyle was amazing – guns, gasoline, and woodburning fireplaces.  Plus they even had Internet.

Then an old boss called.

He was looking for me to move down to the lower 48, specifically, Texas.  Honestly, we weren’t interested.  Fairbanks was wonderful.  And I had even said (once upon a time) that I’d never move to Houston.

I told him, “No.  Thanks for asking.  We like it here.”

His response:  “What would it take for you to move this way?”

Me:  “Okay, (NUMBER).”  I arrived at number by adding my salary, my wife’s salary, her bonus, my bonus, and then threw 20% on top.  I thought that my unreasonable request would at least gently shut him down so I could move on and ignore him.

Him:  “Okay, we could do that number, plus a guaranteed 20% bonus, minimum.  And a signing bonus.  And we can move all of your stuff.  But the boss says we can’t buy your house with the relocation package.”

I was stunned.  He called my bluff.  The Mrs. and I spent agonizing hours on this, but finally gave in and listened.  He flew the whole family down to Houston and we looked the place over.  Not to our liking, but the opportunity was so large . . . .

We got back to Fairbanks, and found a job offer on my email.

Me:  “I can do it, but only if you buy my House.”  I secretly hoped they’d stick to their guns and say no.

Him:  “Okay, we’ll buy your house.”

I told my Alaska boss, who was not at all Mr. Potter, that I was quitting.  The company I’d worked for in Alaska immediately raised my salary by 20%, and promised that there would be more to come.  But the opportunity there was working on something much smaller than the new job.

Part of the calculations involved in coming to our decision was Pop Wilder’s life:  he had become stuck in a situation when he didn’t take the chance for significant success, and always regretted it.  In my case, I was going to take the opportunity – it was 100 times bigger than anything I’d ever done.

So, we moved to Houston.  And it worked out okay, even though we still miss Fairbanks.

But it did start me thinking, about opposites.  Staying in Fairbanks would have been easier.  How often is doing the opposite thing from what’s easy the right thing?

I think the answer is:  most of the time.

  • Exercise vs. Couch – it’s obvious that sitting on the couch and eating Twinkies® is generally more pleasurable than exercising until your thighs are on fire and sweating buckets, but study after study (dating back 4,000 years to Egypt, where the first article appeared in Healthy Pharaoh Today) shows that, while more fun, couches kill.
  • Full vs. Hungry – Imagine the feeling after a Thanksgiving feast . . . and now imagine it killing you. Yes, nobody likes feeling like they’re really hungry, but recent studies have shown that food deprivation is awesome for you, both short term and long term.  I’m mean, not starving to death long term, but rather periodic fasting.
  • Party vs. Work – Hard work may pay off in the future, but partying always pays off now. That’s exactly the right answer if you’re running for congress.  Everyone else wants to see the work first.
  • Discipline vs. Freedom – It’s hard to make a plan and stick to it, day after day, for months, especially when it looks like it’s not succeeding. But how many times did that one extra attempt push a person from failure to success?  Stephen King would be a dead drycleaner except for trying one more time (LINK).
  • Thrift vs. Spend – Saving money is hard, when there are so many shiny things to buy, and so very much PEZ® to eat. So very hard.  But it will allow you to buy even more PEZ© when you are old, like me and your Doctor says you shouldn’t have it.
  • Kindness vs. Selfishness – Okay, there have been a few moments in my life when I’ve cut loose and allowed myself to be horribly selfish. Those days are generally weekdays.  Or weekends.  And often occur during the Summer, but also Winter.  And Fall.  And Spring.  At least I try.  On alternate leap years I really try. See also:  Courteous vs. Rude.
  • Honor and Loyalty vs. Cowardice – A coward dies a thousand deaths, a brave man but one. But I also bet a live guy wrote that?  Anyway, it’s tough to show honor and loyalty in a world that values neither.  So much easier to give in.  My problem is I have to look myself in a mirror and see the guy on the other side.  So is it my cowardice of not being loyal and honorable that keeps me loyal and honorable?
  • Morality vs. Licentiousness – Apparently Hollywood hasn’t heard of “morality,” at least based on the most recent headlines. Maybe someday someone will make a movie about that?

The easy road is downhill.  Challenges are hard.  Letting go of the comfort of the warm bed on a cold morning is hard.  Growth and achievement require effort.

Do the opposite of comfortable – that’s where living a heroic life starts.  Or maybe heroism starts on Skyrim® or Assassins Creed™?  But heroism does start with taking a chance.  Being bold.

When was the last time you took a chance?

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.

Your Passion is Stupid

“No, not unpopular, they just have a more selective appeal.” – This is Spinal Tap

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Okay, there’s a time when your passion of throwing big rocks in the river should be followed.  That’s whenever you’re at the river.

Pop Wilder was a banker.  Oh, I know what you’re thinking, John Wilder is the banker’s son, summers in Maine, winters in Switzerland.  No.  Summers in the forest cutting firewood in Colorado, winters in Colorado on snowmobiles fifty miles into the back country.  Okay, winters were better than Switzerland, at least since the CIA stole the secret of the Swiss “hot chocolate” technology and weaponized it in Swiss Miss® cocoa packets.

On occasion, especially after a few bourbon and waters, Pop Wilder would get a bit melancholy.  “John Wilder, you can be whatever you want to be when you grow up, but don’t be a banker.”  Although by any measure, Pop was successful.  And he was passionate about his work.  He left every morning before the Sun came up to open the bank.  He got home two hours after the bank had closed.  He unlocked the place and locked it back up.  He never took more than 10 vacation days in any year, and I never saw the man take one day off due to being sick.  (An aside:  I’m stunned that’s the first time I came to that realization – I haven’t taken a sick day off since 2000.  Wonder where that stubbornness comes from?)

Pop Wilder, you see, wasn’t the “snort cocaine off a stripper’s butt” type banker, but rather the “small town banker that drives a car to work that’s eight years old.”  I think he might have not abused his power enough . . . I’m not sure.  What’s the use of having power, if you don’t abuse it?

What always bothered Pop Wilder the most was when he had to explain to a person who wanted to borrow money that he wouldn’t lend it to them – he didn’t think the loan was based on sound collateral, or the borrower’s income wasn’t enough to cover their living expenses plus their debt.  He was proud at the end of his career that he’d never had to foreclose on a single home.  To him, the act of lending money was a moral event – you didn’t burden a borrower with more debt than they could pay.

That didn’t make the borrowers who he turned down happy.  They were (understandably) upset that Pop had crushed their dreams, but in the process, he’d done them the biggest favor of their lives.  In a weird way, his “no” had saved their financial future from the siren song (read The Odyssey or watch Oh, Brother, Where Art Thou (LINK) if you missed that reference) of their dreams and passions . . .

One of my favorite things to see is the garden variety successful person who’s being interviewed.  Let’s pretend it’s me, since I’m rich and semi-famous:

Oprah:  “What’s your secret, John Wilder?  How did you get to the pinnacle of success and yet maintain those superb washboard abs?”  (Oprah bites her lip.  Perhaps I should have not worn such a tight shirt.)

John Wilder:  “I followed my passion, Oprah.  My passion is all consuming.”

Fade to Clip of Me Synchronized Snowboarding Off the Top of Mount Everest Accompanied by an Actual Yeti.

You’ve heard that, too:  successful people telling you to follow your passion.  I probably heard that two dozen times between high school and college.  Follow your passion.  Invariably it was by short salesmen who were in suits while I was wearing an Iron Maiden t-shirt.  And I was (really) thinking about going skiing or checking out the girl of the week.  My passion did not and does not involve being an old man in a suit.

Hopefully you haven’t done followed your passion, because your passion is stupid, unless you are the ghost of Steve Jobs.  Steve, you can follow your passion.  Only you.  Namaste.

I’m sorry to tell everyone else a simple fact: your passion is stupid.  And my passion?  My passion is stupid, too.  Maybe even really stupid.

The Mrs. and I have been married roughly since the invention of dirt.  We’ve thought about opening our own businesses several times, and even produced a business plan or two.  All of them have been based on things we like, things we are passionate about.  We’d discuss, fine tune, get the spreadsheets ready, and then decide if we were passionate about it.  As you’ve hopefully read in the fine pages of this blog before – the best deals are the ones you don’t do.  We’ve passed on most of the deals.

But one in particular we got all of our ducks in a huddle, got a small business loan application together, and went off to the local bank to ask for a small business loan with our spreadsheets and our plan and our proposals and estimates and projections.  I didn’t go to the meeting – I was at work.  But The Mrs. walked in, and the banker didn’t blink an eye before he got to his response.  “No.  Not now.  Not ever.  Please pretend we’ve never met.”

The Mrs. was upset when she got home.  I shrugged, and we decided to carry on without opening that business.  About a month or two later we read in the local newspaper about how someone had opened a business that was nearly exactly what we’d planned to open up.  They did a detailed story on the place, nearly a full page, with color pictures.  Amazing amounts of free advertising.

That business closed up before six months had passed.  The banker who said “No” had saved us $55,000 of loaned money.

Oh.  I get what Pop was doing.  Rather than helping people live their passion, he was saving them from their passions.

The people who say that you should follow your passion are generally not passionate about the thing that they’ve done, whether it be roasting coffee beans or creating BookFace®.  No.  They’re passionate about success.  They’re passionate about their business because it brought them success.  It’s like pretending you like Tootsie Rolls Lollipops® for the outer candy shell.  You don’t.  You like the center.

And that’s the secret of success.

I am passionate about playing the guitar.  I love to do it.  Unfortunately, my guitar is as good as Johnny Depp’s personal hygiene or money management skills.  So, of course, I devoted my entire career to playing bad guitar?  NO.  I suck at guitar.  I will never be good at it.  But . . . I do math and science-y things really well.  I have the intuition on that stuff that Eddie Van Halen has for meth guitar.  Maybe not that good, but I found that the combination of the math stuff and the science stuff and the planning stuff and the intuitive grasp of physical systems and processes (with a dash of normal human empathy) pops me into the top 0.1% (hint, that’s the only place the money is).  That combination allows me to win where other people would lose (in certain situations).  And in one instance the application of those skills allowed an IPO to go through that netted a company a billion or so dollars.  Yay me!

And winning in situations like that makes me passionate about combining those skills.  So, am I following my passion?  Well, I’m following my success, which is a lot like following passion.  Except following my passion would make me bankrupt because my guitar is only slightly better than my singing.

So it comes down to . . . what are you good at?  I mean, really good at?  Not what you’re passionate about.  Let’s face it:  you can be passionate about drinking bourbon, WWE, MMA or anthropology, but none of those things are helpful unless you’re part of the 0.1% AND you can figure out how to win/make money with that skill combination.

Can you make money with it?  Most things you’re good at don’t pay any (really any) money at all.  You’re in the top 0.001% of the world at trimming nosehair?  No.  Next.  Your skill should translate into actual income.  What does the best person in the world at what you’re good at make?  Can you live on 1/10 of that?

Okay.  You’re good at it.  It’s a rare skill.  You can make money at it.  Good money.  Now your challenge?  Get better at it.

Most people take a decade or more of really hard work, over 10,000 hours, to become world class at a skill.  Generally, the longer they execute the skill and the more they work at it, the better they become, peaking in their forties or fifties.  These aren’t physical skills – those peak about 24, and take a big nosedive once you pass 30 or so, and if your skill is there, strike quickly – age will pull you away faster than you anticipate.  What I’m talking about are mental skills that are honed by experience.

Passion?  No banker will lend on that.  They’ll lend on experience, skill, and excellence.  Be passionate about those and the world will allow you to snowmobile in Colorado in winter . . .

People will call you lucky.  Just smile and ignore the sweat.

How Many Full Moons?

“Patients sometimes get better.  You have no idea why, but unless you give a reason, they won’t pay you.  Anybody notice if there’s a full Moon?” – House, M.D.

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Proof time is fleeting.  This is now 205 pounds (that’s sixteen metric tons) and is going to college in less than twenty-two months.

If you live to be 80 – you will have lived through 1042 full Moons (maybe 1043, depends on when in the month you were born).  That seems like a lot of full Moons, but if you’re, say, 28, you’ve already burned that number down to 677.

How many of those full Moons will you see?  If you’re part of today’s smart phone obsessed majority, not many.  Here’s a pretty powerful quote from Paul Bowles’ book, Sheltering Sky:

Because we don’t know when we will die, we get to think of life as an inexhaustible well.  And yet everything happens only a certain number of times, and a very small number really.  How many more times will you remember a certain afternoon of your childhood, an afternoon that is so deeply a part of your being that you can’t even conceive of your life without it?  Perhaps four, or five times more?  Perhaps not even that.  How many more times will you watch the full Moon rise?  Perhaps twenty.  And yet it all seems limitless…

In a point I’ve (tried) before to make:  You’re dead.  What, exactly, are you going to do about it?  How are you going to live . . . today . . . to justify all that you are?

Inside each of us is our vision of ourselves.  It’s not as the world sees us.  It’s as we see ourselves.  And our minds are powerful tricksters.  Jordan Peterson (I’ve written about him (LINK), (LINK), and (LINK)) spoke in one video I watched about treating a girl with anorexia.  She could easily distinguish, say, which book or piece of paper was larger, but she could see no difference between the size of her thigh and that of Dr. Peterson.  So Peterson had her trace her thigh’s width while sitting on a piece of paper.  Then he had her trace the width of his thigh.  She was shocked that his was so much larger than her emaciated thigh.

You know the type of person that you think you are – what kind of person does the outside world see?

I think that as we (as a society) become more enmeshed in the inner and virtual world, we become somewhat apathetical to what goes on in the actual, physical world.  I’ve talked with multiple parents of high school aged children and their parents are concerned:  the kids don’t seem to want to do anything.  They’re enjoying life, but the drive to perform and achieve seems to be missing.

“Where is he going to school?”

“We’re just trying to get him out of high school.”

And the Moon keeps circling the Earth.

How do you feel about yourself?

Does the world see you the way that you do?

What are you going to accomplish before the next full Moon?

There are no guarantees.

Get going.

Medieval French, Medieval Warm Period, Medieval Volcano, Medieval Weight Loss Pill

“This is Jenny.  She and her family are having a picnic at the foot of a volcano.  Oh no!  The volcano has erupted!  What do you do now Jenny?  That’s right.  Duck and cover.  What do you do Jimmy? Duck and cover.  Duck and cover!” – South Park

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Thankfully the volcano killed off the giant ice crabs.

On July 17, 1315, Roul returned to his home from a hard day’s farming.  He was very tired.  He was dirty.  He didn’t rank highly on the social scale – he was a serf, and could be bought and sold with the land he lived on.  They didn’t call Roul a serf – his social class was called “villeins” in the local language of northern France.

I was very cold – especially strange since it was July.  The sunsets, when Roul saw them, were more colorful than any he remembered in his life – he was 28 – but the weather was cold, and wet.  At the best of times his wheat harvest might produce seven seeds for each one planted.  Subtract saving one seed for next year’s planting, 10% of them for the Church, and 50% of them for the Lord whose land he farmed and taxes and out of each 14 seeds in a good year Roul could keep, at most, five for eating and trading.  In 2015 the same field, plowed using modern machinery, planted with hybrid seeds, and with fertilizer levels closely monitored would bring over 30 seeds for each one planted.

But Roul could see none of that.  His life was smaller.  Not only was a tractor unimaginable, but the amount of real wealth it represented would be greater than the wealth of an entire province in 1300’s France.  His income was small.  But combined with the barter they got for his wife’s sewing, it was a good, but very tough life.

This year?  This was the worst year he had ever seen.  And the old graybeards in town said that they had never seen a year like this – ever.

And they hadn’t.  The Medieval Warm Period ended around 1300A.D., with temperatures greater than today’s during much of that time, quite optimum for growing plants during the long growing seasons and the population of Europe had expanded.  But the Warm Period ended.

But 1315 was even more special:  Mount Tarawera erupted.  Although Tarawera was almost exactly on the other side of the world from Roul in what would be named New Zealand by Dutch navigator Abel Tasman 320 some years later, its impact on his life was profound.  The volcanic dust and ash filled the atmosphere and cooled the Earth for more than two years.  The Great Famine followed.  Over the next seven years at least 5% (and perhaps as many as 12%) of all northern Europeans died.  The world for them contracted and became hungry, mean, and criminal.  The Black Plague found easy purchase in the wasted land.  The combined impacts of famine and disease caused Europe to experience a significant depopulation during the 1300s, which led to labor being more valuable, which led directly to the values that formed the Renaissance.  The birth of modern culture was forged in famine and pestilence.

But we were talking about Roul.

In the bitter cold of winter of 1315 and 1316, Roul and his wife, Cateline resembled hibernating bears more than a farmer and wife in the prime of life.  During the intense cold of the winters, they spent most of their time huddled under blankets on their straw bedding trying to do as little as possible to conserve every bit of energy – the harvest had been poor and food was in very short supply.  Most days they got up to do the minimum of chores required, and ate very sparingly.

Roul and Cateline didn’t starve.  It was a near thing.  But the society they saw a decade later scarcely resembled the one that they had left behind in the spring of 1315.

So, how far have we come as a civilization?  Right now hunger is still a world problem, but hunger is less prevalent now than at any time in recorded history.  Ever.  Obesity, however, is as bad as it has ever been, and been getting worse.  Stupid Skittles®.

I’ll admit, some dead Roman was right when he said that a pleasure repeated too often becomes a punishment.  But being fat is still way better than starving to death.  Like a joke The Mrs. loves:

A guy was talking to his dog.  “No more food for you, or you’ll get fat.”

The dog responds, “Fat?  What’s that?”

The guy:  “It’s when you eat and drink too much and sit on the couch and don’t exercise and gain a lot of weight.”

The dog:  “Ohhhh, that sounds good.  Let’s get fat.”

What people really want is to sit on their couch, eat chips, drink beer, play video games, and look like The Rock after a particularly challenging workout.  And there are billions of dollars available to anyone who can make that happen.  And people are working on it right now:  The Exercise Pill.

They even found one that was awesome:  GW501516.  Sexy name.  All the cool kids call it 516 (really).  In the subjects that the scientists gave 516 to, they found that nearly immediately exercise endurance went up by double digit percentages.  They lost weight without working out any more than usual.

A perfect pill!  With 516 you could have it all.  Endurance, an athletic bod, and lower weight.  516 even released the hormones and all the good stuff associated with strenuous exercise.

So, where can you get some?

Well, your doctor won’t prescribe it for you because all the test subjects came down with megasupereverything cancer.  Whatever 516 did, it really did a number on the test subjects, giving them every cancer one can imagine.

Thankfully they were mice.

But people are taking 516 right now, body builders and dudes looking to lose weight while getting strong.  Seems like you can buy the stuff, it’s just not approved, and it has been banned by multiple sports (I think there’s a Lance Armstrong joke in there, but I’ll skip it).  So you can get it, but you’re not supposed to take it, just like animal antibiotics, which people do take, since they can skip going to a doctor and just get the stuff online.

Work hasn’t stopped on bringing 516 (and some other exercise pills) to market, but they’re hoping with 100% less cancer, and the New Yorker (LINK) has a pretty good article on it.  I won’t spoil the ending.  Okay, I will.  We don’t have an exercise pill.

But . . . should we?  I guess that, from a perspective of having people live healthier lives, I’ve got to say, yeah, we should.  But the very discipline required to keep and maintain a weight, the hard work, the sacrifice, isn’t that part of what makes us stronger, so when life is tough, we know we have the internal strength to stand up to challenges?

Nah.

All that sounds like work.

They’ll have a pill for willpower and inner strength, won’t they?

Key Economic Indicator Higher Than Colorado Pot Smokers

pe ratio

(from http://www.multpl.com/shiller-pe/ on 10/31/17)

The Shiller P/E ratio is shown above.

What is it?

Shiller (who won an actual Nobel® Prize, not a fake one like I made in my 3D printer) analyzes the value of stock markets.  One key metric he came up with was his Shiller P/E ratio – it reviews the price of the stock divided by its earnings, but rather than for a single stock Shiller looked at the largest 500 stocks on the US markets – the Standard and Poors (S&P) 500.  It’s sort of a proxy for how big business is doing in America (and, to a lesser extent, internationally, since these stocks are very big and typically have significant foreign revenue).  Read the above paragraph forty times if you’re having trouble sleeping.

Now you know what it is.  Normally I’d be all snarky here and mention how it’s exactly the sort of straight line that Johnny Depp could walk on a Saturday night, but I’ll just leave this short post here.

You don’t need a Nobel™ to read this graph . . .

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.

Risky_Business

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.

20171026_202459

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! 

Rules for Negotiation: Never Negotiate Against Warren Buffett . . .

“To win a negotiation you have to show you’re willing to walk away. And the best way to show you’re willing to walk away is to walk away.” – Burn Notice

DSC00230

If bidding starts higher than a bag of Skittles® for this truck, it’s too high.

Last Wednesday I posted about how a really big source of wealth was “The Deal” (LINK).  I listed some good and bad deals, and noted that some deals were big winners for all sides.  But deals don’t come pre-assembled.  They’re made (or not made) on purpose.

And as near as I can figure, the people who get wealthy off of deals look at many more deals than they ever make.  Last time I played poker, I played 30 hands for the evening.  I won two.  I made $30 bucks.  I would have made more, but I kept trying to lose so I didn’t walk out of the house $80 up, which I would have considered rude because it was the first time I played poker there.  (My initial stake was $20.)  Lots of bad deals, two winning deals.

One big lesson leads to the first rule:  it’s easier to win or create great deals when the stakes are so small that you can think calmly and rationally.  Hence:  Warren Buffett can make lots of small (to him) bets that were white-knuckle negotiations on the other side of the table.

Rule 1:  BATNA

The first rule of negotiation is that you don’t have to end up with an agreement – you need to know your BATNA – Best Alternative To a Negotiated Agreement.  In the poker example, I folded and was out a buck or two on each hand I walked away from.  Several times in my life I’ve walked away from job offers because they weren’t right.  And no amount of negotiation could have made them right.

Sometimes, most times, the best deal is no deal.

Warren Buffett generally walks away from most deals.  He could literally do almost any deal he wanted to do, since most companies are smaller than the available cash that his company has on the books.  He reminds me of the story about the guy on the golf course who kept talking about how much money he was worth.  The old Nebraskan golfer couldn’t stand it.

“How much are you worth, son?” asked the Nebraskan.

“Fifteen million dollars.”

The Nebraskan responded . . . “Flip you for it.”

The question you have to ask is . . . what happens if you don’t come to an agreement?

If you’re Buffett, there’s no deal you have to make.  But you’re you – there are consequences from missing deals – sometimes significant.

One particular negotiation that I had to make involved negotiation over some land with a guy worth about $80 million bucks.  If you can help it, NEVER negotiate with someone worth $80 million dollars.  Unless the deal is ludicrously good for them, they have NO reason to even speak with you.  Unless, your kid is in the same calculus class.  So, he talked with me.  And gave offered us his land at 10 times the going rate.

Our alternative as a company?  It was spending several million more than his offer on another patch of land.  We almost the other land, on principle.  The rich guy?  He wouldn’t have cared.  Our deal, worth more than the average family makes in years, literally was a favor because his kid went to school with my kid.

Sometimes your alternative sucks.  But we had one.

Another big mistake is buying into the frame of reference of the other party.  If his opening position is that he’ll trade you a handful of magic beans for your two children, negotiating him down to just one child isn’t awesome negotiation (unless you really want him to take both).  No, the deal is bad and probably isn’t worth negotiation.

Rule 2:  Don’t negotiate against yourself.

I worked with a guy named Moe who was a genius at negotiation.  We would drive around in the company pickup and he would take me, the new kid at work, out to look at jobsites.  Occasionally these trips would involve Moe’s personal shopping, as well.  He was a golfer, and one time we walked into a golf shop and he asked about a specific club.  He then proceeded just to walk around the store, and the clerk would follow him around, constantly lowering the price.  The clerk was negotiating against himself, while Moe looked disinterested.  I tried the same tactic later that week at a furniture store – same result.

Rule 3:  When you get to yes, shut up.

This one is pretty simple.  I’ll just shut up now.

Rule 4:  The deal isn’t done until the deal is done.

When I bought my first car from a dealer, I was surprised that negotiation wasn’t done.  We had just negotiated price.  Then there was financing.  And undercoating.  And floor mats.  And add on maintenance contracts. And about half a dozen other things.  The deal wasn’t done until after another dozen “deals” were done.  They tend to push these deals after hours of negotiation, when you’re tired.

Rule 5:  The more information you have the better you can understand what a good offer is, and whether to accept it.

Whenever you negotiate for a job, the employer has more information – how much they can offer for the job, and what other things they can do to sweeten the deal.  One colleague I know started a job in management at a company after accepting their offer.  Three months later, a new employee of his started.  The new employee had gotten a signing bonus:  my colleague hadn’t.

Oops.

Rule 6:  Know what is important to the other party.

It might be money.  It’s probably money.  But it also might be looking good to their boss.  Understand what they want, and then see how to best give it to them.  It might be something simple like being able to leaver every other Thursday at 3pm.  It might be that they won’t stop until you give them a coat made from bigfoot hair stained red from a pigment derived from Martian sands.  Or even something unreasonable.

Rule 7:  If you live longer than age five . . . you will run into unethical negotiators.

They might lie.  Which looks and sounds a LOT like bluffing.  But it’s not, and you know the difference.

They might threaten.  One salesman always talked about all the people that got fired for buying the competing product from his competitor.  How did that affect me?  It made me want to never buy his product (I’m contrarian that way).

They might try to impact the negotiation by “accidently” letting information slip.  Information carefully prepared to skew your decision or offer.

My best advice?  Be honest.  No one can cheat an honest man.  And always be ready to walk.

There are other deals.

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.