GM has a negative equity of $60 billion. I've never seen a listed company with negative equity before but it basically means that company, if bought is worth less than $0, yet some how the market capitalization for GM is $1.13 billion at it's current share price of $1.85.
So if someone bought out GM for $1.13 billion, you'd get $60 billion in debt. Sounds like a terrible deal to me. So here's my question, what do you do with a company that is so terribly in debt? You shut it down. Sad, but true.
I highly doubt that GM will ever make it back to profitability, or even have positive equity in this lifetime. Given the current economic climate we have now, I highly doubt that car sales will return in time to even give GM a chance.
So here's my play. I've decided to buy a few put options with a strike at $3 for $2. If GM goes broke, share price goes to zero, the contracts become exercisable and the underwriter is forced to buy @ $3.
We'll see what happens.
Tuesday, February 24, 2009
Monday, February 23, 2009
Terrible Analysis Should be a Crime
I've been following up on a lot of economic reports recently and I have to say that the quality of analysis being published on the internet is crap. Not just ordinary crap, but the kind of crap that might have come out of mutant cow that should've been shot in the first place.
Yeah, it's that bad and I am in a ranting mood.
Just having data doesn't make you intelligent
Sure, having data might make you *seem* intelligent, because it might imply that you did some "research" possibly leading to some interesting conclusion, but saying stupid things based on good data still doesn't change anything-- you'd still be an idiot.
I remember once I was listening to a commentator quote that once that the richest 10%, despite making about 90% of the wealth should be outraged because 10% of the population was paying 90% of the taxes. Hence progressive taxes are a bad thing-- we should have a flat tax instead.
For a second, he sounded intelligent. After I thought about it, he was a total idiot.
Suppose that we did have a flat tax. The people that made 90% of the wealth would pay 90% of the taxes by definition of a flat tax. Suppose that there were 11 people out there. 1 man that made $9 and 10 men that made $1 and everyone was taxed at 10%.
The total amount of money made was $10, so the government would get $1 out of it. Right? So let's figure out how much everyone paid!
The 1 rich guy paid $0.9, the 10 poor guys each paid $0.01 for a total of $0.1. The rich guy that made 90% of the money paid 90% of the taxes!
I am surprised that people with intellectual deficiencies this bad haven't been weeded out by natural selection because it takes talent to be this stupid!
Critical Analysis is Crucial
The ability to think critically is essential, because this directly relates a person's ability to put data into perspective. In other words, it's what gives meaning to data. Meaningless data is useless, the same goes for people that don't have critical thinking skills.
If you think I'm being harsh, well... the conversation would just have to end here... Heh.
Just being Critical doesn't Mean that you're Smart
Especially if you're wrong. We all know the loud mouthed critical dude that thinks he knows his stuff but is completely off the deep end. If you want an ounce of respect, you've gotta be right. Right in ways that are concrete and measurable.
Now that's the real test of intelligence.
It's tough being smart. Smart people know this and know when to shut up. The stupid ones don't.
Yeah, it's that bad and I am in a ranting mood.
Just having data doesn't make you intelligent
Sure, having data might make you *seem* intelligent, because it might imply that you did some "research" possibly leading to some interesting conclusion, but saying stupid things based on good data still doesn't change anything-- you'd still be an idiot.
I remember once I was listening to a commentator quote that once that the richest 10%, despite making about 90% of the wealth should be outraged because 10% of the population was paying 90% of the taxes. Hence progressive taxes are a bad thing-- we should have a flat tax instead.
For a second, he sounded intelligent. After I thought about it, he was a total idiot.
Suppose that we did have a flat tax. The people that made 90% of the wealth would pay 90% of the taxes by definition of a flat tax. Suppose that there were 11 people out there. 1 man that made $9 and 10 men that made $1 and everyone was taxed at 10%.
The total amount of money made was $10, so the government would get $1 out of it. Right? So let's figure out how much everyone paid!
The 1 rich guy paid $0.9, the 10 poor guys each paid $0.01 for a total of $0.1. The rich guy that made 90% of the money paid 90% of the taxes!
I am surprised that people with intellectual deficiencies this bad haven't been weeded out by natural selection because it takes talent to be this stupid!
Critical Analysis is Crucial
The ability to think critically is essential, because this directly relates a person's ability to put data into perspective. In other words, it's what gives meaning to data. Meaningless data is useless, the same goes for people that don't have critical thinking skills.
If you think I'm being harsh, well... the conversation would just have to end here... Heh.
Just being Critical doesn't Mean that you're Smart
Especially if you're wrong. We all know the loud mouthed critical dude that thinks he knows his stuff but is completely off the deep end. If you want an ounce of respect, you've gotta be right. Right in ways that are concrete and measurable.
Now that's the real test of intelligence.
It's tough being smart. Smart people know this and know when to shut up. The stupid ones don't.
Outsourcing done the wrong way
I mentioned earlier that my project group is having a $100,000 machine custom built and delivered for our research work. My research team has decided to put me as the guy that deals with the details of getting the machine working. The hardware setup had been finally completed the machine has been moved into our labs.
The stupid thing is that the people that built the machine haven't been on time with the software, not a single line of code written and the thing is even written labview for crying out loud. And some how, having the control software is costing us $20~$30k to write and they plan to do it in a week. I could do that kind of work in a heartbeat and I've done it before too on a different machine.
So here's the deal, one day at work, my supervisor was off on a business trip for several days and to kill time, I decided to write software to automate one of the experiments we do. Basically, what people used to do was take data every hour for some experiment. The experiment would generally run for as long as someone was at work. What I did is automate the process, I managed to figure out the code and write the entire software in 3 days and now we run data logging experiments for 72 hours instead of just 8 like we used to do.
The guys we've contracted to do the same job are sending in 2 guys and need a week to do it. Seriously, I can do what they do in half the time and half the man power.
I shake my head at this whole thing. The point of outsourcing is to *save* money! Well there you have it... if you want to get rich, be a contractor! Working for big corporations is like taking candy from a baby.
The stupid thing is that the people that built the machine haven't been on time with the software, not a single line of code written and the thing is even written labview for crying out loud. And some how, having the control software is costing us $20~$30k to write and they plan to do it in a week. I could do that kind of work in a heartbeat and I've done it before too on a different machine.
So here's the deal, one day at work, my supervisor was off on a business trip for several days and to kill time, I decided to write software to automate one of the experiments we do. Basically, what people used to do was take data every hour for some experiment. The experiment would generally run for as long as someone was at work. What I did is automate the process, I managed to figure out the code and write the entire software in 3 days and now we run data logging experiments for 72 hours instead of just 8 like we used to do.
The guys we've contracted to do the same job are sending in 2 guys and need a week to do it. Seriously, I can do what they do in half the time and half the man power.
I shake my head at this whole thing. The point of outsourcing is to *save* money! Well there you have it... if you want to get rich, be a contractor! Working for big corporations is like taking candy from a baby.
Thursday, February 19, 2009
Almost One Year
It's almost one year since I started working in Japan doing R&D work. I'd have to say that time most certainly flies, that of course might imply that I've been having fun. To a degree, I'd have to say most definitely yes, but I'd have to say that most of my fun isn't work related, but I digress.
A few days ago, I form was sent out to me and to the other new recruits to prepare a form as a sort of a review of their work place, what the environment is like, what we do, personal satisfaction with the job and any other sort of comments that might help us do our job better.
The form needs to be submitted next week and the new recruits are going get together for some kind of meeting with the HR people. So I am going to take this time to write my own review of the year to help me put things into perspective.
The Environment
As far as it comes to working environments, my work place is pretty lax. I don't find myself super bogged down with work nor do I find myself working crazy hours or overtime which is stereotypical with Japanese work culture. I do, however put in about 1 hour of overtime everyday to try and get some extra pocket cash since base salary for new hires are pretty low as it would be nice to have a little extra spending cash for if/when I need it.
The People
The people are generally nice and I am fortunate to be in a fairly friendly team as we like to joke around from time to time while working. There are other small subteams in the group which aren't as lively so I am rather happy about that.
But having a little fun aside, I think there are some communication issues in the sense that there isn't a lot of it happening. I find the people in my team to be kind of in their own little world when it comes to work. I hardly hear from other people about what they really are doing aside from the things presented in the meetings (and simply attending meetings to learn is a terrible way to learn).
I also find that people tend to be quite unresponsive when it comes to new ideas. I've made some presentations on some ideas about what might be nice from time to time but usually it ends into either "we'll look into it" or "ok that seems interesting" and ends at that. For a company that is supposed to be about technological innovation, just passing up ideas or not acting on them is a sign of creative death. It also shows from the kinds of products they've been recently putting out... all of them are totally behind when it comes to the technological revolution curve.
On job satisfaction
Job satisfaction for me is directly related to the amount of inspiration I can derive from my work. Unfortunatly, I am not at all inspired by my work. After condisering what I do and what we are making, I don't see it as a leap forward in technology and at the same time, I am not finding a lot of interesting new ways of doing my job because I need to find a way to make time and get resources to do what I want to do (hence forth I am working on becoming very good with very cheap resources).
The other problem is sort of a lack of fresh and beautiful ideas. I've spoken with people from time to time and I don't feel a vibe of creative energy or vision. It kind of sucks when I have a lot of things that I want to try or do and have no one to talk with about it... or no good source of interesting ideas.
The company is a big place and there are probably lots of people that I haven't met yet that might be really interesting people. But from the people I've met so far, I don't know; something is missing.
A few days ago, I form was sent out to me and to the other new recruits to prepare a form as a sort of a review of their work place, what the environment is like, what we do, personal satisfaction with the job and any other sort of comments that might help us do our job better.
The form needs to be submitted next week and the new recruits are going get together for some kind of meeting with the HR people. So I am going to take this time to write my own review of the year to help me put things into perspective.
The Environment
As far as it comes to working environments, my work place is pretty lax. I don't find myself super bogged down with work nor do I find myself working crazy hours or overtime which is stereotypical with Japanese work culture. I do, however put in about 1 hour of overtime everyday to try and get some extra pocket cash since base salary for new hires are pretty low as it would be nice to have a little extra spending cash for if/when I need it.
The People
The people are generally nice and I am fortunate to be in a fairly friendly team as we like to joke around from time to time while working. There are other small subteams in the group which aren't as lively so I am rather happy about that.
But having a little fun aside, I think there are some communication issues in the sense that there isn't a lot of it happening. I find the people in my team to be kind of in their own little world when it comes to work. I hardly hear from other people about what they really are doing aside from the things presented in the meetings (and simply attending meetings to learn is a terrible way to learn).
I also find that people tend to be quite unresponsive when it comes to new ideas. I've made some presentations on some ideas about what might be nice from time to time but usually it ends into either "we'll look into it" or "ok that seems interesting" and ends at that. For a company that is supposed to be about technological innovation, just passing up ideas or not acting on them is a sign of creative death. It also shows from the kinds of products they've been recently putting out... all of them are totally behind when it comes to the technological revolution curve.
On job satisfaction
Job satisfaction for me is directly related to the amount of inspiration I can derive from my work. Unfortunatly, I am not at all inspired by my work. After condisering what I do and what we are making, I don't see it as a leap forward in technology and at the same time, I am not finding a lot of interesting new ways of doing my job because I need to find a way to make time and get resources to do what I want to do (hence forth I am working on becoming very good with very cheap resources).
The other problem is sort of a lack of fresh and beautiful ideas. I've spoken with people from time to time and I don't feel a vibe of creative energy or vision. It kind of sucks when I have a lot of things that I want to try or do and have no one to talk with about it... or no good source of interesting ideas.
The company is a big place and there are probably lots of people that I haven't met yet that might be really interesting people. But from the people I've met so far, I don't know; something is missing.
Saturday, February 14, 2009
And now the US Republicans care about inflation!?
Politics generally make me sick, because it's usually about chest thumping and making one's self look good and by pretending to care about constituents when it's really about caring for their own asses.
I saw a youtube clip today of republican Dan Burton complaining about the devaluation of the US dollar and how he managed to get contacted by some Chinese representative that they were worried about the devaluation of treasury bonds they held.
How else should I put it other than that this one terribly big bullshit act.
A Sense of Perspective
Let me be blunt. It was the Republican government that put the US into a huge debt into the first place by the Iraq war and then dishing out bailouts for the banks in when the financial crisis came out. And now that they have just lost the house to the Democrats that they want to complain about spending too much and the devaluation of the US dollar!?
Where were the calls for prudence when it came to deficit spending when the Republicans were in power? The only one Republican that cared dearly about excessive government spending was Ron Paul, who had little support from his colleagues when we was trying to reign in big deficit spending.
It makes me sick at how quickly some politicians change the tune of their song.
If politicians were paid in proportion to their level of approval, most of them would probably be broke.
I saw a youtube clip today of republican Dan Burton complaining about the devaluation of the US dollar and how he managed to get contacted by some Chinese representative that they were worried about the devaluation of treasury bonds they held.
How else should I put it other than that this one terribly big bullshit act.
A Sense of Perspective
Let me be blunt. It was the Republican government that put the US into a huge debt into the first place by the Iraq war and then dishing out bailouts for the banks in when the financial crisis came out. And now that they have just lost the house to the Democrats that they want to complain about spending too much and the devaluation of the US dollar!?
Where were the calls for prudence when it came to deficit spending when the Republicans were in power? The only one Republican that cared dearly about excessive government spending was Ron Paul, who had little support from his colleagues when we was trying to reign in big deficit spending.
It makes me sick at how quickly some politicians change the tune of their song.
If politicians were paid in proportion to their level of approval, most of them would probably be broke.
Thursday, February 12, 2009
Scalable systems and businesses
If you want to make lots of money, learning about scalable systems and businesses are a must. Making a profitable business is one thing, but setting up a condition where your business can grow to an indefinite size is completely another problem, and often a very overlooked problem.
The biggest advancements in human productivity (and at the same time, wealth) has always involved the development of scalable systems. Starting from the development of the printing press, the industrial process and onwards to the information revoution, all of these are examples of the ability productivity and profits to an arbitrary large size. The only limiation preventing infinite scaling is demand.
The biggest businesses bringing in the biggest revenues are the ones that have scaled the most easily. The finance sector is perhaps the most easiest to scale as you don't really have to produce anything and profits come in from lending other people's money. Software is another good example with the birth of Microsoft as the technology to make copies of software is arbitrary small and disks and CDs being fairly easy to distribute. Finally, companies like Google and Amazon have been able to take advantage of the scalability of the internet to do business with arbitrary large numbers of people.
What can't be scaled, and revenues at the same time, are things that are directly limited to your capacity to produce or do something. In other words, it's highly unlikely that anyone living on the productivity of their own manual labor will become very rich.
Suppose that someone opened a small burger stall somewhere. The maximum amount of money a person making and selling burgers is generally limited by their individual capacity to produce burgers. Should they work in their position for their entire life, it is much less likely that they will be able to make large amounts of money.
Suppose now that the burger flipper is now able to hire people to flip burgers, and let's assume that the burgers this stall makes is exceptionally good that demand is very high. All he would have to do is hire sufficient numbers of people to make his trademark burgers thus scaling his output and revenues at the same time. None of this would be possible had he remained a cook his entire life.
The equation for the amount of money that you should be able to pull in should be:
total revenue = profitability*scalability
Now all you need to find is something that is both very profitable and scalable as a business.
The biggest advancements in human productivity (and at the same time, wealth) has always involved the development of scalable systems. Starting from the development of the printing press, the industrial process and onwards to the information revoution, all of these are examples of the ability productivity and profits to an arbitrary large size. The only limiation preventing infinite scaling is demand.
The biggest businesses bringing in the biggest revenues are the ones that have scaled the most easily. The finance sector is perhaps the most easiest to scale as you don't really have to produce anything and profits come in from lending other people's money. Software is another good example with the birth of Microsoft as the technology to make copies of software is arbitrary small and disks and CDs being fairly easy to distribute. Finally, companies like Google and Amazon have been able to take advantage of the scalability of the internet to do business with arbitrary large numbers of people.
What can't be scaled, and revenues at the same time, are things that are directly limited to your capacity to produce or do something. In other words, it's highly unlikely that anyone living on the productivity of their own manual labor will become very rich.
Suppose that someone opened a small burger stall somewhere. The maximum amount of money a person making and selling burgers is generally limited by their individual capacity to produce burgers. Should they work in their position for their entire life, it is much less likely that they will be able to make large amounts of money.
Suppose now that the burger flipper is now able to hire people to flip burgers, and let's assume that the burgers this stall makes is exceptionally good that demand is very high. All he would have to do is hire sufficient numbers of people to make his trademark burgers thus scaling his output and revenues at the same time. None of this would be possible had he remained a cook his entire life.
The equation for the amount of money that you should be able to pull in should be:
total revenue = profitability*scalability
Now all you need to find is something that is both very profitable and scalable as a business.
Monday, February 02, 2009
Unproductive
For the past 2 months, I've been rather unproductive. Unproductive in the sense that I haven't been doing anything worthy of having a positive or memorable impact upon myself. During the weekdays, I come home at about 7 pm (squeezing about 1.25 hours of overtime), whipping out some dinner while I surf the net or play computer games until about 10 pm. After that, I start scouring the net for economic data or reports (most of which are garbage) before it hits 11:30 pm here, which is perfectly the time when the NYSE opens and I watch what happens until about about 12:30 am before I goto bed.
On weekends, my days are usually filled with gatherings. Events that I mostly get invited out to and I oblige, usually heading out in the evenings to meet up with people whom I seem to meet only from time to time for dinner or drinks. Sometimes I meet some interesting people, but I only keep occasional contact with them. When it comes to meeting people, something seems markedly different from the experiences I've had in the past. Now that I look at it, the environment in which I meet people has changed rather drastically. But I'll talk about that in a different post.
Suffice to say, I haven't been doing anything of real significance lately and my time is being poorly spent.
Dealing with the Urge to do nothing
I have to say that I am fortunate that I live close to work. I can wake up at 8:20 and still check in by 8:59 after changing, eating breakfast, reading a little news and then brushing my teeth before a brisk paced walk from my room to the office. Compared to other people that have to commute by train and spend about 30-40 minutes a day on travel, I save at least a productive hour everyday. The only problem is that the only thing that I've found my self doing with it is goofing off and that is going to have to stop, and that is going to be thepoint of this post.
There are a variety of things that I would like to do but just end up having "no time for it". I'd have to say that having "no time" is a terrible excuse because I am quite sure that most people have time in general somewhere that can be allocated to doing something productive.
I do believe that people in general are programmed to operate on their urges. Whether be it determining when it's time to eat, sleep, watch TV and etc. The problem with I think is the programming of our urges, since being young-- most of us have not been trained or programmed while young to be self-productive, or perhaps have the urge to do things that have a positive impact on ourselves. Instead, I believe that most of us shun the work or effort required to be productive and squander it by finding ways of killing time, which seems to me to be a rather slow form of suicide-- killing time is like killing yourself; second by second.
I think that most of this poor mental programming comes from school, by some how learning that studying, work, exercising or activities that are supposed to be "good for you" is a chore. The problem with this is that it leaves a bitter taste of doing things that are "good for you" in one's mental mouth making people less inclined to be self-productive and find ways of avoiding such activities.
It is perhaps one of the reasons that entertainment has become such an important part of most people's lives; it becomes quite obvious from looking at my entertainment expenditures in my annual budget.
Hard work shouldn't be painful
I don't believe that hard work should be painful. But it seems to be the way people are taught to think about it; if you're working hard at something, then you're probably exerting a lot of will power doing something that you don't like. It is quite rare to find anyone hard at work at something they really like. Work has that kind of image, it's something that "pays the bills;" it's just something that helps keep you alive.
People generally should work hard on things that they enjoy. The other important thing that people should be able to do is work hard at things that have a direct positive impact on their lives. There is a reason people exercise, or study languages, build things and etc. And what causes people to do these things is motivation.
The unfortunate thing is that most motivation that encourages us to do these things are somehow related to pain. "Study or else you're not going to pass your test," or "Work your job or else you'll get fired" or something of that variety. It is something of a rather sad trait of our modern society.
I believe that a life is much better lived if motivations sounded like "I studied math because I thought it was interesting," or "I grow strawberries because I like their taste." It is far too rare for me to find people doing the things they want to do. And I think that is sad.
Wrong Obligations
I am starting to believe now that we've been taught to live by the wrong obligations; the idea that we have to be whipped into being educated to take up a job that we probably won't like so we take on the heavy burden buying a house and then raise children to do the same thing.
There is a better way of living and it's finding the things that you enjoy and having the freedom to pursue them. But the problem is that most people don't even have a chance to get there, because we've all been told that we've got to work hard at the things that we don't like to live a decent life.
Most people live this way because they know that they can survive doing this. The sad thing is that most people will likely never have the courage to take the risk to find a way to make a living doing something they enjoy. And I think that's the whole problem with it all, most people just can't find enough positive motivation to do something they really enjoy, because somehow we've setup too many mental barriers to do it.
I'm tired and I've flipped back through my post. I'm totally rambling. It's been too long since I've done a real post. I need to get back into it again.
On weekends, my days are usually filled with gatherings. Events that I mostly get invited out to and I oblige, usually heading out in the evenings to meet up with people whom I seem to meet only from time to time for dinner or drinks. Sometimes I meet some interesting people, but I only keep occasional contact with them. When it comes to meeting people, something seems markedly different from the experiences I've had in the past. Now that I look at it, the environment in which I meet people has changed rather drastically. But I'll talk about that in a different post.
Suffice to say, I haven't been doing anything of real significance lately and my time is being poorly spent.
Dealing with the Urge to do nothing
I have to say that I am fortunate that I live close to work. I can wake up at 8:20 and still check in by 8:59 after changing, eating breakfast, reading a little news and then brushing my teeth before a brisk paced walk from my room to the office. Compared to other people that have to commute by train and spend about 30-40 minutes a day on travel, I save at least a productive hour everyday. The only problem is that the only thing that I've found my self doing with it is goofing off and that is going to have to stop, and that is going to be thepoint of this post.
There are a variety of things that I would like to do but just end up having "no time for it". I'd have to say that having "no time" is a terrible excuse because I am quite sure that most people have time in general somewhere that can be allocated to doing something productive.
I do believe that people in general are programmed to operate on their urges. Whether be it determining when it's time to eat, sleep, watch TV and etc. The problem with I think is the programming of our urges, since being young-- most of us have not been trained or programmed while young to be self-productive, or perhaps have the urge to do things that have a positive impact on ourselves. Instead, I believe that most of us shun the work or effort required to be productive and squander it by finding ways of killing time, which seems to me to be a rather slow form of suicide-- killing time is like killing yourself; second by second.
I think that most of this poor mental programming comes from school, by some how learning that studying, work, exercising or activities that are supposed to be "good for you" is a chore. The problem with this is that it leaves a bitter taste of doing things that are "good for you" in one's mental mouth making people less inclined to be self-productive and find ways of avoiding such activities.
It is perhaps one of the reasons that entertainment has become such an important part of most people's lives; it becomes quite obvious from looking at my entertainment expenditures in my annual budget.
Hard work shouldn't be painful
I don't believe that hard work should be painful. But it seems to be the way people are taught to think about it; if you're working hard at something, then you're probably exerting a lot of will power doing something that you don't like. It is quite rare to find anyone hard at work at something they really like. Work has that kind of image, it's something that "pays the bills;" it's just something that helps keep you alive.
People generally should work hard on things that they enjoy. The other important thing that people should be able to do is work hard at things that have a direct positive impact on their lives. There is a reason people exercise, or study languages, build things and etc. And what causes people to do these things is motivation.
The unfortunate thing is that most motivation that encourages us to do these things are somehow related to pain. "Study or else you're not going to pass your test," or "Work your job or else you'll get fired" or something of that variety. It is something of a rather sad trait of our modern society.
I believe that a life is much better lived if motivations sounded like "I studied math because I thought it was interesting," or "I grow strawberries because I like their taste." It is far too rare for me to find people doing the things they want to do. And I think that is sad.
Wrong Obligations
I am starting to believe now that we've been taught to live by the wrong obligations; the idea that we have to be whipped into being educated to take up a job that we probably won't like so we take on the heavy burden buying a house and then raise children to do the same thing.
There is a better way of living and it's finding the things that you enjoy and having the freedom to pursue them. But the problem is that most people don't even have a chance to get there, because we've all been told that we've got to work hard at the things that we don't like to live a decent life.
Most people live this way because they know that they can survive doing this. The sad thing is that most people will likely never have the courage to take the risk to find a way to make a living doing something they enjoy. And I think that's the whole problem with it all, most people just can't find enough positive motivation to do something they really enjoy, because somehow we've setup too many mental barriers to do it.
I'm tired and I've flipped back through my post. I'm totally rambling. It's been too long since I've done a real post. I need to get back into it again.
Subscribe to:
Posts (Atom)