Capitalogix

Camp Kotok: Back Again!

I was just in Maine at Camp Kotok, a private gathering of economists, fund managers, and other financial industry professionals. 

There was limited phone service or access to the Internet… so people had to talk with each other.  And unlike most of my schedule, almost everything happened outside.  Discussions, while vigorous, often take place while fishing or grilling. 

At a past Camp Kotok, I did this interview with Bob Eisenbeis, Cumberland Advisors' Vice Chairman & Chief Monetary Economist.  Check it out. 

 

Cumberland Advisors via YouTube

 

Camp Kotok is an interesting place. The event transformed from a simple retreat after 9/11 ... when many attendees experienced the WTC collapse and came together for some fellowship and to discuss their experiences.  From then on, attendance grew, and the gathering evolved. 

As a side note, before the gathering became known as Camp Kotok, it was referred to as the “Shadow Fed” (in part because of the people who attend).

Attendees are bound to “Chatham House Rules” (participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed).  However, general thoughts, ideas, forecasts, and comments can be discussed and published.

On this trip, I talked with David Kotok about the event, what it means, and how it’s grown.

The intent of the participants (and the environment) helps create a platform for meaningful and productive conversations about the opportunities and obstacles facing America and the world. 

Every year, I come back with new ideas and fresh perspectives on things I forget to think about. 

AI was on everyone's mind.  The financial industry is changing quickly, and I’m confident that advanced technology will become an even bigger driver. 

In general, economically, the mood was cautiously optimistic to bullish. 

Remember, it is an election year!

Social Media Is Changing Everything ... 10+ Years Later

In 2009, I wrote an article highlighting the audacious amount of texts and data my then-16-year-old son was using compared to the rest of the family ... It's funny to look back on.

Here is an excerpt from that post. 

_______

My son won't use e-mail the way I did. So how will people communicate and collaborate in the next wave of communications?

 Here is a peek into the difference that is taking hold.  I was looking at recent phone use.  The numbers you are about to see are from the first 20 days of our current billing cycle.

• My wife, Jennifer, has used 21 text messages and 38 MB of data.
• I have used 120 text messages and 29 MB of data.
• My son, at college, used 420 text messages, and is on a WiFi campus so doesn't use 3G data.
• My son, in high school, used 5,798 text messages and 472 MB of data.

How can that be?  That level of emotional sluttiness makes porn seem downright wholesome. 

But, of course, that isn't how he sees it.  He is holding many conversations at once.  Some are social; some are about the logistics of who, what, when, where and why … some are even about homework.  Yet, most don't use full sentences, let alone paragraphs.  There is near instant gratification.  And, the next generation of business people will consider this normal.

Is social media a fad? Or is it the biggest shift since the Industrial Revolution?

_______

Fourteen years later, I send more text messages than my son, and we both use multiples of that amount of data a month. 

I also remember scoffing at my son having his phone on hand at meetings - that it was a distraction. And yet, here I am, phone on my desk at meetings. But, e-mail is just as important as it was in 2009. 

One of the things we miss in discussions about generations is that the trends of the younger generation are often adopted by the previous - even if they're not as tech literate. 

Technology changes cultures for better or worse ... but it's hard to look at the impact of social media and believe it hasn't been deleterious. 

The promise and peril of technology! 

Are You Ready For Some Football?

Are you ready for some Football?

Yesterday was the Cowboys' first preseason game. 

It wasn't exactly the prettiest (partly because it was the first game of the season, but also because many of the starters sat the game out to avoid injury).  With that said, it was still a fantastic experience.  The NFL (and Jerry Jones) knows how to put on a show. 

 

It's Easy to Feel Good at the Start of a Season.

Lots of people ask me how the Cowboys look this year.  The truth is, at this point in the season, it's impossible to know because injuries have a dramatic impact on the game.  

Regardless, each year I choose to be optimistic about the chance of a post-season run. 

That kind of logic (or lack there of) is why I think automated trading is better than humans attempting to do it themselves.  It's a way to make objective decisions and eliminate fear, greed, and discretionary mistakes.

On the other hand, it feels so good to hope!

A Lesson From the Game.

I had an interesting discussion at the game yesterday.  My guest commented that Jerry Jones is a fantastic business person - which is hard to argue - but probably shouldn't be running the team.  He believes the team needs a change of pace to switch things up. 

While I don't know if that's why we tend to struggle so much more late in the season, it reminded me of a great business lesson. 

Entrepreneurs often mistake their domain expertise for general expertise.  "I'm fantastic because I'm fantastic at all these different things." And the result is they overestimate their ability to be great at things outside their unique ability.  A similar issue is that many people believe they are deep thinkers, because they think deeply about what they think about.  However, they often don't realize how narrow their range of thinking is, and how many things fall outside their expertise, interest, or even consideration.

Less Is Often More.

Learning to offload tasks that you may not be as fantastic at as others is a great way to free up time to focus on not only the things that you're great at – but also bring you joy and energy. 

Hope that helps!

How 'bout them Cowboys!

Time Flies - Another Year, Another Lesson

Thursday was my 60th birthday.  I can't believe how time flies.  Birthdays seem to come more quickly as you get older.

It makes sense, though, I suppose.  When you were four, a birthday represented a quarter of your life.  Now, a year represents a much smaller percentage.

While it's not always pleasant getting older, it sure beats the alternative!

This year, I made a concerted effort to be more healthy, fit, and vital in mind, body, and spirit. I said I wanted to sprint into 60, rather than roll into it.

If you are going to live longer, your future has to be compelling to you.  Otherwise, who would want to extend their stay?  That is why I strive to keep my future bigger than my past.  

As time marches on, I become increasingly grateful for the friends and family who share the journey with me.  This year, I spent my birthday in San Diego, surrounded by family and some close friends.  On Saturday, they surprised me with a "Birthday Palooza," celebrating my 60th along with my wife Jennifer's 50th. 

 

 

When I was a kid, I couldn't imagine being where I am today ... nor could I imagine the path that got me here. 

Looking back, it all seems to make sense (even though it felt pretty random while making my way through it).

I feel lucky to have been in the right place at the right time, so consistently, and to find the gift in most situations (even when it seemed so well hidden).

I'm grateful for a lot today, and as much as I love innovation, sometimes things are perfect just the way they are. 

Hopefully, you took time this weekend to let someone know they're important to you.  If not, now is a good time for that too.

Onwards!

Do You Think the U.S. Has Aliens?

I'll admit to being fascinated by the idea of aliens.  Growing up in the 60s and 70s, there was no shortage of science fiction fantasies imagining what a space-faring civilization would look like and, more importantly, what would we, the Earthlings, do when they made contact. 

Last year, there was a U.S. congressional hearing on Unidentified Flying Objects.  While there wasn't any proof of aliens, they did admit to phenomena they couldn't explain with their current information.

Now, we have multiple former military officials testifying in a House of Representatives meeting that the U.S. has recovered not only spacecraft but alien biological matter for decades.  While I do believe in the possibility of aliens, I remain skeptical.

There are many stories (or theories) about how we had encountered aliens before and just kept them secret.  For example, in 2020, a former senior Israeli military official proclaimed that Aliens from a Galactic Federation had contacted us - and that not only is our government aware of this, but they are working together. 

In contrast, I have found it more realistic and thought-provoking to consider theories about why we haven't seen aliens until now.

For example, the Fermi Paradox considers the apparent contradiction between the lack of evidence for extraterrestrial civilizations and the various high probability estimates for their existence. 

Let's simplify the issues and arguments in the Fermi Paradox.  There are billions of stars in the Milky Way galaxy (which is only one of many galaxies).  Each of these stars is similar to our Sun.  Consequently, there must be some probability of some of them having Earth-like planets.  Further, it isn't hard to conceive that some of those planets should be older than ours, and thus some fraction should be more technologically advanced than ours.  Even if you assume they're only looking at evolutions of our current technologies - interstellar travel isn't absurd.  Thus, based on the law of really large numbers (both in terms of the number of planets and the length of time we are talking about) ... it makes the silence all the more deafening and curious. 

If you are interested in the topic "Where are all the aliens?"  Stephen Webb (who is a particle physicist) tackles that in his book and in this TED Talk.   

 

via TED

In the TED talk, Stephen Webb covers a couple of key factors necessary for communicative space-faring life. 

1. Habitability and stability of their planet
2. Building blocks of life 
3. Technological advancement
4. Socialness/Communication technologies

But he also acknowledges the numerous confounding variables, including things like imperialism, war, bioterrorism, fear, moons' effect on climate, etc. 

Essentially, his thesis is that there are numerous roadblocks to intelligent life - and it's entirely possible we are the only planet that has gotten past those roadblocks - or that there might have been others in the past, or others may develop in the distant future. 

What do you think?

Here's another article I wrote on the subject, titled "Are We Alone In The Universe?"

Finally, here are some other links I liked on this topic.  There is some interesting stuff you don't have to be a rocket scientist to understand or enjoy. 

• 75 Reasons We Don't See Aliens 
• Wait But Why: The Fermi Paradox
• A New Theory on Why We Haven't Found Aliens Yet
• A List of Solutions to The Fermi Paradox
• Dissolving the Fermi Paradox, Future of Humanity Institute, Oxford University

To Infinity and Beyond!

Life After Death ... Will A.I. Help you Live Forever?

My Aunt recently passed away. She was my Dad's sister ... and she was a fantastic person. She was loving and kind. She was a natural-born caregiver, And she was as sharp as a tack. What wouldn't we give for another moment with her? My response to her death reminded me of my feelings when my Dad passed away. 

This time, the conversation was a little different. People asked me if I thought that A.I. would enable us to live on after our bodies started to give out on us. I recorded some of my thoughts. 

 

I don't think A.I. will give us life after death.

I do believe technology will get good enough to create a replica of you - that talks like you, responds like you, and even comforts people who miss you. 

I don't believe technology can capture whatever part of us doesn't live in our bodies. Whether you call it our soul (or something else), I don't think that will ever get uploaded to the matrix, so you live on. 

And, I think that's okay. Part of the beauty of existence is the transience, the joy, the suffering, and the range of human experience. That is a big part of what we call life.

When my Dad was dying, every moment took on new meaning. Not only did time seem to slow down, but there was a weight and intimacy that's often taken for granted. 

What do you think?

Here Are Some Links For Your Weekly Reading - July 9th, 2023

Here are some of the posts that caught my eye recently. Hope you find something interesting.

Lighter Links:

• France Set to Allow Police to Spy Through Phones. (Lemonde)
• Your Most Ambivalent Relationships are the Most Toxic. (NYT)
• Is Positive Psychology Science or Snake Oil? (PsychologyToday)
• Einstein and Musk Chatbots Are Driving Millions to Download Character.AI. (Bloomberg)
• New Report Warns of Brain Control Weapons Being Developed by Communist China. (DailyWire)

Trading Links:

• The Copyright Battles Against OpenAI Have Begun. (Quartz)
• Baby Boomers Own Pretty Much Everything - But Millennials Could Be About to Catch Up. (Markets)
• Forbes World's Billionaires List 2023: The Top 200. (Forbes)
• Wall Street Soothsayers Are Bewildered About What's Next. (Bloomberg)
• SVB, BBBY, Lordstown Lead List of US Bankruptcies as Companies Fold up at the Fastest Pace Since 2010. (Markets)

Understanding Economic Freedom

We often think about the U.S. as the "land of the free." That is good marketing ... but is it true?  In large part, it depends on the contexts and frameworks you choose to evaluate what constitutes freedom. 

For example, Strategic Coach breaks "entrepreneurial freedom" into four categories: time, money, relationships, and purpose.

Meanwhile, if you look at the First Amendment of the U.S. Constitution, you've got freedom of speech, press, assembly, and the right to petition the government ... and we've since instituted a litany of other freedoms and liberties. 

In this post, we will examine the concept of economic freedom.  Economic freedom represents more than just freedom to make money, it pertains to the decisions and liberties one has in that pursuit. 

The Heritage Foundation releases a yearly Economic Freedom Index. 

 

 

According to VisualCapitalist, the ranking uses four broad categories, each with three key indicators to measure economic freedom.

1. Rule of law: property rights, judicial effectiveness, government integrity
2. Size of government: tax burdens, fiscal health, government spending
3. Regulatory efficiency: labor freedom, monetary freedom, business freedom
4. Open markets: financial freedom, trade freedom, investment freedom

The 12 indicators are weighted equally and scored from 0-100.  The overall score is the average score among those indicators. 

Based on these metrics, the U.S. doesn't even enter the top 10. 

Surprisingly, the U.S. ranks 25th overall - and only 3rd in the Americas. 

Now, freedom means a lot of different things, and economic freedom is only one of many modalities ... but it's an important factor. 

If you were in control, what change would you make to increase the United States' economic freedom?  If you're not from the U.S., where does your country rank, and why?

Musk vs. Zuckerberg: Fight Of The Century

In today’s “Truth is Stranger than Fiction” episode, Elon Musk and Mark Zuckerberg seem to be discussing a "cage match." But, for those of us who have been around awhile, we remember the first real billionaire fight when Herb Kelleher, co-founder of Southwest Airlines, settled a business dispute with a rival by arm wrestling in front of an audience at an arena, in an event dubbed “Malice in Dallas.” 

This supposed cage fight started because Elon responded to someone on Twitter saying, “I’m up for a cage match if he is lol” to which Zuckerberg posted an Instagram story saying, “Send Me Location.”

Supposedly, there’s a real chance they do it, and talks they may do it in Vegas.  

Now, their beef isn’t new. Back in 2016, Musk’s SpaceX was contracted to shuttle a satellite into orbit for Facebook. During a routine test, an explosion on the ground caused the satellite to be destroyed, and Zuck to say, “I’m deeply disappointed to hear that SpaceX’s launch failure destroyed our satellite that would have provided connectivity to so many entrepreneurs and everyone else across the continent.”

Ever since, they’ve been going at it. They take different stances on AI. They’ve gotten off each other’s platforms, etc. 

So ... who do you think will win?

Happy Father's Day 2023

This year, Father's Day was smaller than usual.  My wife, Jennifer, is in Indonesia, and my older son is on the west coast. 

Meanwhile, my younger son, Zach, took me to one of our favorite Asian restaurants with his new Fiancée, Sloane. 

I've been calling her my daughter-in-law since he brought her home (because some things are inevitable and easy to recognize). 

Reflecting on the past year, I'm grateful for my granddaughter (from my married son, Ben, and his wife).  And, I'm also grateful that Zach and Sloane got engaged and started to plan the rest of their lives together (and hopefully more grandchildren for me). 

As a father, having great kids is a double blessing.  On one hand, it's nice to be proud of who your kids are and the things they do.  On the other hand, it's also nice to feel proud of the small part you played in helping them become who they are.  

Of course, I also look back ... and spent some time thinking about my father and his terrific influence on so many lives.  

My Dad believed in setting high standards.  He explained that most people's lives are defined by their minimum standards.  Why?  Because once those standards are met, it is easy to get distracted by other things (and figuring out how to meet the minimum standards for them as well).

He was also my best friend. 

I see so much of him in myself, and in my children, and many of the aphorisms I teach come from him.  I'm grateful that I can still see his impact on the world. 

Hope you had a nice Father's Day weekend too.