Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff
Have you seen TwitSprout's Obama Dashboard?
Obama held a Town Hall via Twitter in early July. You can see the full analysis here; or look take a look at how the infographic breaks-it-down and highlights some interesting details.
Here is the link for the interactive version. The infographic was created by Dan Holowack at TwitSprout.
This is an interesting use of Twitter, data-mining, and the real-time analysis of big data. I imagine we'll be seeing a lot more of services like this.
Have you seen TwitSprout's Obama Dashboard?
Obama held a Town Hall via Twitter in early July. You can see the full analysis here; or look take a look at how the infographic breaks-it-down and highlights some interesting details.
Here is the link for the interactive version. The infographic was created by Dan Holowack at TwitSprout.
This is an interesting use of Twitter, data-mining, and the real-time analysis of big data. I imagine we'll be seeing a lot more of services like this.
One positive for the stock market has been the dramatic rise in earnings following the financial crisis.
Most business students can tell you that stock prices supposedly represent the present value of the future earnings stream.
However, one reason for the current earnings spike has been the fact that the US dollar has effectively been devalued.
Slash the yardstick by which financial performance is measured (e.g. dollars to dollarettes) and relative performance will appear more positive.
For example, when corporate earnings are measured in dollars, an investor will find that earnings are currently greater than what was achieved during the dot-com bubble and fast approaching the record levels that were achieved at the tail-end of the credit bubble. However, when measured in another world currency such as gold (see the chart below), the earnings picture isn’t quite so rosy.
Click here for more Chart of the Day insights.
This chart illustrates how S&P 500 earnings measured in ounces of gold actually peaked back in 2001, and has moved within the confines of a dramatic downtrend ever since.
From this perspective, the historic spike in earnings that began in the summer of 2009 doesn’t look all that historic, with current earnings coming in at a level that is significantly lower than what occurred at the conclusion of the dot-com and credit bubbles.
Here is a quote from Richard Russell, one of the well-known market commentators and Dow Theory experts:
"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgitt are mere memories."
One positive for the stock market has been the dramatic rise in earnings following the financial crisis.
Most business students can tell you that stock prices supposedly represent the present value of the future earnings stream.
However, one reason for the current earnings spike has been the fact that the US dollar has effectively been devalued.
Slash the yardstick by which financial performance is measured (e.g. dollars to dollarettes) and relative performance will appear more positive.
For example, when corporate earnings are measured in dollars, an investor will find that earnings are currently greater than what was achieved during the dot-com bubble and fast approaching the record levels that were achieved at the tail-end of the credit bubble. However, when measured in another world currency such as gold (see the chart below), the earnings picture isn’t quite so rosy.
Click here for more Chart of the Day insights.
This chart illustrates how S&P 500 earnings measured in ounces of gold actually peaked back in 2001, and has moved within the confines of a dramatic downtrend ever since.
From this perspective, the historic spike in earnings that began in the summer of 2009 doesn’t look all that historic, with current earnings coming in at a level that is significantly lower than what occurred at the conclusion of the dot-com and credit bubbles.
Here is a quote from Richard Russell, one of the well-known market commentators and Dow Theory experts:
"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgitt are mere memories."
Let's start with One Hundred Dollars. A stack of them makes Ten Thousand Dollars.
So far, so good.
Next, let's put One Hundred Million in perspective.
I don't know about you, but that still seems like a lot of money to me. Nonetheless, it fits nicely on a military-standard pallet.
The U.S. Deficit is approaching Fifteen Trillion Dollars. The image below will help you visualize that. The scope and scale of that amount of cash is a surprising.
To see more, click here to go to a site called WTFNOWAY.
And, if you want to see an updated, interactive version of the U.S. Debt Clock, just click the image below. It is worth spending a little time to watch the pace the numbers turn.
Surprised?
Let's start with One Hundred Dollars. A stack of them makes Ten Thousand Dollars.
So far, so good.
Next, let's put One Hundred Million in perspective.
I don't know about you, but that still seems like a lot of money to me. Nonetheless, it fits nicely on a military-standard pallet.
The U.S. Deficit is approaching Fifteen Trillion Dollars. The image below will help you visualize that. The scope and scale of that amount of cash is a surprising.
To see more, click here to go to a site called WTFNOWAY.
And, if you want to see an updated, interactive version of the U.S. Debt Clock, just click the image below. It is worth spending a little time to watch the pace the numbers turn.
Surprised?
Is the glass half-full, or is the glass half-empty?
It is all a matter of perspectives, isn't it.
Let's look at one of the positives. Some companies are doing fantastic.
Here is a chart of Apple's quarterly sales, by product.
Apple grew revenues by 82 percent last quarter, which is remarkable growth for a company of its size ($28.6 billion in quarterly revenues).
Can you remember another company, that size, growing revenue that fast? I can't.
You can talk about consumers having less money to spend, negative sentiment, etc. It didn't matter. Apple is showing that cream rises to the top. If you make something people want, they will find a way to get it.
How about the negative? America isn't the only country with debt problems.
Deficit, National Debt and Government Borrowing – How Has It Changed?
How has it changed? It has gotten worse.
Here in the U.S., we talk about deficits, debt-ceilings, and government borrowing, as if we are the only country suffering. But the news shows that this disease has spread through the world (and not just Greece either).
For example, the chart below shows the United Kingdoms deficit over time.
Does it look like a mirror of Apple's success to you? Wonder what that means?
At some point, a crisis is likely. However, the chaos surrounding crisis often results in tremendous opportunity.
Ultimately, it doesn't matter what happens … it is what you do.
Many opportunities present themselves every day in the markets. The goal is to identify what is working, and to trade it while it is working.
Niccolo Machiavelli said: "Whosoever desires constant success must change his conduct with the times."
Perhaps it is time to make some plans so you respond intelligently to what happens.
HMG Note: As I write this, there is still a failure to agree about the debt ceiling.
If it isn't resolved before morning, international response should be telling. Will it spark fear, or will the markets shrug it off? The answer will probably tell you a lot more than the news did.
Is the glass half-full, or is the glass half-empty?
It is all a matter of perspectives, isn't it.
Let's look at one of the positives. Some companies are doing fantastic.
Here is a chart of Apple's quarterly sales, by product.
Apple grew revenues by 82 percent last quarter, which is remarkable growth for a company of its size ($28.6 billion in quarterly revenues).
Can you remember another company, that size, growing revenue that fast? I can't.
You can talk about consumers having less money to spend, negative sentiment, etc. It didn't matter. Apple is showing that cream rises to the top. If you make something people want, they will find a way to get it.
How about the negative? America isn't the only country with debt problems.
Deficit, National Debt and Government Borrowing – How Has It Changed?
How has it changed? It has gotten worse.
Here in the U.S., we talk about deficits, debt-ceilings, and government borrowing, as if we are the only country suffering. But the news shows that this disease has spread through the world (and not just Greece either).
For example, the chart below shows the United Kingdoms deficit over time.
Does it look like a mirror of Apple's success to you? Wonder what that means?
At some point, a crisis is likely. However, the chaos surrounding crisis often results in tremendous opportunity.
Ultimately, it doesn't matter what happens … it is what you do.
Many opportunities present themselves every day in the markets. The goal is to identify what is working, and to trade it while it is working.
Niccolo Machiavelli said: "Whosoever desires constant success must change his conduct with the times."
Perhaps it is time to make some plans so you respond intelligently to what happens.
HMG Note: As I write this, there is still a failure to agree about the debt ceiling.
If it isn't resolved before morning, international response should be telling. Will it spark fear, or will the markets shrug it off? The answer will probably tell you a lot more than the news did.
Here are some of the posts that caught my eye. Hope you find something interesting.
You don't need a formal setting to learn about leadership.
Derek Sivers gave this 3-minute talk at a TED conference.
You can watch a movement happen, start to finish, in under 3 minutes, while he points-out some of the lessons.
A leader needs the guts to stand alone and look ridiculous. But what he's doing is so simple, it's almost instructional. This is key. You must be easy to follow!Now comes the first follower with a crucial role: he publicly shows everyone how to follow. Notice the leader embraces him as an equal, so it's not about the leader anymore – it's about them, plural. Notice he's calling to his friends to join in. It takes guts to be a first follower! You stand out and brave ridicule, yourself. Being a first follower is an under-appreciated form of leadership. The first follower transforms a lone nut into a leader. If the leader is the flint, the first follower is the spark that makes the fire.
The 2nd follower is a turning point: it's proof the first has done well. Now it's not a lone nut, and it's not two nuts. Three is a crowd and a crowd is news.
A movement must be public. Make sure outsiders see more than just the leader. Everyone needs to see the followers, because new followers emulate followers – not the leader.
Now here come 2 more, then 3 more. Now we've got momentum. This is the tipping point! Now we've got a movement!
As more people jump in, it's no longer risky. If they were on the fence before, there's no reason not to join now. They won't be ridiculed, they won't stand out, and they will be part of the in-crowd, if they hurry. Over the next minute you'll see the rest who prefer to be part of the crowd, because eventually they'd be ridiculed for not joining.
And ladies and gentlemen that is how a movement is made! Let's recap what we learned:
If you are a version of the shirtless dancing guy, all alone, remember the importance of nurturing your first few followers as equals, making everything clearly about the movement, not you.
Be public. Be easy to follow!
But the biggest lesson here – did you catch it?
Leadership is over-glorified.
Yes it started with the shirtless guy, and he'll get all the credit, but you saw what really happened:
It was the first follower that transformed a lone nut into a leader.
There is no movement without the first follower.
We're told we all need to be leaders, but that would be really ineffective.
The best way to make a movement, if you really care, is to courageously follow and show others how to follow.
When you find a lone nut doing something great, have the guts to be the first person to stand up and join in.
—
Original video at http://www.youtube.com/watch?v=GA8z7f7a2Pk
Official transcript at http://sivers.org/ff
