Capitalogix

Doing What Works - Insight Happens in an Instant

Colin Powell said that "There are no secrets to success. It is the result of preparation, hard work, and learning from failure." 

On the other hand, I've found that insight often happens in an instant. 

In Kung Fu Panda, an overweight,  seemingly uncoordinated panda transforms into the unlikely hero of the story who battles evil and saves his village.  The turning point?  His teacher recognized that during a quest for a snack, nothing could keep our hero from his food.  By integrating that in the training routine, a star was born.

OK, that was a Disney movie.  Maybe you want a real-life example?

My youngest son, Zach, is learning to drive.  Currently, I am working on improving his mental map of where he is, where he is going, and how to get there.

My early assessment was that he did not have much of a sense of direction.  This was making our time in the car together either existentially funny - or stressful - depending on my mood.

"What comes next?" was often followed by a blank look or a head shake. The answer to "Which way do we turn?" was a seemingly random "north," "south," "east," "west," "right," or "left" -- or sometimes several of them.

Apparently, I was asking the wrong questions.  He has an encyclopedic knowledge of where restaurants are, and an uncanny ability to get there.  We just have to plot his course with the right milestones (fast-food, pizza and ice cream).

He explained to me, "hey, I just do what works."  And that makes a lot of sense; I'm just glad he found something that works.

Before He Trades Video

This tongue-in-cheek music video, called "Before He Trades," re-makes a popular Carrie Underwood song as a trading reminder.

Here is the direct link.  From John Carter.

New Imaging Tools Will Change How You Access Information

Photosynth is a new technology from Microsoft.  It is software that could transform the way we look at digital images. Using still photos (and more), Photosynth builds a breathtaking new form of composite image, and lets us navigate them.  This service turns multiple photos of a scene or site -- say, an art gallery or a building -- into a 3-D scene you can virtually "walk" through on the Web.

Ten-years ago I saw something like this; it was the interface to a game called Myst.  It was ground-breaking at the time.

In the early phase of adoption for Photosynth, I expect to see things like the 3-D rendering of the Canals in Venice.  It is an easily accessible way to explore the concept.  Soon, however, this could evolve into a new way to hyper-link a wide range of data, meta-data, and business information.

To get a better idea of what this can do, watch this video from the Ted Conference introducing Photosynth.

Think about how much the web has already changed how you do research?  Also, because it is so easy to do now, think how much more research you do.  For example, I'm amazed at how often I search Google or Wikipedia. Similarly, I use sites like Digg, Technorati, Regator, and various blogs to find relevant information - even if I didn't know I was looking for it.

Photosynth is different, and in some ways a step beyond, those research tools.  It is graphics-centric instead of text-centric.  And I can imagine a new type of front-end (a new framework) for accessing information stored virtually anywhere.  Consequently, I expect to see a lot more of this, and things like it.

Click here to explore some interesting Synths.  You can make your own, too.  For example, here is a link to a Photosynth of, my son, Ben's dorm room at Duke.  It took him about a half-hour to make it.

Note: you can use arrows on the screen to navigate a Photosynth image; and the "Space Bar" is helpful, too, because it jumps to the next cluster of 3-D images.

An Early Sign of Economic Recovery?

I got to visit the Cowboys' new $1.1 Billion Dollar stadium, which opens next year.

It is a lot bigger than the model in this picture.

There is a lot of development happening here in Texas.  Part of it is because of Oil & Gas money.  I suspect that part also is an early sign of economic recovery.

P.S., My corporate lawyer tells me deal-flow is great here too.

Weekly Commentary through August 22, 2008

The bullish arguments are that we still have a series of higher lows off the July bottom; and that the market is performing relatively well in the face of negative news.  The bearish arguments are still almost everything else. 

On Friday, Oil was down 5 percent -- great news? Not quite, it was still up on the week.  The Dow was up 200 points -- yet still managed to close down for the week.  Also, the NASDAQ closed just below its 200-day moving average.

Here are a few of the posts I found interesting this week:

• With new lows in sight, is Lehman a takeover candidate? (BloggingStocks, Mish, NYTimes)
• Boone Pickens' Strategy is Water-Tight; form your own town and issue govt bonds (DealBreaker)
• Supermodels out-perform the Dow (TheStreet.com)
• Hewlett-Packard's profit climbed 14% to $2.03 billion (WSJ, MarketWatch)
• Corporate Insider Buying is strong (Hulbert in MarketWatch)
• Comparison of Bernanke's 2007 and 2008 speeches at Jackson Hole (Infectious Greed)
• Producer Prices jumped 10% this year, most since 1981 (NYTimes)
• Goldman Sach's warns of recession fears for half the Globe (UK Telegraph)
• Barry Ritholtz asks whether we are in a "Psychological Recession"? (Big Picture)
• Jittery investors redeemed $27 Billion in mutual funds this July (Investment News)
• Mortgage applications drop to lowest level in eight years (Bizjournals.com)

And, a little bit extra:

• Apple planning to make 40 Million iPhones in 2009 (BusinessWeek via MacRumors)
• Microsoft hires Jerry Seinfeld to tout Vista; but is he still "cool"? (Silicon Alley Insider)
• The dawn of intelligent machines; surpassing human intelligence by 2050? (BBC)
• Obama's social networking strategy, and who's behind it (MIT Technology Review)
• Educators urge lowering of drinking age to curb binge drinking (Washington Post)
• EBay undergoing Amazonification; moving to fixed price sales (BusinessWeek)
• Great graphic comparing Usain Bolt's record-setting run to history (NYTimes)
• Crumbling archives of texts get a new lease on life from an anti-spam tool (BBC)

iPhone App (Hoax?)

This video is spreading quickly, and though speculation is that it is a mock-up, I found it to be quite compelling.  Somehow I get the sense that it demonstrates a sliver of what's to come.

My guess is that we will start to see data visualization applications, using similar technologies, that will enable users to access data in powerful new ways.

iHologram - iPhone application from David OReilly on Vimeo.

LiveScribe - All Things Fit to Print

I got a new gadget. It is a Livescribe pen that records both what it hears and what you write.

From a small sample of using it about a dozen times so far, I am impressed; Livescribe works great, and delivers immediate benefit at meetings and seminars.  I use it to review conversations and brain-storming sessions for clarification, or to catch something I missed the first time through.

It generates an interesting polarity of responses though. Some people get it instantly and want to know where they can buy them.  Others couldn't care less.  No one objected to its use during the meeting - and I suspect that it became invisible quickly.

It records about a hundred hours of surprisingly clear audio.  The pen has a camera, just above the tip, that captures the image of what is being written -- and synchronizes this to what you hear or say.  And if you go back and touch the tip of the pen to writing on the page, you hear what was being said while it was written.  You can even control the playback speed to go faster, or slower, when you want.

The Livescribe pen looks and feels nice.  It comes with a leather travel case and a dock to sync it with your computer.  There is well-designed software that lets you manage and share the results. Livescribe created a place to post "pen-casts" online, to share with your team.  You can limit who see it with an access control list or leave it open.  Click here for an example.

I'm sending my son to back to school with one.  It seems like the perfect environment for a tool like this. 

All-in-all, Livescribe is worth a try. For more information about this interesting technology, here is the Livescribe's site.

Here are some video demos.

It looks like college book stores and Amazon are expected to be the big distribution channels.

Weekly Market Commentary for 8/15/08

From last week's wild swings - to a narrowing range, poised for a breakout.  The market has something for everyone.

The mystery of where the markets are heading continues, reminding me of physicist Niels Bohr’s quotation: “Tomorrow is going to be wonderful, because tonight I do not understand anything.” Echoing that is 84-year old Richard Russell, “Very frankly, I can’t come to a firm conclusion as to whether we’re dealing with a bull or a bear market. Sometimes you just have to wait and allow the market to tell its story. Remember, we may be in a hurry, but the market never is.” (Hat tip: Prieur du Plessis)

Small-Cap and Tech are showing some leadership.  As it hits its June highs, the Russell 2000 Index is performing better than the other US Equity Indices.  The NASDAQ Index is performing well also, though it is sitting just under its June highs.  In contrast, the S&P 500 and Dow Jones are still lagging.

Here is a chart of the Dow.  Notice that price sits right at the resistance line and the 50-Day Moving Average.

Here are a few of the posts I found interesting this week:

• S&P Languishing, but less than these previously high fliers (Infectious Greed)
• What Does Obama imply for the markets and the economy? (Kudlow)
• Ten Market Rules to Remember (Big Picture)
• Thoughts on Trading Stress and Emotion (TraderFeed)
• Short-Selling Restriction Experiment Set to End (NYTimes)
• The Dilemma facing Thoughtful Investors (A Dash of Insight)
• What is a Recession - and why we may not get there? (NBER)
• Down 97%: Tax Trouble Coming For States & Cities (Big Picture)
• Wall Street hiring again -- but in India (ClusterStock)
• Starbucks needs a jolt (Covel)
• What happens if you list your house for $1? (Zillow, Big Picture)

And, a little bit extra:

• Hot Gadget: Amazon's electronic book viewer, Kindle, gaining in popularity (ZDnet, Bloomberg)
• Amazon Kindle version 2.0 due out in October, in time for holiday sales (InfoWorld)

Resilience

Watching the Olympics has been an uplifting reminder for me.  The sport of it is fun to watch.  Yet, the deeper story is even better.

For example, Michael Phelps was expected to break Mark Spitz's record in Athens four-years ago.  While he was dominating, it just didn't happen, then. 

Can you imagine setting world records, winning gold medals, and still feeling like you came up short?

Can you imagine how many times he replayed the missing hundredths of a second that separated him from his dream?
So how did he do it this time?

Somehow the great ones are resilient and durable in distressing situations.  They adapt and cope; and ultimately gain strength from adversity -- often converting it into a gift.  They find a way to transform what seemed like setbacks into the fuel they need to get to the next level.

Nietzsche said "that which does not kill me, makes me stronger."  And that statement applies to trading and funds management as well.   Trading often seems like it is not fair - and that can be very good for us. 

Pilobolus: Things Aren't Always What They Seem

In trading, recognizing that things aren't always what they seem is a big part of the game. 

Here is a clever video that plays on that concept. It is from Pilobolus, a talented dance and performance art troupe.

Here is the direct link.

And this one has an unexpected ending.

Here is the direct link

Also, here is a link to their performance at the TED conference. (TED)

And here is an article about the "magic" of Pilobolus worth looking at. (CBS)