Capitalogix

Capitalogix Commentary 12/27/09

Since I'm spending the holidays in Asia, I thought I'd share a few lighter things this week.

First up is the Elf-Yourself site from JibJab.  And my wife says I can't dance.

Send your own ElfYourself eCards

Click here to make one yourself.

Second, here is something I look forward to each year.  Uncle Jay sings the year in review.

Market Commentary.

At the end of each year, the big financial media outlets typically conduct roundtables to get outlooks from key players in the financial markets.  Over the past few years, the individuals that run the best financial blogs and websites have become key players in their own rights, and their opinions are highly regarded by millions of loyal readers.  This year, Bespoke asked twelve popular financial blogs/websites to respond to the same 25 questions regarding their 2010 outlooks as well as their take on 2009. 

 

The responses were thought-provoking, and hopefully they will help you form your opinions on what is to come for financial markets in the year ahead. 

Best Wishes for a happy holiday season and for a prosperous New Year.

Business Posts Moving the Markets that I Found Interesting This Week:

• Is the Recession Really A Depression? (ZeroHedge)
• One in Four Children on Food Stamps, One in Eight Overall. (GlobalEconomicAnalysis)
• 77% of Small Businesses Plan No Raises in 2010. (Financial-Planning)
• U.S. Foreclosures to Reach Record 3.9 Million in 2009 (Bloomberg)
• What's the Real Purpose & Risks Of Quantitative Easing? (WSJ)
• Physics Envy: Finance's Search for the Laws Of Human Behavior? (FT)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• The 10 Questions You Should Never Stop Asking. (Forbes)
• Founder of Salesforce.com Explains How to Start a Business. (Economist)
• Which IT Projects are Right for the Cloud? (Computerworld)
• Why Vegetarians Might Want To Think Twice Before Eating Tomatoes. (DigitalJournal)
• Will Science Allow Us to End Aging by 2029? (H-Plus)
• Russia's Highest Court Rules Against Religious Freedom. (DigitalJournal)
• More Posts with Lighter Ideas and Fun Links.

Simon Sinek Says "Start with Why"

Inspiration is stronger than persuasion.  It gives people a sense of purpose and belonging that has little to do with external incentive or benefit.

Simon Sinek, who is quite charismatic and well-spoken, is delivering this message to a rapidly growing fan-base. 

My team thought Simon was inspiring, engaging and insightful.

You can watch a short video that introduces his material below. 

In addition, you can explore more of his ideas in his book,
Start with Why: How Great Leaders Inspire Everyone to Take Action.

An Example of Finding the Right Person for a Job.

Who do you believe will do a better job, someone who takes a job because of the salary and benefits ... or someone truly inspired to accomplish the job's purpose? 

Phrased that way, of course you know the answer.  Still, how can you leverage this to better select customers and employees?

For example, Simon uses the story of Sir Ernest Shackleton to illustrate this concept.  Shackleton was preparing to lead the first expedition across Antarctica in 1914. Legend has it that when seeking crew members for his journey, Shackleton placed the following ad in a newspaper:

"MEN WANTED FOR HAZARDOUS JOURNEY. SMALL WAGES, BITTER COLD, LONG MONTHS OF COMPLETE DARKNESS, CONSTANT DANGER, SAFE RETURN DOUBTFUL. HONOUR AND RECOGNITION IN CASE OF SUCCESS.
- SIR ERNEST SHACKLETON"

When the expedition became stuck in the ice and could not be rescued for 22 months, not a single man was lost. The reason Simon gave for their unlikely survival was that Shackleton hired survivors that could deal with the situation and were aligned with the mission and purpose.

Can you imagine writing an ad like that to attract the right people to your cause?

Watch This Video.

Here is a video of Simon speaking at a Ted Conference.  It is a great intro to his stuff. 

Other Resources:

• Here is a link to Simon's Blog.
• Here is a link to Videos of Simon.
• Here is a link to an article on why to know someone else's Why.
• Here is a link to Simon's Book: Start with Why.

Related Posts:

• Getting Ready for the New Year.
• Sometimes Simple is Better.
• Is Knowing How and Why Enough?
• The Flow of Planning.

Capitalogix Commentary 12/20/09

John Mauldin and George Friedman were in Dallas this week.  Several hundred people came out to hear their thoughts on the world and the economy. 

For what it's worth, Freidman's Stratfor service and Mauldin's Thoughts from the Frontline and are both terrific reads.

I take it as a bullish sign that so many people made time, in the middle of the day, for an event like this. 

While the mood in the room was that the easy money has already been made in the equity markets, people were looking for places to put money to work. 

Sentiment Soaring ...

Up-and-Down ... the ride continues.  Still, sentiment is quite bullish.  How bullish?  AAII's weekly survey showed the fewest bears since April 30th. That was just about the time the Russell 2000 rolled-over to start an 8% correction.

Market Commentary.

Here is a daily chart of the Dow Jones Industrial Average.  It shows the market at a decision-point.  The month-long consolidation has taken the market to a place just above major support and resistance level ... And back to the upwards sloping trendline.  

Traders expect a big move after periods of compressed range (like the one we are in now).  Bollinger Bands are often used to represent volatility. You can construct by plotting bands two standard deviations on either side of the 20-period moving average (note the pink bands in the chart above).  One of the indicators I keep an eye on, is the band-width of these Bollinger Bands (it is plotted in the bottom pane of the chart shown above). When it gets narrow for an extended period, that "squeeze" puts me on alert for expanding volatility. 

What do you do?  You watch price.  This is the classic buy point in an up-trend.  On the other hand, there's everything else.

Insight: Price is the Primary Indicator.

What do you think is the most bullish indicator of our markets?  It's not a trick question; the answer is "price".

The markets have held-up nicely, throughout this rally, despite lots of bad news about the economy. And that, in-and-of-itself, is bullish.

It doesn't matter what technical analysis indicator you use (increasing negative divergences and selling on down days ... or less positive momentum and market breadth), the markets have given us a clear message recently. Price is the primary indicator, and it has stayed above support. 

While there will likely be a bearish divergence when the trend finally ends, it is clear that a strong uptrend trumps most bearish divergences.

The Implications of America's Rapidly Expanding Debt.

Here is a video from Consuelo Mack's WealthTrack, about the lessons of history. Best selling author and historian Niall Ferguson talks about the seismic global economic and market shifts of recent years mean for our future, particularly the longer term implications of America's exploding debt.

Here is the transcript.

Business Posts Moving the Markets that I Found Interesting This Week:

• Volcker: No Growth Besides What the Fed's Pouring Into the Economy. (BusinessInsider)
• M&A Activity: Google Buying Start-ups Again. (BusinessInsider)
• A Start-Up Jokingly Touted a $100 Billion Valuation. Now VCs are Calling. (Forbes)
• Wal-Mart's Web War Against Amazon Risks Little. (WSJ)
• What's Glittering Isn't Always Gold - Other Metals Doing Well.(WSJ)
• Thoughts on the Market's Recent Gap Activity. (Quantifiable Edges)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• A Glimpse at the Future from Microsoft's Lead Tech Visionary. (CNet)
• Forbes Gave Ken Auletta’s ‘Googled’ a Great Book Review. (Forbes)
• Milken Institute's Journal of Economic Policy Worth a Look. (Milken)
• Craziest Google Street View Shots. (HuffingtonPost)
• Jewish Delis Are Dwindling, Traditions and All. (NYTimes)
• MIT's Next Bionic Breakthrough ... Stepping Beyond Human. (Forbes)
• More Posts with Lighter Ideas and Fun Links.

Observations on Holiday Season Economic Indicators

Hopefully, you are having a happy holiday season.

Technology is changing how I prepare this year.  A major portion of my gift purchases happened online, rather than in-person.  What about you?

 

I did go to the malls; and what I found was lots of parking spaces and deals that I could easily better with an internet connection.

It will be interesting to see how consumers spent, and which retailers were naughty and nice.

Here are a few of the other things I noticed recently.

The Christmas Lights Economic Indicator?

In past years, my neighborhood was a flashing Wonderland of Christmas lights.  This year, the displays are much more down-to-earth.  Are people feeling less jolly?  My guess is that fewer people chose to pay someone to hang the lights for them.

The Blockbuster Indicator?

When I went to see Avatar, on its opening day at the theater, a quarter of the seats were empty.   Box Office Mojo reports that the opening numbers were respectable, though not phenomenal.  The reviews have been great ... so perhaps fewer people chose to pay the $3 per ticket premium to see this movie in 3D because they are more in touch with their budgets and spending limits.

Avatar Delivers the Wow!

I highly recommend seeing James Cameron's new movie, Avatar, in 3-D.  It was terrific ... much better than I hoped or expected.

It was so good that none of us would leave to refill the popcorn ... And my wife didn't use the bathroom once (which means you should expect Avatar to win a bunch of Oscars).

The story and underlying message were good. Yet, that isn't why people will flock to see it. This is one of those "you have to watch this on a big screen" movies. It is a spectacle.

Enjoy it for what it is ... And later, think about how many cool technologies you saw the characters use that you can't wait for someone to develop in this world.  Visionary and very cool.

Here is a short example of what to expect.

Not All 3-D is Created Equal.

The CGI effects were way better than I expected.  Frankly it was hard to tell what was "real" and what wasn't.  The unsung hero, though, was the 3-D technology.  It was far and away the best I've seen, because it seemed real and natural, rather than a gimmick.  It was so good, you forget it is in 3D.

In contrast, the Dallas Cowboys handed out the older blue and red filmed 3-D glasses at their game against the San Diego Chargers last week.  The idea was to use the giant screen to show 3-D replay highlights. 

Here is a picture of people trying to use them at the game.  At first, it was novel.  However, as you might have guessed, watching the live game with the glasses was almost impossible.  After a few minutes, the crowd started booing until the stadium switched back to regular graphics.

After watching Avatar, though, I expect to see a lot more 3-D content. Major manufacturers are betting on it too. The technology is getting better ... And so is the experience.

Other Resources:

• Here is a link to the main Avatar Movie website.
• Here is a link to the Avatar Pandorapedia.  Yes, that's like Wikipedia for geeks.
• Here is a link to Avatar News and Trailers.
• Here are some reviews.

Palin and Shatner's Strange Word War

Words alone, won't do this justice.  You should watch for yourself.

Sarah Palin and William Shatner channel something strangely reminiscent of beatnik poetry or Haiku.

Enjoy.

It is like a competitive poetry performance, except they are reading each other's words out of context.

Other Resources:

• This is generating some press.
• Here is a link to Palin's book, Going Rogue: An American Life.

 

Capitalogix Commentary 12/13/09

It was a slow news week, as long as you weren't Tiger Woods.  Numbers and charts can tell only so much of a story.

Market Commentary.

Why has the market stayed so strong?  The first thing that comes to mind is massive government intervention.  The next thing that comes to mind is that there have been more buyers than sellers.  That is not a pun.  Perhaps it is more telling to say there hasn't been a lot of committed short sellers.  Recently, however, there hasn't been a lot of committed buyers either.  The result has been a month-long, narrow trading range.

Here is an intra-day chart of Dow Jones Industrial Average. It is easy to see the trading range that has constrained prices for the past month.  Notice how many times price has turned-down off the highs, and bounced off the lows.  The question is, will it happen again?

Technical traders will see this as a likely time to turn back down.  The Dow is at the top of its recent trading range and has several negative divergences (like the MACD shown at the bottom of the chart).  However, markets aren't known for rewarding the "easy" trade.

In addition, big moves often happen after tight ranges.  So, the next move might be a big one.

For a clue as to the direction of the next move, it may help to look to the Financial Sector.

Financials are Often Early Indicators of the Broader Market.

Here is a chart of Goldman Sachs. It is going through a downside correction, beneath its 50-day moving average, and is testing support.  A sustained move above this level could be a very bullish early indicator for the U.S. Equity markets.  A further break-down, from here, would also be telling.

Business Posts Moving the Markets that I Found Interesting This Week:

• The Post-Recessionary Global Economy: In Search of the New Normal. (Wharton)
• Think The Worst Is Over? Think Again, VCs Say At Tech Showcase. (WSJ)
• BusinessWeek's List of the World's Most Intriguing Companies. (BusinessWeek)
• Where Does the Money Go From Each iPod Bought? (Telegraph.UK)
• Is Time to Be Brave and Buy the Dollar? (TimesOnline)
• More Posts Moving the Markets.

Lighter Ideas and Fun Links that I Found Interesting This Week

• Time Magazine's The 50 Best Inventions of 2009. (Time)
• Loneliness is Contagious: Even If That Sounds like an Oxymoron. (Slate)
• Six Social Media Trends for 2010. (Leader)
• Learning From Porn: Lessons from the Cutting-Edge Of Technology. (MediaPost)
• Dissecting the Dollar's Re-Design Project. Is This Re-Branding? (Mint)
• More Posts with Lighter Ideas and Fun Links.

A Water Drop Filmed in Ultra-Slow-Motion, at 2000 Frames-per-Second.

What looks "normal" in real-time, is something quite different when you have the means to perceive it. 

Very cool stuff.  See for yourself.

Here is a video showing a water-drop in ultra-slow-motion (2,000 frames per second). It is from the Discovery Channel's series 'Time Warp', where MIT scientist and teacher Jeff Lieberman and digital-imaging expert Matt Kearney use the latest in high-speed photography to turn never-before-seen wonders into an experience of beauty and learning.

What it Means.

Wisdom comes from finer distinctions. 

Think about how being able to make more distinctions per unit time is changing the world. 

It is changing everything ... from auto-landing airplanes, your car's thermostat or cruise control, to Goldman Sach's recent trading record from high-frequency trading.

Need Energy, a Clear Head, or a Power Nap ... There's an App for That.

pzizz (pronounced puh-zizz) Relax is a power-nap app. 

Whenever you feel tired or frazzled, put on your headphones, set the time you have available - and pzizz creates a new and unique soundtrack, each time you use it.  There's nothing to learn - and no effort required by you. 

Simply press a button, and you get a surprisingly effective and pleasant relaxation session.

Increase Energy and Performance.

I've been a pzizz user since 2005.  Frankly, I'm still surprised by how much it helps when you need a quick nap, pick-me-up, or boost of energy (even if you only have 15-20 minutes).  It is nice that it works to relax you; it is even better that you wake-up feeling good and ready for the rest of your day.

Here's How it Works.

First, find a comfortable place.  Second, choose how long you want your power nap to be.  Third, adjust how much talking you prefer. Fourth, headphones are better - but not necessary.  Fifth, press the button and let yourself relax.

What Happens?

Each session has three parts, the Intro, Main Session, and Wake-Up Sequence.  Throughout all of them, a deep, cool, British voice guides you through some relaxation techniques and gives you encouragement and positive feedback.  The voice is done by Michael Breen, a well-know NLP Expert.

Sound Waves Affect Brain Waves.

In addition to the NLP guidance, pzizz  also leverages binaural beats and ambient sounds to help you relax.  Yes, there is also a pleasant background track complete with music, bells, wind chimes and other assorted ear candy designed to lull you to sleep. Bottom-Line: You'll like it.

Try It Yourself.

If this all sounds new-agey, I can't blame you. I mocked the idea of pzizz when I first heard about it. "Actions speak louder than words".  If you need proof, try it yourself. Click this link to download a sample 15 minute energizer soundtrack and a sample 15 minute sleep soundtrack to see how it works for you. 

The software is available for PCs and Macs.  Also, pzizz has two iPhone apps.

Keep an open mind and you may be pleasantly surprised.

Related Links:

• Review - Energize Your Sleep With pzizz - 40Tech
• Review - pzizz for iPhone- Gear Diary
• Review - pzizz Napping Software at Work - MacNN
• Review - pzizz "How"s and "Why"s - SleepWarrior
• 7 Soothing iPhone Apps to Help You Relax

Related Posts I've Written:

• Light and Sound Machine
• Holosync

Getting Ready for the New Year with Postive-Focused Planning

Holiday shopping season is in full-force.  That means 2010 is right around the corner.

As an early gift, I got to go to a hockey game with my son.  This picture captures a Good News - Bad News moment for me.  On the positive side, I'm happy to see that my son shaved off his strangely orange mop of hair. However, standing next to him, I look like a professional "before" model.

That helped me realize that it's time to start thinking about New Year's resolutions, and specifically some health related resolutions.

Here is a summary of that process.  Hopefully, you can use some of these concepts.

• Focus on What You Want.
• Focus on Why You Want It.
• Focus on Ways You Might Get it.
• Focus on the Progress.

Below, I'll take you through an example of the four steps you need to use Positive-Focused Planning to get what you want.

Moving Towards a Solution, Rather Than Suffering with the Problem.

My first instinct was to think "I need to lose weight".  Knowing that "you're fat" isn't helpful … my head, quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle".

Blah, blah … They are just words.  What I needed was something specific, measurable and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that.

Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

This post isn't about health and fitness, it is about the mind-set and techniques you can use to set empowering goals and plans in any situation.

So, while I could list a lot of ways to lose weight; and I might even remember to do some of them, when you create a driving force, the momentum takes care of itself.  The first step in doing that is knowing WHY you want something.

I really do want to be healthy and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  In order to do those things, I must find better ways for me to live a healthy lifestyle.

The WHYs are just as important for business goals too.

Focus on Potential Solutions, Rather than Problems or Challenges.

Obstacles Exist. The bad news: I don't eat fish and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports.  And I rarely get 7 hours of sleep.  The good news: is none of those things matter; and even if they did, it just would mean that I have a lot of room for progress.

It is natural to focus on obstacles.  Use them as a reminder to focus on potential solutions instead. They are beacons, pointing the way.

How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do ... and another is of things Not To-Do.

Here are some of the sample To-Do Items:

• I will drink more water than coffee.
• I will stretch, or do basic calisthenics, on days that I do not go to the gym.
• I will make a healthy shake as a meal replacement rather than a meal supplement.
• I will focus on relaxation and meditation, as much as I focus on strength & physical exercises.

Here is the actionable list of Not To-Do Items.

• I will not buy new pants or wear stretchy pants.
• I will not eat snacks out their container, and will portion-out what I want first.
• I will not compare my current level of fitness to what I used to be able to do. Instead I will focus on my actions and improvement.

Create Healthier Habits.

It is easy to follow your routine.  So, make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

• Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
• Buy healthy snacks, like fruit, raw nuts or organic energy bars (instead of chips).
• Make exercise time, the time you enjoy listening to music.
• Park at the end of the parking lot, so you get to walk.
• Meet with friends at the gym, rather than a bar or restaurant.

You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly, to make a big difference?  Which things can you automate or outsource?

Focus on Your Progress.

In this case, it really is about the journey.  Instead of keeping track of how far you have to go ... notice how far you've come.  It is about creating energy, momentum and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

• Find shoes that don't hurt your feet.
• Pick a gym, or a personal trainer.
• Run more than two laps without stopping.

It doesn't matter what they are are ... they all count, as long as you know that you are moving in the right direction.

Summary.

The point of this exercise as was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:

1. First, figure out what you want, and why it is important to you. 
2. Second, find something you can do, right now, which moves you in the right direction.
3. Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
4. Fourth, set milestones so that you can recognize and celebrate your progress.