Ideas

  • Capitalogix Commentary 02/06/09

    090206 Obama Life Not Perfect
    Humor usually has its base in truth.

    Perhaps that is why this cartoon caught my eye; it pokes at a sore spot.

    It has been weeks since many people figured things changed.  Not much seems better, yet, does it?

    Emotions are not logical.  So even though I might consciously understand that we are going through a long process, I want instant gratification.  It is human nature.  And that explains a lot about the market in-and-of-itself.

    I once heard that a Recession is when your neighbor loses his job, and a Depression is when you lose yours. With unemployment spiking, a lot more people are feeling "depressed".

    Market Commentary: The good news is that the lows held, and it looks like there's decent support at these levels. It is worth noting that we saw a strong rally anticipating the Senate's Stimulus Plan.

    Déjà vu, though; didn't we see this pattern before?  Last October the markets rallied off the lows in anticipation of the bailout deal, only to move down again once it passed. It will be interesting to see what happens to the market when the Stimulus Plan actually passes. Will confidence spur a further rally, or will speculators have to switch back to bear-mode?

    In a bear market, it's common to see large rallies. So, it wouldn't surprise me to see a rally off these lows. However, it would surprise me if we didn't actually make new lows. Here is a chart comparing the market action from the 1929 crash to what's happening currently.

    090206 Today vs The Great Depression The January Barometer Predicts a Down Year:  I talked about this a few weeks ago; research published by Yale Hirsch in the "Stock Trader's Almanac" suggests that market performance during the month of January often predicts market performance for the entire year. This January Barometer has worked especially well in odd years (the first year of a new Congress), with only two misses in 69 years. While the January barometer has a good record of prediction, StockCharts.com still puts it in the "for what it's worth" column because, while it is interesting to note, it might simply be coincidental.

    It is hard to imagine 2009 being a positive year.  As I talk to business owners, I sense a weariness and fear. The economy is catching up with them, directly or indirectly. An interesting side effect is that some of the more successful entrepreneurs I talk with are starting to get excited about the new opportunities in front of them.  In contrast, several expressed feeling a little guilty and sad about their success in the face of what's happening around them. This is what happens during periods like this. Old models fall away and new leadership emerges.

    Here Are A Few Of The Posts I Found Interesting This Week:

    • Was All The Doom And Gloom At Davos A Contrary Indicator Of Better Times Ahead? (Slate)
    • Obama's Wall Street Initiative: Getting beyond slapping the hand that feeds you. (Daily Beast)
    • Doesn't Everything Use Flash Memory? SanDisk reports $1.8BB loss amid demand slump. (CNet)
    • More tech troubles, Motorola Q4 loss of $3.6BB with sales falling 26%. (CNet)
    • Are Morgan Stanley and Goldman Sachs showing new leadership? Price says "Yes". (Bespoke)
    • Is Stronger Medicine Needed To Fix The Banking Crisis? (Barrons)
    • Facebook growing 7X faster than LinkedIn, but that's not the whole story. (Silicon Alley Insider)
    • Necessity is the Mother of Invention. A new class of start-up ventures (BusinessWeek).

    And, A Little Bit Extra:

    • Jennifer Hudson lip-synced the National Anthem at the Super Bowl. (ABC)
    • Interactive Data Visualization of Twitter Chatter During the Super Bowl. (NYTimes)
    • Crowd Behavior Explained; the herding instinct is chemical. (New Scientist)
    • Mating Season Is Over for the Alpha Males of Banking. Wallet-size matters. (Bloomberg)
    • Professor Uses Math to Decode What Makes The Beatles Music Special. (WSJ)
    • Teleportation Is Now Real – Just Don't Try It at Home Yet. (Time)
    • Verne Harnish Rockefeller Habits one-page strategic planning tool. (Classic & New Version)

  • Are We There Yet? Some Changes Happen In Slow-Motion.

    Change is a constant. Yet it's often hard to see the forest for the trees. 

    It seems like just yesterday that my son, Zach, was making sand castles on the beach. This week he turned 16 and is driving.  It reminds me of line from a song in the show, Fiddler On The Roof: "Sunrise, Sunset; Sunrise, Sunset … Swiftly Go the days."

    Zach Building Sand Castle on Margate Beach 200p                   090130 Zach at 16 200p 

    On a day-by-day basis, I rarely noticed the change. However, looking at old pictures makes it obvious that there was growth and progress. 

    So, what did I notice?  Sometimes it was what a great kid, or how loving, he has been.  Other times I noticed that he didn't eat his vegetables, or that he drives passionately with a very heavy foot.  In any case, what I focused on is what my life seemed filled with, to me. 

    Unfortunately, that is what has been happening in the markets as well.  There is a lot of fear, uncertainty and doubt because people are focusing on what is wrong or what is missing.  And frankly, the world has given us a lot of opportunities to focus on that lately.

    But that isn't all there is to focus on in the market.  I was talking to an old trader friend of mine, this week, and said he is "cautiously optimistic" because the lows have held even though everything but the kitchen sink has been thrown at the markets recently.

    It is all about perspective, isn't it?

    Here is a series of photos starting with Bush and ending with Obama. In the series, the differences from picture to picture are subtle.

    Bush to Obama

    This is also a metaphor for what I expect to happen over time. We are where we are. It doesn't really matter how or why we got there. We are here. And little-by-little we won't be here anymore.

    If you are looking at the country or the economy, realize that it took years to get here. Simply changing a regime won't flip a switch.  Some changes happen in slow-motion.  Or, perhaps from our perspective, some changes appear to happen in slow-motion.  From a different vantage point, the rate of change might seem very different.

    The same can be said for changes in a person are changes in the business. It's easy to see the gap between where you are and where you'd like to be. Regardless, you will probably get there faster by building momentum and confidence by focusing on the improvements and progress you're making.

    Tough times are great opportunities to discover character.  I'm often amazed at the innovation and insight that occurs at times like these.

  • Capitalogix Commentary 01/30/09

    090130 Cartoon Global Financial Crisis Davos WEF
    In Davos, they are holding the World Economic Forum.  The tone is a little different this year.

    Putin warned about the first truly global economic crisis,
    which he says is continuing to develop at an unprecedented pace.

    Soros said “Central banks have lost control,” and basically predicted a new economic world order and the end of the Dollar as the world's default currency.

    So far at the Forum, the U.S. has played the role of the wounded giant.

    Meanwhile, at home, the WSJ says there have been more than 70,000 layoffs this week alone,
    something President Obama called "a continuing disaster for America's working
    families." He urged passage of his $900 Billion stimulus bill and issued Executive Orders to increase the clout of unions.

    Reports show the U.S. economy shrank about 5% last fall — the worst contraction since 1982. Because businesses failed to cut production fast enough after the financial crisis hit in October, they're now stuck holding vast inventories of unsold goods. In order to correct, they've begun aggressively closing factories and shedding workers.  The Washington Post says the economy is sinking under the weight of this excess inventory, and that the data suggests the worst is yet to come.

    090130 Ships in SPore
    This story is playing-itself-out in different forms across the globe.  For example, I got an e-mail from a trader showing ships stacked-up in the Port of Singapore.  This picture was taken a few weeks ago. Apparently these are empty ships, waiting for cargo.  Since the docks are full of other empty ships, the result is a near complete slow down.

    Question: Does that illustrate the state of the commercial world in the Far East?  Or, perhaps, could it simply be the result of Chinese New Year celebrations? I guess time will tell.

    Charts That Caught My Eye This Week:

    The January decline was steep, but U.S. Markets held above their late November lows. Most surged
    over their 50-Day Moving Averages, only to sink back downwards.

    090130 SP500 Breaking Down

    With Equity Indices suffering and Bond prices falling as well, is there anything performing well?  Recently, Investors have turned to gold as a safe haven. It looks like gold just broke above and successfully re-tested its trendline.  On a closing basis, Friday was the highest gold close in six months.

    090130 Gold Breaking Out 

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

    • Why Obama unloaded on Wall St execs, as JFK once unloaded on steel barons. (NYTimes)
    • UK article spotlighting 25 people at the heart of the economic crisis (Guardian)
    • Apple awarded key patent on things that makes the iPhone, the iPhone. (AppleInsider)
    • Elliott Wave Theory's explanation of "irrational herding" during uncertain times. (Prechter)
    • Americans display venturesomeness, even in grim economic stretches. (NYTimes)
    • Steve Jobs a music visionary, or just visionary? Judge for yourself. Interesting article. (CNet)

    And, a little bit extra:

    • An attempt to make the ThinkPad sexy. I'll admit, they caught my eye. (Lenovo)
    • Watch the Ads From the Super Bowl Online (Hulu)
    • Add "Obama-cized Poster Effects" to your photos. Interactive and flexible. (Obamicon.Me)
    • Malwarebytes fixed a Trojan for me that apps I paid for couldn't remove. Nice. (Download)
    • Big Brother's Watching: Swiss Police Spy Marijuana Field With Google Earth (ABC News)
    • Printing the NYT Costs Twice as Much as Sending Every Subscriber a Free Kindle (Silicon Insider)

  • Hope Is Only The First Step.

    090123 HMG Innovate Poster
    It doesn't matter whether you liked or supported Obama during the campaign. Something changed, and the effects will be felt around the world.

    That isn't a political statement.  It is a call for action and an alert to the opportunities and possibilities ahead.

    Watching the Inauguration I knew, deep in my body, that I was watching (and a part of) something historic.

    Just because the change hasn't yet flowed through to something you're looking at, doesn't mean that the change hasn't already occurred.  So, simply looking around, you might not notice that anything changed (for
    example, the market continued to go down on Inauguration day). Make no mistake,
    though, things Changed.

    Hope Is Only The First Step.

    In business (and certainly in trading) hope is not a great strategy; so it's ironic that it's what we need most right now.

    Hope creates confidence, and confidence breeds action. 

    Sitting around waiting for governments to fix what's wrong is a recipe for disaster.  Gandhi said "Be the change you seek in the world." It's never been more true than now.

    This is not the time to wait for others to fix everything and clean up the mess.  This is a time for action.  This is a time to be open to possibility.

    I'm excited!  Periods like this are ripe with opportunity. And it brings to mind something my father told me a long time ago.  The difference between good and great is infinitesimal.  People who are good take advantage of opportunity, while people who are great create opportunity.

  • Hope Is Only The First Step.

    090123 HMG Innovate Poster
    It doesn't matter whether you liked or supported Obama during the campaign. Something changed, and the effects will be felt around the world.

    That isn't a political statement.  It is a call for action and an alert to the opportunities and possibilities ahead.

    Watching the Inauguration I knew, deep in my body, that I was watching (and a part of) something historic.

    Just because the change hasn't yet flowed through to something you're looking at, doesn't mean that the change hasn't already occurred.  So, simply looking around, you might not notice that anything changed (for
    example, the market continued to go down on Inauguration day). Make no mistake,
    though, things Changed.

    Hope Is Only The First Step.

    In business (and certainly in trading) hope is not a great strategy; so it's ironic that it's what we need most right now.

    Hope creates confidence, and confidence breeds action. 

    Sitting around waiting for governments to fix what's wrong is a recipe for disaster.  Gandhi said "Be the change you seek in the world." It's never been more true than now.

    This is not the time to wait for others to fix everything and clean up the mess.  This is a time for action.  This is a time to be open to possibility.

    I'm excited!  Periods like this are ripe with opportunity. And it brings to mind something my father told me a long time ago.  The difference between good and great is infinitesimal.  People who are good take advantage of opportunity, while people who are great create opportunity.

  • Data Visualization of President Obama’s Inauguration Speech

    Here are two interactive ways to look at and understand what was said.

    090120 Obama Speech Word Cloud

    Go to Wordle's site to make one yourself.  You can choose colors and layouts to get the look you want.

    Also, here is a Word Tree from IBM's Many Eyes site.  I like this type of tool because you can interact with the data.  Type in any word you see in the Word Cloud above.  This will show you every instance of that word, in context.

    090120 Obama Speech Word Tree Also, here is an embedded link to a version you can interact with yourself.  I suggest you start with words frequently used in the speech like: Nation, People, Today, New and Must.  You can also try phrases like "We Will".

    The Word Tree tool is interesting and useful. Also, I can see how it will work in a business setting with business plans, proposals, marketing material, etc.  This is very cool; and it is easy to build a word tree on your own data at Many Eyes.  Have Fun. 

    Other Links:

    • Word Clouds of Inaugurations Compared (Bush, Clinton, Reagan, Lincoln). (Read Write Web)
    • Hand-Drawn Mindmap of Obama's Speech. (Agerbeck)
    • Photosynth Image of Inauguration site. (Mashable)
    • Another Inauguration site panorama with incredible detail. (Gigapan)
    • Pictures of Obama's Inauguration from Space; puts things in a different perspective. (GeoEye)

  • Capitalogix Commentary 01/16/09

    Are we in a Recession or Depression?  From my standpoint, I don't think it matters much.  Naming the disease doesn't fix it if you still don't know the cure.  Regardless of what you call it, we're still faced with the symptoms: the credit collapse, carnage in the financial sector, higher prices but less money to spend, and rising unemployment. 

    The kicker is this has been happening worldwide.  Yet, most commentary I read treats this like the cause and effect happen here.  If you look around, though, there haven't been many safe havens. And I suspect that we have less to do with the start or end of this mess than we give ourselves credit or blame for.

    It Is Not What Happens, But What You Do.  You see it repeated through history … Times like these are the catalyst to great wealth for some, and the poor-house for others.  If someone were looking back on this time from 10 or 15 years in the future, this is probably early in the new cycle.  This is a good time to figure-out what you believe will work going forward. 

    The party isn't over.  It is just a new dance, with a different rhythm and a faster pace.  So, maybe it is time to be nimble and to learn some new steps?

    A Look at the Markets:  A few weeks ago, 80% of stocks in the S&P 500 were trading above their 50-day moving averages.  With the declines we've seen since then, that percentage has moved down to 40%.  Financials have led those declines

    This chart shows 2009 performance, by sector.  So far most sectors are doing well.  The exception has been Financials, which look a bit oversold.

    090116 Sector Performance Chart

    Nonetheless, with the S&P 500 approaching its November lows, it's comforting to see 40% of stocks still trading above their 50-day moving averages.  At the prior lows, the number got down nearly to zero.  The fact that the overall declines have been limited to a smaller area of the market is a positive for those hoping that the lows will hold.

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

    • Is so much bad news good news for you? A Bullish forecast. (Dash of Insight)
    • Bank of America gets another $20 Billion from the Fed (Federal Reserve)
    • Yahoo has a new CEO, how did Wall Street react? (TechCrunch)
    • Sony looks set to lose $1.1 Billion in Fiscal 2008 for first loss in 14 years. (Gizmodo)
    • Circuit City Pulls the Plug.  They are liquidating and closing over 500 stores. (Huffington Post)
    • Disney seeing some positive signs? (Jim Hill)
    • Great Visualization showing GM's woes, the least of which is lack of cash. (WallStats)
    • Twitter's New Status as an Investment Tool. (MSN Money Central)

    And, a little bit extra:

    • Size Does
      Matter: Finger length may reveal your financial acumen. (New
      Scientist       & Telegraph)
    • Your inner voice never lies. But does it know what it is talking about? (Psychology Today)
    • Schools get futuristic face scanners to identify students and strangers. (Telegraph)
    • In retrospect, this was a huge marketing boner. Funny. (YouTube)
    • MS’s new Songsmith product adds music to any vocal track. "Epic Fail". (Blog & Gizmodo)
    • The taxman cometh? IRS urged to tax virtual worlds, economies. (Ars Technica)
    • Surprise, surprise … research shows Facebook still mostly for the young. (MIT Tech Review)

  • Capitalogix Commentary 01/16/09

    Are we in a Recession or Depression?  From my standpoint, I don't think it matters much.  Naming the disease doesn't fix it if you still don't know the cure.  Regardless of what you call it, we're still faced with the symptoms: the credit collapse, carnage in the financial sector, higher prices but less money to spend, and rising unemployment. 

    The kicker is this has been happening worldwide.  Yet, most commentary I read treats this like the cause and effect happen here.  If you look around, though, there haven't been many safe havens. And I suspect that we have less to do with the start or end of this mess than we give ourselves credit or blame for.

    It Is Not What Happens, But What You Do.  You see it repeated through history … Times like these are the catalyst to great wealth for some, and the poor-house for others.  If someone were looking back on this time from 10 or 15 years in the future, this is probably early in the new cycle.  This is a good time to figure-out what you believe will work going forward. 

    The party isn't over.  It is just a new dance, with a different rhythm and a faster pace.  So, maybe it is time to be nimble and to learn some new steps?

    A Look at the Markets:  A few weeks ago, 80% of stocks in the S&P 500 were trading above their 50-day moving averages.  With the declines we've seen since then, that percentage has moved down to 40%.  Financials have led those declines

    This chart shows 2009 performance, by sector.  So far most sectors are doing well.  The exception has been Financials, which look a bit oversold.

    090116 Sector Performance Chart

    Nonetheless, with the S&P 500 approaching its November lows, it's comforting to see 40% of stocks still trading above their 50-day moving averages.  At the prior lows, the number got down nearly to zero.  The fact that the overall declines have been limited to a smaller area of the market is a positive for those hoping that the lows will hold.

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

    • Is so much bad news good news for you? A Bullish forecast. (Dash of Insight)
    • Bank of America gets another $20 Billion from the Fed (Federal Reserve)
    • Yahoo has a new CEO, how did Wall Street react? (TechCrunch)
    • Sony looks set to lose $1.1 Billion in Fiscal 2008 for first loss in 14 years. (Gizmodo)
    • Circuit City Pulls the Plug.  They are liquidating and closing over 500 stores. (Huffington Post)
    • Disney seeing some positive signs? (Jim Hill)
    • Great Visualization showing GM's woes, the least of which is lack of cash. (WallStats)
    • Twitter's New Status as an Investment Tool. (MSN Money Central)

    And, a little bit extra:

    • Size Does
      Matter: Finger length may reveal your financial acumen. (New
      Scientist       & Telegraph)
    • Your inner voice never lies. But does it know what it is talking about? (Psychology Today)
    • Schools get futuristic face scanners to identify students and strangers. (Telegraph)
    • In retrospect, this was a huge marketing boner. Funny. (YouTube)
    • MS’s new Songsmith product adds music to any vocal track. "Epic Fail". (Blog & Gizmodo)
    • The taxman cometh? IRS urged to tax virtual worlds, economies. (Ars Technica)
    • Surprise, surprise … research shows Facebook still mostly for the young. (MIT Tech Review)

  • Hope, As Something to Hope For

    Regime Change Political Cartoon
    It doesn't matter if you've read "The Audacity of Hope."  Tuesday, change will come.

    I'm pretty sure that President Obama will not have these lines in his Inauguration Speech.

    "Most of all, I want to thank the Republicans for making this historic occasion possible. Of course, I must also thank you, President Bush, for years of angering the American people. Without your efforts, none of this would have been possible. You have shown the world that  "change" is not only something we can believe in again, but something we demand."

    What Obama won't say on Tuesday … is being said with cartoons or gadgets like this Obama Inauguration Speech Generator.
    Click the image below to make your own.

    090117 Obama Inauguration Speech Generator 600p

    I found it at Mashable, and enjoyed remembering playing MadLibs as a little kid.

    Also, Esquire had an interesting piece that generated two links on this topic.

  • Hope, As Something to Hope For

    Regime Change Political Cartoon
    It doesn't matter if you've read "The Audacity of Hope."  Tuesday, change will come.

    I'm pretty sure that President Obama will not have these lines in his Inauguration Speech.

    "Most of all, I want to thank the Republicans for making this historic occasion possible. Of course, I must also thank you, President Bush, for years of angering the American people. Without your efforts, none of this would have been possible. You have shown the world that  "change" is not only something we can believe in again, but something we demand."

    What Obama won't say on Tuesday … is being said with cartoons or gadgets like this Obama Inauguration Speech Generator.
    Click the image below to make your own.

    090117 Obama Inauguration Speech Generator 600p

    I found it at Mashable, and enjoyed remembering playing MadLibs as a little kid.

    Also, Esquire had an interesting piece that generated two links on this topic.