Hitchhiking across America: embracing optionality and risk

Have you ever wanted to spend a month hitchhiking your way across country, or see the American landscape pass by from the inside of a freight train boxcar? 

In the Vice documentary series, How to Hitchhike Across America: Thumbs Up, artist David Choe and his friend/nephew Harry Kim show us how to do just that. 

 

Note: You can watch the full series by clicking through to the next episode link at the end of each clip.

I started watching this series on YouTube without any real expectations and was sucked in. The two start off hopping a freight train out of Los Angeles. As they make their way, slowly, to Las Vegas, we hear a bit of back story on David's life and their immediate plans for the trip. 

While I won't give away all the details of their trip, I will say this: only in America can you hop out of a freight train boxcar and walk right over to your comped room at the Venetian.

Now, what I didn't know until after I started watching is that David Choe is a rather well-known graffiti artist and painter. In fact, back in 2005 Choe was hired by Sean Parker to paint some "graphic" murals on the walls of Facebook's first Silicon Valley office. David took company stock in lieu of cash for his efforts. Those shares were worth $200 million at the time of Facebook's IPO (about 5 years after this series aired).

As you watch David and Harry make their way across country, you begin to notice a theme. Aside from their most immediate concerns - finding a place to sleep, hitching a ride to the next town - there is no preplanned structure to their days. If the guys see an opportunity to have some fun or meet someone new, they take it. 

Sure, there's a great deal of risk in this style of travel. When they're not avoiding cops or railway security guards, the guys discuss their fears of being mugged or raped, while also acknowledging the fear most drivers have of them. It's not easy hitching a ride from strangers in a time when, as one of their new pals offers, "the media has us scared of each others' shadows". 

David and Harry and their fellow travelers have embraced these risks and try to meet them as best they can, while opening their lives to a sense of freedom and optionality. They go where they want and they can take the odd detour on their way if they so choose. In this, they might find approval from Antifragile author, Nassim Taleb, who argues for an anti-fragile world of "many highway exits and options" (more on that here). 

While I watched their (well-edited) adventure unfold, I wondered about the benefits of such of a lifestyle. Although these two can probably choose to dip in and out of the hobo life at will, maybe they're gaining an insight into America, and life, that some of us may never have. Is it possible their serendipitous travels and approach to life might open up opportunities that may never have come if they were shackled to their work desk or stuck inside a corporate office? 

While we ponder that, I'll leave you with this quote (thanks Wikipedia!): 

"It has often been said that Choe's greatest artwork is his own life. As his friend Jason Jaworski explained, "For me, there is no artwork Dave or anyone can create that is capable of completely equalling the vast canvas of Dave's life, which he paints daily while simply living." 

Your life is your own unique canvas. Try to paint something you'd want to see.

Bitcoin crosses $100 mark in latest surge

Bitcoin, the virtual currency on everyone's lips, surged through the $100 mark this week. 

Bitcoin is currently trading at $117.2 on Mt. Gox (click through for current quotes and market depth), one of the most liquid bitcoin exchanges. Having traded near $15 in early January, bitcoins are now up over 750 percent in US dollar terms year to date. 

Here's a chart of the bitcoin/Euro price, currently at €92.18 on Mt. Gox. Interest in the bitcoin market recently exploded across Europe as Cyprus' banking crisis led savers to wonder if their bank deposits would be seized to help bail out ailing banks. 

As the New Yorker explains in their piece on, "The Bitcoin Boom": 

"...That a number of panicked Europeans appear to have reckoned the wildly volatile, vulnerable, and tiny bitcoin market a preferable alternative to their own banking system, even temporarily, signals a serious widening of the cracks between the northern and southern E.U. countries in the wake of the euro-zone debt crisis. 

It also illustrates the broader collapse of trust that is threatening the world of global banking and fiat money. The weakness in existing currencies stems from lack of faith in institutions—particularly central banks, which are often in league with commercial and investment banks. 

When a government bails out a failed bank or insurance company—in essence, by printing money—the net effect is that the currency as a whole is debased, in favor of a few and at the literal expense of everyone else, which amounts to a fair description of today’s global financial system. Hence the sudden appeal of bitcoins, which appear, for the moment, at least, to be immune to the machinations of inept or crooked bankers and politicians." 

I've been reading and tweeting about bitcoins and the future of virtual currencies quite a bit in recent months. Recent events seem to have sparked a great deal of interest in this area, even for those (like myself) who have yet to transact in the virtual currency market. 

We've seen a previous boom and bust cycle in Bitcoin prices, with a passing media frenzy ("it's a bubble!", "an unregulated ponzi scheme!") to match. The last peak in Google web search interest came in June 2011, amidst official alarm over the "untraceable peer-to-peer currency's" alleged role in online money laundering and the drug trade. 

Now that we're seeing a near-parabolic rise in bitcoin prices across the globe, we can probably expect another new peak and cyclical crash (or maybe a slightly calmer consolidation period) to follow soon.

However, if the decentralized issuance of bitcoins remains steady over time, we could see a flourishing market for virtual currencies develop longer-term. Whether it's Bitcoin or some other innovation that stands the test of time, we'll be watching this trend with interest. On that note, I'll leave with you with the following quotes.     

"Encrypted currency is at the Altair development stage. If Bitcoin isn't actually the Apple II, we're very close" @kevincarson1
— Guillaume Lebleu (@giyom) August 25, 2011

"Bitcoin is the beginning of something great: a currency without a government, something necessary and imperative." - @nntaleb
— David Shvartsman (@FinanceTrends) March 24, 2013

Nassim Taleb on Antifragile at Google

 

Authors @ Google presents Nassim Taleb, discussing the concepts from his latest book, Antifragile: Things that Gain from Disorder. 

Here, Taleb offers his view that the opposite of fragility is not "robustness", as commonly supposed, but anti-fragility. Whereas things that are fragile need to be handled with care and kept in a state of tranquility, things that are anti-fragile benefit from volatility. 

According to Taleb, fragility and anti-fragility can be measured, whereas risk cannot (in spite of what Ivy League academics with risk models may think). You'll hear why anti-fragile systems have benefits that outweigh their risks, and why some fragile systems are vulnerable to "prediction error" and hidden, intolerable risks which vastly outweigh any associated benefits.

Using the example of Seneca, a wealthy Stoic philosopher who often imagined himself to be poor, Taleb suggests we should always try to have more upside than downside from random events - "and then you're anti-fragile". 

So let's hear it for an anti-fragile world of "many highway exits and options". It sounds a lot better than a world centered around top-down planning by the supposed elites.

Related posts: 

1. Nassim Taleb on Antifragility at Princeton.

2. Econtalk interview with Nassim Taleb on Antifragility.

Nassim Taleb on Antifragility at Princeton

 

Nassim Taleb discusses the concept of Antifragility at Princeton. 

If you want to understand the long-term consequences of market interventions and other attempts to delay or remove stressors from real-world systems, watch this video. 

Taleb also makes clear that we are at an unprecedented point in history, in which those in power benefit on the upside while having no real risk (no "skin in the game") on the downside. In other words, our supposed "leaders" hold their positions and accrue benefits from them without having to display courage or face the consequences of their actions and decisions.

You can hear more from Taleb on this topic in an excellent econtalk interview from earlier this year. 

His new book, Antifragile: Things That Gain from Disorder is available on Amazon.   

Steve Jobs - Billion Dollar Hippy (BBC documentary)

Steve Jobs' brilliant life and entrepreneurial career are profiled in this BBC documentary, "Steve Jobs - Billion Dollar Hippy". 

Today is a big media day for Apple, given the hype surrounding the release of the new iPhone 5. A fine time to look back on the Silicon Valley landscape of the 1970s and the counterculture and tech hobbyist environments which inspired Steve Jobs and Steve Wozniak to start their own little computer company (now valued at over $600 billion dollars, market cap). 

This is a great overview of Jobs' rise and fall at Apple, his entries into the realms of interpersonal computing and filmmaking at NeXT and Pixar, and his triumphant return to Apple that kickstarted its reinvention as a design-focused electronics company. 

Enjoy the video, and check out our related items below for more on Steve Jobs and the tech revolution.

Related posts: 

1. Steve Jobs PBS interview from 1990, rarely seen.

2. Interview: Steve Jobs and Bill Gates at D5.

Patents and copyright? "Great artists steal"

Came across this clip of Apple CEO, Tim Cook complaining that the ongoing tech patent wars are a "pain in the ass".

Granted, this is a topic that's recently been covered by Mark Cuban, or going farther back, by Bastiat in his "Three Stages of Invention".

However, one could look beyond Tim Cook's complaints to examine the very idea of the supposed necessity of patents and copyrights. The book, Against Intellectual Monopoly does just that, arguing: "Patents and copyrights do not promote economic progress but impede it."

Note this passage, from the same book, which calls attention to the fact that patents can block the market's progress by preventing product imitation, development, and refinement:   

"Imitation is a great thing. It is among the most powerful technologies humans have ever developed … imitation is a technology that allows us to increase productive capacity. Innovators increase productive capacity directly...". 

Without Matisse, would we know Picasso? Steve Jobs quoting Picasso: "good artists copy, great artists steal."

Arthur C. Clarke predicts the internet and PCs

Arthur C. Clarke forecasts the future of 2001, a time when home computers and interconnectivity with others through technology are commonplace (via Eddie Markets).

William Blake art from The Book of Urizen

 William Blake etching with watercolor & ink (Tate collection).

Rewards for Failure

"The United States has lost its way".

Greg Simmons at ScopeLabs riffs on the rise and fall of nations and our bailout society in this excellent six minute YouTube video. 

Greg hipped me to this clip after I mentioned how I had enjoyed some of his Skype interviews with Matt Davio. From the moment I saw their first taped discussion, with Greg standing there in his Black Flag t-shirt, ready to talk trading and current events off the cuff, I knew I had found someone on my wavelength. 

This clip is a must-see, plain truth indictment of our societal decline. Will America wake up from its national brain-coma in time to right itself? Watch and learn, friends...watch and learn.

Steve Jobs interview from 1990, recently surfaced

Watch An Interview With Steve Jobs on PBS. See more from NOVA.

Steve Jobs talks about the future of computing in a rare 50 minute TV interview aired on PBS. 

When asked how computers have changed civilization, Steve begins by noting how humans were able to leapfrog the more efficient locomotion of other animal species by using tools, or technology. 

Offering the example of how a human on a bicycle could easily surpass the locomotive advantage of the most efficient animal, a condor, Jobs concludes: 

"We humans are tool-builders. And we can fashion tools that amplify these inherent abilities that we have to spectacular magnitudes. So for me, a computer has always been a bicycle of the mind: something that takes us far beyond our inherent abilities. I think we're just at the early stages of this tool."

You can see by the re-do of his 1st interview response that Steve was always "on message" and rehearsing and delivering the exact points he wanted to make when selling his vision of how we use technology and Apple products. 

It also highlights the fact that modern TV interviews are often actually rehearsed, taped, and edited performances, rather than the more spontaneous give-and-take than the finished product tries to convey.. Steve could see this, and he crafted his message to the medium, whether he was out on his own at NeXT or selling to a larger consumer market for Apple. 

Enjoy the discussion and insights, and see our related posts for more on Steve Jobs.

Related articles and posts. 

1. Interview: Steve Jobs and Bill Gates at D5 conference - Finance Trends.

2. In Charts: Apple (AAPL) vs. Microsoft (MSFT) - Finance Trends.

Black markets: a global $10 trillion economy

Excellent article from Foreign Policy entitled, "The Shadow Superpower", which examines the world's $10 trillion underground economy.

"You probably have never heard of System D.

Neither had I until I started visiting street markets and unlicensed bazaars around the globe.System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards.

To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of "l'economie de la débrouillardise."

Or, sweetened for street use, "Systeme D." This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy..."

Why the attraction to this unlicensed, improvised economy? Because that's where the jobs are, and where flexibility exists for entrepreneurs and traders/merchants to come in and do their thing without burdensome costs of regulation, licensing, and taxation (i.e., red tape). 

"...It used to be that System D was small -- a handful of market women selling a handful of shriveled carrots to earn a handful of pennies. It was the economy of desperation. But as trade has expanded and globalized, System D has scaled up too.

Today, System D is the economy of aspiration. It is where the jobs are. In 2009, the Organisation for Economic Co-operation and Development (OECD), a think tank sponsored by the governments of 30 of the most powerful capitalist countries and dedicated to promoting free-market institutions, concluded that half the workers of the world -- close to 1.8 billion people -- were working in System D: off the books, in jobs that were neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes. "

This is a trend I've talked about a bit on Twitter, but haven't covered here on the blog. Be sure to check out the full piece. It's well worth your time, and these trends will likely take hold here in the USA for similar reasons.

Life imitating The Simpsons: trillion dollar coin edition

Thought surely this #trilliondollarcoin thing was a joke, but no. Life imitating The Simpsons, again: http://t.co/hKgQlaQ $$Fri Jul 29 19:09:51 via webDavid Shvartsman
FinanceTrends

Update: For more on this see Credit Writedown's post on the #trilliondollarcoin meme.

Fun on Twitter with Joan Jett + upcoming posts

Just a fun, candid shot of Joan Jett (then of The Runaways) backstage in 1977.

In case you haven't noticed, I'm spending a lot more time on Twitter lately than on the blog. Twitter is fun, it's easy to post quick thoughts & links (on any subject), and with the efficient grouping (via lists and follows) of market participants and favorite bloggers on the stream, it's become my "RSS feed you can talk to".

I'll be posting on the blog a bit more (after hours, or during the day when time allows) in coming weeks. You'll probably start to see more market and trading-related commentary which mirror our real-time discussions on Twitter and StockTwits, as well as our more recent posts on stocks and futures markets.

PS, be sure to visit some of our favorite bloggers in the meantime (see our sidebar "Blogs" list), and check out Brad Elterman's fantastic photo blog while you're at it.

What will historians say about us?

Great quote from Umair Haque:

I have a hunch. The puzzled historians of the 23rd century will say: "Why did they let sociopaths, crooks, and narcissists run their world?"Thu Apr 07 16:48:22 via TweetDeckumair haque
umairh

Hedgeye on government shutdown

Must read note from Keith McCullough at Hedgeye on the government shutdown:

"Finally, we’re here. This week we’re finally going to see US Professional Politicians face the door that’s closing on their conflicted and compromised careers of debt-financed-deficit-spending. This isn’t the time to give into their fear-mongering. This is going to open he door for a generational opportunity in America. This is great news.

On Friday, the stop-gap bill to keep the US Government open for business expires. With $14,272,778,776,442 in US Debt + another $55,800,000,000,000 in unfunded Medicare and Medicaid liabilities, I say shut these politicians down. The biggest risk to America today isn’t what’s happening in the Middle East or Japan – it’s the 112th Congress..."

Keith just linked to this Monday research note on Twitter and I had to post it here. Hope you'll take a moment to read it and pass it along.

Finance Trends: The Best of 2010

We're wrapping up some of your favorite posts (and mine) for this Finance Trends "Best of 2010" features edition.

You'll find key interviews with leading businessmen and investors, along with the best of this year's posts emphasizing the strong trends and events that are shaping our country, our investment markets, and our world.

Without further ado, here are some key posts highlighting the big picture trends we've witnessed in 2010, some of which may continue to unfold in 2011 and beyond.

1. On a Return to Classical Education. Your educationally-deprived editor muses over the benefits of a Classical education, and how such a foundation in thinking might help us as investors and as citizens of the world.

2. Marc Faber: Final Crisis Yet to Come. Wonderful presentation by Marc at this year's Mises Circle in NYC, offering a crucial take on US monetary policy and the likely outcomes of the Fed's "quantitative easing" experiments. Video and presentation slides included.

3. Niall Ferguson on Fiscal Crises and Imperial Collapse. Must hear presentation from Ferguson offers a historical overview of government debt crises. Highly relevant back in May and only more so now that the developed nations' sovereign debt crisis continues to unfold here at year-end 2010.

4. LTCM and the Lessons of Failure. Thoughts on hedge fund collapses (and fund manager resurrections), the money manager merry-go-round, risk management, and the dangers of overconfidence.

5. Must Hear Interview with John Burbank of Passport Capital. Part of our series on global macro investors and hedge fund managers, this excellent discussion with John Burbank comes to us via Benzinga podcast.

6. Michael Burry: An Up & Coming Macro Star? An in-depth look at Michael Burry's gradual transition from a US stock-focused value investor to an international, global macro investor.

Includes an unedited transcript of Bloomberg TV's interview with Burry, in which he offers his views on the economy, investing, and his famous subprime short trade.

7. Jim Grant, John Hathaway and Peter Munk sit down with Charlie Rose to discuss gold as money, the causes of the recent final crisis, and likely outcomes of Fed and government intervention in the markets.

8. John Allison on "Leadership and Values". The former CEO and Chairman of BB&T bank speaks to Virginia's Darden School of Business on the importance of adhering to a sound ethical framework and engaging in "win-win" business transactions. Excellent talk on the spirit of true capitalism and personal responsibility.

That's all for 2010. Please join us for more in 2011, as we explore the coming year's macro investing themes and future economic events.

You can keep up with us in the meantime through our real-time updates on Twitter and StockTwits or via the Finance Trends RSS blog feed. Have a Happy New Year!

*Photo credit: Floor of the New York Stock Exchange via LOC.gov.

GM's post-bailout IPO a disgusting "success"

Thankfully, I've not watched any of the TV hoopla surrounding General Motors' (or if you prefer, Government Motors') post-bailout IPO.

Still, I can't avoid the news of this event entirely, as I'm exposed to the GM news through my Twitter stream, StockTwits, and the recent posts from some bloggers I keep up with.

The disgusting spectacle of this government-engineered IPO (made possible with your taxpayer dollars) was but an ugly image in my mind until I found Greg Harmon's tweet on StockTwits' GM stream. Now I have the shocking, surreal life photo to go with it:


Subtlety is dead in America. You are being ripped off and the banner proclaiming it is staring you right in the face. It is a disgusting spectacle indeed, to see the announcement of GM's post-bailout IPO draped over the American flag and the columns of one of our most revered capitalist institutions, the NYSE.

Last night I read an article in which GM's CFO Chris Liddell described the then-upcoming share offering as "historic". Historic is not the word I would have used to describe it. A farce and a national shame would be much closer to the mark.

Meanwhile, GM CEO Dan Akerson had this to say about the IPO and its effect on reducing the US government's stake in GM:

""They have taken their ownership down by roughly half," he said. "I would say that the average taxpayer in the United States would look at this particular transaction as very positive.".

Well it's nice to know the government is reducing its ownership stake in GM, but let me stop here and point out the use of the word transaction to describe this unseemly state of affairs. "Transaction"?!

A transaction is an exchange that occurs between two or more willing parties. Did US taxpayers have a say in any of this? Were you consulted on the auto industry bailout or were you given an opportunity to vote on whether your money could be used to prop up a failing enterprise such as this? How many IPO shares of the "new GM" were allocated to your account today in exchange for your kind support?

Before I go off the deep end completely, let me point you to Jeff Carter's excellent post on the GM IPO over at Points and Figures. Read it, and check out Francine McKenna's Forbes blog post on GM's unaudited financial statements while you're at it. Then get back to me if you still think this is a wonderful, "historic" investment opportunity or an "exciting" chapter in our country's history.

Who will be the Horatio Alger of China?

While searching for a classic trading text on Scribd, I came across this 109-year-old tome on the success of 19th and early 20th century entrepreneurs called, How They Succeeded, in the related books sidebar.

Looking through the table of contents, one finds an interesting array of business, artist, and educator profiles and plucky little subchapter titles emphasizing the virtues of hard work, thrift, and foresight. Admirable traits to be sure, though the Horatio Alger-type bootsrapping tales of personal success and luck are usually mocked in the politically correct schoolrooms of today.

How They Succeeded

For those of us schooled in the cynical view of free enterprise and the dastardly deeds of the robber barons (and most of us who attended American schools in the last 40 years were purposely imprinted with that bias), it may seem a bit comical to look at a chapter on John D. Rockerfeller and find subheading titles such as "His Early Dream and Purpose", "There Was Money In a Refinery", "Hygiene", "Foresight", "Philanthropy", and so on.

Still, as I read through an early chapter on Marshall Field, one of the great merchants of my home town, Chicago, I'm attracted to the story of Mr. Field's rise in business and how his personal success coincided with the growth of our fair city.

There are sound business lessons here, and the themes of devotion to work and purposeful sacrifice with a clear goal in mind are a refreshing tonic at a time when an ever growing number of people are looking to game the system and enrich themselves off the work and savings of others.

Will we find a good deal of whitewashing of some of the economic and social injustices of the past, acts that helped a few of the industrialists profiled here along to great wealth and power? It's very possible, and we'll have to read and compare these optimistic tales with the views handed down to us by some economic historians.

However, as I think about the valuable lessons in some of these old tales of business success, I wonder if a similar tradition of rags-to-riches stories will take hold in that other rising economic power of the East. Who will be the Horatio Alger of China (or better yet, the Orison Swett Marden) and what stories will he or she tell?

Related articles and posts:

1. Classic quotes and timeless wisdom from, How They Succeeded - Finance Trends.

Features of the Week

Some worthwhile items of interest gathered for you in our Features linkfest:

1. Why saving is right and economists are wrong - Minyanville.

2. "My honest word": a translated interview with Vladimir Putin - Russia Watchers.

3. 7 things to do to improve your trading performance - The Kirk Report.

4. Our ongoing recession: stimulus-fueled recovery - Sense on Cents.

5. Castro: "Cuban model doesn't work for us anymore" - Credit Writedowns.

6. Media: How Fred Wilson killed Inc. Magazine - Zerobeta.

7. Reflections on the Sovereign Debt Crisis - Edward Chancellor at GMO.

8. To embrace death is to embrace life - The Financial Philosopher.

9. Fearless fall predictions & the illusion of knowledge - Derek Hernquist.

Enjoy the links & reading material, and thanks for stopping by. You can follow us on Twitter for timely financial updates and via our blog RSS to catch all our posts. Have a good weekend!

FT interviews Adam Fergusson: When Money Dies

Financial Times sits down to lunch with Adam Fergusson, author of the newly revived classic, When Money Dies, a social history of the Weimar hyperinflation.

Fergusson's 1975 book has recently been republished to sate demand from a new generation of investors eager to learn the lessons of Germany's inflationary catastrophe. In fact, recent reports that the book had been recommended by none other than superinvestor Warren Buffett (a rumor later reported to be false) seemed to stoke readers' demand.

Author Fergusson notes that Mr. Buffett is now in possession of a copy, so it will be interesting to see if the lessons of Weimar Germany take hold and influence Buffett's thinking on our own inflationary path and the ability of central planners/bankers to manage our monetary affairs.

An excerpt from FT's interview with Adam Fergusson:

"Fergusson wrote When Money Dies in the early 1970s when the British economy was buckling in the wake of the first oil shock – which killed growth and pushed prices up. “When I started researching it in 1973, inflation was about 10 per cent, and when the book came out in 1975 it was nearly 25 per cent,” he says. “Somebody said, ‘We must go back and look at what happened in the 1920s when prices got out of ­control’.”

It started life as a series of articles in The Times that drew on the Weimar story in order to warn Britain off the inflationary track. But, I interject, weren’t the parallels rather thin? Even at its peak in 1975, British inflation hit an annual rate of only just over 24 per cent. At the climax of the Weimar disaster, prices were doubling every two days.

The quantum was different, Fergusson agrees. But, he says, all periods of high inflation – however harsh – involve the same moral slide. “The corrupting thing about inflation is the way the feelings and jealousies are exactly the same,” he says. “You worry that some people are doing better than you are – people who know what to do about rising prices while you don’t.”

In the Weimar time, this was particularly extreme. High inflation wiped out debts, atomising the savings of the prudent and redistributing wealth to the fortunate or simply unscrupulous..."

Read on at the link above for the full piece, and see our related post links for more on When Money Dies and an audio interview with author Fergusson.

Related articles and posts:

1. When Money Dies: read it online - Prudent Investor.

2. Interview with author Adam Fergusson - BBC.

3. Dying of Money - Finance Trends.