What Can You Do With One Gram

What can you do with one gram of weed? You can start a lot of novel conversations. Getting my picture on the front page of the local paper (The bi-weekly South Whidbey Record) helped. Marijuana is legal in Washington State. Finally, I can try to cook up some stress-relieving foods and drinks. First, though, I have to sort through crowds of expectations and anxieties. A great debate over a cup of tea – as the American tea party gets redefined yet again.

Life is not work, work, work, even though that’s what I’ve been doing almost every day. The New Economy means I’m working seven days a week, with one day off every other month. I’m an optimist. It’s temporary. I’m looking forward to Thanksgiving.

Life is also change. I watch trends out of habit, and have benefited from that in the past. It was good to catch onto the Starbucks early rush, and I don’t drink coffee. I drink tea; which, ironically I learned to appreciate at the first Starbucks store back when they sold loose leaf and spices, too. Besides anticipating some relaxing relief from a non-alcoholic and non-caloric beverage, I’ve been watching the marijuana industry in case there are investment potentials. Nothing rational yet. Stay tuned.

My simple expectations sit nicely in the middle of the two extremes of commentary directed my way. “Oh my god, this new stuff is so potent you’ll hurt yourself!” “Awesome! Welcome to the club. Party on!” Ah, I just wanted a cup of tea, or maybe something extra for my popcorn.

Amidst the swirl of advice I stepped back and did some research online (where else do we do it?) for recipes and techniques. The people uploading to YouTube must be rich, growers, or willing to sacrifice a lot to buy their ingredients. “Take a half ounce and …” A half ounce?! A gram cost me $30. Yikes! I can’t follow those instructions. That’s why I decided to experiment.
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When people heard I was going to experiment I heard horror stories. It is almost as if they expect me to take the entire bud and smoke it as quickly as possible. That makes as much sense as chugging a bottle of booze.

And then, of course, there are those that choose not to partake; which I totally understand. If you don’t want to do it, don’t do it. Some people like tofu. Well, okay, go enjoy that.

The discussions are all appreciated. Party on. Be careful. Only do it if you want. Be responsible.

The echoes of the conversations collided in my head. How to start the explorations? How much should I use? Should I sequester myself for the day? Should I …?

Wait a minute. All I want is a cup of tea and to get past this first step. Tea is easy. Boil water. Either drop leaves in water or pour water onto leaves. A sweet spot probably exists somewhere between no leaves and no effect, and an entire bud and probably too much. Besides, the reason to start with water is because it isn’t a very effective way to extract the effect.
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Do those images spook you? Don’t worry. The bud was still in its bag when I decided I wanted a regular cup of herbal tea. The leaves are lemon balm from my front yard. Writing is hard work. I needed something to drink.

I’ve decided to get silly, even before my first sip. I know just the right dose to get things started. A leaf from a bit of a bud. A fraction of a portion of a gram. A daisy petal would weigh more. Love me. Love me not.

Of course that’s a ridiculous amount. That shouldn’t do anything. That’s the point. Except for the last few decades, marijuana use was the norm. Let’s get past the folderol and get to spending more time talking about the day than what’s in the cup.

Okay, maybe one little leaf really is too little to make that point. I’ll double it and see what happens.
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Intermission while the tea steeps.

Ah, the aroma. It smells just like – boiled water. The water has a bit of color, but I don’t have a working dishwasher so that may be more of a measure of my dishwashing skills. Oh, and the flavor. The flavor is that of – yep, boiled water in a cup that maybe should’ve been cleaned better last time.

Seriously, I am going to continue my culinary explorations, partly from curiosity about a recently forbidden substance, partly from curiosity about anything new that’s added to my pantry. And, if I find myself giggling, well, considering the way things have been going I could use a good laugh – and some popcorn.

I’ve learned something tonight. I need to use more leaves to even color the water. Maybe next time I’ll try four leaves. Radical.

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More Insufficient MicroVision News

MicroVision announces news! No, really. This time with numbers! Surely its stock (MVIS) will react. It certainly did last February. Surely October will be no different. Except it was. The life of small companies and small stocks are irrational, or at least chaotic. Individual investors must try to make sense of the news from their perspective. Easy or not, it is rarely conclusive.

Check back through my blog. In February 2014, a news item took MVIS from about $1.40 to about $2.80 in a day. MicroVision was working with Sony. Nice. A big name company validated MicroVision. Years of waiting were vindicated and the market rushed in. And then drifted back out.

Waffle words, revenue payments which were large, but not large enough, and great gaps in which no words were spoken meant expectations dwindled and faded over the months. MVIS stumbled back down about $1.80. The discussion boards fill the gap with speculation, but the market doesn’t want to speculate on the stock.

Today’s news was encouraging. The company is still not allowed to mention Sony by name, as bizarre as that is, but this time there was a definitive payment amount mentioned in the press release. No need for speculations. There was a need to meet greater expectations though, and the stock fell on the good news.

Every MVIS investor gets to interpret the news from their perspective. Each perspective is unique, which is why the discussions never end. Here’s my interpretation of the news.

The press release.
MicroVision, Inc. (MVIS), a leader in innovative ultra-miniature projection display technology, today announced it has entered into an agreement valued at $1.5 million with its Fortune Global 100 customer for display module support services.
MicroVision recently announced successful completion of development work under an April 2013 agreement. The company and its customer will now transition to focusing on commercialization activities that are expected to span several phases including production readiness, initial production and market launch for the display module.
“We are pleased to provide continued support to our Fortune Global 100 customer as we work together to bring the display module incorporating PicoP® display technology to market,” said Alexander Tokman, president and CEO of MicroVision.

Here’s how I parse the information.

  • “MicroVision, Inc. (MVIS), a leader” Being A leader isn’t as strong as being The leader. While it may be a bit of wordsmithing, even a small company like MicroVision is worth tens of millions of dollars. Every word that can change the public perception by 1% is affecting the company’s value by hundreds of thousands of dollars. Of course, maybe they don’t see themselves as being The leader.
  • “entered into an agreement” is good news, but Entered is not Completed; which means backlog increases, which is good; but the work and potentially the payments come later.
  • $1.5 million is good news. It isn’t however enough to make the company profitable. It is on the same order as my estimate for the total pay for key executives. Regardless, it is money, it has value, and that value should be reflected in an update to the company’s valuation. For a Price/Sales = 6, the market cap should increase by $9M. For a Price/Earnings = 20 (assuming services are all profit, which they are not), the market cap should increase by $30M. The current market cap is about $75M, so there is logic to suggest the stock could’ve risen by 12% – 40% from my perspective.
  • “Fortune Global 100 customer” = Sony, with a high degree of certainty; which is good news because it means a significant customer came back for more.
  • “Support Services” = Services are not products, so there’s no way to know how many units are involved. It is business, but the major necessary revenues for MicroVision will probably be from licensing fees, royalties, and sales. At least, that’s what I gathered from the stockholders meeting.
  • “recently announced successful completion of development work” = Old news, therefore, no change in valuations.
  • “now transition to focusing on commercialization activities” = I thought they were already doing that. From some interpretations, commercialization, i.e. product launch and sales, were likely to commence in time for the 2014 holiday shopping season that is less than four weeks away.
  • “production readiness” = Suggests they are not not already in production, not even for an early 2015 product launch.
  • “initial production” = Confirms above.
  • “market launch” = Not a surprise, but there was that expectation that this holiday season would see such an event. Considering the production comments, it sounds like MVIS success is the seemingly permanent 6-9 months away.

Here’s how the market parsed the information.

  • MVIS drops $0.03 = Not a surprise.

Nothing else about the market is definitive because the market is not one thing; the market is an unorganized herd of conflicting motivations, incentives, and resources. Collectively though, they were underwhelmed by the $1.5M news even though they’d cheered early 2014’s $1.7M news.

Making sense of investing is never a completed task, because the markets continue to change. In the last 15 years the markets, the members of the investing community, have reacting to the Internet Boom and Bust, 9/11, The Great Recession, and lots of lingering unease. The logistics have changed dramatically, with far more computer influence now than then. The world has changed.

Some basic investing tools have not changed. In this case, parsing a press release continues to be the careful dissection of the phrases; seeing each as a piece of logic to be taken at face value first and interpreted later.

MVIS was not buoyed by the news. The next press release could already be scheduled as I type. Whether the good news is that close to good news or not, at this point I step back and re-collect the pieces. The company is making progress. They are getting paid for the progress by a returning customer, that customer has the potential to make very large deals, and that customer is not alone because MicroVision has several others that are quieter. I hadn’t expected MVIS to go up 40% on a $1.5M deal; but I take the drop as a sign that market is irrational, ignorant, or quietly aware of something I’m not. Yet, so it goes. That’s MVIS’ insufficient news, for now.

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Weed Arrives on Whidbey For Me

Promises, promises, and then success! How long have you been waiting for good news, of any size? Friday, October 24, 2014 at 11am, marijuana was finally for sale on Whidbey – legally, that is. Grand implications reverberate around the globe. Great debates amongst the community. Simple changes in individual lives. Marijuana is legal? I think I’ll have a drink.

If you want some fascinating history written by heavily filtered interests, try tracking down how a plant native to America and grown by Americans for centuries joined harsh drugs like heroin in our modern Prohibition. My favorite anecdote is about how President Nixon wanted to classify marijuana so strictly because it gave law enforcement officials an easy reason to round up protesting radicals. If true, loose threads from the fight against anti-war protests in the Sixties and Seventies are only now being tied up. From such motivations policies, politics, and people are affected for generations.

Washington State legalized recreational marijuana almost two years ago. We celebrated that, mostly with cheers and alcohol. Marijuana was legal, but we couldn’t buy, sell, grow, or gift it. Rather limiting. It took a year and a half before pot shops finally opened. Washington is a regulatory state. Many forms must be filled out and filed. Finally, July 2014, the first pot shops opened. They were rare. Only one in the city of Seattle. A few in Bellingham, which provides another reason I like B’ham. And Whidbey, Whidbey Island Cannabis opened its doors, and I was there – to see an empty counter and employees who shrugged their shoulders at the lack of product. The shops were open! But the supply chain had many links that were kinked.

Whidbey has to do things differently, even when it isn’t trying. Our shop was held up by permits. Evidently, there were more to fill and file. Oops. Please pardon the delay, eh?

It has been entertaining, from the outside. I’d swing past if I was in the neighborhood, which is necessarily far removed from “urban” Whidbey. Whidbey Cannabis 082514Little suggestions of progress were movement in the sign-up clipboard left on the front steps, a yellow permit sign posted on a standing frame beside the building, lights on as something got done. I wondered if the restaurant next door thought I was stalking the place. Finally, the announcement. Opening, re-opening, was scheduled for October 24. Last time, the first people in line were the people showing up to see if there was a line. Buying was secondary, including for me.

I got there early because I wanted to see if there was a line; but also because I had a question for the local building supply business. I’m a busy guy, and almost every trip has more than one purpose. As I came back past the door to Whidbey Island CannabisDSCN5462, I noticed it was open. They’d been doing something outside earlier, but I hadn’t bothered them. Maybe they were open early? Nope. Besides, they had one last inspection and inspector due any moment.

Evidently everything went alright because they opened on time. And, who was in line? Me and the local reporter. Then two more folks showed up. My name was on the list since July, but it didn’t look like a rush; so, the reporter and I chatted before going in. Just being mellow.

The main event, waiting in line and stepping up to the counter, not a big deal.DSC_5109 It was confusing though, because marijuana sales have lots of new rules and regulations. The employees must be trained, and so must the customers. No touching the product. Buds are available by the ounce. Edibles are behind the counter. Paraphernalia are in the display case. And descriptions that are advertising pitches. Just like with tea, there are many varieties of leaf, product, and application. It is good that they were helpful.

Rather than try to master the process I stayed to what I wanted. I like to cook. To me, marijuana is a plant. I eat plants. I suspect you do too. Why buy something in small quantities and then burn it? It sounds inefficient. Besides, I’m not interested in getting wasted. Not even back in college did that seem like a good idea. Some plants taste good just as they were harvested: apples, corn, berries. Others work well when something draws out the flavors. Three ways to pull out flavors are in water, fat, and alcohol.

Allow me to describe my upcoming culinary experiments. (Got recipes?)

  • Water: Tea is an easy choice. Evidently, cannabis and water are a weak reaction so I don’t expect much potency, which can be a good thing but inefficient use of a pricey product. It might be a nice way to start, though; because, today’s weed is evidently very strong, and tea leaves can be reused. The only losses are in the aroma.
  • Fat: Butter or oil should work. Eggs should too. I haven’t decided yet, but I do recall college days with omelets, cakes, and such. Supposedly a more efficient solvent than water, but diffused throughout the food. Simplest and most ironic recipe is buttered popcorn. Gotta start somewhere, and why not make marijuana part of the munchies?
  • Alcohol: A touchy combination, supposedly very efficient as well, but I’m going to check online recipes before I go there. Mixing strong culinary chemicals is something to embark upon with respect. Go ask the first human who bit into the wrong pepper or mushroom. Combine them right, and taste buds are happy. Mix them wrong and go write spiritual fiction.

Except for the tea, I’m going to do a bit of research before I cook. This stuff is as pricey as some saffrons and I’ll probably treat it similarly. DSC_5114 - Edited

Being on the front page of the local paper created a few electronic messages from concerned friends. Images of partying, and wild abandon may have scared them; even though I am known for not drinking and driving – to the obvious and vocal disapproval of some restauranteurs. Partaking at home is my preference. You see, I’m not interested in the parties. I’m interested in the zero calorie equivalent of the glass of white wine at the end of the day. Though, it will be interesting to see if the munchies counter that. If you’ve been reading this blog, you know how my life has been lately. A non-alcoholic non-caloric possibility for relaxation, ah to dream of it. And maybe now I have it. You see, evidently one thing it is good for is as a sleep aid. Imagine my relief.

My simple wants and needs are secondary to the public debate. Decades of indoctrination in ideological diatribes mean very few are basing their opinions on data. The medical and chemical risks of marijuana seem to be far more benign than that of alcohol, tobacco, and potato chips. The benefits are significant enough that some of the customers who showed up in July were only there for pain relief. To see them turned away was painful.

The larger debates will continue. Public opinion was swayed enough to allow the legalization in two states, and soon in others. The larger costs of enforcement and the creation of a lucrative black market are lessons we learned in our first Prohibition, and are learning again. We Americans learn slowly, but we learn.

The larger debates are larger than America. Legalization is undercutting black market demand, even at the early elevated prices. (I bought one 1 gram bud for $30. I think that much would’ve bought an entire baggie back in college.) Foreign policy is shifting. Legalizing marijuana means drug cartels are losing major markets and revenues, fewer Americans will be locked up, police forces can concentrate on more serious crimes, and governments can make more money.

I’m just looking for a way to unwind and get some rest. Legalizing a native plant changes the world, fine. In the meantime, until I know how to handle this new member of my pantry, I’ll continue sipping that other prohibited food product that I’ve tested and experimented with: a bit of distilled potato with a few spices and a few ice cubes.

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Tiny House Winners

Buying the biggest house you can afford for your first house makes as much sense as learning how to run by starting with a 100 mile race. Yes, it might work, but there’s a good chance you’ll hurt yourself. What we’re witnessing now are a lot of people with strained financial hamstrings just now trying to get back into the race. It shouldn’t be a surprise that idea of starting with a tiny house is just as appealing as a runner deciding to restart their training with some nice walks.

There was good logic behind the concept of buying the most house you could afford, and buying the cheapest house in the neighborhood for the minimum downpayment. It maximized your money, leveraged the value of the mortgage, and amplified that by participating in the higher rise created by the increased prices of the rest of the houses in the area. That logic worked as long as some assumptions worked. Housing prices are most likely to go up. Your mortgage will become a smaller fraction of your monthly costs because of some combination of it being fixed, or the rate being lower than your raises, or the appreciation making everything else moot. That world almost existed for a long time. Today, we know prices aren’t safe from retreats, mortgage rates can do strange things, and raises are rumor for most.

My current situation is too common, though how I got here is unique enough for a screenplay. Someday I’ll write that, maybe. I started, though, by following that logic. I bought a nice, though cheap, house just inside the border of a golf course estate; and lived with finances so close to the edge that even with a frugal life and an engineer‘s salary, I had to close off the upstairs and hope the roof didn’t leak. I was lucky. Within four months the house appreciated by 30%. Any lack in discretionary income was secondary to making more in real estate than I did in months of overtime professional paychecks. Four years later, when I decided to sell because I was getting married, I had to drop the price enough that a lot of those gains were gone. Amortized over four years my returns were a few percent per year.

We’re three paragraphs into this explanation and maybe you’ve noticed what I didn’t mention. It was a house, not a home. You may have noticed that it was more house than I needed or wanted. At the end of those four years I was relieved to be rid of it. There weren’t any upgrades, except a new fence. The roof hadn’t leaked, but the hot water tank, which was oddly installed in the second floor crawlspace, had dramatically leaked sending a stream of hot water down the staircase. Raises meant I was finally returning to discretionary spending, but filling the empty rooms with furniture seemed pointless, so I didn’t. When the house hit the market again, my minimalist style meant the prospective buyers thought I’d already moved out before I’d packed up anything.

First they ignore you, then they laugh at you, then they fight you, then you win.” – Nicholas Klein (not Gandhi)

Within the last decade or so, people have begun taking advantage of the minimum building size rules to construct tiny houses. The idea within the regulations was that there should be some lower limit to building size under which the regulators wouldn’t have to worry about approving permits. If a parent wanted to build a play house for their kid, they shouldn’t have to fill out paperwork. If a spouse needed a studio, a study, a sanctuary, or a place to get away from their spouse, they shouldn’t have to explain it to anyone except their spouse. The authorities ignored such insignificant dwellings.

It is easy to ridicule the concept of living in a space that is smaller than a MacMansion’s master suite walk-in closet. If you shop ’til you drop, then you need a place to put all that stuff. A 120 square foot shed isn’t big enough for some people’s shoe collection. Foodies have pantries and wine cellars bigger than that. Wal-Mart and Costco exist for reasons; people like buying things and buying in bulk may save money, and bulk needs a place to live. How could a person live in such a small space? Don’t they wear clothes or shop?

The reality is that many people had more than enough incentives to find the smallest housing options available. Concern for the environment, a desire to lower their utility bills, a repugnance towards mortgages, a destroyed credit rating for too much debt or not enough income, a desire to walk away from the mainstream, a sense of style, control over every aspect of their lives, or because they had not other option – all reasons people have used to live in Tiny Houses. If you haven’t heard about them, it’s a trend that is already becoming hard to ignore. Go check out Tiny House Listings and see the variety of solutions people have found or are selling. A nominal Tiny is about 120-160 square feet. Houses as small as 96 square feet are notable, but common. Step up to 240 square feet and you’ve got a place some would consider palatial.

The fight has begun. Regardless of people’s need for shelter, the defenses are being raised by conventional housing authorities, frequently with the backing of conventional providers. There are arguments for regulation, or minimum size requirements to uphold neighboring prices, or automatic responses purely based on attacking something that’s different. The attacks are underway. The attacks lack alternative solutions to the compassionate need that inspired pioneers to act.

I suspect the Tiny House movement will win. The momentum exists, and is growing. I’m witnessing it as I write about them for a Seattle real estate site, Seattle.Curbed.com. There are tens of thousands of people reading the pieces even if there are only a few dozen buying, for now. I have friends who have Cabin by Angela, and are improving Tiny Houses. I stayed in one. I’ve visited others. Laugh as you may, but anyone who appreciates the workmanship inherent in yacht design can appreciate a similar level of expertise inherent in many tiny houses. When you’re only working in 120 square feet, you might as well make them all exquisite.

DSC_5094Today I had to repair a window. The light was brighter in my bedroom this morning, and that was not good. It meant the storm beat my storm window into shreds. I left work a bit early to come home and stretch some plastic over a window screen frame that hopefully will survive until I have more discretionary income again. It made me wonder. This house, my first house after having owned four to actually be worthy of the name home, is only 860 square feet. It and its 7,000+ square foot lot are more than I can take care – at least to the level I deem appropriate. Its market valuation and the mortgage balance was too close for comfort. Do I still have too large a house?
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Imagine, as I did, starting my real estate experience by buying the smallest that house met my needs. Not the cheapest house, but the smallest one that met my needs including neighborhood and commute. Instead of trading around houses and mortgages based on an old bit of conventional wisdom, I could have bought a house for far less, carried less debt, took better care of it because there was less of it to care for and because I had more money to spend on it – and then, moved up to something larger if I wanted to. There’s a strong chance that by now I’d be out of debt, have more money in my portfolio, and wouldn’t feel subordinate to the needs of a major fragile investment – even if it is home.

I cheer the people who are building tiny houses. When I day dream about winning the lottery, I dream of buying or building a house that is just the right size for me to take care of and enjoy, and that leaves more than enough time for enjoying the rest of life. A tiny house, that’s off the grid, on a large lot, with a gorgeous view; and, while the list continues, the details are secondary to the appreciation I have for the people who, regardless of regulations and convention, are building their homes to the right size for their needs and wants. They are the winners.

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Rationally Irrational Finance

Humans are rational people. Ha! If you think that you obviously haven’t met any. Actually, people are rational, but in a very personal way. There’s a Robert Heinlein quote I’ll paraphrase because I can’t track it down. “People always do what they think is best, it’s just that best frequently is judged by criteria they aren’t conscious of.” They’ll say they wished they could’ve done something else that everyone knows is the right thing, but dig deep and ultimately they’ll use a criterion that may only make sense to them. If we all acted perfectly rationally there’d be no reason to invent Vulcans. We don’t, which is why our art and culture is so diverse, and why economics and finance don’t seem to make sense. Understand that people are rationally irrational and a lot of the world makes sense.

Someone doing something that appears to be bizarre will make sense at some level, even if it is because they are trying to please someone who isn’t there who never had that criterion. Many people base life choices on hopes of pleasing someone they are no longer in relationship with. Family is as good a source as any. We want them to like us because they didn’t back then, we guess at what they’d like, we’re probably wrong because we guessed wrong before, and we end up doing something that makes no sense in our lives and that looks bizarre to everyone else.
“I’m saving all of my money, because that’s what they’d expect me to do.”
“I’m making sure I have a nice wardrobe, because that’s what’s expected of me.”
“I’m going to prove that I can be independent and successful, because they said I couldn’t.”

Diving into deep introspection to challenge such actions can cost a lot in counseling fees. Going off on a year-long sabbatical may produce the same effect, and maybe cost about the same. One of my counselors pointed out that, like most people today, all I really needed was someone to share deep feelings and thoughts with ; and, he pointed out how rare that has become in our highly-individuated lives. The year-long sabbatical is the material of fantasies, memoirs, and movies; but one friend called in from Spain to reveal that it is no easier finding yourself when you’re thousands of miles from home, so you might as well take the time, save the money, and sit in your backyard. There’s enough to explore within, and no plane tickets are required. Though I will admit that my walk across ScotlandWalking Thinking Drinking Across Scotland was effective, for me.

There are three aspects of our irrational selves that influence personal finance: ourselves, the market, and the world.

An industry of financial professionals exist precisely because many people realize they are too irrational to manage their money, or at least they feel that way. Professionals, like Mike Brady, are known for being the calming, rational influence that keeps investors from over-reacting. Fear and greed sell well in the media, and financial professionals should primarily be swayed by data, not emotion. Individuals can also manage their money. The majority do; but part of financial success is based on how successfully they understand their motivations and risk tolerance. Understanding does not guarantee success, as the retraction of my early retirement proves, but understanding does improve the odds. (And yes, I’m an optimist; and yes, I know the risks and rewards for investing as an individual rather than with a professional. Want data to assess my decision? Check out figure L in my book, Dream. Invest. Live.Dream Invest Live cover)

The financial markets are run by a crowd that is by definition, professionals. And yet, the market reacts irrationally. If they all operated solely on data and used the same algorithms, there’d be nothing to differentiate them, and none would offer a competitive advantage. As each tries to get ahead of the rest, anticipation and extrapolation enter. Taken far enough, instead of reacting to official reports they react to estimates based on research, which means someone starts reacting to hints of how the research will come out, which leads to someone reacting to the possibility that someone will do research. It is only one example, but investments are sometimes judged by how many researchers are researching the stock. Another obvious example is the ripple that happens with the firing of one missile from one Middle East country towards another; though lately that is happening so frequently that everyone just takes it as the norm. Ah, but let news leak of a virus in a hospital and similar effects reverberate through the market.

We know the world needs help; but we just can’t agree on what help for which issues, who is responsible, and who’s going to pay for it. Rationally, the majority want the species to continue and thrive, but from that basis can spring commercial space ventures, Isil (Isis, Is – IsNot?), Occupy, and the localvore movement. Each has rational reasons for acting, but there will always be someone else who thinks they are irrational. There’s probably even a rational explanation for the US Congress, but my brain balks at describing what I suspect is happening there. Maybe after another glass of wine.

Anyone trying to understand the direction of our civilization, and how to find a place or a fulcrum within it is justified if they complain of headaches, frustration, and a touch of cynicism. That may actually be proof of having achieved an understanding of the fundamentals of the situation.

We, as a species, tend to muddle through. We, as individuals, have to decide how to arrange our days and lives to fit. There’s a fantasy world where you make plans when you are twenty based on a world you’ve witnessed for several years, and have those plans work unchanged for the next half century or so. The change in the world is accelerating. Plans based on the lifespans of mortgages run into scenarios in which there will be societal, political, and environmental upheavals large enough to require a new perspective. Write plans in pencil, or into a file that can be edited. Remember though that the fact that is less likely to change is our basic nature as rationally irrational beings. Write that in ink. Lock it into a read-only file. Chisel it in stone. It is in you, and me, and us; and the ability to be simultaneously rational and irrational may be the reason we will adapt and survive.

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A Scottish Anniversary 2014

Tom Trimbath (trimbathcreative):

Four years ago our world was in turmoil, and we looked forward to getting past that. Well, hmm. Ah, but somethings that no one else can control are safe within us.

Originally posted on A Walk Across Scotland:

Four years ago tonight I was back home and wondering what was going to happen next in my life. I’d just walked across Scotland, back from what was supposed to be a vacation and stepping into a realization that my life had changed and that a book would result. Walking, Thinking, Drinking Across ScotlandWalking Thinking Drinking Across Scotland has an embryo. There was enough there to tell me something would be coming, but there was a lot of gestation before anything would be born. The origination of ideas and inspirations are sudden. Manifesting them takes energy and trust. I continue to trust, and wonder.

Has it really been four years? It seems much shorter. The world has gone through significant crisis since then, and we aren’t obviously back to a familiar normal. Hopefully, that’s progress. In the time that since my walk across Scotland, the people have debated and voted and almost become a…

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What Comes Next

Planning a life can seem like a silly venture. My passion is people and ideas. My degrees are in Aerospace and Ocean Engineering. Many know me because I’ve written six books and produced five more. My photography receives more compliments than I ever expected. I find it very gratifying to help people plan and implement their projects, or life choices. When I was 15 there was no way to know that I’d be doing all of this 40 years later. If I live another 40 years, I should expect to laugh at any plan I make today. And yet, I continue to work on what comes next.

A cubicle job has a series of seductions. There’s a regularity of the space, the paychecks, the benefits, the work, the people, the commute, the topics, and even the lunch choices. The rest of a life can hang on such a structure. Work hours define which hours are left for sleeping and living. To some, such a routine is dull and drudgery. To others, such routine frees up the mind by marking off the pieces where thought is required from where emotions can be expressed. Regardless, any suggestion of regularity in this era is an illusion based on a world that never existed.

Life after The Great Recession returned to normal for many people. If it hadn’t, the protests in the streets would be louder or the exodus from the mainstream would be greater. In quiet conversations, off to the side, and rarely amongst more than two or three, people are asking me about what I think comes next. I shrug my shoulders a lot, listen a lot, pass along my optimisms and pessimisms – and then ponder at the incongruity I hear when they close the conversation describing actions based in the 70’s: IRAs, pension plans, retirement relocations, hobbies that will be resumed, etc. Even amongst people that see today’s norm as a fragile and temporary shell, there’s talk of how long they have until they’ve paid off the mortgage. If you think the economy is going to implode and the country is going to become insolvent within the next ten years, why assume that the mortgage will even exist in eleven years?

The reason to assume nothing will change is because, even after great changes, many things stay the same. Prior to the American Revolution and after the American Revolution crops had to be tended, bills had to be paid, and taxes had to be collected.

The reason to realize that things will change is because they always do.

I got a degree in Aerospace and Ocean Engineering at just the right time for the United States to accelerate into space and radically change the course of human civilization. The Space Shuttle had just been launched. We knew it wasn’t the best design, but it was a marvelous improvement over the Apollo Program, and that made it to the Moon. Surely America wouldn’t give up its lead. Commercialized space, and the vast wealth of resources available off-planet should have been enticements enough to take the next steps. If we did it right, the planet’s resources would have a far better chance of staying in the ground. Self-sustaining orbital habitats would be an impetus to develop processes that would allow life on Earth to happen in the ultimate recycling loops.

That didn’t happen. I suspect you’ve noticed. We abandoned space and dreams, for a while.

I enjoyed that job, and was saddened to realize that my effort came at the wrong time. We, as a civilization, thought we needed to pull back and devote more effort to the Cold War and disco. (But I did get to work on a fascinating project that challenged many of my assumptions and taught me a lot about the power of ideas.)

Ah, I knew you so well.

Today, I updated my Events page. I have a series of talks and classes coming up (and room for more, call me). The topics are Modern Self-Publishing, Social Media, and Personal Finance after the Great Recession. None of those seem to have much to do with a Masters’ degree in Aerospace and Ocean Engineering. If I expected them to, I’d be having a difficult time every day of my life. Fortunately, I know how all of it ties into my passion, and that knowledge is valuable.

My passion is for people and ideas. As far as we can prove, people don’t exist without ideas, and the only ideas I can effectively pursue exist within people. I’m a fan of the human race, which is why I want us to explore and colonize space; which has the happy consequence of leaving the Earth in better shape. Why tear down a life-covered mountain for a bunch of rocks when there are bunches of life-less rocks flying by our planet? That idea inspired me to get my two degrees.

Other people’s ideas inspire them. Knowing that I can help them inspires me. Self-publishing, social media, project planning, consulting, writing, and even photography are all ways for me to connect people with ideas to people with other ideas. If I had only seen my professional career as my only possibility, I would’ve been lost when I retired early (a temporary condition, evidently.) If I’d thought that the change would require a total redefinition of my self, I would’ve balked at the task. With a bit of introspection, and a great deal of retrospection, I was able to find the underlying passion that was also unrelenting.

Understand the fundamentals of why you do what you do. Then, when change inevitably happens, you’ll be readier to say good bye to the shell and illusions and find the strength in the structure beneath.

What’s coming next? I don’t know, but in the meantime I have these classes and talks, some intriguing projects, and some fascinating people with marvelous ideas to keep me busy.

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Getting Real With Tiny Stocks

Let’s get real. Put the emotions aside. Let the data talk for a while. I think emotions belong in personal finance, because otherwise persons won’t care about finance. I also know that math belongs in finance because finance is driven by arithmetic and math. Our emotions, however, don’t like to be usurped. Here’s an exercise I conduct that introduces each to the other when I analyze stocks.

Microsoft, Apple, and most of the S&P 500  companies grab headlines anytime they choose. They gain that power by what the companies do, but also by the consequences for their stocks: MSFT, AAPL, INX. Their stocks rise, the market rises. The number that typifies their power in the investing community is their market capitalization. Market cap can be as simple as the price of the stock multiplied by the number of shares of the stock. That’s arithmetic, not even fancy mathematics.

Investors draw lines in the investment environment declaring stocks to be small, medium, and large based on their market caps. Depending on who you are talking to, those borders change. Depending on how picky they are, they may even add micro and mega.

Let’s put market cap in perspective. According to Google, over 6,500 corporations have market caps of over one billion dollars; that’s $1,000,000,000. Currently there are about 7.125 billion people. Currently there are about 2,217 corporations with market caps over $7.125 billion. That many rich companies mean most investors, especially the professionals, only look at large companies. That also means many of them look down on small companies. I’m glad they do.

As an individual investor in a competitive marketplace inhabited by very powerful and ruthless competitors, I’m glad to find a niche that they avoid and dismiss. Thank you for laughing at small companies. Thank you for ignoring that the largest companies started out as the smallest companies. Even a multi-billion dollar corporation probably has a historian who can track it all back to one or two people who came up with an idea.

That rise from almost nothing to unimaginable wealth is an element of our society. It exists without judgment until we act upon it. I’ll leave that debate aside for this post.

Individual investors with high risk tolerances can’t readily invest in the “almost nothing” unless they start the business themselves or know the people involved. There are rules about angel investing and venture capital that encourage people to be “accredited investors“, which generally means someone with over a million dollars in liquid assets. The idea is that such a distinction is proof that you’re a prudent investor. Pardon me as I pause and reflect on how that definition totally ignores the role of luck in our lives.

For the individual investors with high risk tolerances but poorer finances, one option is to invest in small companies before they are popular, profitable, or proven. Warning bells ring whenever such investments are considered, and the label of “speculation” is appropriately applied. Some elements of the financial system aim to protect such investors from themselves. Many individual investors take that as a challenge.

A good characteristic of any investor is the willingness to analyze the investments they are considering. Small companies have less data, which is another reason for large investors to concentrate on large companies. While many investors have many opinions about their investments, I am most impressed with those who conduct an analysis, and even more impressed with those that publicly share them as part of an open discussion.

When dealing with small companies that have little data, it is necessary to extrapolate. Extrapolation, as most people familiar with math know, is easily misleading. Whenever extrapolation and estimates drive an analysis, I find myself checking the results against outside limits and benchmarks.

After MicroVision’s Annual Shareholder meeting I did a quick analysis of the share price possibilities based on comments made by the Chairman of the Board. I liked the answers, but I knew they had to be given some perspective. Based on the components that go into digital cameras, it is possible that MicroVision could see similar growth. Given that growth in the company, I calculated the growth in the stock.
2015            $33
2017           $178
2020         $667
2023      $3,333
It should be obvious that if I can hold the stock until 2023 that I’d be a multi-millionaire just from my MVIS shares. Have no fear, I’d diversify and have a bit of fun long before then. But how big is a company with a price of $3,333? Would it be bigger than the biggest company that exists now?

Currently, according to Google there are 30,059 companies to invest in. I suspect that includes mutual funds and such, but I work with the data I can get. 20,532 are worth more than a million; but there are a lot of houses worth that much. Even at one hundred million, there are 12,309 investment opportunities to pick from. At ten billion we’re down to 1,666; a number small enough that many people would recognize many of the companies. Only 96 are larger than one hundred billion; not all of which are recognizable, but most are. That top rarefied niche is the home of the drivers of the market indices, the holders of immense wealth, and also probably partly owned by most pension plans. None have made it to a trillion, yet.
Market cap    # of companies
1.00E+06        20,532    32% percentile
1.00E+07         17,272    43%
1.00E+08        12,309    59%
1.00E+09          6,578    78%
1.00E+10           1,666    94%
1.00E+11                96    100%

max cap 100814 market cap

So, where does my estimate place MVIS? Assuming about 45,000,000 shares for MVIS
2015               $33         $1,485,000,000
2017              $178        $8,010,000,000
2020            $667      $30,015,000,000
2023          $3333    $149,985,000,000

max cap 100814 MVIS

MVIS market cap and share price

That last number is definitely high, but at least it isn’t higher than what’s proven possible in 2014. It suggests that MVIS would be a major player in the S&P 500, even as the index climbs. That’s where conventional wisdom wags a finger and says it won’t be so. Maybe so. I don’t need it to get that high. I need sooner rather than 2023. But, that company with the largest market cap, the one that most people laughed at for decades was started by two guys who had an novel and simple idea. Thank you Steve and Steve, Jobs and Wozniak.

PS
If big price numbers create an emotional positive or negative response, remember, they’re just numbers. BRK, with a market cap lower than AAPL’s, closed today at over $200,000 per share, directly because there are less than two million shares available. MVIS has less than fifty million shares.

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Reasons For Optimism October 2014

Overall, I’m optimistic. Got problems? Same here. I need to find additional work. My house, car, and self are requesting repairs. Yet, I’m optimistic. One friend calls it the Trimbath Sanguinity. I also like the term apocaloptimist. There’s a crisis amongst us, and I think what comes next might be alright. Here are some trends that I listed from just one day of casual web browsing.

Electric transportation
Mass produced electric cars have been tried before, and famously squelched. A good idea resurges, and does so with broad appeal and without trying to mimic old solutions. Electric cars are becoming common enough that there’s no reason to comment on them as they drive by. I’ve ridden in a few, and a few hybrids, and after the first few minutes the novelty is replaced with a normal drive. The range may be an issue, but that is only going to improve, not degrade.

Electric bicycles sound like they should just be toys considering the weight involved in batteries for electric cars. They do weigh more than a normal bicycle, but the extra weight doesn’t slow them down much. On my bicycle commute route is a one or two hundred foot hill. An electric bicycle climbed past me without hesitation. Its range may be limited, but just clearing that hill from my commute would save me ten minutes. People in flatter terrain are seeing the advantage.

Microelectronics
LEDs aren’t just light bulbs. It is easy to forget that they are Light Emitting Diodes, little bits of electronics. Their efficiency is impressive. Their lifespan is impressive. The rapidity of the price drop is becoming impressive. My local grocery sells subsidized ones for $4. Any extra cost is worth the extra life, and mine don’t have the annoying buzz of the CFLs I tried.

Someone did remember that LEDs are electronics and decided to try using them for more than just light. US electricity cycles on and off 60 times a second. That’s fast enough that our eyes can’t detect the 50% of the time they are off, but that is slow compared to computer speeds. But, LEDs can be cycled at high enough speeds that they can send data. Instead of using radio waves to create wi-fi (and creating some health concerns), LED lights can be designed to act as a local internet called li-fi. The bad news is that the light is stopped by obvious things like walls. The good news is that the signal is much more secure. Hackers can’t get the signals from inside closed rooms. Hospital rooms don’t have interference from other hospital rooms. And, those wi-fi health concerns are avoided. Someone will find something wrong with li-fi too, but maybe all they need is to leave the room rather than live in the wilderness or in a faraday cage.

LEDs are also showing up in monitors, not like in the flat panel displays on our laptops, but as pico projectors. Whether or not MicroVision succeeds with its MEMS mirror oscillating red, green, and blue laser diodes, computers, televisions, monitors, and an immense array of fragile flat glass electronics that require immense quantities of resources, transportation, and disposal costs will be replaced with projectors the size of postage stamps that necessarily take far fewer resources and leave far less waste.

3-D printing
Being able to print documents at home was a dramatic change for every household. The ability to print color and photographs continued the trend. Those impacts are small compared to the advent of 3-D printing. It might seem like a toy that can print toys; but the implications are far greater. Even if the price of the part doesn’t change, being able to buy something and print it rather than ship it dramatically reduces the cost of time, shipping, packaging, warehousing, and the waste of discarding unsold inventory. Just like print-on-demand means authors no longer have to store books and ship them to buyers, individuals will be able to design parts, sell the designs, and enjoy the royalties. Passive income is a nice thing. Decreasing waste in resources and time is even better.

Tiny Houses
If you haven’t seen them, you probably will. Tiny houses

For Sale

For Sale

are a growing answer to a population that either can’t make enough for normal mortgages, or don’t want normal mortgages, or have realized that they’d rather own a house than have a house that’s so big that it owns them. Everyone’s answer is different, but a bit of self-examination of basic needs means a house below 1,000 square feet usually suffices. I live in 860 square feet, and could just as easily live in 600 square feet. Others push a bit more, happily declutter, and get down to 120 square feet, some even less. Rather than being spartan, tiny houses tend to have high-end everything because the total cost of the house is so low because it is so small. Total impact on the environment is lower, especially when it comes to heating. Total impact on the owner is less in terms of upfront costs, recurring costs, while allowing more free time because there’s less house to take care of. If you have to move, put it on some wheels or load it on a truck and relocate.

Solar power
Solar cell efficiency is increasing. The cost is reducing. The subsidies help, but oil, gas, nuclear, every other energy source is subsidized, and sometimes more that solar. Residential solar is becoming popular enough that it is impacting conventional power generation. A destructive economic cycle is developing around conventional power because of solar and wind. As more people use alternative energy, fewer people are using conventional. Fewer people maintaining the old system means the cost per capita for conventional power goes up. That provides and incentive to use solar and wind, which feeds the cycles. Many environmentalists have pushed for energy policy changes, but basic economics and the acts of individuals may have a stronger effect.

Walk Away movement
I am witnessing what I am calling the Walk Away Movement. Some of the advances I’ve mentioned above, as well as others, are enabling people to become more self-sufficient. Transportation, energy efficiency, power generation, sustainable housing, and self-manufacturing, are joining an increasing population of people growing their own food, making their own clothes, repairing rather than replacing things, building communities, and learning skills that extend beyond sitting on the couch with a remote. The power structures are providing disincentives to participate in politics, and public advocacy; so why try to change a Senator’s mind when it is easier to stay home and be a role model.

Social media
Go ahead and groan, but we groan about social media via social media because it is far more effective at connecting with personal networks that anything that came before; except when villages were small enough that everyone could fit in the pub. Good ideas travel faster and farther because we shout it out and people listen. Phone calls, snail mail, and public meetings can’t reach as large of an engaged audience as an idea that goes viral.

Legalized marijuana
Whether you inhale or not, legalized marijuana is one example of how ideas are spreading. Despite our concerns about control, social media is far less controlled than anything coming through the official channels or conventional news media. it is now much easier to check data, listen to debate, and make up our own minds. We won’t all agree, but we’re at least working at an amazing array of issues far more effectively than the US Congress.

Graphene
Much of what I’ve just described is the consequence of the Age of Silicon. Even a bit of both sides of the political dysfunction and the WalkAway Movement are enabled by the information that flows through silicon chips. Graphene is almost magical in how much better it is. Graphene isn’t just a replacement for silicon’s conductivity. Graphene is also a building material so strong that an elephant standing on a pencil point isn’t enough force to break through a sheet of graphene the thickness of clingwrap. The difference between the strength of chemical bonds and molecular bonds creates astonishing characteristics. Graphene is nothing more than sheets of carbon. The holes between the atoms are smaller than water. That means a material that is strong and waterproof that also conducts electricity and heat. How about a roof and walls that are only one atom thick? The resources required to hold them up would be minimal, and fewer resources are used.

Consciousness, The Universe
The most powerful positives may be the progress we’re making in understanding consciousness and our place in the Universe. The insights are simultaneously humbling and inspiring. We reaching beyond compassion based on “Because I told you to.” and fundamentally learning about our similarities and interconnections. We may finally reach the point where people treat other people as if they were people, no labels applied.

Ironically, most of these ideas don’t affect my daily life. My financial situation is improved, which some take to mean resolved, but which I know is insufficient and fragile. While one of my major clients is closing their project, and I continue to look for an improvement, I’ve also had fun, actual fun, working for a new client. An article I wrote for Curbed Seattle, went to #1 regionally, then #3 nationally, and then was picked up by a news outlet. It had more views than there are seats in the Tacoma Dome. Now, that’s encouragement! Especially, because I did something similar the month before.

I may be hitting my niche, explaining things as diverse as real estate, aerospace, and financeDream. Invest. Live. in conversational and entertaining terms. Exercise that, and couple it with my joy in simplifying complex program plans, and my financial situation may get back to repair-the-house money, or more. We may be hitting our niche, in areas that we’ve all become aware of, but in ways that are creating a new mainstream that is hopefully pointed in a much better direction for everyone. Okay, I feel optimistic again. (I’ll look at the bills later.)

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Twiddling Thumbs

What broke loose in the world? Everything seems to be in flux; but, maybe it’s always been that way and we’re just aware of it now thanks to the Internet. Nah. This time is different, as every time is. Almost all of the change is out of my control. I could try to track every detail, understand every nuance, and anticipate every possibility. And I’m old enough to know better. Sometimes the best approach is to keep doing what I’ve been doing – as long as it seems like a good idea. And sometimes, it just makes sense for the mental equivalent of twiddling my thumbs to keep my mind occupied while the world resolves itself.

I know, I’ll run a civilization! Gamers know what I am talking about. There’s a game called CivilizationScreen shot 2014-10-01 at 7.29.07 PM, aka Civ, also known as an addiction. A successful run at the game can take ten or twenty hours to play. This is not a shoot-em-up, unless you consider the seemingly inevitable global conflicts. Civ is a strategy game where the player starts with a wandering band of settlers who haven’t even developed writing. The player has to build up their country’s size, technology, culture, military, and relationships. The first country to launch a spaceship to Alpha Centauri wins. Finally a game that doesn’t require shooting and subjugation for success; except that is an option too. And success is possible by being the best diplomat, or most advanced culturally, or merely being the biggest in 2050. It takes strategic planning, big and small picture perspectives, and a lot of brain cells. I can dive into a game of Civ and have nothing left over for worries, anxiety attacks, or useless anticipations.

The planet is changing rapidly, and isn’t waiting for us to resolve a debate over the cause. People are implementing solutions are quickly as they can, and trying to make more of the population aware of the situation. Governments are realigning themselves in Scotland, the Ukraine, Syria, and probably a couple dozen other places. The US elections are only weeks away, and while there will be votes, it is hard to tell if there will be change; unfortunately, the lack of change is initiating change in the form of consequences. The economy is improving, at least in sectors; and maybe that’s enough, as I’ve seen many businesses gain traction and earn their owners a living. My business is losing a major client as they conclude their project; yet I hear hints of enticing possibilities that could replace or even improve that revenue stream. Aside from all of that, I’m hearing good news from many of the stocks in my portfolio; particularly, Peter Jungmann’s positivity regarding MVIS. Passive income again? That would be a welcome return.

It is tempting at such times to try to do something for each of the issues, and I do. But, it is also possible to do too much, even though it will have no other effect than to spend time. I live a life with little waste. I use my bicycle more than most. I compost. I won’t list the rest because no one needs to read anyone’s list of what they think they’re doing right. A good rule is that, when in doubt, people are making and acting on their best guess. That’s all any of us do every day.

But sometimes, I must remind myself, there is nothing to be done beyond what I’m already doing. I try to live “right”, at least according to my values and abilities. The forces in play in the world have incredible momentum, and are usually only affected by opposing levels of incredible momentum – though I do enjoy that fact that chaos theory suggests that a small random cause can have an immense effect. The forces in play in my personal finances have far less momentum, and yet are probably equally resilient and sensitive on any given day or night.

So tonight, while I wonder what’s happening with the ice caps, the protests in Hong Kong, the election fodder the politicians will provide for Stewart and Colbert, whether the economy’s recovery is temporarily superficial or permanently superficial, whether my newer clients will ramp up as they’ve suggested, or whether MicroVision and MVIS will finally be proven successes within weeks or days, I guess I’ll have dinner, let the world settle itself without my active interference, and play a game where I try to take over the world – peacefully.

twiddling thumbs

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