Hunting For The Funny

There’s fun in the dysfunction. There are also shouts and outbursts; but look at the industry that was built around Jon Stewart, Stephen Colbert, Jon Oliver, and Larry Wilmore. How can you laugh at a time like this? Because, it is the best choice available, even in the worst moments. Sometimes that is by choice, but a lot of times laughter is by necessity. Hunting for the funny is a valid strategy, but sometimes you have to keep the joke and the punch line to yourself.

I’m planning a sequel to Dream. Invest. Live.Dream Invest Live cover If you don’t remember the first book, know that it is the basis for this blog. Go back to the earliest posts and find a different tone and set of topics. Then, the Great Recession hit everyone, in the midst of which I was hit by my Triple Whammy. Scenarios that were imagined but not expected played out, usually moment by declining moment, and occasionally by abrupt drops. It can be inconceivable to find laughter in there. Comedy is about timing, and finding the right timing is a marvelous coping strategy. Now, I have to find the right timing for the sequel, and find the right way to add the funny.

In retrospect, the fears were funny. The fears I had about losing my wealth were academic, lacked perspective, and were concerned with only those things I could imagine. The real fears from the real threats weren’t funny because reality was revealed. The absurdity of the situation, however, eventually percolated through. At the start, the lag time was weeks or days. Years into this process, the lag time can be so short as to be inappropriate. That’s actually good, because realizing the unreal nature of reality is a sign of awareness.

A deal fell through. That’s a disappointment, but the good news is that I was considered as responsible contributor for yet another deal. One deal fell through because I happen to be friends with one group, and another group didn’t like that. What is this, junior high for seniors? One deal fell through because someone decided to sleep with someone that they weren’t supposed to, and someone else understandably got upset, which upset yet another someone that had the money. As if I had anything to do with that one falling apart. One deal fell through where the person with the money was going to hire me full time as executive director, but only after they had a bit more money, but before that happened the SEC froze their assets. That’s another one I won’t try to fix. But the potential was so great. I could go on, and probably will in the sequel.

Watching some underpaid young adult sprint to my house to play tag with it as some sort of proof of occupancy to the debt servicer. Watching another one drive by with hands off the wheel because both hands were being used to take a picture of my house then just getting control of the car before it veered off the road. Being followed through a local store I’ve shopped in for years by a police officer for no other reason I can think of other than I was wearing a hoodie. Really? And each of these people got paid to do this?

The people with the greatest fears about money are the people with the most money. There’s an appreciation for the fragility of wealth in the modern world, and I happen to be an example of what can happen because of a string of bad luck. That scares a lot of people; and while rationality assures others that bad luck is not contagious, many seem to play it safe by increasing their distance. Cough. Cough. Is there an hand sanitizer that fights poverty?

The people with the greatest concerns are those that have already lost, or have never acquired, wealth. Fears can be abstract. Facing the reality of the concerns of not having enough money to pay the bills becomes more specific because every life is unique. I live alone and have never had kids. I don’t worry about child care, saving for college, or finding ways for children to enjoy life without being ostracized. Others do. I, however, need to concern myself with the expenses that support my business which provides my income: computers, internet access, fueling and maintaining the truck that replaced my Jeep, taxes. They may not care about computers and transportation. When you don’t know what you’ll lose, you don’t know what you’ll have to protect. After you know what to protect, the list of concerns shrinks. Life becomes simpler, even as it becomes tenuous.

Watching my computer decide to not boot, that’s a worry that isn’t funny; until after it goes ding and remembers what it was designed to do. Watching my fence fall down for the third or fourth time, that gets to be downright silly; but it wouldn’t be for my friends who reduce expenses by growing most of their food. Watching a friend get upset about some slight to my situation can be hilarious; which can be a shared laugh, but is equally likely to be an opportunity to stifle it and show appreciation for how much they care.

About a month ago I came up with an idea that I thought would work well for a company. A couple of suggestions evaporated, and I put them aside to work on independently later. Ta da! Guess what they decided to launch as a national initiative? Wow that has an amazing resemblance to my idea. As a friend put it, I could either laugh or throw something. There’s nothing in particular that I want to throw because I can’t afford to replace anything that may break, so I laughed. About the same time, another friend commented on how hard I was working and how that probably wasn’t healthy. My laughter went straight to the border between hilarity and hysteria and danced along the edge. Of course, this is level of effort can be unhealthy. But it is the best choice available. Besides, the laughter helps.
Photo on 2015-02-25 at 20.08If you are going through a similar situation and find yourself stifling a laugh, go ahead and laugh. You might have wait until you get home, close the door, run the water, and turn on the radio; but laugh. There is fun in the dysfunction because society is really quite silly. It isn’t real. We made most of this up because it seemed like a good idea at the time, but we are only imperfect humans. Mistakes will be made. Be concerned about the legitimate concerns, laugh at the rest as you can. And, if you haven’t lost it yet, don’t worry, don’t fear. You may never get here, and it is only when you get here that you know what to worry about. Focus on the few key serious bits and realize you won’t have to hunt for the funny. It will be all around you.

(Really, advertisers. Do you realize how your serious ads quickly become comedies when viewed by people who know what really matters?)

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PicoAir Meets ShowWX

Finally. I got to see, hold, and use a PicoAir PicoAir and PicoPro are projectors that fit in your pocket, or at least mine. They, and the technology within them, have the potential to positively disrupt the electronic display industry. Academic and abstract discussions aside, there’s now a product to buy and hold, or in my case, to borrow for a few minutes. Peter, who is internationally followed (via his blog and tweets – dude, upload a profile photo, eh) for his tracking of the company that provides the enabling technology, MicroVision, is a fellow shareholder of MVIS. He was nice enough to drop by my office so we could look at the new technology, compare it to the old technology, celebrate the advance, and wonder why the stock hasn’t responded.

No product is a panacea. Yet some products dramatically change our electronic worlds. The innovation that was the iPhone may never be surpassed for its impact; and yet we said similar things about the personal computer, the microchip, and the transistor. Picoprojectors may not fit inside that camp, but if they don’t, they at least have the potential to live in that neighborhood. Take a look at almost any electronic device. Almost all of them have displays. Any display that is more sophisticated than monochrome text is an amazingly complex and delicate collection of microscopic circuitry and precise material processes. It is only through massive development efforts and the now common economy of scale that has brought the display prices down to the level of commodities. Regardless, displays that are now considered conventional (LCDs, LEDs, plasma, etc.) are amazing. They are also limited by power, size, manufacturing complexity, transportation and warehousing expenses, and ruggedness. As I’ve written before, imagine replacing displays that come wrapped in plastic, surrounded by plastic peanuts, stabilized by styrofoam, and boxed in cardboard – imagine replacing that with something that can be dropped in an envelope and mailed, and yet still produce images that are measured in feet.

The PicoAir is not a panacea. But it does show what is not only possible, but is actually for sale. It is a projector that is about the size of a smartphone. It displays an image that is always in focus and that expands in a cone one foot diagonally for every foot the projector is away from a wall. Stand two feet back, get a two foot image. Stand four feet back, get a four foot image. Stand ten feet back, and get a ten foot image, but one that gets progressively dimmer. Just like a flashlight, the farther the beam spreads, the dimmer the light. At one foot away from a wall, or seat back, or piece of cardboard, the image is larger than any pocket cell phone. Such a capability has been discussed, but it has yet to catch on with regular consumers – at least not with the previous products.

MicroVision produced one of those previous products. Five years ago I received my first generation picoprojector from MicroVision.

MicroVision's first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

MicroVision’s first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

My ShowWX showed up via UPS (and almost didn’t), and was used for a few years until the novelty wore off. Actually, the utility wore off because the room I was using it in caught the sunset which outshone the projector. I found that I could only use it after the sun went down, and with Seattle’s late summer sunsets, that meant it wasn’t good for many hours of the day. The other limit was that the ShowWX required cabling, some way of being propped up, and had to be hooked up to a sound system or the movie would be silent.

The PicoAir is brighter, wireless, and includes speakers. I can’t afford one, but Peter did, or at least considered it a bit investment research. He brought it by my office. We set the two machines beside each other, and considered the advancements. Image brightness is up. Speckle is down. Heat is less of an issue. Usability is dramatically improved. Price is improved. This is all good. About the only downside was that each still needed to be propped on something unless the person using it has tireless arms.IMG_0417
The simplest review of the PicoAir’s operation was that it was so simple, seamless, and superior that we soon turned to talk about MVIS. With such an impressive product, why hadn’t MVIS moved?

Estimating a proper value for MVIS has become a moot analysis. If the current stock price was based on rational, conventional valuations they would only make sense if it is assumed that the company will never have a product, won’t grow, and yet will somehow survive. If it is going to grow, then near term valuations of $20 are easy to produce. If it is going to bankrupt, then near term valuations of $0.02 are easy to produce. Yet, for the last year, the stock has bounced around $2 and a market cap of less than $100,000,000. Good news hasn’t raised it. Bad news, or at least the lack of news, hasn’t dropped it. And yet, the company is making progress with an impressive potential 2015 pipeline.

Individual investors should know other individual investors; especially since 2008. Sit together and commiserate. Conventional wisdom has proven to be less than wise, and the investing environment has changed. We continue to invest because we believe in and have experienced the potential rewards, and yet, just like with the Three Guys Walk Into A Bar, we can watch the trades and see what appears to be stock manipulation. Small stocks have always been threatened by illegal trading. The sums involved in trading are so large relative to the size of small companies that prices become set more by trading than investing. Trading is not illegal. Trading to manipulate a stock’s price and profit from that action is illegal, at least as I understand it. We both commented on the fact that, for the last year, MVIS has traded within about $1.50 and $2.50. Those may seem like large swings based on stock price, but they are within the noise of movement within a market cap valuation that is potentially above a billion dollars.

We conduct our analyses. Research the companies by talking with management, visiting the company, attending the meetings, and buying the products. Okay, I did that years ago but can’t afford to now. Peter, however does all that and more. Then, finally, a catalytic moment, a significantly improved product is released, it is met with impressive reviews, the company tweeted “The initial demand for #PicoAir far exceeded our forecast.“, and yet the stock doesn’t move.

Two concepts come to mind: delusional investors, or coiled spring stock. Until the stock moves, MVIS shareholders have to deal with people who consider them delusional. If the stock never moves, then the detractors are right. If the technology, the company, and the stock finally reflect the positive disruption that is possible, then the longer the wait, the greater the release and the steeper the climb in the stock – or at least that is the hope.

I’ve listened to detractors before. They were right about Iridium. They were wrong about Starbucks, and America Online, and Pixar, and F5, and others. For the last few years, they’ve been right about my portfolio, including MVIS. None of us know the future. But, what I do know is that when his Peter’s PicoAir met my ShowWX it was obvious that impressive progress has been made, and that maybe a bit more patience will produce much greater rewards. I certainly hope so.

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Three Guys Walk Into A Bar

A day trader, a commodities speculator, and a traditional investor happened to meet each other over a bar, or at least above a restaurant that serves beer and wine. It wasn’t a joke, but we had to laugh. We’re all witnessing the same behavior, realize there’s nothing we can do about it, realize there’s nothing the government is doing about it, and yet we all continue to invest. When your list of choices diminish, it is easier to make the choice, but you’re less likely to like it. Investing has certainly changed.

Whenever I sit down to write this blog I experience a frequent lament. I wish I had more time to research the data, analyze what I’ve found, check with other analyses, revise as necessary, and report the results. That’s what professionals get to do, and I suspect even they don’t get as much time as they’d like. Instead, I spend a bit more time than most checking news reports, perusing charts, checking in on online discussions, and reviewing my choices. My semi-annual portfolio review is the most structured of the exercises, but even that is far removed from the computations I’d enjoy producing. Data can be fun. Geek out!

But, I am not a professional and am only responsible to myself. I post my thoughts publicly via this blog and various discussion boards, but they are my thoughts about my situation. Your situation will be different. And yet, the lack of a difference is what I noticed during a chance meeting of three people that happen to continue to invest regardless of the current climate.

My office is in a coworks, a place where a mixed group share a space but rent desks. Interruptions are normal, and that includes visitors dropping by to check out the space. If you’ve been reading this blog you know I buy stocks in small companies, hold them for years, and then hope to sell them after they’ve grown. It is an old strategy sometimes called Long Term Buy and Hold (LTBH). One visitor sat down and started asking me questions about the space, and the topic of bandwidth and internet access led to the topic of high frequency trading. Another visitor happened by, recognized me from one of my talks, and mentioned that he was a commodities speculator as well. All of us were investing. All of us were interested in economical office space for jobs that had nothing to do with investing. Our investing was encouraging enough to occupy some of our time, but not profitable enough to negate the need for regular income.

We were all also about the same age. We had all experienced an earlier era in investing that was more rational, more regulated, and more enticing. We all recognized that we are in a new era.

Investing has never been completely free of inequities. There have always been people with unfair advantages. As civilization has matured, there has been a trend to minimize the disparities; and yet, within the last decade or so, the regulations and regulators aren’t keeping up with imbalances and improprieties. It seems that the inequities are increasing.

Here’s where I’d like to pull up the data, reference specific events, analyze money flows, and contemplate core trends. In the meantime, through that conversation and others, it seems that the imbalances and improprieties are outside the control of individual  non-accredited investors.

High-frequency trading is happening at such a technical level that large financial institutions are moving their trading computers as close as possible to the market’s trading computers because the time it takes electrons and photons to move a few extra feet is a disadvantage. Seattle is much more than a few extra feet from Wall Street.

Market manipulation hasn’t been proven, and may be unprovable except by a whistleblower, but flash crashes are effectively approved because the trades aren’t negated. There are regulations and mechanisms in place to manage such irregularities, but none of us had seen them exercised. Small investors get dropped out of stocks, and large investors step in to take up their positions at a bargain.

Wealth accumulation means larger portfolios are larger, that there is less for the smaller portfolios, and that the big money is chasing the big investments while ignoring the small investments. The demand for large cap companies increase because they are large cap companies, and small cap companies are more likely to remain small because there isn’t as much money left to invest outside the large portfolios. Unfortunately, small companies are where innovation happens; so subsequently innovation isn’t encouraged.

We’re all seen the activities, and yet we invest because we must. When there are fewer games in town, and games are the only way to “win”, then you have to play to games that are available.

Many investors no longer invest: 43% of Americans are only invested in cash, which is another way of saying they have a checking account and nothing else; and 53% of Americans have returned to the Great Depression habit of hiding cash somewhere around the house because they don’t trust the banks.

I wish I had the time to draw together the amount of involved in high frequency trading and the trend with time; the number, severity, frequency, and consequences of flash crashes; the numbers of small cap versus large cap investing capital; and the total wealth accumulating in cash in working class households. But, I don’t have the time to do more than draw my own conclusions.

My conclusion is that I will continue to invest because of another trend I’ve witnessed (and for which I’ve seen data that I can’t find quickly enough), and that is the fact that working harder no longer is effective for financial mobility. Wages are stagnant. Living expenses are increasing, regardless of the official inflation numbers or the temporary blip in gas prices. I continue to work seven days a week because that’s the way I pay the bills, or at least most of them. I even have hope that improvements will come my way – but I’ve held those hopes for years. My stocks are a hope. I’m invested in disruptive companies, which hopefully make enough money for the stock to attract the large investors, while also positively impacting the planet. That isn’t the refined, sedate, conservative investing strategy from years ago, but that was a different era. Or, at least that’s the way it looks to a trader, a speculator, and an investor who all have seen the old era, and the new – and who are all sitting at the same bar and continuing to invest and work.

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Passionate Hope

Seven billion people can’t all be right or wrong. If we were all right about the same thing at the same time it would be spooky. Of course, maybe that’s what a common cosmic consciousness would be like. If we were all wrong about the same thing at the same time, that would potentially be tragic. Somewhere in the universe, that’s happen to a civilization. We never have unanimous agreement. There are even people who place the planet above all, and think the only way for it to thrive is to get rid of us. Fortunately, we rarely all agree. That may seem like a bad thing, and the cause of much suffering, but it is also the reason we may yet find solutions to our problems. Cheer the innovators.

My passion is for people and ideas. It makes for some fascinating conversations. It is one reason I enjoy consulting with artists and entrepreneurs. They are people with passions as well, and most of their ideas are aimed at solving problems. Somewhere between where we are and where we need to get is a bridge that will be built by someone with the right idea.

My other passion has also been stymied lately. The corporate version of the artists and entrepreneurs is the startup company with a disruptive idea. There are companies that aren’t just trying to build a better mouse trap. They’re trying to trap the mouse and get it to work for us. The body is confused about how to fight cancer? Retrain it rather than launch a separate assault. Electricity has a bottleneck called copper cable? Superconduct it. Signals need to be switched faster than materials allow? Build a switch with almost no moving parts. TVs and monitors are too fragile and bulky and use far too many resources? Throw away the screen and play with the light. Those are the stories of Dendreon, Geron, American Superconductor, GigOptix, and MicroVision. I act upon my passion for their ideas by buying their stocks (DNDN, GERN, AMSC, GIG, and MVIS.) That outlet for my passion has been stymied because, even when the companies make progress, their stocks languish – and in some cases become involved in bankruptcies.

A long time friend, fellow blogger, fellow ex-aerospace engineer, and fellow inventor has lived within the realm of invention for years. That’s how he makes his money. Over on his blog, ideaworth, he points out the realities of pursuing your passions. Most ideas fail. That’s an oversimplification though. The ideas don’t fail. What fails is the implementation of the idea. If an idea was obvious everyone would already know it. That means the inventor needs more than the skill of inventing. The inventor must also develop the skill of convincing (and recognizing when a great solution can’t find a problem to solve). The data show that persuasion is not as prevalent within the inventive. Many good ideas never get their opportunity to meet the people who need them.

(He’s also one of the most articulate and vocal back channel commenters to this blog and I encourage you to encourage him to post his responses as guest posts to this blog. The man has good insights and a slightly different perspective, which I appreciate – and which I think should be made more public. That offer is also out there for folks that have more to say than will fit into the Comments section. If you have something to say, say it, or better yet, write it down. It may get posted.)

The world does not lack ideas. Even in the small community that is Whidbey Island, I’m asked about a new project every week or so. Some are simple solutions to small problems. Don’t underestimate how much people will appreciate good granola or biscotti. People laughed at the concept of high-end coffee and now Starbucks is responsible for inspiring thousands to open independent gourmet coffee shops, and has dramatically improved the lives of coffee growers.

 

 

On a grander scale, graphene continues to amaze engineers and scientists with unexpected properties. Go check my Pretending Not To Panic blog for links. Graphene was an accidental and innocuous discovery. Ever since we began burning candles we’ve been making graphene, but we didn’t know it. It is deceptively simple. Graphene is simply a sheet of carbon. But, because that is all it is, it can do amazing things. A sheet of it isn’t like a regular material. Most materials are made of lots of chemicals, collections of molecules held together with chemical bonds. A sheet of graphene is a molecule. There is no upper limit to the size of a sheet of graphene. A house-size sheet of graphene would be a house-size sheet of one molecule. Molecular bonds are far tougher than chemical bonds. The frequently sited example is that an elephant standing on a pencil couldn’t poke through a sheet as thick as plastic wrap. Imagine roads and houses built from such a material, which just happens to be trapped carbon. Weirdly enough, use it right and it filters hydrogen out of the air, fuel from thin air. Use it right and it is waterproof, so that extra strong road and roof don’t leak. Bullet-proof clothes can become common, which raises additional issues.

As much as I am a fan of graphene, I am a fan of the people who are willing to take risks and examine the accidental outcomes. The stock market currently doesn’t acknowledge innovation. The great money pouring into the market and driving it to new records is coming in from large portfolios and is directed at conventional companies, or companies that received massive cash infusions at their start. To some, Microsoft and Apple may be innovative, but they are decades old. Most truly innovative firms are starved for funding, then either collapse or are bought out and absorbed. While it would eventually beneficial if their innovations were then championed by the larger firm, they are more likely to be sequestered so they don’t challenge conventional products. Fortunately, that doesn’t stop passionate people from innovating.

What do you see when you look at a seed? Do you see something to sprinkle on a bun? That’s where millions of sesame seeds go. Do you see something to plant? That’s how you can get another plant. Do you see a forest, that just needs fertile soil and patience? Innovators, dreamers, inventors, and entrepreneurs can be considered nuts. What do I see? Nuts grow trees. Trees grow forests. Forests can cover continents. Our world needs more forests. A person who simply needs the right environment and a bit of time to create something far larger, grander, and globally pervasive than one person – they are my passionate hope.

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A Quiet Graduation Day For GigOptix

Did you ever have a party, and had no one show up? I’ve almost had that happen. Did you ever have something to celebrate, and find yourself in a crowd of strangers? That’s happened more than once. GigOptix hit a critical day in the maturation of a corporation. They made more money than they spent. They made a profit. Based on the market’s reaction, no one cared – well, except for a few folks like me. The lack of thunderous applause doesn’t change the fact of the accomplishment. Maybe the celebration comes later.

There was a good chance that GIG, which is GigOptix’ stock symbol, was going to have a good day. Yesterday they announced profitability. Every company has two main phases, when they are young and spending far more than they are making, and when they are old and making far more than they are spending. There are infinite variations on that norm, but the day to celebrate is when a company graduates from the first phase and enters the second. In a simplistic view, the company and the stock go from being a speculation to an investment. Graduation day has some weird mathematics though.

Math geeks know what happens when we try to divide by zero. Things blow up; at least mathematically. FigureB When a company is losing money, even if they are growing revenues and decreasing expenses, the price to earnings are negative because the earnings are negative. When a company is making a profit, the price to earnings is positive; and can be used to evaluate the company and the stock. When a company crosses that point when revenues and expenses are exactly the same, the earnings aren’t negative or positive because they are zero. Divide by zero and the result is infinity. Infinity to and beyond is a great attitude, but a lousy mathematical situation.

Great debates transpire about what is the proper price to earnings ratio. Mature conservative companies may have a value of about one. Disruptive companies in an enthusiastic market can have ratios about twice their growth rate. A company that is growing about 10% a year is doing reasonably well and can have a ratio of about 20. (P/E = 20) Above that and the stock may be pricey. Below that and the stock may be a bargain. Pay attention to the words just used: debate, about, may. Bull markets shift the numbers higher while bear markets shift the numbers lower, and all that is altered by the general market versus the specific industry versus the specific competitors. Like I said, great debates transpire.

GIG has traded at about a P/E of one. GigOptix makes very high-end electro-optic switches. If that last phrase didn’t mean anything to you, don’t be surprised. GigOptix makes things that let us stream movies without hesitation, but they do it in a way that may be hard to understand. The demand is easy to appreciate. Very few companies can do what they do. I think their technology is disruptive. I think their industry is growing. I think they have a lot of potential. The market is pricing them as if they were a construction firm that isn’t growing. That may be because the analysts understand something I don’t. It may be because the analysts don’t understand the technology, aren’t allowed to look at such immature companies, or are too busy chasing around the mega-bucks from the mega-wealthy who are most interested in the mega-corporations.

GigOptix made $32.9M in 2014, a 14% increase over 2013. Take that 14% growth, multiply by 2 to get a P/E of 28, and realize that the E was nearly zero so the math falls apart.

That’s why I look at Price to Sales for small companies. If you want the details, go buy my book.Dream Invest Live cover In the meantime, I use a Price to Sales of about 6. Revenues ($32.9M) times 6 equals $197.4M That’s my estimate of GigOptix’s worth. Even after the good news, the market thinks GigOptix is worth $32.8M (based on market capitalization). Divide my estimate by the market cap and get about 6. If the market drove GIG from today’s $1.19 up to $7.16, I’d think it was finally recognizing GigOptix’s current conservative value.

But, it didn’t. GIG barely moved. About 118,000 shares traded, which sounds like a lot, but at $1.19 that’s only $140,420 traded. That’s not even a real estate deal.

And yet, that’s what I’m watching happen to many of my stocks, most of which were bought with the strategy of buying small companies and selling them after they are large.

MicroVision had good news too. A product that they are key to (PicoAir & PicoPro) inspired the following tweet; “The initial demand for #PicoAir far exceeded our forecast. We are working hard to get the devices to you ASAP. Thank you for your support!”

- @Celluon News like that should be news. MVIS was even quieter than GIG.

I sit back and watch good news go unnoticed, except by the loyal stockholders, and I wonder how much has changed. In rational markets, stocks move based on math and logic though with some psychology shifting the outcome. In irrational markets, emotions rule, the crowd rules, and math and logic are inconveniences. The markets are hitting record highs, but the markets represent the large companies and therefore the large portfolios. Every large company started small. Does this mean that these small companies will eventually reach such large valuations, or has something fundamentally shifted such that they won’t get that chance? Dendreon’s bankruptcy reached a critical point today too. They were small, disruptive, and technically successful; but failed financially (and arguably through purposeful intent.) Has the corporate, industrial, and financial immune response developed an actively negative reaction to anything new? Or, is it just a matter of time before the good news filters through?

When I bicycled across the bridge to Key West after riding across America, and when I stepped onto the bridge over Aberdeen’s train tracks after walking across Scotland I did so alone and relatively quietly. Both of those accomplishments deeply improved my life, regardless of the size of the celebration. The changes just took time to filter through. Maybe the same will happen here, as we pass through this investing phase.

I’ll quietly lift a glass to all three, GigOptix, MicroVision, and Dendreon for different reasons; and hope to have a more boisterous party some time soon.

PS To the fellow MVIS shareholder who was planning ahead, when in doubt, Glenlivet and the older the better. Some good things just take time.

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Dance When You Can

Swing, waltz, salsa, or just shaking it. Has it really been that long since I blogged about something light and easy? The local children’s theater held a dance-a-thon as a fundraiser. The last full day I took off was Christmas, and my next day off is hopefully some time before the end of February. (My Rule of 7 continues.) The holidays, and then the start of the new year are hectic times. We’re living in fascinating times. The effort and the issues are wearying. Life isn’t just working and surviving. Life is also about the dance.

Personal finance is personal, and lately my personal life has been driven by the need to make enough to pay the bills. The good news is that I’m almost making enough; but almost isn’t enough. The other good news is that various stocks in my portfolio supposedly can do well in 2015; but five weeks into the year they haven’t. My other blog, Pretending Not To Panic, is gaining in popularity; and the research for it continues to uncover reasons for great optimism and great pessimism. Sorting it all out has given me a headache that was exacerbated when I tried to decide which timely topic to write about tonight. It took a bit of homemade beef stew and a nice glass of boxed red wine to remind me that sometimes the most important thing to do is to forget to do the things that seem important.

When I dance, I smile. That’s simple enough. Not everyone likes dancing, but I do. Throw a multitude of issues at me and, except while in the depths of my personal financial downturn, dancing with a partner makes me smile. The rest of the day can be intense analyses or tedious research; but, eventually that has to be put aside. What is really important? Being responsible is really important; otherwise, there’d only be a lottery ticket’s chance of me paying my bills. Being responsible is more than just responding to money issues. Being responsible to community, to other individuals, to myself, is also important.

Responsibility isn’t just altruism. Society and civilization survive because we respond to each other. If everyone only worried about themself then everyone would have to be a farmer, rancher, doctor, policeman, mechanic, and self-schooled in a long list of craft skills.

Responsibility is, however, also about self. If a person doesn’t take care of themself, they can’t take care of others. The harder I work, the longer I go without a break, the less effective I become. Health, relationships, and attitude degrade when the only thing in life is survival. Take it too far and words become more difficult, simple math requires a calculator, schedules are missed. Fortunately, the solutions aren’t expensive.

A couple evenings ago I went for my walk. The Powerball lottery was up to over $300,000,000 and I had a ticket. (Now it is over $400,000,000; so, I guess I didn’t win the jackpot.) As I walked I thought about how I would indulge myself. It was a fun exercise, especially when I realized that it would cost far less than $1,000,000 for my indulgences: a campfire by the beach, I already do that in my neighborhood; a long hike or ski trip, which might cost a few hundred for some new gear; a long schedule of massages, which cost less than many people spend on dinner. I enjoy my own cooking, so maybe a nicer kitchen and better ingredients. I enjoy talking with my friends, especially when the topics are substantial; so, maybe some extra wine or whiskey as lubricants. (Hey, this is Washington. We can add cannabis to the conversation.) The greatest indulgence is the one I evidently least afford right now and that is time. Having the bills paid, the debt eliminated, the repairs completed would ease my mind and my time so I could sit and enjoy whatever.

Oh yes, and there’d be dancing. There’d be dancing because, as I said above, when I dance I smile. Finding that one simple thing that creates that reaction is precious, and highly individual and personal. Amongst the great concerns about the planet and its people, we lose something if people don’t also find what makes them happy. I’m lucky. Most of what makes me happy are things that aren’t things. Experiences are marvelous. A few things may help them happen. (I really appreciate good dance shoes.) Experiences are actions. They take time. Life is nothing but time. Experiences are living.

My needs and wants may disappoint the advertisers, but they can go sell things to people who find joy in things. Go back and check my review of the Super Bowl ads. Very few of them made a direct connection between a thing and joy. They make allusions to enticing notions, but almost everything uses sex to sell, and almost none of the things had anything to do with sex. At least the Fifty Shades of Grey and Victoria’s Secret ads weren’t as much of a stretch.

There’s a storm coming in tonight. The rain isn’t here, yet. I’m going to close now, so I can spend a bit of time doing something I enjoy. The issues and concerns probably won’t change much (though earthquakes do happen, so you never know). I suspect the bigger change will be in myself. And, who knows? Maybe it will start raining and I’ll start dancing. As long as it makes me smile.

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Real Wealth Inequality Worries

A cascade of thoughts can become an avalanche of insights from one piece of information. I’ve been tracking wealth inequality for years. Data drives most of the thoughts, but after consuming dozens of articles and videos it only takes one extra story to crystalize my concern. The snowball that started the avalanche was a local NPR story. The insight convinced me wealth inequality is different this time, despite what some say it isn’t just a bunch of poor people complaining, and the situation is getting extreme enough that something is going to change whether by choice or chance.

The global story that caught my attention was the fact that about 80 people have as much wealth as the poorest 3,500,000,000.

The local story that caught my attention was that less than 5% of the people moving to Seattle are considered middle class.

We become numb to data. If we weren’t, Federal spending and personal priorities would shift from destruction and junk food to construction and healthy habits. Eighty people have this. Five percent fit here. Just numbers. Trends can be ignored, too; but maybe I notice them more than most.

Eighty people own half the world’s wealth. Four years ago it was 388, and we were shocked. Before that it took so many to not warrant being counted. Unfortunately, at this rate, in four years half the wealth will be owned by 17 people. I doubt that it would ever get down to 1 person owning more than half the rest of the species; but ask yourself how few would it have to be before you thought the situation should change.

Only 5% of the people moving to Seattle and King County are middle class. That’s odd enough, but if middle class is a narrow definition, then a small percentage makes sense. Middle class was defined as making $35,000 to $125,000 per year. That’s a broad range. The good news is that the area is attracting a lot of high income jobs. The bad news is that the majority of new residents make less than $35,000.

As wealth inequality increases, and as income inequality increases America loses its status as a classless society. When there was an even distribution of income and wealth, there was mobility, hope, and a reason to work harder. A chasm, a moat, is widening that can’t be crossed with attitudes and stereotypes that were valid ten years ago.

The main reason I am worried about the economy is that, as wealth accumulates, spending stagnates, businesses stagnate, jobs stagnate, incomes stagnate, the country and the world stagnate.

Give a billion dollars to a multi-billionaire. If they spend it, the only way to spend all of it in a year is to buy very expensive things from other very rich people. To spend a billion dollars in a year a person has to spend $2,739,726 every day. Buying a sports team isn’t enough. Buying companies works, and if done right, creates more wealth – which exacerbates the inequality. The greater likelihood is that the billion won’t get spent, and the life of the multi-billionaire wouldn’t change.

Give a billion dollars to a thousand people and they each get a million. It’s possible to spend a million. Many would. Many would also say thank you and reinvest it because so few folks have retirement accounts. Much of the money would get spent, and many people could relax a lot more. There might even be a vacation in there.

Give a billion dollars to a million people and they each get a thousand dollars. A million lives would create a million variations. For some, a thousand would be nice, but soon blends into an existing portfolio. For some, a thousand would let them take a short vacation, or fix the house or car, or pay down a bit of debt. For some, it would be the greatest windfall of their lives and would arrive just in time for some to avoid bankruptcy, foreclosure, default, homelessness, or hunger. A lot of the billion would be spent.

Give a billion dollars to a billion people and most Americans wouldn’t notice, but large parts of the world’s population would immediately put the money to work. Very little would languish.

Wealth is accumulating. Productivity is up, but wages are flat. Profits are up, but wages are flat. Jobs are up, but many are for lower wages, or temporary, or part-time, or without benefits.

The trend is continuing. Wealth continues to accumulate. Luckily, at least the American part of the story happens within a representative democracy. With enough votes, anything can happen; and while the lower classes are growing, the power remains elsewhere. A few of the ultra-rich are advocating for change, but they are in a minority within their ranks.

Ironically, a possible source for change may come from the recently ultra-rich. The ultra-rich shrank from 388 to 80, which means there are 300 people who are now excluded from that club. Just a bit poorer than them are the multi-millionaires who may be realizing that they won’t get to be billionaires. They don’t need the money, but humans have other motivations. People with tens of millions or more are also more likely to be able to exercise the money is speech is power process that is operating in America’s government and media. While the greatest collection of votes may be in the lower class, the greatest collection of political power may be in the bottom 99% of the 1%.

Historically, there have been very few peaceful resolutions of wealth inequities. I look forward to hearing examples. Asking around, the most common example I hear is the French Revolution, the source of the fictional “Let them eat cake” and the source of the very real guillotine. Wealth redistribution is not a case of someone writing billions of checks or some hacker redistributing cash. Much of the wealth is in real estate, stocks, bonds, and commodities. Even if the wealth of Microsoft was redistributed by giving one share of MSFT to everyone one the planet (with about a billion shares left over), everyone would get about $42. The stockholders meeting would be awesome and could stand in for the United Nations. It is unlikely to happen. The wealth has taken decades to accumulate. It might take just as long to distribute.

My worry is that I see no significant effort to curtail the trend; the trend accumulates wealth outside the mainstream economy; any movement of that wealth tends to be from portfolio to organization, not from person to people; and that a peaceful resolution has no historical precedence.

The timing is not academic. At this rate, with potentially only 17 people owning half the wealth in four years, the imbalance within lives and the economy should become more pronounced. I have a difficult time believing that political pressures or revelatory compassionate responses of the ultra-rich will move faster or prove stronger than the possible populist desire for dramatic change.

Pardon me as I sit back and continue pretending not to panic.

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The Real Super Bowl Competition 2015

A toast to the Seahawks. I heard that they … ” lost. Just a one word edit from last year’s Super Bowl post. Ah, the power of words. I worked through the game, or at least most of it. So it goes. Some day I’ll sit in on a Super Bowl party, but evidently that’s at least a year away. I quit watching in 1982 when I realized I got incredibly emotional about the Steelers in a sport where, on average, every team loses half the time and wins half the time. The ads, however, intrigue me. Just like the parties, they’re insights into what people care about, or at least what people are told to care about. So, join me as I pour myself an after work cocktail, and sit and sip and watch this year’s ads. What issues, trends, and styles are winning and losing this year?

Consider this. If there were no ads, would there be a Super Bowl? I like to think that yes, there would be a Super Bowl and professional football, but there would be far less money involved. Let’s see where the money’s being spent.

(Thanks to YouTube for providing a channel for the ads that doesn’t require watching or recording the entire game plus the pre-halftime-post game shows.)

  • Dig: Armageddon sells. Oops. Apocalypses are popular? Oh well, maybe that’s why I am not alone in Pretending Not To Panic.
  • T-Mobile: Frugality fights wasted and expensive phone contracts, with a vulture. No wasting money sells, and the bad guys are vultures.
  • American Family Insurance: Things will get brighter, because dreams are all some people have. Is it already this dismal after only three ads?
  • Microsoft: Empower through technology. Courage in the face of reality, which suggests reality requires courage. Oh dear.
  • Mercedes-Benz: Excellent production values. And the value isn’t in the quality of the car but in racing faster than the competition. And the tortoise gets the hare?

    Come on people, let’s get a positive message that doesn’t start from a downer.

  • Fifty Shades of Grey: Well, I certainly didn’t see that one coming. And now for some escapism.
  • M&T Bank: Persistence and hard work can make you a football star. And how many people make the cut who also had persistence and hard work?
  • Furious 7: And now for more escapism, but this time with exploding cars.
  • Geico: Short, simple, and sorry I missed the gecko.
  • Pepsi: Evidently the best way to sell colored sugar water is to not mention the colored sugar water – but show the logo.

    At least we’ve gone from downers to irrelevant.

  • Toyota: Great message, nice production, good to hear Ali. Don’t know what it has to do with a Camry, but, ok.
  • Jurassic World: Don’t mess with Mother Nature. Wasn’t that the message from the first movie? Neat spherical cars though. Camry’s?
  • Kia: Yes! 30mph and fireworks and breaking convention. Very refreshing.
  • Loctite: Go ahead, make me laugh. Thanks, I needed that. And they actually showed the product doing something useful. Nerd on!
  • Doritos: Snack food gets the girl, and her kid. Silly man; but, maybe he wants a ready made family (if she’s available.)

    We’ve gone from irrelevant to at least one that was useful.

  • Minions: They weren’t really trying to profile sports fans, were they? Keep your clothes on, people; unless you’re in Fifty Shades of Grey. (See above.)
  • Toyota: The pendulum swings as “men’s messages” return. And have something to do with Camrys.
  • Nomore: Did they knowingly place these two ads together? Tasteful, powerful, necessary.
  • Nissan: Dad’s the message again.
  • Northrup Grumman: Selling bombers and spy planes … to Congress via the voters?

    Probably the most masculine set of five (arbitrary selection) which points out that advertisers may have caught on that women watch the show since so many ads aren’t macho.

  • Odyssey: Who is chasing her? The drones? In which case, fear the machines. The government? In which case, fear the authorities. In any case, fear and persevere.
  • Dodge: Actually listening to the wisdom of experience? Marvelous! Curious how many of them have their licenses. If they don’t Dodge should give them a car and a race track and let them have fun.
  • McDonald’s: Brilliantly simple message and gimmick; paying with love. I’m interested to hear what the Sharing Economy will say. Now, about the food…
  • Pitch Perfect 2: Sequels are in. So are musicals. Musicals?! Fun. Wasn’t the last time they were popular was during the Great Depression?
  • Bud Light: Pac-Man for real. Fun game. Amazingly expensive. Now, about the beer…

    Such an interesting mix that I’d like to year what the centenarians have to say about tech dangers, the power of live, musicals, and good food an good beer.

  • T-Mobile: Reality. Being able to call from your crawlspace is handy. What stories she has from down under…
  • Skittles: Arm wrestling for a lemon Skittle. Whatever.
  • Sprint: Cost is more important than coverage. Fun video. Looks like someone intruded in the creative process for the last third without adding anything.
  • Ted 2: And now for something totally frivolous.
  • Terminator Genisys: Wow. A movie that’s a sequel. How uncommon. (Sarcasm, in case you couldn’t tell.)

    They won’t leave a mark. (But now that I’ve written that I’ll think about them more, so maybe it is effective.)

  • Wix: May be one of the few that actually addresses what the product does. Making a good web site and making a successful business are two different things.
  • Blacklist: A TV show where things blow up.
  • Snickers: Now, that’s a version of the Brady Bunch that would be fun to watch; making sugar crashes are more interesting than car crashes.
  • Fiat: The fun a little blue pill can do in Italy. Did Pfizer pay for half the ad?
  • Lexus: Be seen. Be heard. Make some noise. Well, I’ll grant you the car can do that. But what does an SUV have to do with a parking garage and very urban people?

    At least some of them are entertaining. But, how many more are there? The game didn’t last this long, did it?

  • Victoria’s Secret: Who was this ad for? Not that I’m complaining. At least they showed their product.
  • The Voice: That must be a reality show that probably doesn’t look a thing like the ad, and definitely doesn’t give me a reason to watch.
  • Redfin: Hey. Be careful. You also showed something about what your company does. That’s not usual.
  • Tomorrowland: Disney does an ad right. That’s one of the few that actually made me interested in what they had to sell.
  • Doritos: When pigs fly – do they get parachutes?

    I’m getting weary, but a few bright moments are taking me through.

  • GoDaddy: I may not like their product or service, but I like their ad. Keep in mind that I worked through the Super Bowl.
  • Budweiser: A beer ad about beer? Is this a trend? Congratulations. I’ll stick my beers that are so dark you can’t see through them.
  • Budweiser: A beer ad that barely mentions beer? Well, thanks for the entertainment.
  • Game of War: I like games, and I greatly suspect the game doesn’t look a thing like whoever that woman was.
  • Avocados: A fruit, or is it a vegetable, – hey, real food gets an ad! That’s a first, and sad that it’s so alone.

    Those five, er four, could make a set: an entrepreneur working late eating nachos with guacamole and a beer then taking a break to play a game. It could happen.

  • T-Mobile: I know Kim Kardasian is famous, but I don’t even know how to spell her name.
  • Coca-Cola: Another message that we need more love in the world. I wonder how many IT people shrieked at the thought of colored sugar water pouring into their servers and routers.
  • Dove: Care makes a man stronger, and I’m pretty sure the cleanliness of a person’s skin has little to do with what’s in their heart and mind.
  • TurboTax: What does the Tea Party think?
  • Carl’s Jr.: Interesting product, but really, a model biting into a burger that’s probably a week’s worth of calories?

    Best five for displaying a disconnection with reality, regardless of their products and services.

  • Weight Watchers: Courageous to stand out amidst the fast food ads.
  • Always: Changing the definition of “Like a girl”. Another message ad.
  • BMW: An ad for people perpetually behind the curve?
  • Newcastle Brown Beer: Not about the beer, but unabashedly bashing branding.
  • Jeep: Play responsibly, and look beyond borders.

    Messages, messages, and challenge convention – evidently.
    I’m getting tired.

  • GrubHub: Ordering food without having to deal with people. And that’s good?
  • Microsoft: Courage in the face of reality. And use software to manage it.
  • M&T Bank: Somehow landscaping for cemeteries is tied to banks.
  • Clash of Clans: Live the game, in your local coffeeshop, because where else can you succeed?
  • Carnival Cruises: JFK sells the sea, and makes me think a sailboat is a better idea.

Disconnect. And I’m about ready to. There must be an end to this commercialization.

Hallelujah! I made it back around to the beginning.

Here’s what I’m left with.
Microsoft says it best, Courage In The Face Of Reality. There’s a pervading sense that where we are is something that demands perseverance. Life needs fixing. That’s not just a Microsoft message, and it may be inherent in every sales pitch; otherwise, why buy anything? The most positive message was from the centenarians. Live in the moment. Appreciate what you have.

The majority of the rest of the ads sell the idea that we should ignore reality through escapism and fantasy.

Rarely does an ad sell the goods or services the company sells. It must be tough selling cars because they so rarely describe something they do that the others don’t. Many products only distinguish themselves by their branding, not because they are obviously better than their competitors. The loudest defense of a brand is that everyone else buys it so you should too.

I just watched 60 ads. That’s possibly as many as I’ll see for the rest of the year since I disconnected my television. Maybe the YouTube ads will make up the difference, but it will take months. Stepping away from the hourly onslaught makes most ads look sad and silly. As television is replaced by streaming media, and as awareness grows of our reality, many brands that rely on old media and old habits will be replaced as well. The celebrity couple in the electric BMW will probably be even further behind because change is accelerating. Microsoft seems to understand that, as do the companies with various progressive messages; but I feel as if I just devoted more than an hour to witnessing the birth of dozens of anachronisms. l wonder what the ads will be like next year.

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Another Early Boeing Pension

I officially signed up to be a Boeing pensioner, I think. Pensions may be something that has to be explained to young children in a generation or two. Maybe not. As of this week, years before I expected to begin receiving monthly payments, I clicked boxes and answered questions so that, about a decade before my plan, I will be receiving my Boeing pension. Optimizations based on conventional wisdom would suggest otherwise, but reality is more important. Working seven days a week at several jobs has not been sufficient for this ex-aerospace engineer to pay the bills. Important things are rarely done for only one reason, and that’s true here, too. The prominence of those other reasons wasn’t evident until after I hit confirm.

From 1980 to 1998 I was an engineer at The Boeing Company, a place where the The had to be capitalized. People within the company may appreciate the distinction between the titles: senior engineer, lead engineer, aerodynamic stability and control, flight systems, technical coordinator, customer engineer, etc. To people outside the aerospace industry, I was one of the people who help figure out how planes, rockets, and satellites fly or orbit; and how to deal with the incidents when things don’t go as planned. It was fascinating work, and I can fill hours of talks with properly sanitized anecdotes. The unsanitized anecdotes are saved for those who understand the jargon and realities of vehicles flying far faster and higher than evolution naturally allowed. In 1998 I quit, or retired, or left the company voluntarily during an auspicious opportunity. Retiring at 38 inspired others to inspire me to write my book about personal finance, Dream. Invest. Live.Dream Invest Live cover

I thought I was retired, labeled myself semi-retired, and was about to drop the semi- when my Triple Whammy negated the semi- and the -retired and threw me back to work. That transition has been chronicled in this blog, a long writing self-imposed writing assignment that has seen a transition from maybe having enough, to watching it fade away, to fighting to bring it back.

The fight’s been long, painful, unhealthy, and difficult – and is unresolved. My consulting and writing business has grown to within 17.5% of what I need to pay all of my bills including taxes, as long as I don’t spend much on repair or maintenance. Close is good, but I doubt the IRS will consider that sufficient if they’re the one bill left unpaid. There are an amazing array of potential projects, many of which have suggested hiring me for full-time employment – after they get their funding. There is an amazing potential within my portfolio, (check my semi-annual exercise), but the reality is that the companies’ news hasn’t been delivered. My savings are almost gone. My IRA is about 3% of what it was at its peak. My attempts at getting jobs are met with interest but not commitment. My house didn’t sell. The only source of that remaining 17.5% is from my pension that was designed to be accessed in a bit less than a decade from now. My bills can’t wait.

Personal finance is supposedly layers of math and logic, but emotions intrude because we are human. Many people tell me that they have enough money, but it’s locked up in an IRA or a house or some other investment. I understand the feeling. That feeling, however, is artificially induced by the penalty clauses or costs of accessing assets and incomes that are in our control. IRAs are meant to be used in your 60s (your specific age limit may vary), but they can be drawn upon by paying penalties. Houses and other assets can be sold, but you need to replace one housing solution with another. There is a middle ground between assuming assets and incomes aren’t available, and having free and easy access to everything. I’ve already spent much of my IRA while building my business, but it meant selling stock and then paying a penalty to pay my bills. The option was to be homeless and hungry, but with an IRA. I’ve tried selling my house, but the numbers suggest that staying where I am is cheaper than rent, while also holding onto an investment. I’ve delayed signing up for my retirement because of the penalties for accessing it early, but when left with only one reasonable choice choosing becomes easy.

To any Boeing ex-employees who are 55 or older, congratulate the company on making the process relatively simple. (Though I had to call their help line three times, and had to ignore two warning messages to complete the process.) The emotional hurdle was tougher. (Which is why I was glad to know someone else who got theirs early.)

Photo on 2015-01-28 at 18.41
Emotionally, receiving a pension carries imagery of old age, dependency, and a limited time offer. I balked for months because of that ingrained judgment. Money, wealth, income all carry emotional import that we as a society have infused in our culture. Money, wealth, and income are based on a notion of currency that is abstract that we created. I’ve spent four years trying to find sufficient income to sustain a very frugal lifestyle. The influence of emotional and societal judgments shrinks considerably when the list of choices essentially comes down to one. (There are those lottery tickets and risky stocks, but that’s nothing to base a plan on.)

As I filled out the forms and analyzed the options (I chose Accelerated Single, which sounds more like a lifestyle choice than a pension plan) I realized that accessing my pension now was comforting for more reasons than just paying my monthly expenses.

Every day I blog about “news for people who are eager and anxious about the future”.

PNTP

PNTP

(Pretending Not To Panic – my other main blog) Instabilities in our financial system convince me the financial world is due for a massive change. The assumptions behind my 40 year mortgage may be valid for year one, but are highly doubtful for year thirty nine. Waiting almost a decade for full maturity of my corporate pension may be waiting long enough for a fundamental shift to invalidate a supposedly secure commitment. Getting the money now is far more valuable than risking years of uncertainty for a small eventual increase. Besides, income now helps pay off double-digit credit card debt while waiting for my pension benefits to mature risks losses from inflation for the small price of a small effective annuity investment return.

I’m not advising anyone, except myself, to do anything. Personal finance is personal. I do suggest, however, that you check your assumptions about all of your assets and potential incomes. Are they really “locked up”, or were you just taught to think so? If you have more than enough, none of this may be an issue; but, considering that 1 in seven Americans are in poverty, at least some of them may have options that are more prominent than they imagine. Emotionally, I feel as if I capitulated to circumstances. Logically, however, I think I may have made one of my best decisions. Stay tuned. The first check supposedly arrives on April 1st, Fool’s Day and just in time for Tax Day. The story continues.

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Once More Unto DNDN Q

I bought a stock. Boring, some will say. DNDN has never been dull. Years ago I held more than enough shares – if it reached my price estimates. Since then, the company, Dendreon, has lived a story of trials, triumph, turmoil, and possibly that financial tragedy called bankruptcy. One story hasn’t changed since they received FDA approval for their cancer treatment; the technology works. Financial fundamentals tell one story. Technical fundamentals tell another. The risk versus reward comparison is almost at lottery levels; but, great analyses aside, I was able to buy a lot of stock for less than some people will spend on dinner tonight. Personal finance is personal, which means it is always a story, or it isn’t about a person’s finances.

My history with DNDN is long enough for a book, but for the most recent episode read the most recent post. Follow the links or click on the tag, for the details. The quick story is that, as usual, I followed my investing strategy by buying into a local corporation with a disruptive product or service before it met the market, held the stock as it rose – and then watched it implode counter to logic. As it dropped I had to sell to pay bills, first in the $40s, then closer to $4. Almost had my house go into foreclosure. And, am now working my way back out of my financial insecurity. I have reached the point where some untouched cash could be touched. I bought a bit.

Dendreon developed a technology that helps the body’s immune system recognize there is work to be done against cancer. The first treatment approved by the FDA was for prostate cancer. The last time I checked, the treatment worked, and was demonstrating improving efficacy as more data came in. The company should be massively profitable considering a success in the War Against Cancer. Instead, through mismanagement, bad luck, malevolent forces, or over-enthusiasm, the company took on too much debt while the revenues didn’t meet expectations. The stock went from about $5 before approval, to over $50 after approval, to $0.152 as it sits on the cusp of bankruptcy. And then, they had a quarter where they had positive cash flow. That got my interest.

Buying and selling stocks benefits from prudence. Rarely does a trade have to happen within minutes. Even stocks that are rising or falling, usually do so slowly enough that there are days when they languish. I’ve been considering this trade for days based on the recent news about the cash flow. I wrote about it, listened to comments and advice, and welcomed the focus that such a consideration brings to my normally passive trading. The amount of effort for these few shares is nearly the same as when I was investing months of living expenses. The same logical questions must be asked. The analyses of the company’s value don’t change. The main difference is the impact it has on my cash. There’s a longer pause whenever I spend any money after my Triple Whammy that was partly triggered by DNDN’s initial collapse.

I bought shares of DNDN; actually, DNDNQ because of its diminished status.

Check your emotions. Taboos and conventional wisdom are ingrained and can trigger effects out of proportion to the causes. I spent less on DNDNQ than people will spend on dinner, or a smartphone, or a pair of shoes, or even groceries. My holiday grocery bill was larger than my new position in DNDNQ and it didn’t induce days of analyses and consultations. It took me longer to realize that than it did to analyze the company’s potential.

My style of investing, Long Term Buy and Hold (LTBH), is not for everyone. The stock markets since 2009 are evidently not for everyone, because the total number of investors is down. People don’t trust the market. The markets are setting records, but have left many of individual investors behind.

Historically, investing in the financial markets has been essential to a retirement plan; yet, fewer people are buying stocks and bonds. Unfortunately, many people I know don’t trust the other markets, either, like real estate and jobs. Housing may be coming back, but attitudes about a house as an investment have changed. Mortgages are treated with more caution. Biggest isn’t always best. Jobs may be coming back, but many are finding that hard work means stagnation instead of elevation.

With fewer appealing options, I wonder if lottery ticket sales are up.

DNDN(Q) and other such stocks are attractive to many people who are on a financial edge. If working hard means standing still, and if buying lottery tickets is more likely to provide daydreams than security, then maybe there’s something in the middle. That’s where I am seeing people investing. If your reaction is somewhat of a revulsion, good. Their actions, however, aren’t driven by greed but by necessity. If a few hours of work, or their monetary equivalent, won’t make a difference; and if buying the equivalent in lottery tickets is most likely to produce worthless paper; then buying a very risky stock can seem attractive. The fact that such stocks are attractive is a commentary on our current financial situation more than a reason for personal judgments.

It feels good again to be invested in something that is making lives better. I invest in disruptive companies because there are many ways life can be made better, and if I have that attitude I should see if I can profit from my optimism. Check back next month to learn if I should’ve spent the money on groceries, or if I’ll be able to feed myself for a long time based on the value of the stock.

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