Minding Your Mind's Diet & the North Platte Express:

It occurred to me yesterday that all the efforts of my parents to protect my mind from “the Media” over the years of my childhood may have been more reasonable than I initially thought; not because children are somehow unable to separate media from reality (for example I do not recall ever hearing a mental voice say “Finish Him” and pulling a guy’s heart out). It was an important effort because this media was truly shaping my mind.

Stereotypes - Freeways of Thought

I see all experiences one has as ‘impressions’ on one’s mind. Vivid impressions, or a collection of these impressions, are sometimes used by an individual for decision making and are generally called ‘stereotypes.’ In spite the negative connotation of the word I see stereotypes as nothing more than freeways of thought. They are known, often frequently traveled, pathways used by your mind to perform inductive reasoning to quickly produce rational actions. They are generally very useful. However, there are possible negative repercussions of utilizing these freeways…

The North Platte Express

Automobile freeways often take circuitous routes that do not lead directly to where one wants to go. Anyone who has ever taken I-80 west trying to get through Nebraska can attest to this. Although nobody ever seems to want to go to North Platte or Kearney, inevitably you will sit on that interstate as it curves you hundreds of miles out of your way - south to Kearney then north to North Platte – because you do not know of/do not have available any other route to quickly move you through Nebraska (and God knows you want to move through Nebraska).

The circuitous route is worse in mental freeways by the nature of thought. One often does not set out thinking with a known destination (i.e. the proper conclusion). Thus a curve in a freeway can be more than a waste time as the driver may be unaware of the non-advantageous curve, and may pull off the freeway in North Platte; concluding that it was the proper destination all along (and let me assure you it is not).

The Mind’s Diet

Media’s Affect on Thought

Here is where I think my mother was right – it was in the creation of these freeways. It is not that CSI Miami’s exploding heads or Baywatch's bouncing bosoms are going to make a child a sociopath or pervert…but they subtly create pathways of thought through these experiences. Media for better or worse creates real experiences for the viewer/listener even out of fictitious material. Thus seeing movies or watching TV may be creating real impressions that will aggregate into freeways of thought in the viewer/listener.

Take the frequent viewer of CSI Miami for example. These media impressions may influence a viewer’s decision making process who is subsequently trying to consider the arguments regarding gun control. The stereotype he created from images of gun violence victims may lead him to believe additional gun registration and control is necessary. In contrast if the same individual instead watched a documentary regarding the confiscation of Jewish firearms by the Nazi party in 1938 prior to Kristallnacht he may have reached a completely different conclusion.

Note that I am not saying that either of these conclusions is necessarily wrong (at least not in this blog), simply that they may be made through media experience created freeways of inductive reasoning (regardless of the individual’s consciousness to this affect).

Affects on Minor Analysis

I recognize that the gravitas of gun control may cause the passionately considerate analyzer to move past these stereotypes as nothing more than I-80 curves on their way to Denver. However, what about all the seemingly more minor moments of analysis the passionately considerate undergoes (or all decisions that the ignorant/lazy individual makes…however I will not discuss this latter group further here as they are probably not reading this and the thought of them generally bothers me)? For these “lesser decisions” a lack of gravitas may lead the analyzer to accept the curve and mentally exit the analysis.

Personal Revelation

A good example to demonstrate the accepting of a mental freeway curve’s exit happened to me yesterday (and leads me to write this posting). Yesterday I was trying to do some basic self-analysis of the feelings I was experiencing at the moving of some dear friends of mine. I was trying at one point to pinpoint the feelings I was experiencing specifically when we were chatting in the living-room for a couple hours before they left (the feelings seemed strange and unfamiliar generally). However, when I attempted this analysis all I could think about was the end to the movie “Mazes and Monsters” where they all play the role-playing game, “One Last Time.” This curve in my reasoning effectively ended any other analysis on these feelings as it became more than a mental curve and instead a different freeway of thought. Was “Mazes and Monsters” useful to my analysis, or did it lead to a “right” conclusion? Had I just mentally taken the North Platte express and parked the car?

I concluded later yesterday night that this was essentially the “parking” of my analysis. I then went through all of my thoughts and feelings of the day and I realized my entire day was characterized by a series of media inspired mental freeways (including music, TV, etc.), and I was not sure about any of the exiting choices.

The Proper Diet

It occurs to me that my mental impressions are so made up of media that these are the majority of my mental freeways. Media has become how my mind interprets its surroundings. And thus it seems to have truly shaped who I am. I must now consider, “What have I been feeding my mind??”

Obviously, I must be continually dictating the experiences I want to feed my mind; just as a person on a diet should not only be on one for a short period of time…but instead must make it a lifestyle. However, what is the proper mental diet? Is it wrong for it to be so predominately shaped by media? Is it okay that due to my current diet that on a given day I am the sum of Jim Croce songs, M.A.S.H. and Family Guy episodes, and “Mazes and Monsters”? Or am I missing a distinction here between the interpretation of surroundings done by the mind and the mind itself?

These are some things to feed your mind on and get back to me. Please steer clear of that exit to North Platte in any response.

Invention-Problem: Coffee Cup Covers

I hate the plastic caps put on paper cups at coffee places. Every time I drink out of them I either:

1) can’t get enough air through them and thus I end up burning my tongue by me over pouring the coffee finally gravity beats air pressure

2) cap leaks/falls off.

Problem 1) - this should be easily solvable by simply making a slightly bigger air hole - GD it how hard can this seriously be people?

Problem 2) - I want to make a cap with a screw on mechanism. There could be a couple of gaps in the paper roll at the top of the cup where nubs from the cap could slide through. Then to seal the cup I could twist the cap moving the the nubs under the paper roll and thus locking in the cap. A basic drawing would really help and may try to add this or some photos later if there is confusion on what I am picturing.

This seems like a far superior design that isn't that complicated. The only reason I can fathom for why they haven't implemented this design already is there may be fear of the drinker not knowing how to put the cap on by not twisting and thus pouring the coffee all over themselves?

Is there something else I am missing here?

Financial Prediction: The Bubble Flow

So when thinking about the sort of tally that I discussed in my first post it occurs to me that most of my predictions are political or financial in nature. In this post, I want to focus on financial predictions. These financial predictions tend to be predictions regarding market directions; I generally predict these changes but never deduce/implement a plan to exploit it. My most noteworthy prognostication is the housing and .com bubbles. At the height of these bubbles I felt like I was on an island: holding my contrary opinions in-spite the masses of financial analysts that saw never ending profits through some kind of new financial paradigm that was emerging. In-spite my longterm vindication, in the short-term the bubblers carried the day as they made record profits playing the bubble. Thus, for many years I was pragmatically in the wrong.

Timing
I recall being 17 years old and discussing with my father how we should purchase a put on Yahoo! as I could not comprehend how their stock price could be so highly valued when they were losing money (note that by “we” I really meant “he” as although I was trying to instigate this action I had about $2000 net assets at the time and thus was in no position to do anything). He and I were in agreement with this assessment but the issue he pointed out to me was “Timing.” When buying a put, or making any sort of speculation on the downward nature of a stock or market, one has to pay high premiums for the size of execution window. To steer away from me providing poor descriptions of market technicalities, what I am saying is that it is very expensive to hold a position betting on a downward direction when you do not have a very specific timeline for the decline. One either pays a lot up front for a longer period of time, or you pays expensive margin calls as the market keeps going the “wrong way. “ In the example of my Yahoo! dilemma, if we would have purchased puts on Yahoo! back in 1999-2000 my father and I could have potentially enjoyed a 10 times+ return on our money. But, how could we have been confident that it would drop within the year?

The housing bubble worked much the same way for me as I could see the bubble and the ludicrous nature of the lending policies, but I saw no way of capitalizing on the situation financially without having to pay excessive timing premiums. Keep in mind that my predictions of the demise of the housing market began approximately in 2004-2005, and the fall did not occur until 3-4 years later. The best I came up with to act on this prediction was sitting in my apartment for another 3-4 years bitching about speculation and poor home buyers.

Macro Bubble Flow
After ruminating on these two bubbles recently, I now believe that these two bubbles are essentially the same bubble. The flow of capital from the .com bubble flowed into the housing bubble. As the wind came out of the sails of the .com bubble, the proceeds made during this period had to go somewhere and pension plans and average investors were looking for “safer investments.” This led many to move much of their massive bubble proceeds (as well as new investments) into mortgage back securities (MBS), which helped lower mortgage costs for all sorts of housing consumers. Obviously this was all aided by short sighted consumers, poor lending practices, and an irrationally exuberate Greenspan providing excessive fuel for this next bubble by cutting interest rates. I will not do a full shabby analysis of this situation here as I feel that is better suited for better versed individuals writing more profound blogs than this one. However, the key idea I am noting here is that the .com bubble did not so much burst as it got transferred into housing.

Present Day - The Bubble Flow of Energy
So this leads us to the present day where investors are seeking to unload profits, and pension plan/mutual funds planners are again seeking “safer investments” after recoiling from the most recent “burst” bubble. What asset can be safer than house? Apparently that answer is commodities. They are safer than MBS, and sky’s the limit on their new growth potential (this appears to be the currently accepted mantra in-spite of the Tulip Mania of 1636). I feel this is where much of our recent energy and commodity price spikes are coming from – especially in the case of oil (I think food prices have a host of interconnected causes in my mind which include the cost of oil as a driving factor as well as meat and ethanol consumption). Investors are now moving bubble assets into oil companies as well as the commodities themselves. The record price growth has very little to do with any hard numbers, and a lot to do with available monies (and of course the ever present fear of some sort of future shortages).

Prediction
So now that I have provided sufficient foreplay with the history of these bubbles and the concepts of timing and flowing bubbles here is my current prediction and dilemma. Oil prices will fall 60-70% to approximately $50 a barrel and average petrol prices will be approximately $2.00 a gallon in the U.S. I am basing this upon the fact that I feel the current ludicrous jump from $65 a barrel in 2007 to $140 a barrel is based upon this bubble flow described above. Furthermore I had said that $65 a barrel was high last year and have felt for the last 3 years that oil prices were too high. I still feel this is the case based upon the relatively unchanged fundamentals. I felt this exaggeration of price prior to the bubble flow was caused by fears of China and India’s continued double digit GDP growth powered on oil. I feel this fear is unwarranted as this growth rate is excessive and these economies will eventually overheat and lower their demand of oil. This is what I believe will account for the additional portion of the fall from $140 a barrel to sub $65.

However, this prediction is all fine and good if I am right but my issue again is timing. How will I be able to take advantage of this fall when I have limited resources and I have little to no idea on how long the bubble will last?

Flowing to the Next Bubble
My current thought is that if I am to make money I must embrace the concept of flowing bubbles and quit attempting to only predict the collapse of the current bubble. For example, instead of saying we should buy puts on Yahoo! I should have considered buying real estate to take advantage of the next bubble. Or instead of sitting in my apartment bitching, I should have bought shares of ExxonMobil. The benefit of playing the next bubble seems apparent: it is much cheaper to hold a long position in the next bubble for many years than it is to guess the timing of falls. However, predicting the next bubble is obviously much harder than seeing fundamental weakness in a current bubble.

In spite of this difficulty I am daring to venture a couple of guesses on where bubble money may flow next…and thus I am currently considering investing in:

Medical Device Industry – Healthcare in general seems to be a probable bubble movement as the healthcare industry starts enjoying major revenue boosts through the retiring of the baby boomers (who many of which are maintaining much of their healthcare benefits into retirement). The Medical Device sector of healthcare I think is especially interesting because it has many of the same fundamental benefits as the pharmaceutical industry (e.g. long patent life, separation of actual price from the copaying consumer, etc.) without the negativity of an easily internationally duplicated product and an increasingly hostile domestic government that the pharmaceutical industry has.

I have specifically considered buying an Exchange Traded Fund (ETF) that contains multiple medical device companies. I feel this would successfully limit the major risk in the medical device industry of lawsuits. These lawsuits generally come from consumers or other medical device companies for copyright infringement (in this latter scenario I would possibly own companies on both sides of the lawsuit). An ETF would obviously also as well as providing a general spread of other idiosyncratic risk. Specifically I have looked at purchasing trading symbol “IHI.”

Green Industry – This is actually the prediction of my wife, which I am stealing for here. She feels that the oil boom will lead more directly to green energy after the upcoming presidential elections. Government subsidies will start flowing to these industries as the government seeks to look proactive towards both higher fuel prices and climate change. This does seem like a good fit for the bubble flow and could be conceivably accessed through the use of one of the recently created green energy ETFs.

Conclusion
So I have gone on record with a couple of light predictions and have discussed my dilemma of timing and predicting “bubble bursts.” I hope you got through this all, and I will try to keep my future posts regarding predictions shorter and rely more heavily on providing responses to others’ questions of my logic.

The Pretentious Blogosphere

So, I finally made it to the blogosphere…

First Blogged Thought: it is lamely convenient that “blogosphere” is recognized by Microsoft Word, but Playstation is not.

I never have seen myself as a blogger, or even a reader of blogs, as blogs generally seems to me to fall into two categories:

1) timely, unverified information that is 95% useless,

2) pretentious ramblings about oneself

Mine may be no better, and as I have no cutting edge information I suppose this blog may lean towards the latter. However, I have been recently convinced that there is a third possibility for blogs, which is really my ultimate goal for writing: the use of blogs as a forum for tallying, sharing and analyzing thoughts amongst a small group. Thus this is my stab at the third way…hopefully it doesn’t end up next to my karate outfit and my guitar in the closet.

I want to begin by discussing this tally concept and my conceited belief in my propensity to successfully predict future events. My issue is that I have no record to prove my perceived accuracy one way or the other, so my selective memory is probably the reason why I feel I have a tendency to be right (see category 2 of blog writers above). Thus by "tally" I do not only mean a tally of thoughts, but also a track record of my random predictions so that I can better understand my accuracy.

I will talk more about some of these previous predictions and start the official scoreboard with some fresh predictions/ideas in my next post.