After months, even years, of avoidance and threats, last week I joined the world of Facebook. I consider this to be the third leg of the social media trifecta: Blog, Twitter, and Facebook. (Yes, I'm on LinkedIn as well, but there's no practical social element to that, that's all business.)
On balance, this is a good thing. Facebook has become a primary means of communication for a lot of people, so if you want to deliver a message, you'd better include that in your communication toolbox.
Unfortunately, social media complicates your life before it simpifies it. For one, there's going to be a learning curve. For two, I need to figure out the most efficient and effective use for it, both personally and professionally. For three, I need to decide whom I want to see it, and whom I don't, if anyone.
Near term, one thing I'll use it for is to point people to this blog. I got as many Facebook friends in one day as I have Twitter follows. Goes to show you, adults are using Facebook, but not Twitter. (I've thought for a long time that that's kind of strange, since Twitter is so much easier to use.)
Would you like to be my Facebook friend?
Friday, September 30, 2011
Thursday, September 22, 2011
Seeing Patterns Where None Exist
Although some very bright people may try to convince you otherwise, the investment marketplace follows no predictable patterns. If it did, the so-called experts would tell you exactly what and when to buy and sell, and you’d never have to worry about money again.
To better illustrate the difficulty of predicting market moves, let’s take a closer look at typical investor logic, using the parallels between gamblers and investors who try to time the market. Like many investors, gamblers tend to rely on hunches and perceived patterns to determine their next move.
For example, a person flipping a coin who gets ‘heads’ five times in a row might believe there is an increased probability that the coin would land on ‘tails’ with the next toss. Others may think that ‘heads’ is on a hot streak and believe it is more likely for that to continue. But in fact, the odds of the next toss being ‘heads’ or ‘tails’ is 50/50 – no different than for any coin flip.
Investors tend to take similar approaches to the stock market. Rather than setting a strategy, they are often gambling on a certain streak, typically one they believe is going to continue. For example, in the early 1990s, investors bought billions of dollars in vastly overpriced dot-com stocks, simply betting those stocks would continue to move dramatically higher. Ultimately, that market crashed and investors holding those stocks were saddled with significant losses.
More recently, the real estate market seemed to be on an endless upward cycle; people bought property, and counted on the value endlessly climbing. But in the past few years, that myth was exposed, and the real estate market tumbled along with economy as a whole.
The lesson here for investors is to realize that we have a human tendency is to see patterns where none exist, and to ignore those perceived investing patterns. With this awareness, one can increase the probability of investing success by avoiding the guesswork of active management, and establishing a very low-cost and diversified portfolio that can perform well in many different types of markets.
To better illustrate the difficulty of predicting market moves, let’s take a closer look at typical investor logic, using the parallels between gamblers and investors who try to time the market. Like many investors, gamblers tend to rely on hunches and perceived patterns to determine their next move.
For example, a person flipping a coin who gets ‘heads’ five times in a row might believe there is an increased probability that the coin would land on ‘tails’ with the next toss. Others may think that ‘heads’ is on a hot streak and believe it is more likely for that to continue. But in fact, the odds of the next toss being ‘heads’ or ‘tails’ is 50/50 – no different than for any coin flip.
Investors tend to take similar approaches to the stock market. Rather than setting a strategy, they are often gambling on a certain streak, typically one they believe is going to continue. For example, in the early 1990s, investors bought billions of dollars in vastly overpriced dot-com stocks, simply betting those stocks would continue to move dramatically higher. Ultimately, that market crashed and investors holding those stocks were saddled with significant losses.
More recently, the real estate market seemed to be on an endless upward cycle; people bought property, and counted on the value endlessly climbing. But in the past few years, that myth was exposed, and the real estate market tumbled along with economy as a whole.
The lesson here for investors is to realize that we have a human tendency is to see patterns where none exist, and to ignore those perceived investing patterns. With this awareness, one can increase the probability of investing success by avoiding the guesswork of active management, and establishing a very low-cost and diversified portfolio that can perform well in many different types of markets.
Friday, September 16, 2011
Squawkeye Nation
Growing up in NW Iowa, I was a football fan of both of Iowa's large universities, Iowa State University and the University of Iowa. In the 70s they both pretty much sucked at it, although ISU was slightly better. Since the 80s, however, Iowa has become a nationally successful program while ISU has languished.
Maybe it's because I moved closer to Ames, or maybe it's my contrarian side, but during this time I found myself becoming a bit more of an ISU fan. I'm still glad for Iowa's football success and all of the attention it has brought to the state, but that success has brought with it a fan base that is not always appealing.
Iowa football fans weren't always like this. Fans sportingly appreciated the success they had in the 80s, after being dismal for so long. Unfortunately, over the years that appreciation has largely become an overconfidence, even an arrogance, that their football team is better than they are.
This overconfidence manifests itself every year during the ISU-Iowa football game. Iowa dominated this series until about 10 years ago, and since then the teams have generally traded victories. But you wouldn't know that from listening to most Iowa fans.
Case in point was this year's game, which I attended and which ISU won in 3 overtimes. Iowa fans were absolutely shocked at losing - it never crossed the minds of many of their faithful that losing was even a remote possibility. Worse still was not accepting that they were outplayed in the game. (One major exception to this was Head Coach Kirk Ferentz, a class act who said right after the game that ISU deserved to win.)
This Iowa football fan reaction is one I've see far too often with their football fans over the past 2 decades. They're like the bully who gets beat up and goes home crying, and it has made it easy to decide whom I'll root for when the Hawkeyes play the Cyclones.
C'mon now, Iowa football fans. Win with grace, but lose with dignity.
Maybe it's because I moved closer to Ames, or maybe it's my contrarian side, but during this time I found myself becoming a bit more of an ISU fan. I'm still glad for Iowa's football success and all of the attention it has brought to the state, but that success has brought with it a fan base that is not always appealing.
Iowa football fans weren't always like this. Fans sportingly appreciated the success they had in the 80s, after being dismal for so long. Unfortunately, over the years that appreciation has largely become an overconfidence, even an arrogance, that their football team is better than they are.
This overconfidence manifests itself every year during the ISU-Iowa football game. Iowa dominated this series until about 10 years ago, and since then the teams have generally traded victories. But you wouldn't know that from listening to most Iowa fans.
Case in point was this year's game, which I attended and which ISU won in 3 overtimes. Iowa fans were absolutely shocked at losing - it never crossed the minds of many of their faithful that losing was even a remote possibility. Worse still was not accepting that they were outplayed in the game. (One major exception to this was Head Coach Kirk Ferentz, a class act who said right after the game that ISU deserved to win.)
This Iowa football fan reaction is one I've see far too often with their football fans over the past 2 decades. They're like the bully who gets beat up and goes home crying, and it has made it easy to decide whom I'll root for when the Hawkeyes play the Cyclones.
C'mon now, Iowa football fans. Win with grace, but lose with dignity.
Saturday, September 10, 2011
9/11/2001
I remember exactly where I was and what I was doing ten years ago on 9/11/2001.
I was sitting in a Boston hotel room waiting to leave for the second day of a conference I was attending. I was watching the Today show on NBC (live on the east coast) when I saw the report of a plane hitting a World Trade Center tower. Obviously something bad had happened, but it sounded at the time like it might be a small single engine plane, and who knew maybe the pilot had a heart attack or something.
After a while I turned over to watch CNBC. They were also showing the smoke coming from the first tower when you saw the explosion in the second tower, and shortly after that, the replay that made it clear it was intentional, an attack was happening. I forgot about the conference, and stayed in the room to watch. The frantic reports were rolling in about the Pentagon, then other planes perhaps going down. I even recall a report about a fire on the National Mall that turned out not to be true.
The rest of the day was just weird, mostly spent trying to figure out what happened, and how I was going to get back to Iowa. Since I was stranded in a highrise hotel in a major city from which most employees had been sent home, I doubted if I'd even be able to find something to eat. In the end, the hotel had food, and let me stay for as long as I needed. The conference had been abandoned, but it still took me two days, until Thursday morning, to find a one-way rental car and make the 20+ hour drive home.
One of the things I remember most about that day was the local news coverage that evening. One of the hijacked planes used in the attacks had taken off from Boston's Logan Airport, where I'd been just a couple of days before. A lot of local New England people had been on that plane, so it was very sad there, a much smaller version of New York City. It certainly made what happened seem more personal, and less like an international story.
I was sitting in a Boston hotel room waiting to leave for the second day of a conference I was attending. I was watching the Today show on NBC (live on the east coast) when I saw the report of a plane hitting a World Trade Center tower. Obviously something bad had happened, but it sounded at the time like it might be a small single engine plane, and who knew maybe the pilot had a heart attack or something.
After a while I turned over to watch CNBC. They were also showing the smoke coming from the first tower when you saw the explosion in the second tower, and shortly after that, the replay that made it clear it was intentional, an attack was happening. I forgot about the conference, and stayed in the room to watch. The frantic reports were rolling in about the Pentagon, then other planes perhaps going down. I even recall a report about a fire on the National Mall that turned out not to be true.
The rest of the day was just weird, mostly spent trying to figure out what happened, and how I was going to get back to Iowa. Since I was stranded in a highrise hotel in a major city from which most employees had been sent home, I doubted if I'd even be able to find something to eat. In the end, the hotel had food, and let me stay for as long as I needed. The conference had been abandoned, but it still took me two days, until Thursday morning, to find a one-way rental car and make the 20+ hour drive home.
One of the things I remember most about that day was the local news coverage that evening. One of the hijacked planes used in the attacks had taken off from Boston's Logan Airport, where I'd been just a couple of days before. A lot of local New England people had been on that plane, so it was very sad there, a much smaller version of New York City. It certainly made what happened seem more personal, and less like an international story.
Saturday, September 3, 2011
Tolerating Intolerance
In the past week, I've had a front row seat to witness what I consider to be two separate acts of religious intolerance. It isn't the religious intolerance one might think of though. Someone isn't putting down a religion - a religion is putting someone down.
Incident 1 - a pastor at a conservative church is requiring all employees to sign a document to agree to abide by a certain Christian lifestyles. In other words, he is telling some existing (and all potential) employees they are no longer good enough to work there simply based on how they live their life away from work. This type of discrimination may be quite legal for a religious organization, but it's also quite intolerant, not to mention unenforcable.
Incident 2 - a Catholic diocesan pastor vetoed a distinguished alumni award that a school was going to give to a well-regarded community volunteer. The reason - for a short time some years ago, she was on the board of Planned Parenthood. In other words, he is telling her (and everyone else) that all good deeds are usurped by helping an organization he and the church oppose. Again, this type of discrimination may be quite acceptable for a religious organization, but it's also quite intolerant, not to mention stupid.
What do these incidents have in common? That religious 'leaders' preach tolerance, but act differently. They actually only tolerate those who agree with them. In both cases, this is not the first time the pastor in question has said or done controversial things that are far more politically based than faith-based. They are, in a word, hypocrites.
It sounds ironic, but I actually think the world would be a better place if people followed certain so-called Christian principles - if those principles are broadly defined. Things like loving your neighbor as yourself, doing unto others as they have done to you, and showing compassion to those less fortunate. What these pastors are doing, however, doesn't jibe with any of those. They demand that people rigidly adhere to their specific, often politically-motivated agendas. (By the way, Christianity doesn't own those broadly based principles.)
Basically, their religion screws up their faith. It makes them tolerate intolerance. It makes atheists look good.
Incident 1 - a pastor at a conservative church is requiring all employees to sign a document to agree to abide by a certain Christian lifestyles. In other words, he is telling some existing (and all potential) employees they are no longer good enough to work there simply based on how they live their life away from work. This type of discrimination may be quite legal for a religious organization, but it's also quite intolerant, not to mention unenforcable.
Incident 2 - a Catholic diocesan pastor vetoed a distinguished alumni award that a school was going to give to a well-regarded community volunteer. The reason - for a short time some years ago, she was on the board of Planned Parenthood. In other words, he is telling her (and everyone else) that all good deeds are usurped by helping an organization he and the church oppose. Again, this type of discrimination may be quite acceptable for a religious organization, but it's also quite intolerant, not to mention stupid.
What do these incidents have in common? That religious 'leaders' preach tolerance, but act differently. They actually only tolerate those who agree with them. In both cases, this is not the first time the pastor in question has said or done controversial things that are far more politically based than faith-based. They are, in a word, hypocrites.
It sounds ironic, but I actually think the world would be a better place if people followed certain so-called Christian principles - if those principles are broadly defined. Things like loving your neighbor as yourself, doing unto others as they have done to you, and showing compassion to those less fortunate. What these pastors are doing, however, doesn't jibe with any of those. They demand that people rigidly adhere to their specific, often politically-motivated agendas. (By the way, Christianity doesn't own those broadly based principles.)
Basically, their religion screws up their faith. It makes them tolerate intolerance. It makes atheists look good.
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