Innovation = Unemployment

Tuesday, December 31, 2013 Francisco Carneiro 0 Comments

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We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come – namely, technological unemployment. This means unemployment due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.
John Maynard Keynes 1930

I just read the book Race Against the Machine, Brynjolfsson&McAfee (only 77 pages of easy reading) and they mention a story about the power of compounding . From the book:

The second concept relevant for understanding recent computing advances is closely related to Moore’s Law. It comes from an ancient story about math made relevant to the present age by the innovator and futurist Ray Kurzweil. In one version of the story, the inventor of the game of chess shows his creation to his country’s ruler. The emperor is so delighted by the game that he allows the inventor to name his own reward. The clever man asks for a quantity of rice to be determined as follows: one grain of rice is placed on the first square of the chessboard, two grains on the second, four on the third, and so on, with each square receiving twice as many grains as the previous.
The emperor agrees, thinking that this reward was too small. He eventually sees, however, that the constant doubling results in tremendously large numbers. The inventor winds up with 264 -1 grains of rice, or a pile bigger than Mount Everest. In some versions of the story the emperor is so displeased at being outsmarted that he beheads the inventor.

 In his 2000 book The Age of Spiritual Machines: When Computers Exceed Human Intelligence, Kurzweil notes that the pile of rice is not that exceptional on the first half of the chessboard:
After thirty-two squares, the emperor had given the inventor about 4 billion grains of rice. That’s a reasonable quantity—about one large field’s worth—and the emperor did start to take notice.
But the emperor could still remain an emperor. And the inventor could still retain his
head. It was as they headed into the second half of the chessboard that at least one of
them got into trouble.

 Well we might be getting on the second half of the chess board. I see the machines replacing man in almost all tasks with a big advantage. They don't strike, they don't get bored and they accumulate thousands of years of experience & knowledge. Man on the other hand takes 20 years of studying just to get up to date to what is already known of basic knowledge. I see machines doing much better medical diagnosis, etc...

what to do? invest in the machine factory and study programming

more on the same subject

http://thoughtmeme.blogspot.pt/2013/11/just-execution-unemployment.html




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How to be in Shape easy!

Friday, December 20, 2013 Francisco Carneiro 0 Comments

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Do Intervals (Small periods of intense effort once or twice a week)
Q: What is a healthy resting heart rate, and how can I get mine down?
A: The normal range is between 60 to 80 beats per minute (BPM). An athlete could be 40 to 60 BPM. Consult your doctor if your resting heart rate is consistently above 100 BPM. The best way to improve your resting heart rate is with exercise. Start off slow and work up to interval training, in which you run hard, then slow down, and repeat for a specified amount of time or repetitions, once or twice a week.


Intervals strengthen your heart, allowing it to recovery faster, so your heart rate drops safely after intense exercise and stays lower when you're at rest.



I am now at 52 BPM while typing this blog. This means i am not in perfect shape. Last year before race season starts i had a 44 BPM at rest.

The most interesting graph i have seen is one that compares someone that have a resting HR of 60 and on the days they do a peak intervals of 170 during 1 minute (3 x) after the workout is finished  the resting HR goes down to 55.

That is powerful ! Do it, get out of your normal effort zone once or twice a week. The results are amazing.
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My 5 top Pics from last month

Tuesday, December 17, 2013 Francisco Carneiro 0 Comments

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1.Subdue your appetites, my dears, and you've conquered human nature  

 Charles Dickens

 2.If you commit to nothing, you’re distracted by everything

 James Clear

 3.When you think everything is someone else's fault you will suffer a lot

 Dalai Lama

 4.When I was a young man, I wanted to be three things: I wanted to be the world’s greatest horseman, the world’s greatest economist, and the world’s greatest lover. Unfortunately I never became the world’s greatest horseman.

 Joseph A. Schumpeter

 5.It isn't what you have, or who you are, or where you are, or what you are doing that makes you happy or unhappy. It is what you think about

 Dale Carnegie

 One more,

6.The smart money always loses money shorting bubbles because they cannot comprehend that it could go as high as it does

 - Jim Rogers

I like them all but the Dalai Lama quote is very important. If you blame you will be miserable.





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This is not going to happen!

Tuesday, December 17, 2013 Francisco Carneiro 0 Comments

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http://www.zerohedge.com/news/2013-12-16/chart-day-what-generational-theft-looks


I don't think this is going to happen for the simple reason that people will move their business if they feel they are being robbed by the government. Of course Government can rob the middle class forever but the big Sharks will pay taxes somewhere else.

I see a future where government prints money and gives money to almost everybody. Net net the future generation is going to be a net receiver as the previous generations. The debt is going to go up steadily. There is not work for everybody and the State has got to support a big part of the population. Automation&Robotisation is killing thousand of jobs a day.

I have posted in the past about this 




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How not to beat Amazon

Monday, December 16, 2013 Francisco Carneiro 0 Comments

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In his first major presentation to analysts, Mr. Joly coolly analyzed Best Buy’s strengths and weaknesses — which included the perception that Best Buy was not the low-price leader. In one survey, only 23 percent of respondents thought Best Buy’s prices were “lower than others,” far behind Walmart (71 percent), Amazon (56 percent) and Target (38 percent). The result was that many shoppers were browsing in a Best Buy store, using their phones to compare prices and then ordering online from a competitor.
Like many ideas that seem brilliant in hindsight, “the strategy is very simple,” Mr. Joly said in 2012, soon after he took the job. “We believe that price-competitiveness is table stakes. The way we want to win is around the advice, convenience, service.”
By matching the lowest price and enhancing service, he was determined to make sure that a customer who came to Best Buy as a showroom had no reason to buy anywhere else.

Mr. Strasser attended a conference where Mr. Joly spoke. “It jumped out at me,” Mr. Strasser said, “that the most important thing they said was, ‘If we get someone in the store and they don’t buy, then shame on us. If we get them in the store, they’re going to buy.’ ” 


The idea is that Best Buy can match the price of Amazon and offer a better service so people go to the shops that are located at prime locations, get premium advice and pay low end prices as in Amazon. Is this going to fly? I don't think so.

First the advice i get from a seller on best buy is not independent. Second i don't believe all employees of Best Buy know a lot about the multitude of products. The advice i get from thousands of buyers/shoppers on the Amazon website is much more useful. I don't think Best Buy has a chance. Perhaps when people shop for jewelry or watches that you like to try eventually they will win over the Amazons.

The idea that you get the best advice from a sales rep than from thousand of previous buyers is a myth. Best Buy is a short to me. When i don't know but is a short and it will go to zero!

 How to beat Amazon? Perhaps if you cater for non experts (me) and you go to your customer home and you help the client to set up the device/TV/Video etc.... But in this case they have to charge a lot




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Small Wins

Monday, December 16, 2013 Francisco Carneiro 1 Comments

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On a blustery October day in 1987, a herd of prominent Wall Street investors and stock analysts gathered in the ballroom of a posh Manhattan hotel. They were there to meet the new CEO of the Aluminum Company of America -- or Alcoa, as it was known -- a corporation that, for nearly a century, had manufactured everything from the foil that wraps Hershey's Kisses and the metal in Coca Cola cans to the bolts that hold satellites together.
A few minutes before noon, the new chief executive, Paul O'Neill, took the stage. He looked dignified, solid, confident. Like a chief executive.
Then he opened his mouth.
"I want to talk to you about worker safety," he said. "Every year, numerous Alcoa workers are injured so badly that they miss a day of work.
"I intend to make Alcoa the safest company in America. I intend to go for zero injuries."
The audience was confused. Usually, new CEOs talked about profit margins, new markets and 'synergy' or 'co-opetition.' But O'Neill hadn't said anything about profits. He didn't mention any business buzzwords.
Eventually, someone raised a hand and asked about inventories in the aerospace division. Another asked about the company's capital ratios.
"I'm not certain you heard me," O'Neill said. "If you want to understand how Alcoa is doing, you need to look at our workplace safety figures." Profits, he said, didn't matter as much as safety.
The investors in the room almost stampeded out the doors when the presentation ended. One jogged to the lobby, found a pay phone, and called his 20 largest clients.
"I said, 'The board put a crazy hippie in charge and he's going to kill the company,'" that investor told me. "I ordered them to sell their stock immediately, before everyone else in the room started calling their clients and telling them the same thing.
"It was literally the worst piece of advice I gave in my entire career," he said.

Within a year of O'Neill's speech, Alcoa's profits would hit a record high. By the time O'Neill retired in 2000 to become Treasury Secretary, the company's annual net income was five times larger than before he arrived, and its market capitalization had risen by $27 billion. Someone who invested a million dollars in Alcoa on the day O'Neill was hired would have earned another million dollars in dividends while he headed the company, and the value of their stock would be five times bigger when he left.



The idea behind this book (i am not finished yet) is that if you change something in your life, one habit one process one routine it can have some powerful side effects. If people have small wins doing something that is not so important they might get use to win and start wining in more important stuff. Apparently Mayor Giuliani "broken window" theory of government is something like that. If you eradicate Graffiti there is a big fall in all criminality as a side effect. I guess the message is start somewhere and don't fail on that. 





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Korea has the most unhappy kids in the World

Wednesday, December 04, 2013 Francisco Carneiro 0 Comments

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It’s no secret that many Korean students are miserable, especially in high school, as  they prepare for the highly competitive College Scholastic Ability Test, which determines entry into college. (The most prestigious are the elite SKY schools: Seoul National, Korea, and Yonsei universities. Attendance at these schools confer large advantages on graduates once they hit the labor market.)
Compounding the stress are expectations from Korean parents, which are some of the highest in the world, according to the OECD. (From Quatrz)

http://qz.com/153380/korea-is-the-worlds-top-producer-of-unhappy-school-children/

Parents expect too much of their children in Korea, i see from the chart above that my country Portugal is also not well placed. What is the point of everybody to want their children to be a boss/Top of the pyramid? In a Company as well  a boat crew there is only 1 Captain, some officers and the rest are seaman Lot's of seaman. What is the point of putting all the children to study to be a Captain? There are only so many places for Captain post. What would happen to the thousand of children that have a captain degree but can only be a seaman? Our society is designed for disappointment.




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Why do PMI's matter?

Tuesday, December 03, 2013 Francisco Carneiro 0 Comments

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http://blog.yardeni.com/2013/12/manufacturing-boom-excerpt.html


Well it looks like US equity market is expensive but revenues are going to grow a bit (PMI's up = Rev up) However if top line (Revenues) & the economy recover it's possible that the FED trims a bit of QE! What to do?

Since we are in the good period for the market i think it's fair to stay the course until the FED moves. When he does move all the bet's are off.
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Greatness is not cheap

Tuesday, December 03, 2013 Francisco Carneiro 0 Comments

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A great business at a fair price is superior to a fair business at a great price.

 Charlie Munger
PS This is very true, it's easier to make money buying something expensive that turns even more expensive than to buy something cheap that recovers. Unfortunately Unique has a price. This is a general rule that has exceptions, but i believe is a good general rule.

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Don't visit the doctor

Monday, December 02, 2013 Francisco Carneiro 0 Comments

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oecd3


If you take a look at this graph & the previous post about life expectancy it looks like you don't live longer if you go very often to the doctor. I try hard not to go. I see in this graph that the average of most countries is between 5 and 8 visits per year. This year i had to do a check up but that was it. I hope to stay like this.
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Money can buy some years of life but after the basic needs are ......

Monday, December 02, 2013 Francisco Carneiro 0 Comments

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It looks like after some basic needs are met you can not extend life expectancy by spending more money. The US looks like a waste of money.




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Europe in Deflation!

Monday, December 02, 2013 Francisco Carneiro 0 Comments

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1.OECD's chief economist, Pier Carlo Padoan, said that the Eurozone deflationary risks "may be slowly increasing" and "the ECB must be very careful and be prepared to use even non-conventional measures to beat any risk of deflation becoming permanent.

2.Europe is very weak. ECB is Contemplating a a new LTRO- with a twist. 



Nothing new here, as i have mentioned in several posts in the past the problem with the world is excess capacity/overproduction. When that is the case we have deflation, people try to lure customers with the lower price. The only companies that can do well in this environment are?

1.Brands
2.Companies that help to cut costs (Automation & Robotisation)
3.Monopolies

What to do? Invest your money in the Robot factory or in the Bigger get Bigger theme.

 See this link about the same subject

http://thoughtmeme.blogspot.pt/2013/11/brands-monopolies.html
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