The Half Baked Lunatic

You normally don’t think of Kenya as being at the forefront of technical and financial innovation – but I was struck by this story I saw recently on CNN:

http://edition.cnn.com/video/#/video/world/2009/04/15/mckenzie.kenya.mobile.money.cnn

What started out as a way to transfer pre-paid cell phone credits to family and friends has turned into an entire micro-transaction commerce platform that is replacing banks in Kenya. And there’s no reason why it wouldn’t work elsewhere!

Think of it as PayPal for cell phones.  For example – you want to buy a magazine from a vendor on the street, but you don’t have change.  The vendor doesn’t take credit or debit cards. So you just enter their cell phone number, specify how much you want to transfer, tap in your security code, and hit send.  Just like sending a text message, but you’re sending cash.  The vendor’s phone beeps, notifying them More...

How’s that for a title to a blog post?  So what do you think ... does the pope believe in god?

Seriously.  The one thing we can be sure of is that the pope believes in power, influence, control, politics – and huge amounts of wealth.  And he gets all of those things by making sure that OTHERS believe that there is a god.

It’s a great system – the church has countless laborers all across the globe who have embraced a life of poverty, yet they spend their time recruiting new members and collecting donations for the church.  Sure, half of it gets used for local charity, and some (certainly not all) of these projects actually do some good, but a large percentage of the money goes all the way to the top. It’s the greatest scam ever invented! Way better than any other pyramid scheme – they’ve even managed to make it tax deductable!

I’m not saying the pope isn’t a smart guy.  It does take a certain degree of intelligence to More...

Like everyone else, I’m completely outraged by the whole AIG bonus issue. Bonuses should reward exceptional performance and positive results.  Where’s the accountability?

This has been hashed to death in the press, so I’m not going to go into all the reasons why it’s just rotten to the core.

But let’s back up a little bit and see how this fits in with the bigger picture of executive compensation.  This has been an issue for many years, well before the economic downturn. It’s a big thorn in the side of many shareholders of large companies.

Executive compensation needs to be tied not only to performance, but also to their own personal risk.  For example – a hired CEO brought in to More...

The year was 1996.  My wife had graduated from Medical School a few years earlier, and she was in her second year of residency at a large university medical center.

The time was about 1:45 in the morning. And we were Wrestling the Anaconda.

Ok, I need to back up a little bit.  My wife did her residency in Pathology.  She studied in both Anatomic and Clinical Pathology – but this particular year was strictly clinical work.  Although most people think that pathologists primarily perform autopsies (which is the “Anatomic” branch of the specialty), the majority of pathologists are actually on the “Clinical” side of the business.  Clinical pathologists run all the hospital lab functions – blood banks, specimen analysis, frozen sections, lab tests, etc.  During surgery for example, if a doctor is removing a cancerous cyst, they will send the specimen to the lab to have the margins checked.  The pathologist needs to analyze the lump, diagnose it while the patient is still under anesthesia, and make sure that the surgeon has cut into “clean” tissue all the way around.  If not, the surgeon needs to cut a little more.

Most of these specimens are pretty small – typically a few millimeters up to a few centimeters.  But not the Anaconda. That was More...

There is absolutely NO WAY that any kind of a mortgage bailout will be fair.  The people who would benefit from mortgage assistance are generally the ones least likely to deserve it.

Hardest hit are people who either bought a bigger house than they could really afford, and people who snagged one of those great “no money down” loans.  Are YOU willing to subsidize someone who is living in a luxurious home they shouldn’t have been able to afford in the first place?  Is that the kind of behavior that we are trying to encourage?

Absolutely not!

While I do have great sympathy for someone who is losing their home after 20 or 30 years, let’s look at the reality of who this might be:

Assume someone bought a house More...

USAloe, a company in California that I've been doing some consulting work for, is launching two new products this week:  AloeBoost (an energy drink) and AloeRest (a relaxation and sleep aid). Both are made with Aloe Vera juice and other healthy, all natural ingredients.

What's interesting is that these products are going into a network marketing channel instead of a traditional retail channel, and I think people are going to make pretty good money from it.

Now, over the years, I've had plenty of people pitch me on different network marketing companies. All of them have said pretty much the same thing: "I'm going to be retired in two years!"  I've checked back with a few of them, and none of them had the financial success that I've had.

The truth is, a lot of people HAVE made a very substantial income with network marketing (or multi-level marketing, or whatever you want to call it) but these people are More...

All the data we have at this point says that the universe that is just under 13 billion years old.  The universe exploded from a big bang and after a brief period of inflation, it has been expanding steadily at the speed of light. Although there are still some unanswered details, most cosmologists agree on these basic points. From here, however, there are numerous opinions and conflicting theories on the basic nature of the universe.

There are a few different mathematical models that show it’s possible that we can be living in an “open” universe which will continue to exponentially expand forever, a “flat” universe where the expansion will slow down and eventually stop at a certain size, or a “closed” universe that will reverse direction and eventually contract into a “big crunch” – presumably to explode again in another big bang (and with multiple series of “big bang/big crunch” cycles, we have an “oscillating universe”).  While all of these are mathematically feasible (and yes, I’m leaving out a few other good theories), the current data strongly suggests that we are in the “open” model, where the universe will continue to expand forever, until all the stars burn through their remaining fuel and all that’s left is ashes and space dust.

Of course, there are many unanswered questions – such as, More...

It sure is interesting living in Washington D.C.

I’m not talking about the inauguration yesterday, which was spectacular by the way – but in general, you just can’t get away from politics here.

The latest issue that’s getting my goat is this idiotic push to make Washington DC the 51st state.  The DC license plates proudly proclaim “Taxation without Representation” and there are posters all over the city pushing for DC statehood.

The underlying issue is the fact that DC has no representation in congress.  Some residents feel that More...

When people think about trading options, their first response is usually "too much risk". While it's true that options can be misused, they are often used to REDUCE risk by hedging other investments.  For example, buying a stock and selling a "covered call" is a substantially more conservative investment than just investing in the stock itself (less risk, but also potentially lower return).

And yes, I have learned the hard way what can happen if you lose your head.  After about ten years of successfully and profitably trading options, I entered into an overly aggressive position in 2006 that went south - and pretty much wiped out my entire gains of the previous ten years.  Lesson learned: stick to your strategy and stay within your limits!

But in general, even with that painful experience, I am still a firm believer that trading options is more prudent than buying stocks.

Admittedly, options are far more complicated.  More...

I've been doing a little research on historic real estate price trends.  I don't think that many people realize how much appreciation we really had in home prices from 1998 to 2006 - it was an amazing run! Even with the bottom dropping out of the market, we're still above the 30 year "average trend line":

But as history has shown, real estate prices are cyclical.  Just like the tech stock crash in 2001, the faster the run-up in prices, the further things fall.  Most people who've owned their homes for More...