Posts Tagged ‘Thoughts’

Creativity: The Organization of Randomness (plus a prize!)


Imagination is greater than Knowledge Albert Einstein

Creativity is a funny thing. It isn’t thinking, yet its highly intuitive. And it isn’t always rational, yet it solves the toughest problems. When we think of someone as “brilliant,” we rarely refer to IQ points (after 120 it really doesn’t seem to matter).  We are referring to someone who toys with ideas, plays with their assumptions, and can see beyond the obvious.

While it is possible to induce the “creative flow” (as done in brainstorming sessions), there are moments when the most wild and random thoughts just come to you. This often happens when the mind is in a total state of relaxation.

This explains why many great ideas come to us in the shower, or at a time when we are away from our work. Many a genius has been known to have their greatest ideas while on vacation.

Every child is an artist. The problem is how to remain an artist once he grows up Pablo Picasso

Regardless of how the “messages” come, the key to successful conserving your ideas is to immediately jot down your notes on paper, however random and muddled they may seem, (so long as they are legible).

Later on, you can sort it all out, “think” them over and organize them appropriately.

After The Storm

The best way is to sort these ideas into categories:

a) The Bank: These are the hot ideas. The ones that get you excited and are able to be out into action immediately.

b) The Library: These ideas require further research. They are long-range thoughts that may be applicable, but just not at the present time.

c) The Museum: No idea should ever be thrown away. Even seemingly random, irrelevant thoughts are good to archive in order to look over when you’re in need of inducing the creative flow.

Of course, the master brainstormer will be constantly reviewing and reorganizing his or her notes to seek a new edge, a new point of view, so that everything is in order when the next innovative wave arrives!

Big ideas… are little ideas that no one killed too soon Seth Godin

The Prize!

Click HERE to Download our Free Special Edition e-book “How To Change The World

A Few Thoughts…

It’s been some time and I’m in Australia. Needless to say, I haven’t been thoroughly following the markets. Notice I use the word thoroughly. See, that’s one of the beauties of being a long term investor. You can sleep at night and enjoy your days without a worry in the world where your next internet hub may be or what the time difference between markets are.

So here are some of the things that I’ve been pondering recently

It’s not about the money! The best things in life can’t be bought with a Mastercard. It can get you to the time and place that may be most enjoyed with those people you enjoy most, but it does s**t for providing happiness! Go learn how to play a new instrument! Learn a foreign language! Travel to a place you never thought you’d ever go! Offer someone something without anything expected in return! Do something crazy without thinking at all what someone else may think of you! (a shot of some Tequila may be necessary for the latter ). Happiness is something that you express, not something you acquire.

Become an investor! Many people associate the word with financial gain, but I feel that it’s much more than that. Invest in a future, in your family, in your friends, in a meaningful life. The real entrepreneur is one who not only sees his initiative as a personal gain but also a global gain as well!

You are who you are and nobody is like you. (Even though they say that in China if you’re one-in-a-million there are 1,000 people just like you!). In short: Be different! It’s what investors do best!

Why this slowdown will probably be worse than all other recessions: In terms of severity it would seem that from an historical perspective people have no clue what they’re in for. Let’s go back in time. 2000: sure people remember it but no one truly believed it would happen. For stocks to lose 99.9% of their values? For the largest energy company to go completely bankrupt? 1991: The last real real estate downturn. 1987: People confused “bull” with “bubble” and missed the best opportunity in years. 1982: high interest rates nearly shut down commerce. 1973: businesses took the hardest hit since the depression. Now consider that all those factors may come into play over the next 10 years.

This business cycle is unprecedented. It won’t be the 70s, or the Japanese 80s, or the 30s or even Zimbabwean hyperinflation. It will be something entirely new. It will be mostly demographic: Those who own and those who owe. The highest price inflation is possible due to incredible demand, and an equally incredible shortage of supply. Likewise, a much weaker economy is possible due to excessive speculation and promissory mindset by the “splurgers”, and equally excessive speculation and interests by the “frugal”. Nevertheless, the world will learn another lesson (and have another fiasco-name to add to the history books) and the world will once again emerge greater and wealthier than it was prior.

Some analysts say that the silver shorts are naked, some say they are hedged. However, it seems plausible to even the most conservative of long term thinkers that higher monetary prices (calculated by basis or otherwise) of commodities is in order (notice how the Dollar rally has stalled, oil is at new highs and the DBA has bounced back).

It also seems that all agree that interest rates are bound to rise sooner than later. Now although this will slow the economy it is the last resort of the Fed to prevent hyperinflation. It will not necessarily support the Dollar under the circumstance. The Dollar has become subject to far more than monetary policy. It is now a paper promise, traded like any other liability, and a sudden lack in its ability to fulfill those promises may prove detrimental.

Higher rates are better for precious metals, as they have always been in the past. During monetary expansion (as was the past few months) investors find opportunities in a random list of alternatives. Yet when credit contracts the real credit crunch begins and few investors are safe from that (except for hoarders of real value: physical goods).

Oil surged from $122 to $139 last week. This was a simple result of no sellers. This may become prevalent in markets as there may soon be no buyers. Many analysts are expecting increased volatility over the coming months. How many are hedge for a full on crash? Not probable, but definitely possible, and that’s the only thing the prudent speculator cares for.

I had a laugh early yesterday morning when a friend of mine (who happens to think I’m way to involved in markets, which is interesting now that I’ve really toned it down), asks me, “Coffee?”. So with a smirk across my face and without missing a beat I reply “Buying or Selling?”.

Good times!

Sentimental Thoughts

Ever wonder as to if technical analysis actually works? Last week Lehman Brothers said “Models (ours including) are behaving in the opposite way we would predict and have seen and tested for over very long time periods.” Wonder no longer.

Perception is reality on Wall Street, and that perception is changing awfully fast.

The Yen/AUD Carry Trade is now in full reversal.

Why Smart People Aren’t Rich

“I am more intelligent than most people. I have proved that throughout my life. I can now use my knowledge and intelligence in the stock market to gain an advantage over all those other idiots out there who think they know what they are doing, but don’t.”

Then everything goes to hell.

Moral: Everyone has emotions. It’s not about how smart you are, but how good you are at controlling emotions.

The “Short-Term”

Many hedge funds are said to be barring investors from taking their money out (as a matter of fact today was the deadline for requesting withdrawal for end of the quarter).

One analyst writes

Everyone seems to be caught up in the fear this decline has generated that they’ve forgotten that despite the 8% dip, the market had risen 14% off the March low. Before that the market had rallied 20% off the June 2006 low, only to correct 7% in March this year. Before that the market rallied 14% off the October ’05 low only to correct 8% into June ’06. You can see that these are just normal, healthy pullbacks in an ongoing bull market. Most investors get too caught up in the short-term market noise and in doing so they miss the big picture (where the real money is always made).

So, the market rallied off of March 2007, June 2006 and October 2005 lows. I really am dying to know where this guy was in 2000.

Sentimental Thoughts

So while Goldman Sachs’ Alpha Fund is down 30%, those of us left holding gold and silver are actually up 7% for the year. Time to be grateful?

Is it just down right mean to be asking “Capital One, What’s in your wallet?”

Many are scared and are therefore convinced that we are ready to climb a wall of worry. I think they are right and there will be a wall of worry – a short one. But right after it there’s a cliff.

China retracted statements regarding its dollar diversification. Funny, I could have sworn I saw this exact thing occur just a few months ago.

Do you have a list of stocks to buy in the event we have a strong one day crash? I’m sure Buffett does.

Sentimental Thoughts

Bank of Japan Boosts Funds in System to Ease Credit” reports Bloomberg. So Central Banks are pumping the system with excess cash. But let’s consider this for a moment. If you lost money yesterday, you’ll get it back today. But if you have money today… it will be worthless tomorrow. Now for some reason that doesn’t sound fair.

Gold selling of hard after many traders used reserves to cover margin calls. It is interesting to consider how many traders even own gold. Eventually, the market will sell off lower while the gold has gone.

I find it quite interesting that every stock market on the planet sold off at least 2% today, except for Sweden which rose 2%. Something we don’t know about?

Some brilliant words written by Damian Reece for The Telegraph,

“Confidence is like oxygen. It is colourless, odourless and tasteless. You really appreciate its importance only when it’s not there.

Business is all about confidence. When it’s there in abundance economies grow, wealth is created and employment expands.

When confidence dissipates so does growth, economies go into reverse and people lose their jobs. We are witnessing the start of that second phase as confidence starts to leak out of markets, hissing out of the widening cracks in the financial system and into the ether.”

Have a great weekend!


Sentimental Thoughts…

When IBD says that the Rally may be over, how many of its 200,000 subscribers are actually cashing out?

Reasons for a sharp-150-point rally on Wednesday: First day of the month buying, short covering, trading errors, technical indicators. Reasons for the same thing Thursday anybody?

Jason Hummel predicts $8000 silver in the next 15 years. But wouldn’t industrial buying slack off as the price evaluates the differential between demand to supply?

Stocks tallied back and forth for months before the Crash of 1929 after completing their highs. What makes this time different?

The so-smarts don’t seem all that smart anymore.

Friday Funnies

From Fark: Bally Total Fitness files Chapter 11 bankruptcy. In related news, McDonald’s posted record profits this quarter

“Reality is a crutch for people who can’t cope with drugs”

Lily Tomlin

I had a great laugh today when I read a BS chart telling me that stocks were overvalued in 1982! I’ll tear that apart for you on Sunday.

Sentimental Thoughts…

You mean you could miss a margin call?

I’m beginning to believe that the definition of a “Crash” is when all BS technical analysis becomes worthless.

Is this a rally or a dead cat bounce? I’m looking for any reasons to buy and I don’t see any.

Today would have been a great day for a “short-minded” Day Trader.

Did anyone notice how the Volume on the NYSE reached 4.2 Billion?

Everything was back to normal this morning as the standard investor was bullish on stocks and bearish/neutral on gold… What? 100 points?? WTF?

If you think choosing the right investment strategy is tough how about religion?

“We don’t invest in assets or strategies. We invest in a plan”. Robert Kiyosaki