Images for A Solemn Song

I really like the simplicity of this song and decided it needed some imagery to go along with it. It makes me think of the life cycle of a bird, so simple and innocent yet beautiful.

Writing Revolution- Best thing since movable type?

   

I'd consider myself book lover (bibliophile.) I don't just mean I love reading, or the information that I get from books, but I've had enough memorable experiences with paper and print that I am emotionally attached to books. I enjoy the experience of reading imagining the ideas and places presented in the text. I also dig bookish people, librarians and the culture that has grown around books and I know I'm not the only one. It's natural for us as individuals and collectively to be sentimental about our paper past. Still, I recognize it is an emotional attachment and if there really is a better way to store and convey information than we probably should and will adopt it. We might develop a relationship with that new medium as well. Around the time of Gutenberg people probably feared the vast implications of that new form. They might have thought that printed letters were so inhuman as compared to the calligraphy and beauty that was in the hand written word. Or authorities considered the lowered the quality of information because it wasn't personally checked by a monk scribe. I think we can all look back though and see that improvement, or invention or innovation or whatever you call it and acknowledge that it has largely helped and continues to benefit humanity. In fact, on the top of my list of things that make me optimistic for the future of humanity I would definitely put the increasing literacy* and availability of literature as one of the top, maybe number 1.
 

Since then, printing technology has continued to improve but not until recently has there been another complete overhaul. First, personal computers re-thought desks and may have helped us at work but they still didn't quite replace the book. (I think its interesting that Steve Jobs who was influential in the death of written material appreciated very much fonts, typeface and feel of letters, its almost as if he, the father of the revolution, wanted to preserve a vestige of a culture he was about to lay waste to, but was I'll post about him later.) Then came the kindle. Now we have these book-like tablets that can hold loads of books and don't waste paper or have to buy a new editions each time there are changes or edits. The pros and cons are many and the debate continues where ever people consider buying a tablet.
In the end, you can debate it all you want, but price tends to be one of the best guides of how practical things are. If I can get the same book more cheaply and quickly on a tablet, eventually the shift will happen, though as yet print has proven resilient. Another salient advantages of a tablet is as a space saver, so where space is at a premium like in a small apartment, in the city or trudging through the desert sand, sweatily lugging around a bunch of books, a tablet should win. The fall out of of the subsequent shift to digital has already been substantial: small or weakly managed newspaper, magazine and book companies have been gone out of business and many jobs lost(1), although some larger well capitalized companies with forward thinking management have successfully transitioned to online and e-books. But the floodgates are now open and I don't think the digital wave will relent.

    We can guess that the next in line are slower moving institutions like schools and I still wonder what will become of libraries if books become obsolete? One version of a book-less library attempt is already underway in San Antonio Texas. (4)
In schools, billions of dollars and more importantly, children's minds are at stake on when an how tablets will relate to  textbooks. With the promise of didactic games and easy monitoring of students activity, convincing academia is all too easy. Teachers agree, it makes and sense so why hasn't it happened yet?  Well, while there may be a huge potential future in filling schools with tablets, who exactly will stake a claim in this wide open territory is currently in serious contest. Doing it right is what really matters and real improvements don't usually happen the way we expect them to. Trying to get something as complex as a computer that is as intuitive and durable, in short, re-inventing the textbook, is not exactly child's play. In LA they've tried just throwing full size i-pads at kids with mixed results.(2)  Remember, we're dealing with kids, probably one the most un-predictable force in the universe.  In Bridge, the for-profit, mass-education enterprise in Africa, they use tablets in class in a different way, to give the curriculum solely to the teacher. Personally, I'm kind betting on Amplify as a major player in the US. They are probably most aggressively pursuing and trying to profit from tablets in schools though with no major success yet.(3) So yes, tablets may largely replace books in schools, but we can expect some failures and wasted government and corporate resources before someone gets it right. I'm sure though, with the right incentive and vision some very smart, motivated and focused people could get it done, but when those elements will combine nobody knows for certain. My own relationship with a tablet has come a long way, I started out neglectful but have since found myself using it on occasion, still its not anywhere close to books yet.
*http://en.wikipedia.org/wiki/File:Literacy_rate_world.svg
**Other episodes http://vimeo.com/11891919 , http://vimeo.com/11891958 , http://vimeo.com/11891958# ,
http://vimeo.com/11892454, http://vimeo.com/11892516 also interesting http://darwinslibrary.com/
1) http://newsosaur.blogspot.com/2012/04/four-ways-newspapers-are-failing-at.html
2) http://www.latimes.com/business/hiltzik/la-fi-mh-ipad-adventure-20131120,0,942881.story#axzz2n3JmPH8H http://www.macworld.com/article/2065460/ipads-in-schools-the-right-way-to-do-it.html http://www.npr.org/blogs/alltechconsidered/2013/10/25/240731070/a-schools-ipad-initiative-brings-optimism-and-skepticism
3) http://mashable.com/2013/08/29/news-corp-education-tablets/
http://www.geekwire.com/2013/tech-tablets-schools-mix/
http://slashdot.org/story/13/10/08/1952215/nc-school-district-recalls-its-amplify-tablets-after-10-break-in-under-a-month
4)http://www.latimes.com/books/jacketcopy/la-et-jc-nations-first-bookless-public-library-system-opens-20140107,0,7098801.story#axzz2pmce0gj5

Refracting Sunset

 

Refracting Sunset 

Acrylic

This one is more of concept art I guess. I was thinking of an image that explores the nature of light, not so much what it illuminates, but the light itself.  A continuous wave that bounces around until it gets absorbed or some of the wavelengths are absorbed  producing color and shade by shade eventually darkening. This is what turned out. Kind of looks like a cubist sunset, a stain-glass or  as Ross says "diamond sunset." It'll probably end up on the wall at Sun Terrace.  I might at some point to do another variation maybe using neon colors or making it more symmetrical or using a computer.

The Thoughtful Investor- The Intelligent Investor for the Modern Mind

  Benjamin Graham's modern equivalent is this guy: Seth Klarman. Some may think that Warren Buffet is living out Graham's principles, but more than anyone Klarman really mirrors Graham's thinking.* Like Graham, Klarman grew up Jewish and on the East Coast. They both did well in school and had plenty of opportunities in academia but decided to take to money management instead. Like Graham, Klarman's greatest claim to fame was a book he published: Margin of Safety- Risk Averse Strategies for the Thoughtful Investor bleck! what an unappealing mouthful of a name! I'll just call it the Thoughtful Investor.
     The weird thing about the Thoughtful Investor is that the book itself is kind of an object lesson in investing. If you look on Amazon right now its selling for about $2000 used! As happens with many stocks this thing is way over-valued and if you are a real value investor you wouldn't think of paying that much for a silly book. I think this also is telling of the kind of ridiculous thinking that goes on among the types of people have their head in finance.  People in these circles produce the outrageous thinking that paying that kind of money for something so simple could actually be worth it! If you want to read the book and are a normal human being that doesn't throw around $2000, just look for it online, there are PDF's of the text floating around out there or e-mail me and I'll send you a copy.
        So what does Klarman talk about that is so valuable? Really, its mostly a modern, version of The Intelligent Investor. The language is more polished, and the approaches are more up to date, but the principles are much the same.  Where Graham used Price/ Earning, Book Value and Dividends, Klarman uses Net Present Value, Liquidation Value and Stock market Value to gauge price. He defines Net Present Value as the discounted value of all future free cash flows a business is expected to generate. Klarman also mentions private market value as a rule of thumb which I completely agree with, to give an idea of a businesses value when the market's going nuts. One useful resource I've found for private company info http://www.privco.com/  Klarman also brought to my attention spin-offs as a re-occurring source of investing opportunities.
     Even though Klarman isn't as original as Graham, he makes some great points and brings a modern intellect to Grahams principles. He has greatly added to the value investing cannon by writing and  practicing value investing and is definitely a heavy hitter in the world of finance.

Klarman's Fund https://www.baupost.com/

*One difference I see between Buffet and Klarman is their holding time. Klarman thinks its necessary to "continually compare their current holdings in order to ensure they own only the most undervalued opportunities available." Buffet says "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever." I think Buffet is a less likely to sell just because he sees something better out there, while Klarman might try a little too hard to demand the best bargain as did Graham.
     Klarman also says: "Few value investors own technology companies, banks or insurance companies because they have un-analyzable assets and liabilities." If he sticks to this, it would be a huge difference between him and Buffet, Buffet obviously has no problem investing in banks like Wells Fargo and his first and most successful investments were GEICO and Illinois National Bank and Trust.  
     And finally, Klarman also demands hard assets to provide safety while Buffet is more comfortable with a strong moat whether its tangible or not.

Other quotes that I found interesting, useful or just plain liked in his book:

 "Value, like beauty is often in the eye of the beholder."

Once you adopt a value-investment strategy, any other investment behavior starts to seem like gambling.

Some people act responsibly and deliberately most of the time but go berserk when investing money. It may take months or years of work and discipline to earn the money and only a few minutes to invest it. Some spend more time buying a stereo or camera than buying stocks. Many regard the stock market as a way to make money without working rather than a way to invest capital in order to earn a decent return.

Greedy short-term-oriented investors may lose sight of a sound mathematical reason for avoiding loss. It is very difficult to recover from even on large, loss, which could literally destroy all at once the beneficial effects of many years of investment success.  

Downfalls For Institutional Investors: Size, Self Imposed Constraints and Willful Ignorance of Fundamental Analysis.

I believe indexing will turn out to be just another Wall Street fad. (REALLY??!!)

Above all, investors must avoid swinging at bad pitches.

If the prevailing stock price is not warranted by the underlying value, it will eventually fall.

Value investors are not super sophisticated analytical wizards who create and apply intricate computer models to find attractive opportunities or assess underlying value. The hard part is discipline to avoid the many unattractive pitches, patience to wait for the right pitch and judgment to know when to swing.

There are only a few things investors can do about risk: diversify adequately, hedge when appropriate and invest with a margin of safety.

Many investors insist on affixing exact values to their investments, seeking precision in an imprecise world, but business value cannot be precisely determined.

How do value investors deal with the analytical necessity to predict the unpredictable? The only answer is conservatism.

 Investors relying on conservative historical standards of valuation in determining private-market value will benefit from a true margin of safety, while others’ margin of safety blows with the financial winds.

Like Einstein’s theory of relativity this (Soros's theory of reflexivity) may slightly affect calculations but only in rare or extreme circumstances, and for the most part fundamental analysis is still on largely right.

Spinoffs seem to frequently be undervalued and large emerging industries seem to be frequently overvalued like railroad companies were, air freight was, computer companies were.

...it is important to remember that numbers are not an end in themselves. Rather they are a means to understand what is really happening in a company.

Good investment ideas are rare and valuable things, which must be ferreted out assiduously.

Value investing by its very nature is contrarian. Value investing exists where the herd is selling, unaware or ignoring.

Information generally follows the 80/20 rule: the first 80 percent of the available information is gathered in the first 20 percent of the time spent. 

No one understands a business and its prospects better than the management.

Arbitrage is a riskless transaction that generates profits from temporary pricing inefficiencies between markets.

Although trading based on inside information is illegal, the term has never been clearly defined.

And my very favorite! "Value, like beauty is often in the eye of the beholder."

Virtual Reality Check

If I had to take a guess what will be one of the most popular new consumer devices in 2014 ( the next i-phone) my pick would be the Oculus Rift. The Oculus Rift is a virtual reality head-set originally designed for video games. Yes, there have been a lot of attempts at Virtual Reality in the past and no one knows this better than the guy who designed this one, Palmer Luckey. Over a few years he collected about 56 different Virtual Reality Head sets including one that cost $97,000 which he nabbed for $80. He began taking them apart and tinkering with them in his parents garage. Out of that creative process emerged the prototype for what is now known as the Oculus Rift. But just getting the prototype built is one thing but having financial backing to see it built and do it at an affordable cost is very different. That's where Kickstarter.com has helped. Through the use of this "crowd-sourcing" website he raised $2.5 million and gained some momentum in actually bringing the device to the people who could design games for it. He has since recruited a big name in the gaming industry John Carmack among others. 

             The real reason that I think this could take off though, is not the $16 million that this small start-up has now amassed or the demand for the  next cool new gadget. What really intrigues me here is the guy behind product, Palmer Luckey himself. I mean if all I knew was his name, I would guess things will go well for him. But this kid was in community college at 14 and has spent time working fixing and selling cell phones and cleaning boats. He used money he earned to buy his Virtual Reality sets, originally just for his own video gaming pleasure. Upon the realization that there was no better device out there, he took matters into his own hands and been on a mission ever since. According to Wikipedia he was enrolled at the University of Southern California Institute for Creative Technology before transforming into the leader of the group now called Oculus VR. He seems to be passionate about and completely comfortable with hardware engineering and at the same time a non-stop promoter and recruiter. It looks like he has all the elements of a good old fashioned home grown American entrepreneurship, with the right balance of technical thinking and people pleasing.

The device, if it can deliver for $150, it will do something  that the U.S. government has spent millions of dollars trying and failing to develop. It could be used for anything from training to gaming to movies and has the distinct traits of disruptive innovation at work. If nothing else it has been a very inspiring story so far, but barring any unexpected mishaps, I see this going a long way. And I hope it does! This is the type of phenomena drives our economy it creates new industries and probably most importantly sparks your imagination.    

...If not, there will always be someone who will play it: Keith Apicary!

 Flower Arrangement in Vase- Still Life

7.5" x 10" Oil on plasterboard. I was trying to get back to my original purpose for creating this blog and do a quick one day painting as practice. It took a little longer than expected, the rose was wilted by the time I finished. I'll have to learn how to paint more quickly. This is roses and flowers from the yard.

The Distant View

"Our main business is not to see what lies dimly at a distance but to do what lies clearly at hand." Thomas Carlyle

The distance. Watercolor.
 Scott's Flat, Northern CA. I believe.

The Intelligent Investor

     Warren Buffet, largely regarded as the greatest investor of all time, said of Ben Graham "I attended Colombia University’s business school in 1950-51 not because I cared about the degree, but because I wanted to study under Ben Graham." 

     Ben Graham's family immigrated from London in 1894. Graham grew up poor because of the death of his father, and an economic crisis in 1907.  He displayed brilliance in academia and was offered a teaching position at Columbia University. He probably would have preferred studying and teaching there but due to the lingering pain of the economic need to support his mother and family, he instead applied his brilliant mind to investing. He was almost wiped out by the crash of 1929 but survived and brought with him the lesson he learned from those experiences. His writing combines a serious sober perspective with mental agility. The work that he did in business has benefited countless investors and added soberness and stability to the financial world ever since

       According to Buffet there are three important lessons that were established reading Graham's most popular and fundamental work  The Intelligent Investor. Basic number one: Stocks are tiny pieces of businesses. This may seem obvious but people often don't look at the underlying business when they are investing in stocks. They aren't just ticker symbols! They are real live companies that have people have put their blood, sweat and tears into building and maintaining. If they are truly growing, it's because smart, dedicated, hard working people are going in day after day and making things happen. To understand stocks you must understand the people and numbers behind them. There are other ways to invest, you can invest in real estate or land, but when you are buying stocks you are buying businesses. If you wouldn't buy a business maybe you should think twice about buying stocks.

      Two: Mr Market.  Ben Graham came up with the metaphor Mr. Market. He's this crazy bipolar guy who generally feels optimistic and occasionally gets very depressed. You can't predict what he'll do next and you DO NOT want to get sucked into his mania!  What this means is in the stock market it's impossible to predict short term changes because the people buying and selling them are un-predictable. Predictions are difficult and timing things perfectly might as well be impossible. Instead of trying to  time your purchases, you should look at the price you are paying. As with anything you buy, look for bargains and keep your own costs down. To determine price Graham suggested looking at Price to Earnings Ratio and Book Value which are still a decent place to start. He said not pay more than 15 Price to Earnings Ratio but look for between 5 and 10, for book value don't pay more than 1.5 times book value but look for less than 1. The companies should also be large, about 1.5 billion and have paid a consistent dividend for 10+ years.  

     Three:Only purchase if you have a large safety cushion. Graham called this cushion a margin of safety. I think many people (myself previously included)  have the false notion that to make more money investing  you have to take more risks, which is completely the opposite with value investing. As with many things, to do better at it you have to put more time and effort into it and know your limitations, not take more risk. This cushion also includes reducing your risk in other ways, like not using money you will need any time soon. Graham also recommends holding 10 to 30 companies, essentially not putting all your eggs in one basket. He also recommends having bonds be make up 25-50 percent of your stocks partly for the emotional stability that it will add to your investments.

      Warren Buffet, who I'll talk about him more in later posts, has since refined much of Graham's thinking, but I think we still owe a lot to this guy.

                                  

some financial sites I have found useful:
http://seekingalpha.com/
http://www.multpl.com/shiller-pe/table
http://www.libertyinvesting.com/blog/
http://www.shillerfeeds.com/
berkshirehathaway.com/letters/letters.html
http://warrenbuffettresource.wordpress.com/

Some other quotes I thought were important from the book: 

“One fairly dependable sign of the approaching end of a bull swing is the fact that new common stocks of small and nondescript companies are offered at prices somewhat higher than the current level for many medium sized companies with a long market history.” P. 143

“An enterprising investor is not one who takes more risks than average or who buys ‘aggressive growth’ stocks; an enterprising investor is simply one who is willing to put in extra time and effort in researching their portfolio.” p.159

“Concentrate on the larger companies that are going through a period of unpopularity…First they have resources in capital and brain power to carry them through. Second, the market is likely to respond with reasonable speed to any improvement shown.” p.163 

“The aggressive investor must have a considerable knowledge of security values, enough to warrant viewing his security operations as equivalent to a business enterprise. There is no room for middle ground between passive and aggressive status… The majority of investors should be defensive.” p. 176

The longer the bull market lasts the more severely investors will be affected with amnesia; after five years or so, many people no longer believe that bear markets are possible. p.190

“The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stock had no market quotations at all for he would then be spared the mental anguish caused him by other persons mistakes of judgment.” p 203

Price fluctuations have only one signal to the true investor: they provide him an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. “The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.” p 205

Would you allow a lunatic come by at least 5 times a week to tell you that you should feel exactly the way he feels? Yet millions of people let Mr. Market tell them how to feel and what to do despite the fact that from time to time he gets nuttier than a fruitcake. The cheaper stocks got, the less eager people become to buy them because they are imitating Mr. Market instead of thinking for themselves. By refusing to let Mr. Market be your master, you transform him into your servant. After all when he seems to be destroying value, he is creating them elsewhere.   p 215

4      “For anyone who will be investing for years to come, falling stock prices are good news, not bad since they enable you to buy more for less money. The longer and further stocks fall, and the more steadily you keep buying as they drop, the more money you will make in the end-if you remain steadfast until the end. Instead of fearing the bear market you should embrace it. You should be perfectly comfortable if the market stopped supplying prices for 10 years. ”

“You will be much more in control, if you realize how much you are not in control.” p 223

"Buying funds based purely on their past performance is one of the stupidest things an investor can do.” 

Fund Drawbacks Conclusions p. 243

1.       The average fund does not pick stocks well enough to overcome the costs of researching and picking them

2.       The higher a funds expenses, the lower its returns

3.       The more frequently a fund trades its stocks, the less it tends to earn

4.       Volatile funds stay volatile

5.       Funds with high past returns are unlikely to remain winners for long

“Sector funds are the investor’s nemesis.”

The higher the growth rate you project and the longer the future period over which you project it, the more sensitive your forecast becomes to the slightest error. P 282

“It is undoubtedly better to concentrate on one stock that you know is going to prove highly profitable, rather than dilute your results to a mediocre figure, merely for diversification's sake. But this is not done because it cannot be done dependably.” P 290

“Corporate accounting is often tricky; security analysis can be complicated; stock valuations are really dependable only in exceptional cases.” P 318

“Today’s investor is so concerned with anticipating the future that he is already paying handsomely for it in advance. Thus what he has projected with so much study and care may actually happen and still not bring him any profit. If it should fail to materialize to the degree expected he may in fact be faced with serious temporary and perhaps even permanent loss.” P 345

“Surely, then, by the exercise of even a moderate degree of skill- derived from study, experience and native ability- it should be possible to obtain substantially better results than the DIJA.” P 376

“It is true that a fairly large segment of the stock market is often discriminated against or entirely neglected in the standard, than the intelligent investor may be in a position to profit from the resultant under-valuations.”   P 380

The vast majority of people who try to pick stocks learn that they are not as good at it as they thought; the luckiest ones discover this early on, while the less fortunate take years to learn it.” p 396

“The speculative public is incorrigible. In financial terms it cannot count beyond 3. It will buy anything, at any price, if there seems to be some ‘action’ in progress. It will fall for any company identified with ‘franchising,’ computers, electronics, science, technology when the particular fashion is raging. Sensible investors are above such foolishness.” P 437

“Just as the Surgeon General’s warning on the side of a cigarette pack does not stop everyone from smoking; no regulatory reform will ever prevent investors from overdosing on their own greed. The circle can only be broken one investor and one financial advisor at a time. Mastering Graham’s principles is the best way to start.” P 437

Just as a coin does not become more likely to turn up heads after landing on tails nine times in a row, so an overvalued stock (or market) can stay overvalued for a surprisingly long time. p. 466

“It is well established that people often assign a mental value to stocks based largely on the emotional imagery that companies evoke. The intelligent investor always digs deeper.” P 474

“The market scoffs at Graham’s principles in the short run, but they are always revalidated in the end. If you buy a stock purely because its price has been going up –instead of asking whether the underlying company value is increasing-then sooner or later you will be extremely sorry.” P. 486

"Never dig so deep into the numbers that you check your common sense at the door..." p.508

"..chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions…the margins of safety is always dependent on the price paid.” P 516

“A sufficiently low price can turn a security of mediocre quality into a sound investment opportunity.” P 521

Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it- even though others may hesitate or differ…In the world of securities, courage becomes the supreme virtue after adequate knowledge and tested judgment are at hand.”

“Limit your ambition to your capacity and confine you activities within the safe and narrow path of standard, defensive investment. To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”  P 524

“Simply keeping your holdings permanently diversified, and refusing to fling money at Mr. Market’s latest, craziest fashions, you can ensure that the consequences of your mistakes will never be catastrophic.” P 531

“One lucky break, or one shrewd decision-can count for more than a lifetime of journeyman efforts. But behind the luck, or the crucial decision, there must usually exist a background of preparation and disciplined capacity. Interesting possibilities abound on the financial scene, and the intelligent and enterprising investor should be able to find both enjoyment and profit in this three ring circus. Excitement is guaranteed.” P534

“Without a saving faith in the future, no one would ever invest at all.” P 535

Another guache about for the Neal, ahem  I mean the Leading Edge ( http://www.leadingedgemagazine.com/ )this one is for "Of Songs and Solitude." The landscape and foreground is supposed to be the Andes and the background is the lonely solitude of space. This was the first time I had tried painting space and it turned out surprisingly well, I'll probably do something else with stars etc. later on.  

Oil Study of St. Francis by Giovanni Bellini, 1485. 

.

The first time I saw this painting was in an art history class. I was impressed with the golden light that the painting had which reminded of the golden hills of California that I hadn't seen for awhile. That was where the initial idea came from and it stuck with me for about a year. Later while I was thinking about something to do a study of, I decided on this picture because it has so many varied subjects, animals, a person, a building and a landscape and its just loaded with color. There's also a feeling of overflowing life, with plants sprouting everywhere and a vibrancy which the monk seems to be feeling, and reflecting. I think of this also as a male counterpart to the statue Ecstasy of St. Theresa by Bernini. For me it conveys a similar thought, although in a different medium.