"History is a wonderful thing, if only it was true"

Friday, December 31, 2010

File under "duh"

Back to the last PCForum, 2006
Conversation with guy from Cargill re: bio-fuels and the like

Opinion was that the VC's were full of themselves, didn't have a clue about biochemistry and fuels.
"As if Cargill hasn't investigated all of this?"

Layer on the capital demands and you are ripe for failure.
IT/IP calls for minimal capital in comparison.
What does Kleiner’s drift from cleantech mean for green investing? | VentureBeat:

"It appears that titan venture capital firm Kleiner Perkins is moving away from cleantech and going back to its roots in Internet investing, where it made famously good bets on companies like Amazon and Google."


It's about Capital Intensity - VC is about low intensity, not high

Score one for big energy

Cleantech VCs are thinking small | VentureBeat:

"Cleantech has been the industry of big-money investments in ambitious projects, but that may be changing, judging from a venture capital panel at VentureBeat’s GreenBeat conference today.

The most emphatic speaker on this point was Navin Chaddha, a partner at the Mayfield Fund. Chaddha said he’s more interested in investing “downstream” from energy generation, rather than in generation itself. That’s where entrepreneurs will find more opportunities, and those companies require less funding. As positive examples, Chaddha pointed to SolarCity (one of his portfolio companies) and SunRun, which aren’t trying to build giant solar plants or factories, and are instead trying to change the solar distribution model by bringing it directly to consumers.

On the flip side, he pointed to solar panel maker Solyndra, which has reportedly raised more than $1 billion but just announced that it’s closing one of its factories. $1 billion is more than most individual venture funds, Chaddha noted, and spending that much money on a single company is the “antithesis” of what venture capital is about."

Monday, December 27, 2010


Note that I have only traded gold on the short side.
Despite problems with the current system, a gold backed system ensures poverty and low growth.

Could the world go back to the gold standard? | martin wolf's exchange | Economic commentary from the Financial Times – FT.com:

"In short, we cannot and will not go back to the gold standard. As L.P. Hartley wrote, “The past is a foreign country: they do things differently there.” We cannot live in the 19th century. It is foolish to pretend that we can."

Wednesday, December 22, 2010

Study Business, not Economics

Schumpeter: Why do firms exist? | The Economist

Coarse : His central insight was that firms exist because going to the market all the time can impose heavy transaction costs. You need to hire workers, negotiate prices and enforce contracts, to name but three time-consuming activities. A firm is essentially a device for creating long-term contracts when short-term contracts are too bothersome. But if markets are so inefficient, why don’t firms go on getting bigger for ever? Mr Coase also pointed out that these little planned societies impose transaction costs of their own, which tend to rise as they grow bigger. The proper balance between hierarchies and markets is constantly recalibrated by the forces of competition: entrepreneurs may choose to lower transaction costs by forming firms but giant firms eventually become sluggish and uncompetitive.

Tuesday, December 21, 2010


In my spam box today

Now if I wanted to tout it ...
But does not apply

message :
Jt Hoagland has been selected as the 2010 Best of Lansing Award winner in the Investment Advisory Service category by the US Commerce Association. We have tried to contact your business throughout the year but have not received any response. With this final notice you still have a chance to order an award for 2010.
Award Image
The USCA identifies companies that excel in their business category and successfully market their business to the public and the local community. Each year, the "Best of Local Business" Award Program offers recognition to local businesses throughout the country based on the results.

Sunday, December 19, 2010

Great Minds

Think alike - understanding

Questions for Brian Greene - NYTimes.com:
"How would you define intelligence?"

Intelligence is the ability to take in information from the world and to find patterns in that information that allow you to organize your perceptions and understand the external world."

Brian Green?:
This interview is for our annual Ideas Issue, and because you’re a physicist at Columbia University who specializes in string theory and the secret life of invisible particles, let mestart by asking you this: Do you think the fieldof physics is continuing to provide the world with big, important, Einstein-level ideas?
Absolutely. Physics grapples with the largest questions the universe presents. Wheredid the totality of reality come from? Did time have a beginning?

Tuesday, December 14, 2010

yet more on China

Chinese business: Where are the profits? | The Economist:

"Chinese stocks are cheap because the market has spotted some serious underlying problems. Here’s one: as revenues soar, profit margins are falling (see chart). Sales rose by a staggering 42% year-on-year in the first half of 2010. That was partly because the first half of 2009 was dreadful, but sales will still rise by an impressive 23% in the second half of 2010, predicts Macquarie Securities, a broker. Yet margins have been on a protracted slide that shows no sign of stabilising, says Michael Kurtz, Macquarie’s Asia strategist. Normally they rise by 1.5% in the first half of the year because of seasonal factors, but that did not happen in 2010.."

The government wants to allow ordinary people to enjoy more of the fruits of growth. Happy citizens are less likely to riot or demand the right to vote, it assumes. How far it will go remains to be seen, however. Will it allow the (artificially low) interest rates that banks pay depositors to rise? That would reduce the transfer of wealth from savers to well-connected corporations, which enjoy cheap credit. Will it allow the yuan to appreciate, thus walloping exporters but boosting consumers’ spending power? As usual in China, no one knows

More on Asia

Growth - yes
Risk - yes, and has most of the prospective growth already been priced in?

The End of the Asian Bull Market

Over the next five or even ten years, investors relying on emerging economies will not be as fortunate, however, according to Louis-Vincent Gave, CEO of the Hong Kong-based research and investment management firm GaveKal.

Asian economies will grow faster than those in the developed world, Gave predicted, but that won’t be enough to compensate for high current valuations and excessive liquidity. Indeed, Asian debt and US equities offer far better investment opportunities, he said.

“The situation in Asia is 180 degrees from where it was five or six years ago,” Gave lamented, referring to the paucity of attractively priced stocks. He has lived in Asia for most of the last 20 years while investing in the Asian markets,

Houses vs Education

Invest in the future, not McMansions

Milken Institute Publications - Articles, Op-Eds - McMansion economics:

"Roads, railways and runways are important, but the real stimulus to sustainable economic growth is building human capital. If families downsize and redirect a greater portion of their income to education (or to cultural enrichment or to cover the cost of a healthier lifestyle), the benefits they realize can be lasting. If they're willing to forgo some of that expensive elbow room, parents might free up the resources to put themselves and especially their children on the path to more successful careers and higher quality lives in the future, minus the crushing burden of student loans that so many college graduates face today.

This shift could also go a long way toward making the U.S. workforce more competitive. Indeed, Nobel laureate James J. Heckman and Dimitriy V. Masterov of the University of Chicago have sounded an alarm that America is falling behind on this front, noting that 'both the quality and quantity of the labor force are not keeping pace with the demands of the skill-based economy.' That's an equation that has to change as innovation and knowledge workers become ever more prized in the global marketplace.

It's worth noting that China, which is on an upward trajectory, devotes a larger share of household expenditures to education and health than the United States."

Monday, December 13, 2010


Several links on China
Triggered by Jim Chanos on CNBC Squawk Box last Fri AM

From last January
Contrarian Investor Predicts Economic Crash in China - NYTimes.com

and yesterday

With some deeper analysis :

The process culminated in 2005 and 2006 with public listings in Hong Kong of China’s three largest banks. By that time, however, President Jiang and Prime Minister Zhu had already been out of office for two years and a key ally for reform, Vice Prime Minister Huang Ju, was terminally ill. With their departure went the willingness of the top leadership to endure the brutal volatility of market-oriented systems, and that, in turn, weakened the push for a floating currency, independent pricing of debt and other securities and international access to China’s capital markets. The appetite for turning financial institutions into real commercial operations disappeared also.

Reform was relegated to an expanding number of squabbling bureaucracies. China’s new senior leaders, having risen, unlike their predecessors, during years of strong growth, were concerned less with the threat posed by a stunted financial system than with widening income disparities and the possibility of social unrest. Their aims shifted to social goals, notably achieving a “harmonious society”. As a result, China’s financial reform stalled and the country has never truly opened itself up to the world. Foreign firms hold trivial amounts of domestic financial assets (under 2%), and play only a marginal role in any domestic sector.

There have been some advantages in this. Chinese banks were not, in the main, exposed to toxic Western debt and, perhaps more importantly, never adopted dangerous Western methods of hiding risks. But China’s own approach presents these problems in a different form.

To the extent that risk has been distributed, it is largely from state-controlled banks to other state entities in increasingly arcane ways. This distorts external perceptions of China’s solvency. State debt appears to be quite low by international standards (just under 20% of GDP) but when all government obligations are lumped together, the authors reckon it is actually 76%.

The bigger problem, though, is that the system trades almost entirely with itself. Critical information about liabilities and pricing is deliberately concealed or impossible to discern; there are no outside entities establishing prices by bidding in the market. That undermines efficient capital allocation and allows excesses to fester.

Saturday, December 11, 2010


Pretty close to what I said in the interview.

Leelanau News from Leelanau County:
Nov 23, 2010

The chairman of the Economic Development Corporation (EDC) for Leelanau County, EDC, is John “Chip” Hoagland.

“We at the EDC view employment as a regional issue,” Hoagland said. “What impacts the region impacts Leelanau County. Staff at the (regional) Traverse Bay EDC have been working to compile data on where citizens work and live to further substantiate this,” he said.


Hoagland said the trends he perceives include not only the ongoing slump in construction, but also growing activity in “hidden business such as work from home, consulting, and ‘knowledge work.’ This last one is tough to track,” Hoagland noted.

“During my tenure with the Leelanau EDC,” he added, “my focus has been on year-round employment as well as enhancing the agricultural economy. I once heard it said that while you can pick up and move manufacturing jobs (but) you can’t move a farm.”

Nov 24, 2010
On Hunting

John “Chip” Hoagland of Glen Arbor also does not hunt. “It’s never anything I’ve been excited about. I don’t hunt, my dad doesn’t hunt, no one in my family does. I’ve never had a desire to do so,” he said when reached for comment Monday morning.

Hoagland is an investment manager and is involved in many business ventures. He’s now working with Cherry Capital Foods, and is also chair of the county Economic Development Corporation.

“I’m working on too many projects to go into the woods and chase venison,” he said. That does not mean Hoagland has anything against hunting or people who enjoy the sport.

“I wish we had more people out thinning the herd. The less deer we have, the less chance there is one of them will run out in front of my car,” Hoagland said.

Thursday, December 09, 2010

More on Philanth...ropy

And it keeps wealth out of the hands of government...

16 Tycoons Agree to Give Away Fortunes - WSJ.com: "Investor and new addition to the pledge, Nicolas Berggruen, 48, said he decided to give away his fortune while he was alive so he could personally take responsibility for how his money is put to use.

'Wealth is an advantage, but it also is frankly a responsibility,' he said in an interview.

After the initial Giving Pledge list came out, some critics decried it as a public-relations stunt, or the product of tax-breaks that are hurting the government's ability to offer critical services.

'The state has limits in to what it can and cannot do,' said Mr. Berggruen. 'Private enterprise can be faster and less bureaucratic than the state.'"

Tuesday, December 07, 2010

Knowing what is important

Interesting that the some 3000years ago, time-motion studies were underway
And, of course - measurement of beer

Ancient Egyptians’ Mathematical Ingenuity, Written on Papyrus - NYTimes.com:

"The Rhind papyrus contains geometry problems that compute the slopes of pyramids and the volume of various-shaped granaries. And the Moscow papyrus, from about 1850 B.C., has about 25 problems, including ways to measure ships’ parts and find the surface area of a hemisphere and the area of triangles. Especially interesting are problems that calculate how efficient a laborer was by how many logs he carried or how many sandals he could make and decorate. Or the problems that involve a pefsu, a unit measuring the strength or weakness of beer or bread based on how much grain is used to make it.

One problem calculates whether it’s right to exchange 100 loaves of 20-pefsu bread for 10 jugs of 4-pefsu malt-date beer. After a series of steps, the papyrus proclaims, according to one translation: “Behold! The beer quantity is found to be correct.”"

Monday, December 06, 2010


Unintended consequences

Information Warfare: Why Wikileaks Backfired:

"The leaked documents were meant (according to the Wikileaks leader) to embarrass the United States and expose American hypocrisy and underhanded operations, but the result was quite the opposite. The U.S. was shown trying to do what it said, publically, that it was trying to do. But many other nations were shown to be quite different in their private conversations, than in their public ones. Some of these leaders now claim that they were misquoted, or that Wikileaks documents were a fabrication. It was initially believed that the released documents would make foreign officials more reluctant about speaking frankly with American officials. Didn't happen. Those conversations take place mainly because everyone wants something from the United States, and unless you establish a relationship with American diplomats or officials, nothing will happen. Moreover, many foreign officials found the revelations useful, as the leaks got out into the open things (like Arab relationships with Iran and Israel) that could not be discussed openly at home. For the most part, Wikileaks confirmed what was already known, something the Wikileaks crew assumed could not be true."