Finance Trends Letter

  Steve Jobs talks about the future of computing in a rare 50 minute TV interview aired on PBS.  When asked how computers have changed civilization, Steve begins by noting how humans were able to leapfrog the more efficient locomotion of other animal species by using tools, or technology.  Offering the example of how a human on a bicycle could easily surpass the locomotive advantage of the most efficient animal, a condor, Jobs concludes:  "We humans are tool-builders. And we can fashion tools that amplify these inherent abilities that we have to spectacular magnitudes. So for me, a computer has always been a bicycle of the mind: something that takes us far beyond our inherent abilities. I think we're just at the early stages of this tool." You can see by the re-do of his 1st interview response that Steve was always "on message" and rehearsing and delivering the exact points he wanted to make when selling his vision of how we use technology and Apple

Michael Martin was kind enough to recently send over a review copy (via the FT Press) of his new book, The Inner Voice of Trading .  I've started reading through the book and have highlighted an important lesson on risk mgmt., ego, and the emotions we feel as humans who trade.  Here are a few thoughts from chapter 2 of Michael's book, paraphrased or direct quotes, that address some of these issues:  • Most traders drawn to risk management focus on the external "how to" aspect of trading, vs. the inner aspect of emotions and psychology . This is where trouble begins. • Our American education system has ingrained in us the need for accuracy and regurgitation of info. We become conditioned to this accuracy model and the rewards of rote learning. The longer we remain in this reward model, the more it colors everything we do in life.  • In the school model, one's self-esteem is tied to being right . Avoiding mistakes, especially public mistakes becomes par

"...You have no move, Mr. Thompson. You do nothing.".  Reflecting on Nucky Thompson's compromised position in the most recent episode of Boardwalk Empire , Arnold Rothstein (played by Michael Stuhlbarg) tells the embattled Atlantic City treasurer/gangster to simply wait and plan for a time when there is a move to be made.  Rothstein elaborates:   " I've made my living, Mr. Thompson, in large part as a gambler. Some days I make 20 bets. Some days I make none. ...There are weeks, sometimes months in fact, when I make no bets at all because there simply is no play. So I wait, plan, marshal my resources and when I finally see an opportunity and there is a bet to make, I bet it all .". Leaving aside the near-certainty of fixed bets and the part about "betting it all", doesn't this sound like the strategy of a good speculator? When there is no clear move to be made, you must simply wait and do nothing until the real move (the tru

Charlie Rose interviews Facebook's Mark Zuckerberg and COO Sheryl Sandberg in an hour-long discussion on the future of the social web and the impact of social media.  Interesting chat and here's one noteworthy comment from Mark on the need for engineers in our new economy: " My #1 piece of advice [for young students and job seekers] is you should learn how to program ". Also, some discussion of American entrepreneurship, risk-taking, and innovation.  Check it out.

On CNBC India, Rakesh Jhunjhunwala is feted in the same way Warren Buffett is here in the USA.  He is known as one of the great bulls of the Indian markets, and while his success has coincided with the recent decades' secular uptrend in Indian shares, Rakesh is also an adept trader who has made money selling short. He cites Buffett and Marc Faber as two of the greatest influences on his trading and his understanding of markets. CNBC-TV 18 profiles the Indian share trader and investor in this biography special, Wizards of Dalal Street . Rakesh tells Ramesh Damani the story of how he got his start in the share markets and how he searches for attractive investments today.  Here are a few excerpts from the discussion, in which Jhunjhunwala talks about his childhood interest in the workings of share market and shares a few lessons on speculation: CNBC :  "But you're a bureaucrat's son. I mean, weren't you compelled into [that area]?" Rakesh : "I wa

Excellent article from Foreign Policy entitled, "The Shadow Superpower" , which examines the world's $10 trillion underground economy. "You probably have never heard of System D. Neither had I until I started visiting street markets and unlicensed bazaars around the globe.System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of "l'economie de la débrouillardise." Or, sweetened for street use, "Syst