Monday, February 28, 2011

Letters to Mom-in-Law

In the middle of February my #1 lake house drinking buddy, mom-in-law, asked what I thought about the EPA and how ethanol affected the prices of corn.  Not one to pass on the opportunity to toot my own horn, here's the transcript of my response.  Don't forget to check out an article from today's Wall Street Journal, OECD Sees Real Demand Driving Commodity Prices.
I have strong feelings about food inflation, namely that the logarithmic growth characteristics in human populations, coupled with the increasing westernization of foreign countries leads to increasing demand against an increasingly small volume of arable land.  Corn, and other foodstuffs (Tyson has a project that converts chicken fat into biofuels), are inflated for two reasons, then:  demand against supply due to land constraints,  and compounded with supply dislocations caused by weather events like fires in Russia, floods in Australia, freezes in Mexico, as well as the disincentive of those without jobs to produce work in exchange for food.

The latter becomes complicated when considering the hardships endured by the unemployed, but there can be no hope of "recovery" while continuing to push those unemployed onto the government's rolls without creating some kind of modern Works Progress Administration.  Knowing that there's a backstop against which people will not starve, what motivation do they have to find work?  This is a major, major issue.  Present news outlets point to food inflation as primarily caused by supply dislocations.  I stridently disagree with this oversimplification.

To me, there exists a causal relationship between inflation in things that cannot be excepted (food, energy) and monetary policy.  As the price of housing accounts for a preponderance of notional value of the American economy, it gets an extra heavy weighting (~37%) in the figures our government likes to quote in the media.  So when they say, "inflation is muted," they're talking equations, and not credit card receipts.

To conclude, while I believe that ethanol adds to the demand for corn, and therefore drives demand and cost, human demand is the force that must be mitigated, and to do so means gaining real world production from those in exchange for the commodity they wish to receive.

Hopefully you realize that the chart was not meant to push you into hording corn or anything else, just that if you guys decide to visit with your farmers in [a southern state], you have strong leverage to request some rent relief ... especially if they're not treating your place like you want them to.

Saturday, February 26, 2011

A Compilation Show

Ever noticed that when a sitcom wants to mail one in they create compilation shows stuffed with flashbacks and old material?  I used to keep a list of stuff that people said in passing and so might otherwise be forgettable, except that the points were extra salient for the greater purpose, to me anyway.

A lot of these guys were from my working group and I don't talk to them anymore so you don't get names where celebrity isn't involved.


If you look good, you feel good.  You feel good, you play good.  You play good, they pay good.
Deion Sanders

This guy [a major decision maker] scares me because he just doesn't know [the implications of his decisions].

No one talks about what it takes to get things done, they just know when things don't get done; and take notice when they get done well.

Sometimes it's all about making the phone calls.

That's who becomes the fall guy, the one who brings the bad news [without explanation, or workable solutions].

It all boils down to:  is it costing what it's worth?

It tears him up to see people sitting around doing nothing, he'd rather not see anyone than see that.

I don't call and talk numbers until I know that shit.

Go out in front of any building.  How many statues do you see of committees?  The statues are of people who stood against the committees, people who bucked the system.
Kidd Kraddick

Don't let someone remain in a gamebreaker position if he's not performing.  In a position that's this important, average is absolutely unacceptable.
Customers for Life (a book)

You've got an owner who doesn't know, and an architect who doesn't know.  I'll tell you, there's two ways that deal can go down:  they can run the show and eat your lunch, or you can take charge and eat theirs.

People like Tiger and Jordan are greatness because the bigger the game gets the better they play.

There's always a need for people who can take a project and run with it without having to have someone look over their shoulder.

There's a balance there, when you get knee deep in details big shit is flying past you left and right.

When you're negotiating a deal it's a lot easier to get more scope [into the deal] than it is to get dollars.

All people are different, but one must refuse to allow a man to lose confidence in what it is he does.  He's gotta take some lumps and be resilient, but you can't let him get down on himself.
Troy Aikman

You have to understand the difference between being friends and being friendly.  You don't want to be friends with everybody, but it's very important to maintain friendly relationships where it's possible.

Success is determined when preparation meets opportunity.
Tony Romo

I think a great quarterback can be successful in any program, while a good, solid quarterback needs a strong system in order to be great.
Tony Romo

You have to have a common goal.  Two people working independently toward a similar, but separate goal are not in a relationship.  Why would you be together if you didn't think you accomplish more than the sum of your parts?

Things really aren't that complicated.  Don't give issues more weight than is warranted.

I had a producer tell me that if I ever commented on something that he could already see I'd be fired.  "Don't tell me that he made the putt while I'm watching golf.  I already know that."
Pat Sumrall

You can't buy experience.
Tony Romo

One is not entitled to respect, but to courtesy.

You don't want to sugar coat the truth, to yourself, anyway.

One of these days you'll learn:  Keep your head out of the jug and your dick in your pants.

My father-in-law was an old military guy.  The guy's seen it all, he told me the three keys to success:  cut your hair, shine your shoes, and shave.

Remember, you don't have to floss all your teeth, just the ones you want to keep.

Nothing is more rewarding that watching someone who says it can't be done get interrupted by someone actually doing it.

You miss 100% of the shots you never take.
Wayne Gretzky

Sometimes the race is won, not by the fastest, but by the guy who just kept running.

It doesn't matter how many pails of milk you spill ... just don't lose the cow.

Valued employees add value where none was previously expected.

If you get the lines out in the water all you have to do is let the fish come to you.  Then it's just a matter of cleaning and frying them up.

Playing the innocently ignorant card at the right time can be your best friend.

Golf taught me at a very young age I do some dumb shit when I'm on a roll.  Think the same is true with trading.

IF you can keep your head when all about you 
Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or being lied about, don't deal in lies,
Or being hated, don't give way to hating,
And yet don't look too good, nor talk too wise:
If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with Triumph and Disaster
And treat those two impostors just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
And stoop and build 'em up with worn-out tools:

If you can make one heap of all your winnings 
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breathe a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: 'Hold on!'

If you can talk with crowds and keep your virtue,
' Or walk with Kings - nor lose the common touch,
if neither foes nor loving friends can hurt you,
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run,
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man, my son!

Thursday, February 10, 2011

On Jinxes

Am I superstitious?  No.  Do I believe in the power of the jinx?  Yes.

How many times have you been watching a close game with your buddies when "Eighteen-pack" Eddie pipes up at the most inopportune time, "We did it baby!"  You know what happens next.  The jinx isn't a lightening bolt from the sports gods smiting you for having idiot friends.  Rather, it is a result of the collective subconscious leaning decidedly, uniformly in favor of a seemingly obvious result.  The jinx is an indicator.  An indication of complacency on the side with the upper hand, the application of an erroneously calculated likelihood of the opposite outcome.

Wednesday, February 9, 2011

On "Untangling Skill and Luck"

Dudes, my wife and I have been trying to have kids and it's not exactly working out yet.  It sucks, but it is what it is.  During one day when it really seemed to start bothering me, I got the cheesy idea to start writing down some of the stuff that I hope I would be able to teach my child.  The below is taken from last weekend's musings, and so try to appreciate the tone as parental, because that's how it's intended.  This post would probably have never seen the light of day, but an article in the Harvard Business Review by Michael J. Mauboussin hit the retweet circuit today called Untangling Skill and Luck and the timing seemed ... lucky.

My thoughts:

It always feels like something awesome is about to happen.

By viewing the world through a lens of optimism we attain a hopefulness that cannot be overstated in psychological value.  The counterparts to blind optimism include diligence, patience, ethics, and a humble indifference to the final result.  Trading has taught me that opportunity presents itself every day.  To achieve success I must seek it, and to seek it, I must get in the way of it.

Diligence builds confidence by following facts to logical outcomes.  We can plan for, but not foresee every outcome and for this reason we must accept that humanism affects outcomes in ways dynamic, not disappointing.  As I said before, disavowing the desire to control one’s reality must come before the mentally destabilizing temptation to second guess a choice that did not result in the logical and favorable outcome.  Surprises work both ways.  Through preparation we hope to mitigate negative surprises and become exposed to greater volumes of positive ones.  Though an outsider might view this as being serially lucky, work precedes luck in most cases.  Humbly accepting and learning from every outcome adds texture to a fulsome body of experience from which to draw in future endeavor.

Patience as an extension of the choice to relinquish control means recognizing timing.  Execution backed by diligence will, at times, place you at odds with overwhelming pressure to conform to the status quo.  In order to stand resolutely, unwaveringly against these buffeting winds you must have the self-confidence to trust in your work.  You must also be humble enough to realize that you may not be right and act accordingly if the diligence was flawed.  You must also accept that the primal-human herding instinct can put you in the position of being wrong before you are right.  Proper timing is the goal, exact timing is luck, and patience places luck in the category of optimistic expression.

No man can survive in a human world alone.  A baby without its mom, a player without a team, an entrepreneur without ethics, these do not work.  We must always care for one another, not because we may need them in the future, but because it is in our nature to be networked.  Our world as a house of cards built by acts of goodwill can be ruined easily by the ill-intent of a few.  Good things happen in houses constructed of goodwill.  Take joy in the construction because our example can be felt by those around us.  Do not let the misguided decisions of unaffected parties retrograde your higher order choice to act with righteousness when no one else is watching.

One time I read a study that compared the human attention span to water in a bucket.  The water is easily divided into smaller buckets, or into one smaller bucket and several glasses, the point being that maximum focus is pre-set, and distractions inherently deduct from attention and capability in other areas.  Ruining relationships, causing ill-will, and acting with malice may be seem reasonable in a time of heightened emotion, but they are seldom productive, as going against our nature to be networked draws thought, even if we don't realize it.  Regret and hatred draw attention that is better spent in wholesome pursuits.  Aim to be an example of someone who others would like to know while respectfully ignoring those whose petty indiscretions mire our capacity to produce great things.

Human complexity means never fully understanding a situation.  Accept this limitation while striving for detailed knowledge of rudimentary metaphysics.  Every day we create history on the blank canvas of the present.  Every day we face entropy, disaster, and chaos.  Through diligence, patience, ethics, and humility, every day we can create the opportunity for something awesome to happen.