000webhost

Web hosting

Tuesday, June 30, 2015

The Value of Money - Part 4

- I previously remarked that since we use the concept of 'deterrence' so readily throughout the world we are in a de-facto state of 'Cold War' whose weapons are defense, intelligence, and economics. There's a lot of interesting information out there...
http://blogs.telegraph.co.uk/news/shashankjoshi/100224247/france-should-remember-its-own-history-before-complaining-too-much-about-american-espionage/
https://wikileaks.org/gifiles/docs/11/1172615_-ct-analysis-an-economic-security-role-for-european-spy.html
http://www.wikileaks-forum.com/nsa/332/r-james-woolsey-why-we-spy-on-our-allies-17-03-2000/24575/
http://www.abc.net.au/news/2013-11-08/australian-nsa-involvement-explained/5079786
http://www.abc.net.au/news/2013-11-08/the-chinese-embassy-bugging-controversy/5079148
http://www.news.com.au/national/australia-must-choose-between-chinese-cash-and-loyalty-to-the-us-as-se-asia-tensions-rise/story-fncynjr2-1227364070887
http://rt.com/news/270529-nsa-france-economy-wikileaks/ 
http://www.bloomberg.com/news/articles/2015-06-30/why-china-wants-a-strong-euro-as-greece-teeters
http://www.smh.com.au/federal-politics/political-news/china-not-fit-for-global-leadership-says-top-canberra-official-michael-thawley-20150630-gi1o1f.html 
- it makes sense that companies try to run lean rather than try to create. Everybody knows how to save. It's much more difficult to create something of value
- advertising is a broadcast means of achieving increased transactions but in spite of targeted advertising it is still incredibly inefficient. Based on previous experience even single digit click through rates for online advertising is considered suspect/possibly fraudulent 
http://adage.com/article/guest-columnists/study-advertising-half-effective-previously-thought/228409/
- the easiest way of estabishing the difference between what's needed and what's wanted is to turn off all advertising around you. Once you've done that, the difference between need and want becomes very strange and the efficacy of advertising on your perspective becomes much, much clearer
- most businesses fail. A lot of people basically have trouble running a business, have flawed business models, or don't achieve enough transactions to make it worthwhile
http://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/
https://www.linkedin.com/pulse/20140915223641-170128193-what-are-the-real-small-business-survival-rates
http://www.smh.com.au/business/the-economy/google-says-give-rd-tax-breaks-to-small-techies-not-big-guys-20150407-1mfy30.html
http://smallbiztrends.com/2012/09/failure-rates-by-sector-the-real-numbers.html
http://www.isbdc.org/small-business-failure-rates-causes/
http://www.washingtonpost.com/blogs/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/
- immigration is a good thing provided that the people in question bring something to the economy. I look at the Japanese situation and wonder whether or not immigration is a more cost effective means of dealing with their ageing problem than 'Abenomics'. Even if all they do is re-patriate former nationals...
http://www.koreaherald.com/view.php?ud=20150628000326
- if you run through their numbers carefully, and think about where many of the world's top companies are headed, the performance (net profit in particular) of some of them aren't any where near impressive (percentage wise) as the share price growth in recent history. There are many small/mid cap firms that would out do them (% net profit wise) if you're looking to invest
http://www.gurufocus.com/financials/AAPL&affid=45223
https://finance.yahoo.com/q/ks?s=MSFT+Key+Statistics
http://www.marketwatch.com/investing/stock/amzn/financials
http://www.marketwatch.com/investing/stock/goog/financials
https://investor.google.com/financial/tables.html
- in software engineering people continually harp on about the benefits of Agile, Extreme programming and so on. Basically, all it is maintaining regular contact between staff members to get the best out of a piece of work. Peer pressure and continual oversight also forces you to remain productive. Think about this in the real world. The larger the teams are the more difficult it is to maintain oversight particuarly if the manager in question is of a poor standard and there are no systems in place to maintain standards. There is also a problem with unfettered belief in this metholodgy. If in general, the team members are unproductive or of a poor standard this will ripple throughout your team
- GDP is a horrible measure of productivity. As I've stated previously, the difference between perceived, effective, and actual value basically diguises where true value lies. Go spend some time in other parts of the world. I guarantee that there will be a massive difference in the way you view productivity (productivity means amount of work completed per unit time not overall work)
- a good measure of a person's productivity/value is what happens if they take a day off or a have a break. Observe, the increase in workload for each other staff member and how they deal with it
- people keep on harping on about self interest as the best way of maintaining productivity and encouraging people to work hard. However, I have a huge problem with this as it is incredibly hard to differentiate between actual, effective, and perceived value sometimes. At one particular firm, we had difficulties with this as well. I was therefore tasked with writing an application to monitor things (if you intend to write something along these lines please be mindful relevant HR and Surveillance laws in your jurisdiction. Also, keep the program 'silent'. Staff will likely alter their behaviour if they know that the program is running.). The funny thing is that even people you think are productive tend to work in bursts. The main difference is the amount of time that trasnpires between each piece of work and the rate of work that occurs during each burst. The other thing that you should know is that even with senior members of staff when you look at a lot of metrics it can be extremely difficult to justify their wage. Prepare to be surprised if you currently have poor oversight in your organisation. Lack of proper oversight breeds nepotism, lack of productivity, etc...
- you'll be shocked at what poor staff can do to your team. If the members in question is particularly bad he in effect takes a number of other staff out of the equation at the same time. Think about this. You all are recruited for highly skilled jobs but one team member is poor. If he continually has to rely on other staff then he in effects takes out another member of your team simultaneously (possibly more). Think about this when training new staff. Give them enough time/training to get a guage of what they'll be like but if they can't hold up their part of the deal be prepared to move them elsewhere within the organisation or let go of them. The same is also true in the opposite direction. Good employees have a multiplier effect. You'll only figure out the difference with proper oversight and monitoring. Without this, perceived value may completely throw you off
http://programmers.stackexchange.com/questions/179616/a-good-programmer-can-be-as-10x-times-more-productive-than-a-mediocre-one
http://swreflections.blogspot.com.au/2015/01/we-cant-measure-programmer-productivity.html
http://stackoverflow.com/questions/966800/mythical-man-month-10-lines-per-developer-day-how-close-on-large-projects
- we like to focus in on large companies because they supposedly bring in a lot of business. The problem is if they have a monopoly. If they strangle the market of all value and don't put back in via taxes, employment, etc... the state in question could be in a lot of trouble down the line. If/when the company moves the economy would have evolved to see these companies as being a core component. Other surrouding will likely be poorly positioned to adapt when they leave for a place which offers better terms and/or conditions. The other problem is this, based on experience people are willing to except a lower wage to work for such firms (mostly for reasons of financial safety). There is no guarantee that you will be paid what you are worth
http://techcrunch.com/2015/06/28/policy-after-uber/
http://www.businessinsider.com/greeces-former-tax-collection-chief-harry-theoharis-explains-tax-evasion-problem-2015-7
http://www.irishtimes.com/business/economy/smes-account-for-99-7-of-business-enterprises-in-republic-1.2035800
http://www.irishtimes.com/business/economy/economy-primed-for-sustained-growth-says-goldman-sachs-1.2143071
http://www.wsj.com/articles/SB10001424127887324787004578496803472834948
http://www.afr.com/technology/technology-companies/ireland-scraps-google-tech-company-tax-breaks-20141019-119m80
https://en.wikipedia.org/wiki/Double_Irish_arrangement
http://blogs.cfainstitute.org/investor/2015/06/11/solutions-to-a-misbehaving-finance-industry/
http://www.theguardian.com/commentisfree/2015/jun/28/david-cameron-is-abusing-magna-carta-in-abolishing-our-rights
http://www.theguardian.com/world/2015/mar/25/irelands-economy-starting-to-fire-all-cylinders-imf-report
http://www.irishtimes.com/business/economy/who-owes-more-money-the-irish-or-the-greeks-1.2236034
http://www.theguardian.com/us-news/2015/feb/02/barack-obama-tax-profits-president-budget-offshore
http://www.smh.com.au/business/multinationals-channel-more-money-through-hubs-in-singapore-switzerland-than-ever-before-tax-office-says-20150204-1363u5.html
http://www.smh.com.au/business/retail/jeff-kennett-tells-coles-to-pay-12m-to-suppliers-20150630-gi19wv.html 
- when and if a large company collapses or moves the problem is the number of others who rely on it for business
- people keep on saying that there are safe industries from off shoring and automation. I think they're naive or haven't spent enough time around good technologists. Good employees will try to automate or develop processes to get things done more efficiently. Virtually all industries (or vast chunks of them) can be automated fully given time (trust me on this. I like to read a lot...).
http://www.technologyreview.com/view/519241/report-suggests-nearly-half-of-us-jobs-are-vulnerable-to-computerization/
http://www.futuristspeaker.com/2012/02/2-billion-jobs-to-disappear-by-2030/
http://www.forbes.com/sites/jmaureenhenderson/2012/08/30/careers-are-dead-welcome-to-your-low-wage-temp-work-future/
http://theconversation.com/australia-must-prepare-for-massive-job-losses-due-to-automation-43321
http://www.theguardian.com/business/2015/jun/16/computers-could-replace-five-million-australian-jobs-within-two-decades
Only way to keep yourself safe is to be multi-skilled and entrepreneurial or else extremely skilled at a particular profession. Even then there's no guarantee that you'll be safe
http://time.com/3938678/obamacare-supreme-court-uber/
http://techcrunch.com/2015/06/28/policy-after-uber/
- sometimes I think people just don't get it. A small number of outliers is all it takes in order to change group behaviour. Even if we ban regulate/automation there will be those who adopt it without any misgivings much like organised crime, and use of illegal migrants, cash economy, etc... Only real way is to force a cashless society so that we can run algorithms to check for unusual behaviour and breed a more puritan society
- minimal but effective regulation helps to level out the playing field. Making it too complex creates possible avenues for loopholes to be exploited. Too simple and without enough coverage and you have the same problem
- obvious ways to make sustained, long term money include creating something that others need or want, else have the ability to be able to change perception, to be able to see changes and adapt, arbitrage, and using a broadcast structure
- personal experience and history of others with emerging markets such as Asia and Africa says that results can be extremely variable. Without on the ground knowledge and oversight you can just as easily make a substantial profit as a massive loss through fraud. There is very little you can do about this about from taking due diligence and having measures/knowledge to be able to deal with it should it actually occur
http://timesofindia.indiatimes.com/world/uk/India-UKs-3rd-largest-job-creator-in-2014/articleshow/47714406.cms
- in reality, very few have a genuine chance of making it 'big', "Americans raised at the top and bottom of the income ladder are likely to remain there themselves as adults. Forty-three percent of those who start in the bottom are stuck there as adults, and 70 percent remain below the middle quintile. Only 4 percent of adults raised in the bottom make it all the way to the top, showing that the "rags-to-riches" story is more often found in Hollywood than in reality."
http://www.forbes.com/sites/jmaureenhenderson/2012/08/30/careers-are-dead-welcome-to-your-low-wage-temp-work-future/
- use first mover advantage as quickly as you can but have defensive measures in place
http://www.news.com.au/finance/business/is-the-free-ride-over-for-uber/story-fnda1bsz-1227419310284
- investment from third parties (angel investment, venture capital, etc...) can vary drastically. More and more want a guaranteed return on investment at least though
- based on what I've experienced VC is much more difficult to get locally than in Europe or the United States. Luckily, more companies are willing to invest provided you are posting good numbers. One other thing I've discovered locally is that they are too lazy/unwilling to help even if the idea/s may be good though (though this is changing)
http://www.afr.com/business/health/pharmaceuticals/merck-ceo-ken-frazier-on-keytruda-and-why-australians-miss-out-on-new-drugs-20150628-ghyisc
- we don't want to live day by day or have creditors/shareholders to report to so seek the highest profit whenever possible
- you can select a lot of numbers and prove essentially anything in business but their are certain numbers that you simply can't ignore such as net profit/income
- pay a person with cash by the hour where he has to do the numbers versus lump sump and he will look at things very differently. That goes for any profession, even high earning ones
- growth is great but only if it can be sustained and it is genuine. If you have susbtantial variation in growth such as having a few fantastic years of growth and then a sudden drop off that is fed by massive debt you could be in a bit of trouble. You may say that you can just sell off assets. If the growth wasn't good enough then do you see a problem? Moreover, what if you don't have something that it considered worthwhile or easy to sell off? For a state/business, your credit risk suddenly shoots up and you may possibly be priced out of the market. Targeted, sustainable, growth should be the target not growth at all costs. The Chinese position towards economic management is actually making a lot more sense to me now though I'm not certain that it would work quite as easily or be accepted in other states. You may say that we'll invest during good times? The problem is that we're often not wise enough to know when and where to invest
http://www.businessinsider.com/krugman-europe-greece-2015-6
http://www.businessinsider.com/el-erian-on-how-greece-will-impact-markets-2015-6
http://www.dawn.com/news/1162195/putins-next-challenge-propping-up-russias-troubled-banks
- in many places you are seeing a rise of left wing parties. The worrying thing is that they'll lose sight of the benefits of capitalism and fall into the trap of a more puritan communism/socialist system which hasn't really worked over the long term in the past. The other thing to be concerned about is that a lot of them don't have solid policies or answers to the problems which currently face us
http://theconversation.com/postcard-from-spain-where-now-for-the-quiet-revolution-43779
http://blogs.channel4.com/paul-mason-blog/greece-referendum-euro-die/3978
- if more people could distinguish real value from perceived and effective value, needs and wants, we would have less assetts bubbles and price gouging across the board
http://www.news.com.au/finance/real-estate/bis-shrapnel-report-reveals-property-prices-to-fall/story-fncq3era-1227416605503?from=google_rss&google_editors_picks=true
https://www.ozbargain.com.au/node/104348
http://www.news.com.au/world/breaking-news/nz-govt-slammed-over-10m-ny-apartment/story-e6frfkui-1227416038766
- there will be those who say who cares about the collective. Capitalism is composed of boom and bust cycles. Here's the problem. Most companies require debt to survive. If they can't survive that bust cycle they will be part of a collective collapse in the economy. Moreover, based on information I've come across other developed countries have looked at the plans for the Eurozone and the ways of dealing with high debt and are basically using that as the blueprint for the future. Your assets can and will be raided in the event of the state or systemic entities getting into trouble
http://www.heraldsun.com.au/business/greeks-stashing-money-in-homes-as-deadline-looms-for-debt-repayments/story-fni0d2cj-1227403214181?from=google_rss&google_editors_picks=true
http://www.nytimes.com/2015/06/30/business/dealbook/the-hard-line-on-greece.html?_r=0
http://www.usatoday.com/story/news/2015/06/29/evening-news-roundup-monday/29466899/
http://www.bbc.co.uk/news/world-europe-33324363
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/06/30/7-questions-about-greeces-huge-crisis-you-were-too-embarrassed-to-ask/ 
- people say that we should get educated in order to have a high paying job but the problem is that we are increasingly siloed into specific roles. If we can't use the knowledge, the time and money we've spent on education has been for nothing. We require better organisation between educational curriculums and professional settings
http://www.financialexpress.com/article/companies/infosys-wipro-tech-mahindra-it-giants-revamp-culture-to-attract-young-talent-battle-start-ups/86718/
- even if governments are aware that there are problems that are cropping up with our version of capitalism, it's possible that there are those that may be saying that we have no choice but to keep the cycle going. It's the best of the worst
http://www.bbc.co.uk/news/world-europe-33303105
- globlisation essentially buys us more time before things come to a head (if they do). Most of the sceanarios point to organised debt forgiveness as a means of dealing with the problem. Private asset seizure is something that is being metioned everywhere. Raw commodities stored at secure locations may be your only source of safety if things look bad if you are a private citizen
http://www.washingtonpost.com/blogs/wonkblog/wp/2015/06/29/greece/
http://www.news.com.au/finance/small-business/those-selling-safes-are-cashing-in-on-greeces-financial-uncertainty/story-fn9evb64-1227422325045
http://www.news.com.au/finance/economy/what-a-grexit-would-look-like/story-e6frflo9-1227422412614
http://www.telegraph.co.uk/finance/economics/11712098/Europe-has-suffered-a-reputational-catastrophe-in-Greece.html 
- if you want a resilient economy you need maintain a level playing field, flexible workforce, and possibly limit the size and influence of major companies in your economy
http://www.vice.com/en_uk/read/the-irish-emigration-crisis--a-new-century-an-old-problem
- I don't get it. Heaps of countries have adequate blocking technology to be help deal with this if they deem it illegal. Deploy it correctly and your rioting problem is over with...
http://www.arkansasonline.com/news/2015/jun/27/hollande-uber-unit-illegal-dismantle-it/
http://www.theguardian.com/technology/2015/jun/26/uber-expansion-meets-global-revolt-and-crackdown
http://timesofindia.indiatimes.com/tech/tech-news/Officials-hint-at-possible-win-for-Uber-in-Mexico-City/articleshow/47861342.cms
- as stated previously, I've come to the conclusion that a lot of financial instruments are useless. They effectively provide a means of making money under any conditions. If we remove these instruments from play then I think that it may be possible that we may return to less speculative markets that depend more on fundamentals
- anyone can create something of value. The issue is whether it is negligible versus tangible value. This will also determine your business model
- you may know that ther is a bubble but as China and local experiences have demonstrated popping it gracefully is far from easy. Moreover, by the time you figure out there's a bubble it may often too late. Too many people may have too many vested interests
http://www.reuters.com/article/2015/06/29/us-usa-puertorico-restructuring-idUSKCN0P903Q20150629
http://www.businessinsider.com/puerto-rico-is-struggling-to-repay-its-debt-2015-6
http://jamaica-gleaner.com/article/commentary/20150630/editorial-jamaica-no-greece
http://www.heraldsun.com.au/business/breaking-news/world-bank-warns-china-on-reforms/story-fnn9c0hb-1227423791391?nk=5438df4578f2af3f2d269863d041c50c-1435746465 
- theory helps but you won't figure out how market economies work without first hand experience

http://www.afr.com/news/policy/budget/big-government-flourishes-under-tony-abbott-and-joe-hockey-20150513-gh0sgrhttp://www.dailytelegraph.com.au/news/nsw/joe-blasts-welfare-rich-who-have-more-money-to-spend-than-workers/story-fni0cx12-1227357517141
http://www.smh.com.au/business/australiachina-free-trade-agreement-favours-chinese-investors-20150621-ghthjr.html
http://www.afr.com/technology/telstra-cuts-broadband-plan-fees-to-counter-rivals-20150626-ghyir7
http://www.afr.com/opinion/columnists/trophy-trade-deals-wont-change-the-imfs-dismal-outlook-20150628-ghysnn
http://www.brisbanetimes.com.au/act-news/uberx-australian-drivers-working-as-coequals-to-rideshare-tech-company-20150629-ghvjx1.html
http://www.dailytelegraph.com.au/business/breaking-news/hockey-flying-blind-on-negative-gearing/story-fnn9c0gv-1227417798217?nk=0b226f408634f8d8ba57220c3d074f55-1435471944
http://www.abc.net.au/news/2013-11-08/the-chinese-embassy-bugging-controversy/5079148
http://www.macleans.ca/news/world/why-refugees-are-fleeing-france-for-britain/
http://www.businessinsider.com.au/facebooks-shot-at-cisco-just-got-deadly-2015-3
http://www.theglobeandmail.com/globe-drive/culture/technology/gyroscopes-will-allow-bike-to-stay-upright-when-stopped/article24920123/
http://www.businessinsider.in/5-things-Elon-Musk-believed-would-change-the-future-of-humanity-in-1995/articleshow/46831594.cms

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Saturday, June 27, 2015

The Value of Money - Part 3

The Western world generally saw the collapse of the Soviet Union as proof positive of the superiority of capitalism over communism/socialism. Most of the arguments bordered along the lines that the sheer scale of managing an economy, that it resulted in nepotism, bred corruption, stifled innovation, and that it didn't feed into the needs and wants of it's constituents were the reasons for their failure. The irony is that you can see many of the same flaws in communism and socialism that you see in capitalism now. Given the fact that more and more developed economies are getting into trouble I wonder whether this is the true way forward. The European Union, United States, Japan, and others have all recently endured serious economic difficulty and have been projected to continue to experience prolonged issues.

My belief that if capitalism and free market economics is to work into the future constraints must be placed on the size of firms relative to the size of the market/economy. Below are some reasons for my belief in this as well as some other notes regarding market economics:
- I believe that one of the reasons we only favour free market economics because it limits the severity of problems if/when someone/something collapses. If a government collapses you have trouble everywhere. If a company collapses it only impacts the company and the immediate supply chain, distributers, retailers, etc...
- the other problem is most of the companies that grow to this size have no choice but to be driven by greed. Even if they pay their fair share of taxes most of them rely on debt of some sort in order to maintain a viable business. Without cash flow from the stock market, their creditors, etc... they can't continue to pay the bills. Hence, they must satisfy their own needs as well as that of their shareholders and creditors at the expense of those in the wider community. An example of this are the large retail chains that operate in many of the more developed countries. The problem is that their power can now rival that of the state. For instance, in Australia, "Almost 40 cents in every dollar we spend at the shops is now taken by a Woolworths or Wesfarmers-owned retail entity" with their interests including the "interests in groceries, fuel, liquor, gambling, office supplies, electronics, general merchandise, insurance and hardware, sparking concerns that consumers will pay more."
http://www.news.com.au/finance/money/coles-and-woolworths-receive-almost-40-per-cent-of-australian-retail-spending/story-e6frfmd9-1226043866311
If the chain collapses it's likely that hundreds of thousands of jobs will be lost in the event of administration/receivership. I'm arguing that we need to spread the risk a bit. If one part collapses it doesn't bring the whole thing crashing down around you
http://www.instantshift.com/2010/02/03/22-largest-bankruptcies-in-world-history/
- despite politician's complaints about MNCs/TNCs not contributing their fair share towards the tax base they aren't willing to make enough of an effort to change things to create those circumstances. There needs to be an understanding that without someone to buy their products and services these companies will go bankrupt. Large firms need employees and consumers as much as we need their tax revenue
- the irony is that we believe that since companies are large they are automatically successful, we should support them. Think about many of the recent large defense programs that were undertaken by large firms. As indicated previously, there's currently no incentive for them to help the state. They just want to survive and generate profits. The JSF program was deliberately structured in such a way that we've ended up with a fighter jet that isn't up to the original design spec, well and truly over the desired budgetary parameters, and way beyond the original design constraints putting the national security of many allied nations at risk
https://medium.com/war-is-boring/test-pilot-admits-the-f-35-can-t-dogfight-cdb9d11a875
http://www.janes.com/article/52715/jpo-counters-media-report-that-f-35-cannot-dogfight
- progress within the context of market economics is often only facilitated through proper competition and regulation. At the moment, many of the largest donors towards political parties are large companies. This results in a significant distortion of the playing field and what the ultimate decision makers deem to be important issues.
http://www.nytimes.com/2015/06/25/business/obama-bolsters-his-leverage-with-trade-victory-but-at-a-cost.html?_r=0
https://en.wikipedia.org/wiki/Global_saving_glut
Think about nature of the pharmaceutical industry and electronics/IT industries. They both complain that progress (research and development) is difficult. The irony is that it's difficult to argue this if you're not making any worthwhile attempts at it. Both sectors sit atop enough savings to be able to cure much of the world's current woes but they have absolutely no incentive to bring it back on shore for it to be properly tax or to spend it
http://money.cnn.com/2015/03/20/investing/stocks-companies-record-cash-level-oil/
http://www.telegraph.co.uk/finance/11038180/Global-firms-sitting-on-7-trillion-war-chest.html
http://www.telegraph.co.uk/finance/budget/9150406/Budget-2012-UK-companies-are-sitting-on-billions-of-pounds-so-why-arent-they-spending-it.html
http://www.theguardian.com/commentisfree/2013/may/13/tax-havens-hidden-billions
Moreover, they more often than not just use their existing position to continue to exploit the market. A lot of electronics now is simply uneconomical or impossible to repair locally which means that you have to purchase new products once it has gone out of warranty and has failed due to engineered lifecycles (they are designed to fail after a particular period. If they didn't they would suffer the same fate that some car manufacturers have been complaining about. If they don't fail no one will buy new cars). My belief is that there should be tax concesssions if they are willing or they should be forced to invest into SME firms (which comprise the bulk of the economy) via secondary small capitalisation type funds (especially if the company doesn't know what to do with spare cash and it is left 'stagnant'). Ironically, returns on broad based funds in this area (longer term. Losses are often magnified if invested in the short to medium term or even over the long term if invested by a less than compentant money manager) more often than not exceed the growth of the company in question as well as the economy in general
- sometimes I wonder whether or not managing an economy (from a political perspective) is much the same as operating as a market analyst. You're effectively taking calculated bets on how the world will end up in the future. Is it possible that good economic managers need to be more lucky than skillful?
http://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393330338
https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
- in some cases, the nature of capitalism is such that the state has grown so large (because in general government services aren't profitable) that they are beginning to groan under the pressure that many of the more developed nations are now feeling. This is a case of both mis-management and a mis-understanding of how to use capitalism to your advantage
- one of the biggest contradictions in business is that it should all come down to the bottom line. The stupid aspect of this is that most companies have double digit turnover and continue to make the excuse that you should simply put up with whatever is thrown at you even if employee turnover is high. If workplaces were generally more civilised and conditions better then you would have a huge cost removed from your business (loss of employee, advertising, training, etc...)
- normally, when people are taught about life, we start with the small and simple examples and then we are pushed into more complex and advanced examples. The irony is that is often the opposite of the way we are taught about business. We are taught to dream big and win big or else crash and burn and learn your place in society. There is a major problem with this. In the Australian economy, SME business accounts for 96% of the economy. It is similar elsewhere. People leaving our educational institutions basically aren't equipped to be able to run make money by themselves right out of school. Help them/teach them how and you could help the overall economy as well as these students by equipping them to be able to look after their own needs reducing the burden on the social welfare system and giving them valuable employment experience that may be worthwhile later down the track. Most students are equipped to work for other people not to start their own company or operate as individuals
http://www.smartcompany.com.au/technology/information-technology/31806-number-of-businesses-in-australia-continues-to-stagnate-abs.html
- all politicians (and people in general) like to talk about the success of their country in being able to attract MNCs/TNCs to employ people locally. However, the problem is that they aren't the main employment drivers in the economy. Across most of the world's economies small businesses are the driving force ("Such firms comprise around 99% of all businesses in most economies and between half and three quarters of the value added. They also make a significant contribution to employment and are of interest to governments primarily for their potential to create more jobs."). One wonders that even with the increased business (direct and indirect) around a large firm when they exist in a country are you getting value for money (especially if you are subsidising their local existence)?
http://theconversation.com/growing-the-global-economy-through-small-to-medium-enterprise-the-g20-sme-conference-28307
- we actually do ourselves somewhat of a disservice by creating a perception that dreaming and living big is what you should want. Popular culture makes it feel like as though if you don't go to the right schools, work for the right companies, and so on you are a failure. The irony is that if every single graduate were taught about how to commercialise their their ideas while at school I believe that we would have a far more flexible, innovative, economy. Moreover, both they as well as economy in general would get a return on investment. It's no good telling people how to be enterpreneurial if they don't know how to be enterpreneurial.
- the irony of the large donor phenomenon is that SME business accounts for most of the activity within the economy...
http://www.smartcompany.com.au/technology/information-technology/31806-number-of-businesses-in-australia-continues-to-stagnate-abs.html
- as we've discussed previously on this blog the primary ways you can make money are to create something of value or by changing the perceived value of something such that people will want to buy it no matter what the disparity between perceived value versus effective value. Once upon a time I look at German prestige and performance vehicles to be the pinnacle or automative engineering. The more I've learned about them the less impressed I've become. If I told you the evidence points to them being the least reliable, the vehicles which depreciate the most (within any given time frame), most expensive to repair, the most expensive to insure and service, average safety, and that often only have comparable technology to other cars (once you cut through the marketing speak) you'd think that people would be incredibly stupid to purchase them. Yet, this trend continues...
http://usedcars.about.com/od/research/fl/10-Least-Reliable-Used-Car-Brands.htm
http://www.bbc.com/news/business-32332210
http://rac.com.au/motoring/motoring-advice/buying-a-car/running-costs
http://rac.com.au/news-community/road-safety-and-transport/safe-cars/how-safe-is-your-car/used-car-safety-ratings
Another good example is the upper echelons of professional sport and artistry (includes music, art, etc...). If anybody told you that you were paying several hundred dollars an hour to watch a group of individuals kick a ball you'd think that they were mad. The horrible part is when you realise top tier amateur competitions which are free to watch can be just as entertaining and skillful
- in reality, in the real world very very rarely are pure market forces at play and it often takes a lot of time for it to get through to them that for all the stuff/theory that you learn at school there's a lot more that you will also learn in the real world
- most industries fit into the following categories; something that you need or something that you want. By selling people a dream we can turn what you want into something you need and create employment from it
- if you want to make abnormal (excess) profits it's mainly about being able to distinguish between perceived, effective, and actual value. Once you can establish this you can exploit it. This is easier said than done though. Let's say you discovered Lionel Messi playing in the streets of Somalia versus Paris. More than likely, you'd value him much less if we were found in Somalia. Sometimes it can be pretty obvious, at other times it's not much different from predicting the future. For instance, the iPod was essentially a re-modled MP3 player with an integrated software solution/ecosystem, Coke is basically just a sweet, fizzy drink which is actually beaten by Pepsi in blind tests
- we like short term thinking because we like the notion that we can make a lot of money in a short space of time. That means that we can retire early, purchase luxury goods and services. The irony is that this feeds into a disparity between actual, perceived, and effective value which means that flawed businesses can continue to still work. The irony is that this flaw works in practice but in the long term it can results in asset bubbles. Valuation at the correct level is in collective's overall interests
- risk isn't necessarily directly related to reward if you're modelling is good. One way to reduce risk is to let others take it first. You might not make a massive name for yourself but should at least not break bank for a high risk project. This has been a common theme in the Russian and Chinese defense establishments where they have often taken significant cues from American technology
- it's becoming clearer to me that many financial instruments actually aren't required. The industry itself relies on the fact that that many will fall for the perceived notion that you can make a lot of money in a small amount of time or for little labour. However, the reality is that most will make a lot less that what is perceived to be the case. An example of this is the following. Many financial instruments are created for the express purpose of increasing risk exposure and therefore possible profits/losses. In reality, most people lose. It's like a casino where the house wins most the time. The other irony is the following, while liquidity can have a direct correlation with volatility (allows you to reach a more valid price earlier especially if many are involved in pricing), the same is also true in the opposite direction. It only takes a few minor outliers to be able to change the perception where value within the market exists
http://blogs.cfainstitute.org/investor/2015/06/11/solutions-to-a-misbehaving-finance-industry/
- may SME firms collapse within a short time frame but easy credit makes it easier for bad business models to continue to exist. The same is also true of the United States economy where uncompetitive industries were allowed to continue to exist for a long time without adequate trade barriers. If the barriers are lifted we should create circumstances where we force companies to alter their strategies earlier or force them to re-structure/collapse/declare bankruptcy. It will help to reduce the impact of when we provide credit to flawed companies which ultimately collapse
- the way we measure credit risk is often questionable. Financial institutions often turn away low income earners because they are considered a credit risk. I looked at this further and the rates that they are actually charged are diabolical. At one particular place, they were charging 10% for a one week loan, 15% for a 3 week loan, and then 25% for a month long loan. If the industry was so risky though how does it continue to exist? Most of the people who understand the problem have basically said that people who require this money simply have a hard time budgeting and managing their affairs. Essentially providing them with a lump sum component every once in a while makes them believe that they can spend freely. The irony is that the rest of society is also somewhat guilty of this. If we were paid cash and by the hour (rather than regular lump sum payments) and had to pay a component of our bills and other expenses each day we would look at our purchases very differently
http://www.news.com.au/finance/real-estate/stamp-duty-scandal-tony-abbott-under-pressure-to-scrap-our-worst-tax-amid-disastrous-poll/story-fndban6l-1227398035046?from=google_rss&google_editors_picks=true
http://www.perthnow.com.au/news/breaking-news/welfare-card-trial-sites-still-undecided/story-fnhrvfuw-1227398497797?nk=2dc00eb5accf0aef95bbb39faeb08ba0-1434358050
At the other end of the scale, there exists another paradox/contradiction. I've heard stories about people with relatively high incomes being denied credit even though their credit history was good (companies can't make money if you don't breach credit conditions every once in a while). Despite what we say about free market economics, regulatory frameworks, etc... the system is corrupt. It's just not as overt and no one likes/wants to admit it.
- despite what many may think of him, I think Vladamir Putin is actually trying to look after his country's best interests. The collapse of the Soviet Union gave rise to the oligarch. A circumstance that was facilitated by the nature of free market economics without an adequate framework (rules and regulations such as that provided by law). Essentially, the state was replaced by private enterprise where the needs of the many were placed lower on the pecking order than had the state still been in charge. I understand his perspective but I don't believe in the way he has gone about things
https://en.wikipedia.org/wiki/Revolutions_of_1989
https://en.wikipedia.org/wiki/Socialism
https://en.wikipedia.org/?title=Communism
https://en.wikipedia.org/wiki/Capitalism
http://www.msnbc.com/msnbc/pope-francis-rejects-communism-critique
http://ncronline.org/blogs/francis-chronicles/pope-francis-concern-poor-sign-gospel-not-red-flag-communism
http://www.marxist.com/kievs-contemporary-anti-communism-and-the-crimes-of-the-oligarchys-very-existence.htm
- people say that we should do more and spend more in the fight against organised crime. The stupid, ironic thing is that when society is unfair and unjust organised crime grows much stronger because it provides people with a way of making a living. In Europe, the Italian mafia has grown much stronger with the advent of the European economic difficulties and it was much the same in Japan when their asset bubble burst during the 90s
https://en.wikipedia.org/wiki/Lost_Decade_%28Japan%29
- the EU was borne of the fact that no one wanted war again in Europe. It feels like much the same with the rest of the world. We've used progress and better living conditions as an argument against going to war. However, the world has essentally ended up engaging in an effective 'Cold War'. Much of the world's spending revolves around the notion of deterrence. Namely, if I go to want to go to war with you I know that I'll suffer just as much damage (if not more)
https://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures
http://www.globalissues.org/article/75/world-military-spending
There are a number of ways around this. By reaching a concensus for that countries will no longer attempt to project power outwards (defend yourself only, don't interfere with others. Highly unlikely.), invasion will no longer be part of the future landscape (other countries will come to the aide of those in trouble. Unlikely especially with the rise of terrorism.), or else collapse a economies such that countries will no longer be able to afford to spend on defense. The troubling thing is that the last scenario has actually been outlined in various US intelligence and defense reports. It's essentially war without war. If you can wreak havoc in someone's economy then they'll no longer be a problem for you. The irony is that the larger your intelligence apparatus the more likely you can engage in this style of activity. Previous leaked reports and WikiLeaks has made me highly skeptical that the average country doesn't engage in this style of activity.
http://www.theguardian.com/world/2013/aug/29/us-intelligence-spending-double-9-11-secret-budget
https://en.wikipedia.org/wiki/United_States_intelligence_budget
The irony is that you if you don't engage in these activities you may lose a significant advantage. If you do, you're sort of left to question whether or not you are the good guy in this affair
- people who haven't spent enough time in the real world only often understand the theory. Once you understand how things actually work your whole perspective changes. Let's take the housing asset/bubble that we may be going through. As stated previously, making abnormal profits is about managing the difference between perceieved, actual, and effective value. It's clear that in theory boosting supply may change things. The thing I've discovered is that in free market economics it only takes a small thing to change perception. Once the perception snow balls you're stuck with the same problem. This is the same whether it is a new home buyer or a foreign investor purchasing in the local market
http://www.smh.com.au/nsw/mike-bairds-400m-boost-for-infrastructure-fund-to-tackle-housing-affordability-crisis-20150621-ghtfr8.html
http://www.theglobeandmail.com/report-on-business/milk-surplus-forcing-canadas-dairy-industry-to-dump-supply/article25030753/
http://www.brisbanetimes.com.au/it-pro/rental-growth-slowdown-signals-residential-property-bust-on-the-way-20150626-ghxkdr
http://www.news.com.au/finance/real-estate/economists-claim-australia-in-midst-of-largest-housing-bubble-on-record/story-fncq3era-1227410053643?from=google_rss&google_editors_picks=true
- a business structure is simply a focal point of communication between business and consumer. It also affords the opportunity for a government to tax it more effectively
- by being so insistent on upskilling and education it makes low labour costs almost impossible to achieve. This makes a lot of infrastructure projects in developed countries impossible because they are economically unviable. A good example of this is 457 visas in Australia, and illegal immigration in the United States (especially from Mexico) which are often used and abused to acheive lower labour costs than otherwise would have been possible. Another example of this is the Snowy River Hydroelectricity project. It's said that hardly anyone on site knew English and that often people just learned on the job.
http://www.politico.com/story/2015/06/donald-trump-calls-jeb-bush-unhappy-119153.html?ml=ri
Another recent project put this into perspective. It was said that building a building infrastructure (tunnels, office blocks, etc...) in China, shipping it, and then assembling it here in Australia would be more cost effective then building it here alone. We need to give people a chance no matter what their education or skill level if we are to balance government budgets and to reduce the incidents of off-shoring without necessarily having to resort to often expensive anti-shoring techniques such as tarrifs, rebates, taxes, etc...
- our perception of success feels odd sometimes. If you look up the background of Rupert Murdoch, Donald Trump, and several others you'll see that thye are continually on the point of brankruptcy. Under normal circumstances anyone continually on verge of losing everything would be considered mediocre but in the business world they're considered successful because they can keep the whole thing going... Also, look at the poverty figures for the United States, Germany, United Kingdom, United Arab Emirates, Iran, and Japan. Notice the odd one out? Iran has been under sanction for a long time for their alleged nuclear research activities and yet the level of poverty in Iran is comparable to all these others.
https://en.wikipedia.org/wiki/List_of_countries_by_percentage_of_population_living_in_poverty
- the only other way to achieve lower costs in developed countries is to resort to automation and robots (else tap developing countries for lower priced components). I've looked at Australian car manufacturing plants and American and European plants for mass produced vehicles. The level of automation in American and European plants seem to be significantly higher with build quality that is comparable
http://www.kyodonews.net/news/2015/06/20/21340
http://forums.whirlpool.net.au/archive/2050953
- the perception is that we always should hire the best and brightest in order to get the job done and that we should try to do our best to make them happy. The irony is that I've worked on both sides of the fence. By hiring only the best and brightest (perceived to be. A lot of the time the best and brightest don't necessarily get hired based on what I've seen) and only settling on them we force wages up across the board and we make work more difficult for your existing workforce. It may even be more difficult to keep them happy. The other irony is that there are many wealthy global companies who can afford to hire away your best staff forcing prices up even further. Complete free trade works in favour of those who are already wealthy and makes it harder for those down the chain to make a living and to progress
- if all the best and brightest are hired by the same companies (based on personal experience) you aren't necessarily always going to get the best out of them. Companies have an increasing tendency (regulatory as well as political issues) to pigeon hole them into specific roles which doesn't allow them to realise their full and complete potential. The individual, company, as well as the collective lose out
http://blogs.cfainstitute.org/investor/2015/06/11/solutions-to-a-misbehaving-finance-industry/
- we believe in out current style of capitalism because we have a perception that it gives everyone a chance in life to be and do whatever they want. In reality, it's a lot more complicated. At it's very core I think it's very much like Winston Churchhill's opinion of the Westminster parlimentary system, "Democracy is the worst form of government, except for all the others."
http://www.goodreads.com/quotes/267224-democracy-is-the-worst-form-of-government-except-for-all
- it's clear that I believe in limited capitalism and for the most part we should try to work with those within our regions to reduce the chances of a systemic collapse. Currency manipulation, foreign investment law, tarrifs, taxation, etc... are all lawful means of changing the playing field. In fact, the exact same techniques that countries use to protect against trade sanctions can be used to guard the economic safety of citizens locally. By playing by the current rules and free trade we are essentially playing into the hands of the larger companies of the world (mostly based in the United States). It's a form of imperialism/conquest (deliberate or not) without necessarily having to engage in open warfare and with the effective ruler being the United States with these companies acting as proxies
http://www.theglobeandmail.com/report-on-business/international-business/european-business/europe-shutters-as-greek-banks-bleed-cash/article25033867/
http://rt.com/business/250497-obama-economy-china-trade/
- making or saving money can sometimes be counterintuitive. If you've ever worked in the IT industry in any sort of support role then you'll realise that no matter what level of support you operate at one of the main aims is to establish whether or not the problem occurs without your own area of oversight. If it is, you try and fix it, if not you ignore it and basically tell the other end to kindly go away because you often don't have the expertise to fix it, nor do you have the oversight to be able to. The medical and pharmaceutical industry is much the same. The irony is that this perspective can result in longer term harm than good. The United States budget is out of whack with one of the major causes being the high cost of drugs as well as short sighted perspective of medical practitioners who tend to not attempt to treat the problem till it's fixed but keep on managing it. Fix it if you can and the problem goes away, your budget is in better shape
http://ourfiniteworld.com/2011/04/08/whats-behind-united-states-budget-problems/
http://www.businessinsider.com/us-budget-deficit-2011-7
- if so many countries are so concerned about profit shifting why don't they simply make it un-economical/impossible to re-locate from now on? That way existing financial centres for such activity can adapt in the meantime while others countries can begin to regain some of their investment
- every company engages in anti-competitive behaviour. Even though (and others) Google are a supposed proponent of the 'Don't be Evil' mantra they still have shareholders to report to meaning that even if they don't want to they have to
- if too few countries make changes their companies are going to be subject to foreign takeover interest (friendly and non-friendly) if adequate measures aren't taken to protect them. Moreover, they will be at a competitive disadvantage when attemping to branch out. The only way to look after these interests is to look at the way companies are structured in order to look after the needs of both the individual and collective simultaneously
- making changes for a fairer and more equatible society isn't easy and the irony is that those who are already successful will always appeal to reduce the chances of the status quo changing. They will insist that since they 'made it' so can others. Moreover, there are always those within the political and public services who will always have differing opinions on how to acheive the same thing
http://www.smh.com.au/world/us-supreme-court-hands-obama-major-victory-on-obamacare-healthcare-reform-20150625-ghy1xq.html#content
http://www.seattletimes.com/seattle-news/a-pathological-refusal-to-see-any-shred-of-good-in-obamacare/
- people say that globalisation and free market capitalism is a guard against collapse. Someone in the system is always going to be looking for money or someone is always going to have money. The problem is that there's no incentive to do this. Moreover, it has been proven in the United States and Europe that pure private, free trade capitalism isn't necessarily going to fill the void should there be significant underlying problems. Even states and unions can not hold back the dam should the market burst. Moreover, firms have shareholders and creditors to report to. Without adequate safeguards in place the needs of the many are never going to be met by the few who are lucky enough to have survived (there is only one exception to this. If there is strong leadership/management in the private sector which I haven't seen to many instances of)
https://en.wikipedia.org/wiki/Great_Recession
http://www.afr.com/markets/commodities/energy/saudis-seen-escalating-battle-for-global-oil-market-share-20150618-ghrxws
https://en.wikipedia.org/wiki/2007%E2%80%9308_world_food_price_crisis
https://en.wikipedia.org/wiki/2000s_energy_crisis
http://www.news.com.au/national/breaking-news/govt-to-explore-social-impact-bonds/story-e6frfku9-1227416495203
http://www.news.com.au/world/breaking-news/pope-talking-drivel-catholic-economist/story-e6frfkui-1227416020721

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Saturday, June 13, 2015

The Value of Money - Part 2

This is obviously a continuation from my last post, 

No one wants to live from day to day, week to week and for the most part you don't have that when you have a salaried job. You regularly receive a lump sum each fortnight or month from which you draw down to pay for life's expenses.

Over time you actually discover it's an illusion though. A former teacher of mine once said that a salary of about 70-80K wasn't all that much. To kids that seemed liked a lot of money though. Now it actually makes a lot more sense. Factor in tax, life expenses, rental, etc... and most of it dries up very quickly.

When you head to business or law school it's the same thing. You regularly deal with millions, billions, and generally gratuitous amounts of money. This doesn't change all that much when you head out into the real world. The real world creates a perception whereby consumption and possession of certain material goods are almost a necessity in order to live and work comfortably within your profession. Ultimately, this means that no matter how much you earn it still doesn't seem like it's enough.

The greatest irony of this is that you only really discover that the the perception of the value of such (gratuitous) goods changes drastically if you are on your own or you are building a company.

I semi-regularly receive offers of business/job opportunities through this blog and other avenues (scams as well as real offers. Thankfully, most of the 'fishy ones' are picked up by SPAM filters). The irony is this. I know that no matter how much money is thrown at a business there is still no guarantee of success and a lot of the time savings can dry up in a very short space of time (especially if it is a 'standard business'. Namely, one that doesn't have a crazy level of growth ('real growth' not anticipated or 'projected growth')).

This is particularly the case if specialist 'consultants' (they can charge you a lot of money for what seems like obvious advice) need to be brought in. The thing I'm seeing is that basically a lot of what we sell one another is 'mumbo jumbo'. Stuff that we generally don't need but ultimately convince one another of in order to make a living and perhaps even allow us to do something we enjoy.

What complicates this further is that no matter how much terminology and theory we throw at something ultimately most people don't value things at the same value. A good example of this is asking random people what the value of a used iPod Classic 160GB is? I remember questioniong the value (200) of it by a salesman. He justfied the store price by stating that people were selling it for 600-700 on eBay. A struggling student would likely value it at around closer to 150. A person in hospitality valued it at 240. The average, knowledeagble community member would perceive (most likely remember) the associated value with the highest mark though.

Shift this back into the workplace and things become even more complicated. Think about the 'perception' of your profession. A short while back I met a sound engineer who made a decent salary (around 80K) but had to work 18 hour days continuously based on his description. His quality of life was ultimately shot and his wage should have obviously been much higher. His perceived value was 80K. His effective value was much lower.

Think about 'perception' once more. Some doctors/specialists who migrate but have the skills to practice but not the money to purchase insurance, re-take certification exams, etc... become taxi drivers in their new country. Their effective value (as a worker) becomes that of a taxi driver, nothing more.

Many skilled professions actually require extended periods of study/training, an apprenticeship of some form, a huge amount of hours put in, or just time trying to market your skills. A good chunk people may end up making a lot of money but most don't. Perceived value is the end salary but actual value is much lower.

Think about 'perception' in IT. In some companies they look down upon you if you work in this particular area. What's interesting is what they use you for. They basically shove more menial tasks downwards into the IT department because, 'nobody else wants to do it'. The perceived value of the worker in question doesn't seem much more different than a labourer.

The irony is that they're often just as well qualified as anybody in the firm in question and the work can often be varied to make you wonder what exactly is the actual value of an average IT worker. I've been trying to do the calculations. Average IT graduate is worth about 55K.
http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4125.0main+features2320Jan%202013
http://www.payscale.com/research/AU/Job=Graduate_Software_Engineer/Salary
http://www.graduatecareers.com.au/research/researchreports/graduatesalaries/

Assuming he works at a SME (any industry not just IT) firm he'll be doing a lot of varied tasks (a lot of firms will tend to pigeon hole you into becoming a specialist). At a lot of service providers and SME firms I've looked at one hour of down time equates to about five figures. If you work in the right firm or you end up really good at your job you end up saving your firm somewhere between 5-7 figures each year. At much larger firms this figure is closer to about 6-8 figures each year.

At a lot of firms we suffer from hardware failure. The standard procedure is to simply purchase new hardware to deal with the problem (it's quicker and technically free despite the possible loss of downtime due to diagnosis and response time). The thing I've found out is that if you are actually able to repair/re-design the hardware itself you can actually save/make a lot (particularly telecommunications and network hardware). This is especially the case if the original design cut corners. Once again savings are similar to the previous point.

In an average firm there may be a perception that IT there is simply to support the function a business. It's almost like a utility now (think electricity, water, gas, etc... That's how low some companies perceieve technology. They perceive it to be a mere cost rather than something that can benefit their business). What a lot of people neglect is how much progress can be made given the use of appropiate technology. Savings/productivity gains are similar to the previous points.

What sort of stops us from realising just exactly what our value is is the siloed nature of the modern business world (specialists rather than generalists a lot of the time) and the fact that various laws, regulations, and so on are designed to help stop us from being potentially exploited.

The only way you actually realise what you're worth is if you work as an individual or start a company.

Go ahead, break down what you actually do in your day. You'll be surprised at how much you may actually be worth.

What you ultimately find out though is that (if you're not lazy) you're probably underpaid. The irony is that if the company were to pay you exactly what you were worth they would go bankrupt. Moreover, you only realistically have a small number of chances/opportunities to demonstrate your true worth. A lot of the time jobs are conducted on the basis of intermittency. Namely, you're there to do something specialised difficult every once in a while, not necessarily all the time.

It would be a really interesting world if we didn't have company structures/businesses. I keep on finding out over and over again that you simply get paid more for more skills as an individual. This is especially the case if there is no artificial barrier between you and the getting the job done. The work mightn't be stable but once you deal with that you have a very different perspective of the world even if it's only a part time job.

If you have some talent, I'd suggest you try starting your own company or work as an individual at some point in your life. The obvious problem will be coming up with an idea which will create money though. Don't worry about it. You will find opportunities along the way as you gain more life experience and understand where value comes from. At that point, start doing the numbers and do a few tests to see whether your business instincts are correct. You may be surprised at what you end up finding out.
http://forums.whirlpool.net.au/archive/1505450

Here's are other things I've worked out:
  • if you need a massive and complex business plan in order to justify your business's existence (particularly to investors) then you should rethink your business
  • if you need to 'spin things' or else have a bloated marketing department then there's likely nothing much special about the product or service that you are selling
  • if your business is fairly complex at a small level think about when it will be like when it scales up. Try to remove as many obstacles as you can when you're company is still young to ensure future success if unexpected growth comes your way
  • if you narrow yourself to one particular field you can limit your opportunities. In the normal world it can lead to stagnation (no real change in salary/value), specialisation (guaranteed increase in salary/value) though niether is a given. In smaller companies multiple roles may be critical to the survival/profitability of that particular company. The obvious risk is if they leave you're trying to fill in for multiple roles
  • a lot of goods and services exist in a one to one relationship. You can only sell it once and you have to maximise the profit on that. Through the use of broadcast style technologies we can achieve one to many relationships allowing us to build substantial wealth easily and quickly. This makes valuation of technology companies much more difficult. However, once you factor in overheards and risk of success versus failure things tend to normalise
  • perception means a lot. Think about a pair of Nike runners versus standard supermarket branded ones. There is sometimes very little difference in quality though the price of the Nike runners may be double. The same goes for some of the major fashion labels. They are sometimes produced en-masse in cheap Asian/African countries
  • if there are individuals and companies offering the opportunity to engage in solid business ventures, take them. Your perspective on life and lifestyle will change drastically if things turn out successfully
  • in reality, there are very few businesses where you can genuinely say the future looks bright for all of eternity. This is the same across every single sector
  • make friends with everyone. You'll be surprised at what you can learn and what opportunities you may be able to find
  • the meaning of 'market value' largely dissolves into nothingness in the real world. Managing perception accounts a good deal for what you can charge for something
  • just like investments the value of a good or service will normalise over time. You need volatility (this can be achieved via any means) to be able to make abnormal profits though
  • for companies where goods and services have high overheads 7-8 figures a week/month/year can mean nothing. If the overheads are high enough it's possible that they company may go under in a very short space of time. Find something which doesn't and focus in on that whether it be a primary or side business
  • the more you know the better off you'll be if you're willing to take calculated risk, are patient, and perservere. Most of the time things will normalise
  • in general, the community perception is that making more with high expenses is more successful than making less with no expenses
  • comments from people like Joe Hockey make a lot of sense to those who have had a relatively privileged background but they also go to the core of the matter. There are a lot of impediments in life now. I once recall walking past a begging 'aboriginal'. A white middle-upper class man simply admonished him to get a job. If you've ever worked with people like that or you've ever factored in his background you'll realise that this is almost impossible. Everybody has a go at people who work within the 'cash economy' and do not contribute to the tax base of the country but it's easy to understand a lot of why people do it. There are a lot of impediments in life despite whatever anyone says whether you're working at the top or bottom end of the scale
http://forums.whirlpool.net.au/archive/1937638
http://www.abc.net.au/news/2015-06-10/janda-its-not-hockeys-job-comment-that-should-worry-us/6535484
http://www.smh.com.au/comment/smh-letters/joe-hockey-doesnt-grasp-simple-economics-20150610-ghkl9v.html
http://www.bbc.co.uk/news/education-33109052
  • throw in some wierdness like strange pay for seemingly unskilled jobs and everything looks bizarre. A good example of this is a nightfill worker (stock stacker) at a supermarket in Australia. He can actually earn a lot more than those in skilled professions. It's not just about skills or knowledge when it comes to earning a high wage 
http://forums.whirlpool.net.au/archive/2219972
http://forums.whirlpool.net.au/archive/1937638
  • there are a lot of overqualified people out there (but there are a hell of lot more underqualified people out there are well. I've worked both sides of the equation). If you are lucky someone will give you a chance at a something appropriate to your level but a lot of the time you'll just have to make do
  • you may be shocked at how, who, and what makes money and vice-versa (how, who, and what doesn't make money). For instance, something which you can get for free you can sell while some products/services which have had a lot of effort put into them may not get any sales
https://www.ozbargain.com.au/node/197991
  • there are very few companies that you could genuinely say are 100% technology orientated. Even in companies that are supposedly technology orientated there are still politicial issues that you must deal with
  • by using certain mechanisms you can stop resales of your products/services which can force purchase only from known avenues. This is a common strategy in the music industry with MIDI controllers and stops erosion/canibalisation of sales of new product through minimisation of sales of used products
  • it's easy to be impressed by people who are simply quoting numbers. Do your research. People commonly quote high growth figures but in reality Most aren't impressive as they seem. They seem even less impressive when you factor in inflation, Quantitive Easing programs, etc... In a lot of cases companies/industries (even many countries if you to think about it) would actually be at a standstill or else going backwards.
http://www.inc.com/sageworks/the-15-most-profitable-industries-for-private-companies.html
https://biz.yahoo.com/p/sum_qpmd.html
http://www.forbes.com/sites/sageworks/2013/04/28/the-most-profitable-businesses-to-start/

Wednesday, June 10, 2015

Repairing Musical Instruments/Electrical Equipment, the Value of Money, and Dating

If you've been reading this blog for a while now you've noticed that I do a lot of tinkering. One of the things I've been tinkering wih a lot of late though has been electronic music hardware/software. Some things to note:

- you should make the assumption that no one is going to help you with with regards to circuit diagrams when it comes to fixing machines, re-designing/modifying them, etc... The best that you'll be able to manage are teardown pictures/diagrams posted by others out on the 'Interwebs'. 

Don't make the assumption that your problem is the exact same as others out there. Most of the time though they'll be the usual problems that other electronic devices face such as improper contact (also referred to as dry soldering) or failed electronic components.The biggest problem that you will face will be the intermittent issues. For instance, thermally related or else physical contact problems that haven't quite made themselves completely obvious. I had something like this recently. A screen on a Maschine was basically malfunctioning from time to time. The owner told me to press down on the screen to make it work. I tried it and it seemed to work. After tearing it down and trying to fix various contacts it became obvious that this one was slightly more difficult to fix. Putting pressure across the board didn't provide any further clues until a capacitor (C207, halfway across the PCB) fell off (and the problem seemed to be consistent). Re-soldering seems to have fixed the problem. 

Interesting facts. Maschine screens are interchangeable from side to side in case you want/need to repair one of these. They are their own separate module (except in the Mikro based on the description I'm seeing). They are not soldered on to the PCB but are connected via ZIF connectors. 
Repairing a lot of (non-trivial) electronics is a balance between luck, skill, perseverence, etc... Tips on dealing with intermittent problems include using physical pressure applied at strategic points to narrow down the source, purchasing better diagnostic equipment (sometimes your only choice), and using hair dryers/compressed air as a means of temperature regulation.
https://www.gearslutz.com/board/electronic-music-instruments-electronic-music-production/812965-maschine-mikro-has-met-beer-how-crack-open.html
http://www.illmuzik.com/forums/threads/maschine-mk1-controller-help.32980/
http://maschinemusic.com/forum/topics/maschine-mk2-defective-screens
https://www.native-instruments.com/forum/threads/maschine-studio-screens.211153/page-2
https://www.native-instruments.com/forum/threads/hardware-screens-not-working-properly.230738/
http://www.illmuzik.com/forums/threads/maschine-mk1-controller-help.32980/
https://www.native-instruments.com/forum/threads/i-got-2-maschines-and-on-botth-the-screens-are-flickering-out-after-not-even-1-year.193729/

- same with software interfacing. Some companies build their equipment with the express purpose of linking their hardware and software. They have no incentive to help you build something that will interface with their hardware/software. It will take luck, perservence and knowledge of reverse engineering to do what you need (See the relevant chapters in my book on 'Cloud and Internet Security' for further details regarding this.).
http://www.native-instruments.com/forum/threads/midi-keyboard-in-maschine-help.149559/
http://www.youtube.com/watch?v=JkDKV9ys3z8
http://www.youtube.com/watch?v=P2zFEHyBoZU
https://play.google.com/store/books/author?id=Binh+Nguyen
http://www.amazon.com/mn/search/?_encoding=UTF8&camp=1789&creative=390957&field-author=Binh%20Nguyen&linkCode=ur2&search-alias=digital-text&sort=relevancerank&tag=bnsb-20&linkId=3BWQJUK2RCDNUGFY
http://www.mpc-tutor.com/understanding-midi-on-the-akai-mpc/
http://www.acidboxblues.com/2012/07/so-ableton-live-crashes-and-you-think.html

- there is a good chance that you may be eletrocuted at some point. Take measures to reduce the chances that the amount of power that can exit through your body. I often work with rubber gloves, wear rubber sole shoes, etc... Isolate the problem as much as you can and work across modules. If in doubt order in a new module rather than doing component level repair. It will reduce the chances of you getting 'zapped' and sometimes may be the most viable, economic option available once you factor in the amount of time you must spend working on the problem. Finally, if in doubt send it off to someone more accomplished to have the repair completed. This seems obvious but I've come across some people who have tried to scrimage and have done more bad than good when attemping to 'repair' something.
http://dtbnguyen.blogspot.com.au/2013/03/repairing-laptop-power-bricks.html

- you will come across 'smelly equipment' from time to time. I recently came across a Maschine that had been used in a 'smoky environment'. It was so 'smoky' that I actually felt as though I was getting high from simply being around it. I had to tear it down and soak it (the control pads which seem to be made of a silicone and rubber compound, not the device) in hot water and bleach twice for several hours before I could operate 'normally' within it's vicinity. A tip, if you do have to use solvents or other cleaning chemicals test it at a lower concentration and amount first. You don't want to find out later down the line that the substance you used was actually highly corrosive and may have damaged sensitive electronic components.
https://www.gearslutz.com/board/so-much-gear-so-little-time/811452-how-remove-smoke-odour-gear-2.html
https://www.gearslutz.com/board/so-much-gear-so-little-time/632928-anyway-remove-cigarette-odor-used-gear.html
https://www.gearslutz.com/board/electronic-music-instruments-electronic-music-production/456754-how-do-remove-smell-smoke-y-synthesizer.html
http://forums.whirlpool.net.au/archive/1041569
https://www.gearslutz.com/board/so-much-gear-so-little-time/632928-anyway-remove-cigarette-odor-used-gear.html
http://en.wikipedia.org/wiki/Sodium_hydroxide
http://www.ebay.com/gds/How-to-Eliminate-Smoke-Smell-from-Your-eBay-Purchases-/10000000001669988/g.html
http://www.head-fi.org/t/60646/cigarette-smoke-smell-in-electronics-how-to-get-rid-of

As I was growing up, people often told me to, "do something you enjoy". Other told me to, "do something which will help you make heaps of money". Now, I'm a little, older, and a little bit wiser. I say, try and find a nice balance between the two.

You don't really realise what the value of money is until you actually are forced to consider what you earn and what you actually spend. For instance, the general belief is that everyone goes to school and works hard in an effort to find a good, high earning profession at the end of all of it. Recently, I've been looking at the numbers more carefully and for everything you have to put up with in some places you really wonder whether it's all worth it.

Increasingly, many of us are working extended hours (your job description may say 9 to 5 but in reality your hours are much longer or else you have to deal with an undue number of 'off hour' incidents) with unrealistic expectations, lack of training, favouritism/nepotism, un-supportive/directionless management and/or team mates for not much more and after you've factored in travel time/costs, bills, day to day living costs and so on there's not enough left over to say that it was actually worth it especially if it's not in a role that you particularly enjoy.

Even if you make heaps of money you've given up so much time during the week that you can be too burnt out to enjoy it.

Ironically, it's much the same even in some of the 'glamour industries' such as law, medicine, finance, and IT.
http://forums.whirlpool.net.au/forum-replies.cfm?t=2413007
http://forums.whirlpool.net.au/archive/2345937
http://www.amazon.com/The-Striped-Prison-Lisa-Pryor/dp/0330423509
http://skepticlawyer.com.au/2009/12/21/pin-striped-prison/

Moreover, it's the same with a lot of businesses. Live enough and you basically see that in spite of the impressive numbers (7 to 8 figures a month/year) that a lot of businesses may report it doesn't seem like they're going anywhere. They just seem/feel to be struggling to stay afloat a lot of the time. Things make a lot more sense to me now why many lot of companies seem so paranoid when it comes to profit margins and maintaining large amounts of cash savings on hand in case something goes bad (Microsoft has been somewhat notorious when it comes to this).

The obvious answer to this conundrum is to run your own business (or search for your 'dream job'). Unless you've actually been involved in a startup or have been involved in building a company from the ground up you don't realise how much stress is involved. Unless you actually enjoy the work, you're essentially stuck in the same doom loop scenario. Moreover, finding your 'dream job' is made much more difficult by the lack of opportunities, competition, and the fact by recruiters who may not be entirely up front about the job in question. The only thing I've been learning over and over again is to try and find a balance between time, money, and doing what you enjoy. Moreover, once you find something you enjoy and are making money out of it, make the most of it and stick at it for as long as you possibly can (whether that be your own business or working for someone else).

It's pretty darn obvious people use the information on this blog for all sorts of weird and wonderful things. For those girls who have supposedly been lusting after the man behind this blog, please send photos!!! :-) For those who are looking for immigration benefits though please though photos and send money too!!! :-)
http://www.native-instruments.com/forum/threads/maschine-hardware-holding-back-software.192152/
http://www.native-instruments.com/forum/threads/how-many-installs-of-maschine-do-we-get.82355/
https://www.native-instruments.com/forum/threads/maschine-sound-libraries-etc.104439/
https://www.native-instruments.com/en/support/knowledge-base/show/421/on-how-many-computers-can-i-activate-my-native-instruments-product/
http://www.native-instruments.com/en/support/knowledge-base/show/1136/i-have-activated-the-maschine-software-but-not-yet-received-my-free-version-of-massive/
http://www.native-instruments.com/en/support/knowledge-base/show/559/how-to-activate-a-native-instruments-product-on-an-offline-computer/
http://www.native-instruments.com/en/support/contact-support/registration-support/

- as usual thanks to all of the individuals and groups who purchase and use my goods and services
http://sites.google.com/site/dtbnguyen/
http://dtbnguyen.blogspot.com.au/

Fixing Cheap Hurricane Gen850 and Scorpion ET950L Power Generators, Microwave Rice, and More

Fixing Cheap Hurricane Gen850 and Scorpion ET950L Power Generators: - I've obviously been playing around with small ICE engines of late....