All posts by steve@kerrzone.com

Random thoughts – keeping you on your toes

Living with no consequence

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As we move through are lives our behaviours can often result in a consequence. That is a result or effect deriving directly as a result of our action.

These can be positive or negative.

Breaking rules – potentially negative consequnce

When driving, if you proceed directly through an intersection with a stop sign (without stopping) there could be consequences.  These could range from a fine to a criminal charge for manslaughter .

The extent of the consequences are directly related to the effects of the behaviour leading to the consequence.  Running a stop sign without hitting anyone and not being seen by anyone could result in no consequnce.  If you hit someone so badly they died the consequences could be severe.

Seeking a positive consequence

Purchasing a lottery ticket is an example of an action which could lead to a positive consequence.  That is winning some money or otherwise being reward for your purchase (e.g. a prize).

Motivating Effect

A clear benefit of consequences is how they can drive our behaviour.  The results can make us happy (a lottery win) or keep us safe (preventing a car accident). Most importantly though is the motivating power.

Consequences both result from and drive behaviour.  Arguably without consequence there might be little reason for you to just sit around and vegitate (boring).

Life without Consequence

Consequences are important factors in helping us enjoy and get the most out of life.  The results of actions are both a guide on how to behave responsibly as well as being the outcomes we seek.

A life with no purpose, no outcomes, no resulting consequences from our actions would be boring indeed.  Going out on a limb, I would even say, consequences are something to live for.

Random thoughts – keeping you on your toes

When are you a winner?

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One of my favorite sayings is “winners rule; losers check the rules” .  That is being declared the winner is enough, no further examination necessary.

Sports Contest

In the context of a sporting event the conditions that define the winner are clearly defined.  For example, in a soccer game the winner is the team with the highest score.

The loser might challenge the decision by questioning whether the rules were adhered to.  It is doubtful the winner would do this.

The contest of life

If you have set personal goals to live your life by, the achievement of these should be considered a winning condition.  You may have divided the goals into a series of discrete objective, in which case obtaining an objective is also a win.

To avoid the losers conundrum the goals need to be objective and clearly measurable.  (Did I really lose or is it just the definition of winning – that is question the rules?)  Remember, subjective measures beg for a dispute.

Who is competing.

Unlike a sporting event , in the contest of life you are competing with yourself.  My friends, colleagues and readers of these posts are aware I believe “it’s all about me”.  This fits well with my definition of winning at life.

Winning Feels Good

Hopefully one of your life goals is to feel good.  When you achieve it (i.e., win by my definition) it makes you feel good.  It’s like an exponential curve, winning leads to feeling good, feeling good is a win and ultimately it just spins upward.

 

 

Random thoughts – keeping you on your toes

E-mail Communication

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Before the dawn of electronic communication, written exchanges were mostly done by letter.  These letters were delivered through a post office.

With the dawn of e-mail letters delivered via postal service were given the descriptive nickname of snail mail.  From the time a letter was sent until the reciept of a reply could be weeks, even months.

Today of course, your reply times can be measured in minutes some times even seconds if you use email or instant messaging.

Changing Etiquette

At the high school I attended letter writing was a mandatory course. Here we learned the standard rules for layout, design, syntax, content types, greetings , salutations and so on.

While there may be keyboarding courses at most high schools these days when to use e-mail, how to construct the messages and associated protocols are mainly just skills you are supposed to just pick up.

Misuse of the Medium

Given the ease and speed of the medium e-mail is often misused to have a conversation.  Real caution needs to be exercised around this as conversations without visual queues have a high risk of fostering misunderstanding, even offending.

I had a recent interesting example of this when crafting an e-mail to my sister.  The topic was in response to a question/ suggestion she had made to me  and I was answering on behalf  of all the parties, which included my adult children.

Before sending the reply to my sister I sent an e-mail to my children for feedback.  Without exception they all said I was too harsh.  Great and helpful feedback which resulted in a revised response.

For me this highlighted the risks of e-mail communication.  Without the perspective from my children I could have sent my sister a very wrong message.

Random thoughts – keeping you on your toes

Skirting Existentialism

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I will start this post with a  well known  philosophical thought experiment “If a tree falls in a forest and no one is around to hear it, does it make a sound?”

Like so many things, this is a hard question to answer definitively and pondering it can lead to stimulating discussion (or make your head hurt).

What is real?

Personally I believe in both reality (definitive, constant and absolute) and perception (subjective, inferred, self determined).  The challenge of course is determining what is what?

A circular variation on the opening puzzle would ask if sound is real if it is not heard or only if it is percieved to be heard whether actually heard or not.

Facts

When you arrive at a stop sign in a motor vehicle you must stop.  Is this a true and real fact or a perception that applies only if you percieve it to be so.  I would propose the latter thinking presents some risk of a creating  bad result (i.e. crash).

Facts, reality, truth must exist  and be accepted for society to operate.  Ergo, within the boxes of our cultures the tree does make a sound, if we say it does.

Of course for the existentialists thinking begins with the individual.  This focus on individual freedom and authenticity leads to a sense of disorientation and confusion within our ordered world.

While I enjoy these philosophical diversions on occassion, my own feet are firmly anchored on the ground (the real ground not the percieved one).

Random thoughts – keeping you on your toes

Exploring a “sense of humor”

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If you have the ability to percieve humor or appreciate a joke it is said you have a sense of humor.  And if you cannot appreciate humor such behaviour is just inexplicable, or even irrational.

Humor provokes laughter or at a minimum amusement.  Attempts at humor that do not elicit these responses are often termed “failed humor”.

An interesting quality of humor is its lack of consistency.  One person might percieve the hilarity in a situation while another could be remain stone faced.

Value of a sense of Humor

Being funny and making people laugh is what a comedian does.  The ability to experience mirth and all the good feelings associated with it require a sense of humor.  Life can be very desolate without it.

In this sense recognizing the benefits of a sense of humor, encoraging it, even adopting as a personal or corporate value  is a positive move.

Be Happy!

A key personal objective of mine is to seek pleasure (I have mentioned this in other posts) as long as it is not at the expense of others.  This makes me happy.

Laughing makes me happy.  Everyone might not laugh at the same things but to laugh at all requires a sense of humor and I would be lost without mine.

Random thoughts – keeping you on your toes

Freedom of the Press/Reporting Bias

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Around the world members of the media should be allowed to tell their story.  This is freedom of the press; However, this should not be interpreted as telling a story without bias.

Bias comes in many forms.  These can include:

  • telling the whole truth/facts ( as you percieve them)
  • telling complete untruths, doing this knowingly to meet your objective or agenda
  • colouring the truth/facts to support your position.

Personally, I believe every story, every news item has some bias.  It is just part of being human.  It is impossible for us to  relate information without including our own bias to some degree.

Externally Forced Bias

Unfortunately regional, political and religous bias is sometimes controlled external to the reporter and the way the information is shared can be manipulated through consequences.

In these cases where information is misshaped (i.e., propaganda), manufactured or with witheld; then freedom of the press does not exist.

Free Press can still be Biased

News that is not restricted, manipulated or otherwise controlled by third parties can still be presented with regional, political or individual perspectives (reporting bias) and still be considered “free”.

That is, while the story may be free from malicious or nefariuos manipulation by dictorial control freaks; it is still molded by the author.

Like it or not the authors baggage is included, even when it is purportedly “just the facts”.  After all, what is a fact?

(Good news, I will have more thoughts on the definition of a fact in a future post.)

Random thoughts – keeping you on your toes

Supporting the greater good

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Tax avoidance discussions have been highlighted by the global press over the last month or so.  This was triggered by the so called Panamanian papers data theft.

I have already stood on my soap box about data theft in previous posts.  This post focuses on my analysis of tax avoidance.

My emotional stance differs a bit from my Spock like opinion . (Spock was the logic focused half Vulcan character from the original Star Trek series)

This post trys to be very rational about the topic.

Warren Buffet

A couple of years ago Mr. Buffet is said to have noted that he probably has a lower effective tax rate than his personal assistant.  Through use of legal tax avoidance he limted the amount of tax he paid.

To be clear, Warren did not enable this behaviour, (tax avoidance) in fact  the U.S. government set it up so he could reduce his tax payments.

Given he is a bit of sharpie when it comes to money management, I would be more surprized if he avoided the opportunity to maximize his returns, than if he did not.

My simple conclusion based on these facts would be “way to go Mr. Buffett”.  So why all the fuss about tax avoiders.  (Remember tax avoidance is legal, tax evasion is not).

Morale Standard

Is it logical to hold Mr. Buffet and other tax avoiders to a higher standard and if so why?

Personally I use every tax avoidance opportunity that I am reasonably able to capitalize on.  Believe me, no guilt feelings here on my part.

Of course, if I am a excessively wealthy capitalist or Corporation (I am not) I guess  I should freely contibute to the tax system as much as I possibly can.  After all there is the greater good to consider.  (Ooops the emotional perspective is leaking out).

Random thoughts – keeping you on your toes

Understanding your investment style

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There are many ways to configure the types of investments in your portfolio.  On the principle of keep it simple I classify my investments into one of the following 4 categories:

  • Growth
  • Dividend
  • Value
  • Index

My portfolio has all categories but by classifying I can weight to my point in time needs ( more on this later)

In Sept 2012, the Globe and Mail hired four investors and charged each with managing a hypothetical portfolio focused on buying and selling stocks according to type.

The overall returns for the first 3.5 years (so as at March 2016) were: growth – 206.69%, value – 67.77 %, dividend – 45.10 % and Index – 30.89%.

Even the lowest return averages just under 10 % a year.  Way better than a low risk fixed income product like a GIC or Govt bond.

Approach aside, how do you select?

Awareness of these four basic approaches to categorizing a stock can help with the selection process but regardless of the type still the most important step is the actual vetting of the individual equity.

Each approach has a different risk profile and associated potential return (risk/reward).  Generally regardless of the characterization of your purpose (i.e.,growth, income,low risk, good value) the most important factor is that the equity you select performs as expected.

You can use performance measures and various screening techniques to help with this process .  This can be used to identify historic behavior of the stock (although not always a predictor of future behaviour.)

The type of stock in your portfolio can be classified and balanced based on the metrics and future performance predicted.  However, my own selection style always includes these commom sense analysis steps:

  • do I understand the business model (and does it make sense)
  • does the stock match my point in time needs relative to growth, risk and income (these change over time)
  • do the companies leadership behaviors conform to my personal value system (e.g., Volkswagen – NOT)

In short, I would classify my own investment style’s most prominent feature as common sense.

Random thoughts – keeping you on your toes

Learnings for Everyone

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Learning is the activity or process of  gaining knowledge or skill through study or practice.  Learning is an action so it is a verb (unless you belong to the Borat school of Corporate lingo and use it as a noun)

Learnings (noun) are the object of learning.  Somehow I know this without study or practice so I guess there is magic learning too.  Things that just arrive in your brain. (Hold your comments, this last bit is firmly tongue in cheek).

Free Online Learning for all

Principally championed by principled academics the concept of Massively Open Online Courses (MooC’s) is taking off.  In essence the educators from pre and post secondary institutions (largely post) are creating free access to online courses developed by thier skilled and knowledgable academic faculties.

Coursera And Udacity

The two largest providers of MOOC’s are start-up companies “Coursera” and “Udacity”.

Ultimately there is a for profit business model underlying these free offerings, however, if you are okay not getting the degree, certificate or professional designation – free is the byword.

These are not shabby courses either.  Constructed by academic professionals the material is top grade.  If your desire is to learn because learnings improve and enhance your life, but affordability is a factor, this approach is for you.

Wharton MBA

For example If you are interested in taking the same courses and doing the same assignments (albeit not graded) as a Wharton School of Business MBA candidate, login to  Coursera today, no charge ( neither for the course, nor my advice).

This is just one example of what I am talkin’ about.

 

Random thoughts – keeping you on your toes

Music Media Metrics

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I am sure it will not be a surprise to anyone that music industry revenues have changed enormously in the last ten years.  Both the total amount of revenue and the source.

The Globe and Mail charted key changes in global recorded music industry revenues in today’s paper.  Their source was the International Federation of the phonograph Industry (IFPI)

My Interpretations

From 2005 to 2015 the overall revenue dropped by about $5 billion. Physical media revenues dropped almost $12 billion.  Conversly digital media revenues rose about 6 billion while performance revenues were up a billion.

Also of interest is that overall revenue actually grew a little bit between 2014 and 2015.  This was the first actual growth in overall revenue since 2005.

For me this is an obvious trend .  Consumption of music is going digital.  Duh!

The drop in revenue is probably from the change in business model from direct pay to ad supported free digital music (streaming) . Basically The traditional  radio business model being expanded to digital media as higher margin physical media revenue slips away.

IFPI View

The IFPI views the revenue drop as a symptom of the lower price for digital media resulting in unfair levels of renumeration to the artists.

The obvious answer to this is legistlation to ensure sure artists are fairly compensated.  The next big trend is going to be laws that ensure lobbiests are fairly compensated.

Me, I am more a market supply and demand guy.  If you are not recieving fair return for your music, stop producing.

Of course maybe money is not really the issue as producing music is a joy in and itself and most musicians would do it for free.

Odds are Paul McCartney would still make music even without compensation of $50 million a year.