[OT] Stock Market?

41 comments

• RandomMember

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  8 years ago

  I have no idea where the stock market is going. This is not an intellectual exercise or a competition. Just tell me what to do so that I can pay strippers for sex into my old age.
• TravelingGolfer

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  8 years ago

  Dougster, I have a legitimate question for you. You recommend shorting treasuries, because you think interest rates will rise. I agree with this opinion. I think rates have been artificially low for too long, that the fed will start raising rates, and that rates will climb. However, you also seem bullish on the stock market. If you think rates are going to rise, don't you think the stock market will fall, as rates rise? I'm not a Trump supporter at all, but what he said today, I actually agree with. He said artificially low interest rates have created a false economy and a false stock market. As interest rates normalize, both will correct. I tend to agree. Anything can happen, but I wouldn't be surprised if the market corrected or even crashed over the next couple of years. Btw, I trade for a living, and my portfolio is up about 15% this year, which is much better than the market indices are doing. I don't claim to be an expert. Just having a very good year to date. Anyway, curious about your answer to my question. Thanks.
• TravelingGolfer

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  8 years ago

  Oh, and the big banks have been starting to imply the same thing, about interest rates rising. [view link] I'm not backing Trump's claims about it being politically motivated. That I don't know about, and even if it were true, I think it's impossible to prove or to know for sure. I'm just in agreement about the false market, false economy, and artificially low, manipulated interest rates. I just read that interest rates in Japan have started to rise on their own a little, despite the fact that the Bank of Japan continues to cut rates. Market conditions will eventually reset. You can't manipulate something forever. Eventually things will 'normalize'.
• Mate27

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  8 years ago

  I'm up 20% since last year with a passive diversified portfolio. How did I beat the market? Simply by adding in big chunks at it whenever the markets dipped. This strategy works when you will not need to draw the money for several years, over a decade or longer. Last August I put in several thousands, my entire bonus, into my 401k. I did the same this February. Both times marked bottoms of the market and I leave everything else the same. Thankfully I still know how to contribute to the ROTH Ira yearly through a non-deductible traditional Ira conversion, and the timing of that has added to my returns, too. Bottom line, the market isn't for the gain of heart. It will crash, but it could be several years before that happens. I do agree if rates start rising quickly due to battling inflation, it would be a sign to take chips off the table. Again, rates rising is a guessing game too, so don't believe you can be clairvoyant on rates either.
• Dougster

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  8 years ago

  TravelingGolfer: "Dougster, I have a legitimate question for you. You recommend shorting treasuries, because you think interest rates will rise. " Actually "shorting treasuries" is an inside joke around here. I don't have an opinion on the matter.
• ime

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  8 years ago

  Fuck you Jackie
• Dougster

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  8 years ago

  IMO, the Fed has made it pretty clear they would like to raise rates this month. But I think the market is expecting it, so I don't think it will have much effect on treasuries. I won't bet one way or another, however. Long equities (including stock ticker RICK which now pays a dividend) is the safer play, IMO.
• TravelingGolfer

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  8 years ago

  Gotcha, thanks for that feedback. Oh, thought you were talking about going long TBT, which is basically the ETF play on shorting treasuries. I missed the inside joke. My bad.
• Mate27

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  8 years ago

  I believe the short in treasuries was referenced from texastittyfag or "fan" from lurking on here several months, maybe years ago. Many people have been touring they should short the bond market for years, and this has been the cause of raucous laughter from those who know the basics of investing. Believe me, being a genius is a handicap when investing. Keep it simple and know your time horizon. Too many people are quick thinkers and are trying to gain the edge over others. In my SJG-sque style repeating over and over the same mantra, slow thinkers are long term thinkers and don't react to today's headlines. In 10 years the Dow will be over 30k and the S and P will be over 4.5 k, double from where they currently sit.
• Dougster

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  8 years ago

  Meat72: "In 10 years the Dow will be over 30k and the S and P will be over 4.5 k, double from where they currently sit." Sounds okay assuming around a 7% annual return. I happen to think things will grow a bit faster going forward than they have in the past. Nevertheless factoring in some conservatism seems prudent.
• Mate27

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  8 years ago

  When false prognosticators reflect on their predictions of poor Performance in the economy, and hence the stock market, what do they use as an explanation to why things didn't pan out? It seems like optimistic thinkers never get the credit due, and doomsayers catch all the headlines. Is this why SJG is so gloomy? He's an attention getter, and I abhor anyone who simply spouts off trying to get attention to themselves, which is why I'veade it my mission to prove the naysayers wrong. It takes guts to be optimistic, and a pussy to be a doomsayer.
• twentyfive

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  8 years ago

  Meat-That has been my point across all of these threads, all of these chicken littles who claim that the sky is falling are really just a bunch of lazy thinkers. The real point of all of this when ever there is a real problem a solution is found. that applies to markets as well as any human endeavor. The real reason that America has been mostly successful is the ingenuity of its people and their belief that tomorrow will be better that applies to all aspects of life. That's just my humble opinion.
• TravelingGolfer

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  8 years ago

  Meat, I agree with the bulk of what you are saying, except for the guts/pussy part. Look at Mike Burry and Scion Capital. It took tremendous balls for them to ride out that short position back in 2008. They almost lost everything, but they had the balls to ride it out and hit it big in the process. I agree, investing isn't for the faint of heart.
• RandomMember

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  8 years ago

  ^^^ Mike Burry is a truly interesting character. He was finishing his medical residency at Stanford when he decided he couldn't stand being a doctor or interacting with "real" human beings. So he quits residency and starts a hedge fund with absolutely no training in finance. Anti-social guy who preferred to sit in front of a computer. He didn't use fancy computers or fancy math -- just opened up these mortgage bonds and found that they were full of shit.
• Dougster

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  8 years ago

  Looks like the NASDAQ closed at all time highs again today.
• san_jose_guy

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  8 years ago

  "everyone on TUSCL disagrees with me at first but then, eventually, comes around to my POV." Ha Ha Ha! What we have is round after round of Boom and Bust. Hardly any way to see sense in buying in at an all time high. But even more, people should have ways open to them to more directly apply their talents and abilities, and find both financial gain and the satisfaction of building community from that, rather than in speculation in these financial markets. These markets have the effect of devaluing labor and skill. And each boom and bust leaves our economic system is worse shape. At some point something will have to give. SJG
• ime

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  8 years ago

  [view link] Total ponzi scheme only for the rich, oh wait SJG wrong as usual.
• JimGassagain

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  8 years ago

  These markets have the affect of increasing value to labor and skill. Each boom leaves our economic system in better shape. At some point the poor will be too rich to even have to work. Look at how many poor people get free smart phones, ebt cards, and free housing. All due to the Exonomic success from capitalism. 40 years ago nobody has time to deal with media because they were too busy working, and those who weren't working were too poor to have any amenities. Now the poor in today's world can type on the internet all day disincentive zing them from looking for a job. The poor don't want to do well, they just want free stuff. Most poor people, there are a small minority of them who try to better themselves, and eventually they get an education and a better paying job.
• Dominic77

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  8 years ago

  Many regular people come to rely on social safety nets at least once in their lives. The people who tend to derile those safety nets are people who have enough privilege to avoid needing to use these. These are also people to tend to not need to work (themselves) either, through savings (often from high income), wealth, family wealth, inheritance, etc or when out of work do not need to scramble like a normal person to find a job immediately else they'd go bankrupt, not eat, get evicted, etc. It is two Americas, like I wrote. I agree that sometimes we as a society make it a little too easy at times to not work hard and the safety nets. But is social Darwinism really the best option? But what written above is just insensitive and in poor taste and reeks of classism. That's my opinion.
• RandomMember

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  8 years ago

  "@Gassagain wrote: Each boom leaves our economic system in better shape. " --------------------------------------------------------------------- It's hard to see how the last boom and bust in the housing market left the county in "better shape." We're still about 8 years out from the financial crisis, and struggling with an economy on the hairy-edge of deflation. And make no mistake about it -- the crisis was caused by unfettered capitalism. Most notably, we had companies like AIG betting on the wrong side of the housing crash, insuring CDOs without the cash reserves to back it up. We had no choice but to bail out AIG with taxpayer money, because not doing so would have been an unmitigated disaster. So hard-working middle-class people had to bail out rich assholes who made millions (or billions) during the crash. Do you understand @Jim? As much as I like capitalism, unfettered capitalism, without rules and regulations, doesn't work. We also have the current situation where the top 0.1% controls as much wealth as the bottom 90%. Anyone who doesn't recognize this as a problem isn't thinking rationally. Do you really think the problem is that poor people want free stuff, and don't wan't to work hard? If something isn't done, we're headed for feudalism, like the society we descended from. Elements of socialism work better for some things. Important example that I care about: Obamacare. Every day it looks more and more like Obamacare will fail because private insurers can't make money insuring a sicker pool of subscribers. We need a system more like the UK where MDs are told by the government what to charge and private insurance companies are cut out of the loop entirely. Back to the original topic: Not an insider like @Dougster but, yeah, I think the market's propped up by low interest rates. Ten years from now, if you adjust for inflation, I doubt the stock market will be all that much higher.
• TravelingGolfer

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  8 years ago

  Agree with Random Member on all of the above. I think somebody synced my brain with his. Also, agree that Burry is an extremely interesting character. Quite a life story.
• JimGassagain

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  8 years ago

  Many of you are following the path of thinking like the ilk of SJG. It is true there are some individuals who do not have to work due to inherited income and power, but they are far less than the collective poor who soak the system and drain our tax dollars, hence lowering productivity. The successful people don't drain the system. You have to look through the trees to see the forest. And much of the forest is riddled with the infestation of the poor lazy types who want to suck on the teat of the "welfare nipple". Soon other's look at their free ride and the abuse spreads to others around them. It's why when the poor start moving into a neighborhood, the successful ones leave to greener pastures, upward mobility. There are far less examples of the entitled rich 1% suppressing the system as opposed to the constantly immobile poor sitting on their butts sucking the welfare system and our tax revenues. The poor have had no better standard of living ever in history, and they have the many of those rich pioneers who've developed ideas and technology to progress our current standard of living. Many more examples of successful pioneers who took the risk in capitalism to make not only their lives better, but society as a whole due to their innovation. The poor lack innovation and motivation to progress their lives, they look to others to do it for them, and they have the middle class and top 1% to thank for the best standard of living ever acquired in the history of Earth!
• san_jose_guy

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  8 years ago

  JimG, I don't know where you get your ideas. It looks like you are either a dupe of Right Wing Media, or one of their paid spokes persons. It is capitalism which cuts people out of the labor market. That and the abuses of the middle-class family have created an untouchable caste which get used as our scapegoats. But actually these people take far less out of our society than the ones you are calling successful. JimG wrote, "These markets have the affect of increasing value to labor and skill. Each boom leaves our economic system in better shape." This is completely untrue. Each boom and bust results in greater upwards concentration of wealth, while more and more working people find themselves in jobs that do not pay a livable wage, and with zero job security. So the percentage of the population which is very close to homeless increases with each of the cycles. The booms do harm, by running up housing costs and because what ever is driving that cycle sucks up all the funding and attention. Worthwhile businesses fail. And so it is good when the boom fails. But then in the bust, businesses fail and jobs are lost, even with things which are legitimate. So both do great harm. We largely avoided these patterns for 4 decades due to Keynesian Economics. But then Reagan got in, and I've lost track of how many boom and bust cycles there have been since. They are all harmful. And it is not going to go well for the poorest of the poor, because people like you, JimGassagain, insist on using them as scapegoats. Our society used to get its scapegoats in those who did low wage labor and slave labor. But now there is less need for labor of any type. So our society is using the survivors of middle-class child abuse, which usually involves doctors, as it's scapegoats. This is reprehensible, but it still goes on. So as long as this is true, the poorest of the poor will continue, in a land of plenty and for no good reason, to live very hard lives. San Francisco's GLIDE Memorial is where they have got it right, poverty is caused by social marginalization. I think anyone who has ever had any dealings with poor people would instantly recognize this. "GLIDE Memorial Church believes in a radically inclusive, just and loving community mobilized to alleviate suffering and break the cycles of poverty and marginalization." [view link] And poor people are not immobilizing or suppressing any system. Poor people just try to stay alive. It is the super rich and their backers and worshippers who immobilize it, because they demand that it continue to support their interests and privilege. JimG, I don't know what your problem is, but you are turning into a real piece of shit. And the poor do need to start organizing to stop this scapegoating. The poor need to be ready to use all available means to defend themselves. And when they do, I will be with them. Twentyfive wrote. "...all of these chicken littles who claim that the sky is falling are really just a bunch of lazy thinkers. The real point of all of this when ever there is a real problem a solution is found. that applies to markets as well as any human endeavor. The real reason that America has been mostly successful is the ingenuity of its people and their belief that tomorrow will be better that applies to all aspects of life." Twentyfive, I don't think anyone is saying that the sky is falling, just that this boom and bust style of economics is horrible, and that the current boom will lead to another bust. The booms are not good. And the bigger the booms, the bigger the busts. So the sooner this present boom fails, the better. You are right though, generally when there have been problems, solutions have been found. We ended slavery, and we have outlawed institutional racism. And we have made great progress in remedying sexism. But the problems we are facing today have been long in making and they are more serious. The first of these world wide recessions was in the 1870's, and it was caused by over production, especially of steel. And so the 1880's were some rather tough decades. Was there economic reform? Sort of, at least the start of it, with the Granger Movement, efforts to put some limits on Big Business. And then later Teddy Roosevelt showing that the leaders of Big Business were not equal to the President, and forcing some changes. Trust Busting was what they called it. But the 1880's were also when Social Darwinism took hold. And then this resurfaced during the Great Depression, along with Eugenics, and even more so in Germany. We had then following, thanks to the use of Keynesianism, some decades of relative economic peace and stability. But then Reagan was elected and he and his people dismantled that. And then with each of these boom and bust cycles, we have had a resurgence of Social Darwinism, to the point that you have people like this JimG, advocating for a two-tier society. And undoubtedly he will show great outrage when he realizes that I am saying that it will be okay when people use violence and rise up against this. Twentyfive also wrote, "real reason that America has been mostly successful is the ingenuity of its people and their belief that tomorrow will be better that applies to all aspects of life." Yes, I agree with this 100%. But I hope you can see how this is under attack. The idea that life is not worth living unless you are putting money into speculative markets? That is not consistent with belief in a better and more fair tomorrow. The need to find in the poor scapegoats, and to denigrate them, not consistent with the belief in a better and more fair tomorrow. The real problem is the promulgation of these ideas from Right Wing Think Tanks, the attacks on Social Security, and the scapegoating of the poor. I agree with you that people are capable of finding solutions, and that most of the time they have, and this is what makes our country great. But right now, the rhetoric of the Right is so intense and so negative, so two-tier society oriented, so invested in making scapegoats of the poor, that the going is slow and the situation seems to be getting more dangerous each day. Certainly with the candidacy of this Trump, it is really dangerous. What it really comes down to is Capitalism and Self-Reliance Ethic. This late in the industrial revolution Capitalism is a clear negative. It takes, but it gives nothing. And the Self-Reliance Ethic is something derived from the religious doctrine of Original Sin. It is why people have children so that they can abuse them, turning our future Einstein's and Elon Musk's into Homer Simpson's, and now glued to the Right Wing News Media. Back into the 1960's, the US and Western Europe tended to be at the same place. Canada's Public Health Care was first modeled after the US Medicare. Richard Nixon, in his second term, was actually quite moderate on domestic policy. But then something happened. Europe continued to make progress. But in the US we had a horrible history of race relations. Politicians were able to leverage against this, and Richard Nixon started the shift in the South from Democratic to Republican. Back in 1960, all 50 states were competitive in Presidential Elections. Nixon was able to change this. And then here, Lee Atwater, explaining how it works: [view link] And so RandomMember talks about having good health care, and needing to go beyond Obama Care. Well, what made Medicare difficult is that it didn't go far enough. Originally it was to have board controlled fees. And so Physicians lobbied against it. So LBJ compromised with their middle-class views and changed it to "customary fees". And so this is why Medicare costs grew astronomically, where as what we needed was to have the percentage of the population which was covered grow. So there has been a huge Right Wing backlash against the Great Society and against the New Deal. Mostly it has always run on racism, though in code. And now it also runs on this Right Wing Media. And likewise, this idea that you now need to be rich to have old age security, drives people towards this two-tier society. True Origins of the Religious Right [view link] And Dominic77, yes most people do rely on social safety nets at least some. It is actually the well-off who get by far the most benefit from government spending, because the money recirculates. But everybody wants to do well. It's that an increasing number are just forced out into the margins. So they just try to stay alive. Our present system does not give good opportunity to vast segments of the population. If there can finally be political consciousness, then the poor can organize and act collectively. This is what we need. SJG
• Mate27

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  8 years ago

  Lol! SJG is simply the best in this thread, both of them.
• Dougster

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  8 years ago

  Anybody run the back test to see whether buying at all time highs is a good strategy or not? My intuition is that it is, but always best not to be overly reliant on intuition.
• san_jose_guy

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  8 years ago

  If you were to gamble, would it be better to bet the markets will rise, or that they will fall? And allowed what time frame? And then, why does anyone act like putting money into the stock market is anything more than just a gambling game? Why not put your money into your own ventures? Isn't that always going to be better? SJG
• twentyfive

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  8 years ago

  So SJG tell us about your venture, and why should anyone invest in it, has it made any returns for you ? Are you putting money into your venture any hope to see a return on your investment ? Give us projections, or at least a business plan. What do you need to break even, at what point does it become profitable ? BTW driving an RV across Mexico doesn't count as a business plan unless you are going to be selling tacos.
• Dougster

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  8 years ago

  The difference between the stock market and gambling is that most forms of gambling are negative sum. The stock market is positive sum. Also in many forms of gambling there is no way for the player to get positive expectation. There are some exceptions to that, but not many. The main thing this allows people to do is just buy and hold and make money. As for why I don't put money into my own ventures: it's because I don't have any brilliant ideas of my own to start one, so I work for the man. If I do come up with a brilliant idea I might. Latter on in life, I am thinking of getting private equity, but right now, I'm very bad at evaluating the chances of anything that doesn't trade on a public exchange.
• Dougster

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  8 years ago

  90% of businesses fail whereas buy and hold always works, is a good argument against putting money into your own ventures instead of going with the stock market. Of course, everyone will assume they are in 10% who will succeed. @SJG: Have you read the book Dispruted?
• san_jose_guy

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  8 years ago

  I agree that the stock market has a modest positive expectation, where as gambling organized by some "house" has a negative expectation. But things we run ourselves also have a modest or better positive expectation. I would say more positive than just modest. Things funded by VC's like Kleiner Perkins fail at at least a 90% rate. But mom and pop businesses, not over funded, and scaled down as needed, have a very low failure rate. And you don't have to go it alone, can partner with close associates. A team of people will be able to make some things work. What a better result than just winning by gambling! [view link] ????? no. And twentyfive, yes I am putting my money into my ventures. But no, they are not for participation outside of my carefully selected circle of associates. I am not seeking or even considering outside investment, and I do not make disclosures. SJG
• Dougster

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  8 years ago

  SJG: " But mom and pop businesses, not over funded, and scaled down as needed, have a very low failure rate" You are going to have to show me the stats on that one. I do have a couple of friends in Silicon Valley that are working on their own ventures or got in very early and their companies are still young. It's tempting to talk to them, but again, I'm not good at evaluating the chance of no publicly traded companies, and my salary is pretty good in the corporate world, so seems like it would be a needless risk. Like I say if I ever get a brilliant idea for one, or someone can convince me beyond the shadow of a doubt that we should work together... maybe.
• Dougster

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  8 years ago

  I don't even consider startups at all when I get messages from recruiters for them on LinkedIn. Except I did talk to one earlier this year. The pay was very low there and their path to making money didn't seem at all realistic so that just re-enforced my belief about startups. I think a better route might be established player who is taking a new turn with its business strategy.
• JimGassagain

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  8 years ago

  @ SJG "Why not put your money into your own ventures?" Which is exactly What my wife Jeannie and I ha e done the last 15 years, which is also the reason why she and our family live comfortably for the rest of our lives. This is all due in fact to capitalism. If it wasn't for capitalism we wouldn't be able to put our money into our own ventures. SJG be careful to not bite the hand that feeds you, especially when you are stating that you are building your so called "organization", for which we still do t k ow what it is that is actually legitimate. At least I have legitimately told you how I do my business and organization. From you we have heard very little except words. You can go on TV Land or Comedy Central or Netflix to find my brand. Please tell us how great you organize without using capitalism, because we all are seriously be founded how that could be accomplished?
• san_jose_guy

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  8 years ago

  JimG " @ SJG "Why not put your money into your own ventures?" " and " Which is exactly What my wife Jeannie and I ha e done the last 15 years, which is also the reason why she and our family live comfortably for the rest of our lives. " Then doing that, you should not have any need for speculating in things you have zero control over and can never really have much specific information about. This is where this discussion started, when you were following some of our other members and endorsing stock market speculation. If you are smart enough not to be doing that, then you and I are on the same side. As far as Capitalism, that does not just mean the opportunity to start your own business. It is a mistake to think that Capitalism is anything which is different than Lenin's USSR. Capitalism is a system which scrambles social codes. Specifically in the West it scrambled the codes of reciprocal obligation which ran during the Middle-Ages. It replaced these with its own over codings, like the Self-Reliance Ethic, and then finally Social Darwinism and Eugenics. Capitalism makes it okay to drive people off of land and to force them into the cities where they will have to work in factories at starvation wages. So understanding what the problems are, most of Western Europe has gone further than the US, in maintaining a social safety net, and investing in the continuing education of its people. I say that the US would already have been there, were it not for our horrible history of race relations. Richard Nixon was able to play off of this with his 1968 Southern Strategy. And then others like Paul Weyrich and Lee Atwater were able to continue this by using the Born Again Movement. [view link] True Origins of the Religious Right [view link] I say that we need to go in the direction of Western Europe today. All the more so if we want to bring down our crime rate. For an industrialized nation, we have a phenomenally high crime rate. And we already lock up more of our people than any other industrialized nation, and we lock them up for longer, and violate paroles for less, and it still doesn't help. Fascinating documentary about the Netherlands. I saw it in a theater in 1994, and then I got the public library to buy it. But the library copy was cut differently. [view link] trailer [view link] more [view link] These counties in Europe have a mixed ownership picture, some things are publicly owned and some are privately owned. And there is also a large role for the non-profit sector. And sometimes this changes, as these countries are functioning democracies and there is always a plurality of views. I say that the US only remains the way it is, because tremendous money is spent, along with a high level of middle-class child abuse, to keep people from reaching any kind of political consciousness. I am committed to changing this. One friend of mine said that Capitalism is okay, just so long as t is not Crony Capitalism. Well I explained to him that there has never been any kind of Capitalism other than Crony Capitalism. Capitalism needs resources, land, markets, labor, and capital. Know how it gets them? It goes to the government. This is how it started in Europe, with the Enclosure Movement, fencing the common lands, and then driving peasants off of them. Usually they had to be starved, and then still driven off at gun point. And then in the US, there was the first of these world wide industrial recessions in the 1870's, due to over production of steel. So Big Business and Banking interests went to the government, and pressed the Grant Administration to end Reconstruction, the federal occupation of the South. So the South would become a market for manufactured goods, like an internalized third world. And predictably it ran on white supremacy and by pitting poor whites and poor blacks against each other. And then the West was used as a natural resource base. And then what does Capitalism do when it runs into limits and it is clear that it is making things worse and not better? It expands though the government via colonialism and neo-colonialism. So I told my friend that if he wants to understand what Capitalism is, just look at the British East India Company. As far as my own organization, the core of it will be a non-profit, and my salary will be $1 per year. But we also plan to operate a large and increasing number of corporations. All of these will start small, and we will fund them ourselves. The right always holds up USSR, Cuba, and Venezuela as examples of Socialism. Well these places also have no history with Democracy. So I am not suggesting anything like them. Our companies will be competitive businesses, not state supported enterprises like this country has so much of. The amount of stuff we do for government contracts will be comparatively small. Our enterprises will run on brain power more than anything else. And we certainly will be opposed to the Self-Reliance Ethic, and the emphasis on the accumulation of private wealth will be less, as people will have no need for it. We will be adapting a great deal from Israel's Kibbutz Movement, as well as from the UK's Arts and Crafts Movement of the 1800's, and even some from the pre-protestant Brotherhood of the Common Life. Dougster wrote, " SJG: " But mom and pop businesses, not over funded, and scaled down as needed, have a very low failure rate" You are going to have to show me the stats on that one. " I don't have specific stats, but I am sure there are other people who do. Mostly what it comes down to is not over capitalizing and not accepting outside financing or control. If the business is delivering any kind of product or service, usually the owner will just never let it fail. Sometimes you see sell offs, but this is simply because the owner(s) are tired out. Usually they are able to cash out on some good equity, or seller finance a new young energetic buyer, plus having gotten what they made over the years. About this, and about why over capitalization and the K-P model are so bad: [view link] And this deals with people I have worked with, and I completely concur with the assessment. And then from very different quarters and going way back, the advantages of not over capitalizing: [view link] [view link] And then although this is getting into elitism and control, I am inspired by Germany's Fraunhofer Society, and what we do will follow elements of this, centered around an ever expanding brain trust. [view link] Dougster also wrote, " I don't even consider startups at all when I get messages from recruiters for them on LinkedIn." Well people always cast startups as a way to make lots of money. This is unfortunate, and I am sure it contributes to the high level of failure in venture funded startups. Historically with the high-tech startups, what is driving it is simply people who want their heart back. They don't want to be a cog in a big stupid machine. They want to be able to do something new and not have to answer to so much bureaucracy. In large companies one is most of the time playing defense against internal rivals. I know this first hand. It is probably why I type so fast, having had to write so many reports and make so many presentations. So people would go from large companies to startups. Maybe the pay would be about the same, but the risk was higher, but then there was equity on top of that. But most of all people just wanted their heart back. But no, I would not suggest going to one in a field in which you do not have substantial experience. And if they are having to recruit beyond the sphere of people they can get by word of mouth industry contacts, then I would say you are right to reject it out of hand. Then also, the last wave of these start ups would have been in the mid to late 1980's. After that there was a lull. The VC money was still there, being gilded age money. But is was scared. So then came the dot com hype, initiated by Clinton and Gore, neo-liberal Democrats, and the money flowed, but the dot com boom brought in a much sleazier grade of startup. I have never had anything but contempt for this. They were not offering people equity on top of decent pay, they were offering equity instead of decent pay. They were mostly going after new grads, people who would work cheap and who lacked the base of experience with which to challenge the hype. Always suspect any start up which depends too heavily on new grads. So most of these things did not even have a plan for how they would become profitable. But they were still valued at hundreds of millions of dollars, and more. Most of them dried up very quickly. Some people made money, but I would still say that most of them were scams. Needless to say, the things I do will be nothing whatsoever like this. As far as the " established player who is taking a new turn with its business strategy", sometimes this is called intrapreneuring, if there is some wall of separation for the new efforts. I have had dealings with such firms, and often found them to be quite good. But these are still not shoe string operations, and they are still not immune to corporate politics, or problems created by over funding. The more capitalized something is, the more money people are going to be expecting it to produce. Lots of money also clouds people's judgments, and so things get running very fast and loose and the burn rate grows astronomically, while basic problems remain unaddressed. Of course, here what I am saying is that I will become my own VC, but a very different type of VC than KP. One VC I do find extremely interesting is Vinod Khosla. I find that there is much to learn in his approaches. However, I still don't plan to do things the way he does. All the people I am involved with I will know extremely well before there are any discussions about starting companies. And also, Khosla is still investing in people other than himself. Well, when you have that much money, you can't invest it in yourself. You have to invest in other people. But right now, I am nowhere near that point. And also, with the broader organization I am building, we will have some distinct advantage in entering into more established market territories, instead of relying completely on the novelty and greater risk associated with the high-tech model. SJG Sex: An Unnatural History E01 - The Revolution [view link] [view link] [view link] Dizzy Gillespie - A Night In Tunisia [view link] Dave.Brubeck - Take Five In A Quartet(2004) ( awesome ) [view link] Diana Krall - Live at North Sea Jazz Festival 2013 [view link]
• gammanu95

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  8 years ago

  Quantitative easing. Pump, pump, pump. Artificial bubble supported by suppressed interest rates . Now we expect the fed to raise the rates any day, and a sell off ensues. I hate election years.
• san_jose_guy

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  8 years ago

  Usually election years do bring about crashes. I guess this is an unusual election. Just have to wait and see what happens. But then, I don't have any interest in being in the stock market anyway, I'm just responding to people who are boosting for it. SJG
• Dougster

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  8 years ago

  I asked to lock my mortgage rate last week. Maybe just in the nick of time? I do have some experience with startups and tech. Just don't like startups. In a big corporation there is more security including the fact that it's easy to transfer to the right team for your particular style. Unless the whole thing is screwed up. But then you have a prestigious name on your resume and it's easy to go somewhere else. I guess if I fancied myself a good startup picker or knew the people from prior work previous, maybe.
• san_jose_guy

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  8 years ago

  Well that gets back to my point, the reason for going to a start up should not be job security, prestige, and usually not more pay. It offers one a chance to do more things, to wear more hats, and sometimes the equity and the name will become important. But mostly it is just to get one's heart back. In startups you have to handle everything. Talk about being proactive, you have to make it all happen yourself. Remember that with the tech startups, it used to be that they were each really doing something new. So they were exciting and people did talk about them. Now, internet, they are usually just branding and consumer marketing gimmicks. Needless to say, I have no interest in such. People do alright if they know what they want and they know how things work. And this sounds like you. They only have problems if they are just responding to hype and gossip. And this was how my ex-wife always operated and evaluated things. Great book about some startups of decades past, and about some really interesting people: [view link] And also some see in Elon Musk a return to the more visionary and substantive startups. I am inclined to agree, though I do still plan to continue doing my own stuff. [view link] SJG
• Dougster

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  8 years ago

  Not sure about that. In the corporate world some of the best advice I got is not to stay in the same role or team, forever. Go out there and get that variety of experience. Those are the people a healthy corporation is looking to promote. Again, I won't rule out the ideal startup. But I would have to know the people super well. One thing I've found is that CEOs of startups can be real ego-maniacs. Often they are start out really dreamy and idealistic and then swing to the opposite extreme when it's looking like thing didn't go their way. If I were to ever to work for a startup I would insist on the interviewing the CEO to screen out those factors. Got burned with it in the past. Also, to take on startup risks I would ask for a huge chunk of equity. None of this is my plans for the next 5 years at least, but then again "never say never" right?
• san_jose_guy

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  8 years ago

  Well, I would say that going that way makes it likely that one will go to a startup, and then after that end up running their own startups. Yes, ego-maniacs, with some types of startups. Some of the VC's too. And yes, knowing the people really well is best, and that is what I am committed to. Not had it this way before. And yes, when it is just talk and ideas on paper, every thing is possible. But once some goals are missed, it starts disintegrating. Factions form, then it breaks up into smaller and smaller pieces, until no one is able to talk to anyone else, like with the Tower of Babel. [view link] As far as equity, how much you get depends on how early on you are in. Best would be if you and the primary founder are working together from the very start. This is how it will be with my ventures. Some people are in the pool close to the VC's, so they go from startup to start up. This could be good, but I would not want to be in that situation with KP because I do not go along with how they do stuff. But becoming my own VC, and having my own broader organization behind it, I am expecting great things. But again I emphasize that the right reason is to get your heart back. If it is just money, then I would say that there are easier ways to make money. Most important is just to learn to be open to your feelings so you can some to see what you want. SJG
• JimGassagain

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  7 years ago

  Wtf? TL;DR!