Self-publishing – “Jon Felt” Writes a Guide for LinkedIn

One of the ways technology is changing our lives has to do with literature, authorship and publishing. Anyone can use Amazon Kindle to publish without agents or book publishers. This is wonderful, empowering. The only downside is that Amazon is absolutely flooded with material now. Literally on any subject, and the quality varies a lot.

Last year I got in to the self-publishing game by chance.

During the last couple of years I have been using LinkedIn heavily. That made me think that I might as well document my learning process, wrap it into a book and publish on Amazon. It is called “Achieve Your Goals with Free LinkedIn: Fast Guide”. The leading principle was that of condensing 80% of the essential information into 20% of space and pages. We are all suffering from information overload and just need to access the information we want. I wrote the book to respond to this need from the get-go.

Amazon’s self-publishing process is simple and easy to use. No need to worry about that, just go here and all is explained.

The book was written under the pen name of Jon Felt. It has even sold a few copies for $5.87 a pop.

There were 13 LinkedIn guides in a dozen, of varying quality. Mine is different than the most because the focus is on the bigger picture – how to make LinkedIn serve your goals. Rather than describing that there is a button in the right top corner that does this or that..

You will find it here:

https://www.amazon.com.au/Achieve-Your-Goals-Free-LinkedIn-ebook/dp/B01CYDVU5Y

BTW, there are many authors that are making serious bucks by self-publishing.

https://www.forbes.com/sites/jaymcgregor/2015/04/17/mark-dawson-made-750000-from-self-published-amazon-books/#2ba390386b5b

Of course, this is the same as in any field – there are only a handful of people who make huge money, the most make little or none.

 

Forming an Investment Strategy – Pt.3: Mr. Buffett & Mr. Lynch

I had two well-known investment figures in mind when I started writing this: Warren Buffett and Peter Lynch. Many investors agree with Warren Buffet’s remark that you can only make so many good and informed decisions. This wisdom is widely accepted. A lot of people choose to select a very limited number of stocks to their portfolio.

Mr. Buffett

Warren Buffett’s investment style is called ‘value investing’, which means that you try to find companies whose stocks trade for less than their real-economy value. For example, let’s say Company A owns an asset valued 1 million USD. The company has issued 100 stocks, which trade at 8000 USD each. If you’d like to buy all the stocks (we assume the owners are willing to sell it all), you’d pay 8000 x 100 = 800.000 USD. You got something immediately worth a million for 800k. And then there are the company’s future revenues, it’s contracts, patents etc.  In other words, you buy only companies that are undervalued by the market.

Why is value investing difficult and time consuming? Well, in addition to looking at numbers such as FCFE, Warren asks questions like “Is management rational?”. Questions like these require a deep dive into the company and it’s operations. If you do not work in the company yourself, you’d probably need to talk to someone who knows the company and it’s business to get meaningful answers to questions like that.

“You are dealing with a lot of silly people in the marketplace; it’s like a great big casino where everyone else is boozing. If you can stick with Pepsi, you should be O.K.”

– Warren Buffett

I think that the above mentioned probably means that a lot of the market activity is irrational. In a global marketplace opportunities can be found all over the place, but it is important to keep a cool head. Do you understand how the company you invested in makes it’s money? Can you be sure that the company’s management is honest and won’t ruin your investment with a scandal?

The other Warren-wisdom has to do with patience. Something that is definitely not my strong suit..

“Someone is sitting in the shade today because someone planted a tree a long time ago”.

– Warren Buffett

Mr. Lynch

Then I was thinking about Peter Lynch, who is considered to be an iconic fund manager. Apparently he could have over a thousand companies in his fund, but hew still consistently doubled the S&P 500 market index. What happened to careful choosing?

This takes my thoughts back to index funds. There is a lot of data suggesting that on the long run, index funds beat actively managed funds over time. Was Peter simply a pioneer of the index method, combining it to certain selection process that allowed him to build a ‘shadow index’ that swam above the actual index?

“Far more money has been lost by investors preparing for corrections or trying to anticipate corrections than has been lost in the corrections themselves.”
– Peter Lynch

The above seems to make another argument for time in market, as opposed to time to market (timing the market). It is becoming pretty clear that the marketplace today is extremely difficult to predict. It is not just the hundreds of thousands new investors coming to play that makes predicting difficult. Or the algorithmic/automatic trading. The disruptive power of technological and environmental change can really catch us by surprise.

Well then. What should I think? DO we accept the ‘time in market’ rather than ‘time to market’? If so, should I simply stay fully invested in stocks all the time and simply use cheap or even free index funds, such as Avanza Zero (provided by Avanza in Sweden)?


Books – Warren Buffett:

The Essays of Warren Buffett 

Books – Peter Lynch:

One Up on Wall Street

Beating the Street

Learn to Earn

Vehicle to Everything/Infrastructure (V2X) Market 2017

Came across an interesting article by William Mckeown – a research outfit called QY Market Research has published a report titled “Automotive Vehicle to Everything (V2X) Market 2017”.

It lists the key players in this market. In addition to Cohda Wireless and AutoTalks that were already discussed, also these names come up:

You’ll find the article here:

Global Automotive Vehicle to Everything (V2X) Market 2017 Arada, Autotalks, Cohda, Delphi, Denso, eTrans, Kapsch, Qualcomm, Savari

 

 

 

 

 

Learning Swedish: “Bitcoin – En finansiell revolution” by Linus Lovén

I recently read en excellent book on Bitcoin by a Swedish university guy Linus Lovén. I’ve been a bit of a late comer to this party so I thought that I might as well update myself and learn some more advanced Swedish as I go along.

For that purpose, “Bitcoin – En finansiell revolution” turned out to be an excellent choice.  To really compress things, we could say that the book is about two things: 1) Bitcoin as a thing, and 2) the block chain, which is the technology behind it. I came to realize that it is just as important to understand number 2 as it is to understand number 1. The thing is that the block chain has a huge potential for hundreds of different uses – not just facilitation of payments. Smart, self-actualizing contracts that do not need any intermediaries such as financial institutions. Billions of unnecessary cost removed from transactions globally while unimaginable new opportunities arise. I’d call it the business opportunity of the century..

Linus writes with clarity and simplicity, starting with history of currency and examining the forces that have shaped the financial system. He also tracks the idea of crypto-currencies (strongly tied to the libertarianism) and how Bitcoin came to be as a solution to the problem of double-spending.

This is clearly not a Bitcoin fan-book,  Linus takes a comprehensive view on the forces and factors that stand against the wider adoption of Bitcoin as means to payments. Whatever the case, the value of Bitcoin seems to be going up and it is increasing it’s popularity as an investment.

I highly recommend this book. Block chain, if not Bitcoin itself, has the potential of becoming the next ‘big thing’.

You’ll find the book here.

 

More resources –

A central banker’s perspective (by Aleksi Grym at Central Bank of Finland): https://www.linkedin.com/pulse/payments-innovation-disrupt-everything-except-aleksi-grym

PC Mag: Blockchain in 2017: The Year of Smart Contracts
http://www.pcmag.com/article/350088/blockchain-in-2017-the-year-of-smart-contracts

Programmable money – “Inside Bitcoin, The Programmable Currency For Our Digital Future”:
https://techcrunch.com/2013/09/10/disrupt-sf-13-bitcoin-panel/

 

Forming an Investment Strategy – Pt.2: Timing the Market

An old adage goes like this: you cannot succeed with timing the market on the long run. Timing the market means buying cheap and selling at a higher price.

  • It is really hard to beat the index by making “smart” or “informed” investments. Index means the totality of a stock market – for example, all the stocks that are listed in a certain stock market.
  • Only very few investors succeed in this – consistently generating value ABOVE what the index brings automatically. Indexes is being fed by thousands and thousands of new investors from all over the world. India, China, the Islamic World – they are just waking up to owning parts of assets and companies. The only real threat to indexes is a global recession or a collapse of our financial system.
  • What seems expensive now could be cheap in five years time. Even if they are trading way above what their actual, physical assets etc are worth.
  • It might sounds nuts but throwing darts at a print-out of the stock market might give you similar or better results as trying to pick winners from huge amounts of companies and investment vehicles.

An oldie but a goodie: “A blindfolded monkey throwing darts at a newspaper’s financial pages could select a portfolio that would do just as well as one carefully selected by experts.”

http://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/#4c9512756e8b

The people who do beat indexes continuously tend to be among the richest, the ‘Warren Buffetts’ of the world. There is a lot of data suggesting that the best way for a non-professional investor like me to succeed is to invest in low-cost index funds. It is an invest-and-forget strategy, I just let time and compound interest do their job.

A 15% return will double the capital every five years.

The only work I’d have to do is to choose index funds with a low cost as possible, because they are the only thing that is taxing the yield the index is giving me.

Here is a link to a study by Morningstar: http://corporate.morningstar.com/US/documents/ResearchPapers/MorningstarActive-PassiveBarometerJune2015.pdf

“The Active/Passive Barometer finds that actively managed funds have generally under performed their passive counterparts, especially over longer time horizons, and experienced higher mortality rates”

 

 

Do you know what is V2V?

V2V stands for Vehicle-to-Vehicle and it has to do with self-driving cars. They will be reality very soon. Despite of all the obstacles. There are some very powerful motivations for this –

  • Most cars spend over 90% of their time standing still, producing nothing but costing money every minute (insurance, etc.). This is incredible waste.
  • Traffic congestion, unoptimized road transport and commuting cost the society billions in lost productivity. Autonomous vehicles make congestion a thing of the past, with optimal use of the existing road infrastructure.
  • Traffic accidents kill and injure thousands each year. When each car ‘senses’ every other car on the road, there will be no more collisions.
  • Much lower fuel-consumption and mechanical wear on the vehicles.
  • Self-driving vehicles will allow for vastly enhanced urban design.

Tesla CEO Elon Musk said recently that you can put a future Tesla car to work for you when you are not using it. This means that you can use your phone app to direct the car to to driver-less ‘uber rides’ while you are away and make you money. This is how an asset is supposed to work – create value and income! There are predictions that most people will not own a car in the future, we just call one when needed.

Now, the greatest obstacle is not law or regulation, but the fact that self-driving cars eat huge amounts of data. They will essentially build a continuous 3D model of their surroundings and use it to make extremely fast decisions and actions. This requires a different types of chip sets than what we have had for PCs.

As an investor I might ask myself – which company or companies are ‘Intel to IBM’ in the car world? If each and every new vehicle will carry this technology in the next decade? We are at the verge of a major shift.

A couple of names pop-up.

AutoTalks Ltd. is an Israeli company that makes specialized mobile processors and RF transceivers for V2V communication. They cooperate with Audi, DENSO and STMicroelectronics.

Cohda Wireless in an Australian company developing similar technology. The ‘word on the street’ is that this company has received investments from Cisco and NXP Semiconductors.

PS. Another buzz-term is V2X (Vehicle-to-Infrastructure), which refers to the car’s ability to communicate with built infrastructure. You’ll hear a lot more of this in the coming years.

 

Forming an Investment Strategy – Where Are We Now?

The first step is always to try to understand where we stand today (Jan 2017). I started doing some homework late last year, and I discovered some things to consider when looking at the most important economy in the world, the US of A.

  • Median income for households in USA (2000-2014) came down by 8,479 USD or 12,3% (excluding the elderly) *
  • Simultaneously (2000-2014) the American housing price index was at 145,7 (Q1 2000 = 100). In San Francisco it was 196,9 **
  • Since 1980, US real wages have gone up only ca 8%, while productivity has gone up by 63% ***
  • The average hourly wage in US (with inflation) has almost the same buying power than one had in 1979 … this means that the average wage has peaked over 40 years ago: The $ 4,03 per hour wage of January 1973 has the same buying power as $ 22,41 today ****

We can make a couple of important observations –

1), The gains in productivity are not being translated into gains in buying power.

2) Housing prices do not correlate with buying power. A house or an apartment is typically the biggest ‘deal’ an average person does in his/her life.

A very large part of consumption is financed via credit on a continuous basis. Simultaneously the stock markets are still reaching record levels. There seems to be some pretty large risks baked into this situation. Hmm.
* http://www.epi.org/blog/income-stagnation-in-2014-shows-the-economy-is-not-working-for-most-families/
** http://www.economist.com/blogs/graphicdetail/2015/11/daily-chart-0
*** http://fortune.com/2015/09/01/heres-the-real-reason-you-dont-make-enough-money/
****http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

2017 – A Year of Firsts

It is a new year, and my first blog post. 2017 will be a year of firsts in many ways. I will be using this blog to record some of my thoughts on living in Sweden as a foreign person. A diary of sorts, if you will.

In addition to starting a blog, I will try to work out a strategy for dividend investing. I’ve never tried to get smart on investing before, but now in my late thirties it feels like it’s time to do that. The world economy is a bit strange at this moment. I wish I had had the acumen to simply start saving systematically to index funds after 2008, but unfortunately I was busy with other things.  That made me think about the old cliche of life happening while you are busy looking elsewhere.

If there is one thing I learned in 2016 that I would like to remember, it would be this: all opportunities exist in a time-window. 80% of success is to be there when it happens. I know people who have multiplied their savings just by starting to save into simple, low-cost index funds after 2008 crash. I was not there. A new crash has been predicted since early 2015 but it seems to fail to materialize. There are probably hundreds of thousands new investors entering the stock and fund market around the world.

More of this in the next post.

/E_E