Saturday, February 13, 2016

Nightcap 2-12-16

The stock market rally today and it was up about 2% across the board. Oil had a huge rally today it was up about 10%. Unfortunately it is still under $30 a barrel, but at least it is not $26 a barrel. Also, oil rally on a rumor. There is no real news about a production cut. If a production cat is not forthcoming, then we're going to see oil drop it back down to $26 or $25 a barrel. And, if there is no production cut we might see oil go much lower. There was nothing else in the news that was important. Yes there was a shooting at a school in Arizona, there is the normal celebrity gossip, and the rest of the mayhem, and disasters that are occur on a regular basis. It was a quiet day to end a basically quiet week.

What do you think?

Friday, February 12, 2016

Moving jobs to another country

There is an article on the internet about an air conditioning company that is moving their manufacturing from the United States to Mexico. They are doing this because they believe it is the only way they will remain competitive. Is it a good move? If the manufacturing will be of the same quality, then of course it is. The reality is that it just cost too much to make things in the United States anymore. Also, you have to deal with the diminishing quality of the workforce. We no longer have the quality work ethic we had 50 years ago. Talk to any business owner and the biggest problem they have is finding quality employees. Are there better employees in Mexico? You know, I personally don't think so, but at least they are cheaper and that is what the company needs. This is another reason why we are going to have a very difficult time over the next couple of decades. Not only are there going to be fewer and fewer jobs because of the digital revolution. There will also be fewer and fewer jobs as manufacturers take their manufacturing to other countries because frankly, it's just cheaper. Things are going to be very interesting over the next 20 years.

What do you think?

California - Is it a nice place to live?

Here in California we are experiencing a heat wave. Today it was about 85 degrees here in Southern California, so we are having summer in winter which is different. I was scanning the headlines for the rest of the nation and I noticed that in New York City it is so cold that they had to cancel and Ice Festival today. Yes, the weather here in Southern California is terrific. But, is this a good place to to live in? If you went by the weather it is a fantastic place to live, but that is not the only factor that affects the quality of life. Southern California is probably one of the most expensive places to live in the United States. The cost of housing is one of the highest in the nation, taxes are very high, and so is electricity, natural gas, and especially gasoline. While the rest of the nation is quickly approaching a dollar a gallon for gasoline we are still at $2.50 a gallon. Why? Because of all the taxes that are involved and all the restrictions on the formulation of gasoline imposed by the state government. The traffic is horrific here in Southern California, the crime rate is high, and the poverty rate is also high. California is also a socialist liberal paradise. If you want to live in Northern Europe, why bother moving there. Just move here to California, there's not much of a difference except maybe the weather is a whole lot better.

So why don't I move to another state? That's a great question and I wish I had a good answer. I think the reality is that we're kind of stuck here because we owe more on our home than it's worth, and the kids are going to college here. Hey, at least the weather is nice.

What do you think?

The digital revolution

I was just looking at some information on Netflix. It has sales of about 5.5 billion dollar a year with a net income of $300-400 million, but it only has about 2200 employees. How can a company with such a large amount of sales only have 2200 employees? It has so few employees because it outsources as much as possible. I was just reading today that Netflix has finally closed down Its last date center. It now has outsourced all its data to Amazon (which is actually ironic since they are competitors). So not only does Netflix have very few employees, it doesn't even own the servers that its data is on. Talk about radical outsourcing! This is a key feature of the digital age we are living in. You can now create a company that earns billions of dollars a year with very few employees. I would dare to say that you can literally create a multi-million dollar company all by yourself. Is that truly possible? I believe it is so.

I think this is one aspect of the digital revolution that is a blessing and a curse. It is a blessing because well, you can create a multi-million dollar company all by yourself. The curse is, if you are not the owner, who will you be working for? The digital revolution is offering great opportunity to those who are capable of starting their own companies. But, it is a curse to those who will need to find jobs. Why? Because there will not be enough of them. The next couple of decades are going to be very interesting.

What do you think?

Chromebook and dictation

It turns out that Google has a dictation function on Google Docs, so I am not limited to just using my iPhone for dictation. I was not aware that Google Docs had this ability. I am using the dictation function in Google Docs right now as I write. I am also using it through my very inexpensive Chromebook. And one more point, it is all free (except for having to buy the Chromebook first). The great benefits of using a Chromebook is how inexpensive it is to do just about anything you would like to do with a computer. Here I am creating a blog post while using Google Docs and dictation. All of it is free to use. that is one of the best benefits I'm using a Chromebook. I keep asking myself the question of why would you purchase something more expensive when you can get the job done with a Chromebook that is so much less expensive?

One more observation. I actually think the dictation function here in Google Docs is more accurate than the dictation function on my iPhone. Here in Google Docs I am having to do a lot less editing to make sure everything is right. Now, I am going to continue using the dictation function on my iPhone because it's so much more portable. In another words, I can write anywhere I go using my iPhone, but with my Chromebook and Google Docs I am limited to writing only when I have access to Wi-Fi. But, when I can have access to Google Docs I am going to use this dictation function more and more. the reality is that I can put words up on the page much faster using the dictation function rather than typing. Plus, with the volume of writing that I do I do not risk getting carpal tunnel syndrome.

What do you think?

Nightcap 2/11/15

Stocks closed lower today, but not at the lows for the day. It seems there was a little rally at the end of the day. Oil was down to $26 a barrel but has since moved higher. The Democrats had another debate tonight. Nothing else of major importance happened today. Besides the usual crime etc... it was a quiet day again. Let's see what tomorrow may bring us.

What do you think?

Thursday, February 11, 2016

Oil disaster

The price of oil dropped to $26 a barrel today. I remember predicting a few months ago that the price of oil would drop below $40 a barrel and that would be horrible for the economy. Here we are at $26 a barrel and it is a total disaster. Oil related businesses are starting to lay off well paid workers by the thousands. Many of the businesses are in financial crisis and I'm sure we will see a whole slew of bankruptcies and the near future. Unfortunately oil may go even lower. There are reports that storage facilities are just about full and they might have to turn any new oil from their facilities. If and when that happens oil will drop even further. Are we ready for oil to be lower than $20 a barrel? I personally like paying less for gasoline. But, I do not like seeing the destruction of one of the most productive sectors of our economy. This drop in price is going to have negative ramifications for many years to come. if you are in any way involved in the oil industry buckle up it's going to be a bumpy ride. Actually I think that is the wrong analogy. I actually think the oil industry is like the Titanic on a collision course with an iceberg.

What do you think?

The digital revolution and the impact on people.

I just read a report on the impact of automation on jobs. It is estimated that over 45% of jobs are at risk of being taken over by some form of automation. How can you know if your job is at risk? Simple, how easy is it for your job to be done by a computer? I was looking at a list of jobs that are not susceptible to being automated and most of them are in health care. I guess if we want a job in the future we all need to work in the health care industry in some capacity. My concern is this, what are people going to do if their jobs are taken over by automation? In the past when jobs were lost they were replaced by other jobs (like car jobs for horse and carriage jobs that I wrote of before). Unfortunately there are no new jobs being created by the digital revolution. I think we are in for a massive societal unrest and upheaval in the not to far away future (if not sooner). How are people going to earn a living? If you can find an answer you will make a fortune.

What do you think?

See the article at:

Chromebooks v. Windows laptop

I was reading a review of a new Chromebook model last night. The comments regarding the new device were not what caught my attention. What caught my attention were comments in regards to buying a Windows laptop instead of a Chromebook. The reviewer made the point that buying a $200 Windows laptop would be much better than buying a $200 Chromebook. I disagree. Sure the Windows laptop will allow you to download programs that the Chromebook will not, but the inexpensive Windows laptop will not run anything that would justify owning one. For example, you might be able to download Photoshop but because of the lack of memory and a poor performing main processor you will not be able to do much with it. What you end up owning with the cheap Windows laptop is a cheap Windows laptop that can only do a few more things than a plane Chromebook.

Having owned both types of devices I think the Chromebook is a better value. First, Chromebooks usually have better quality components because in order for Windows laptops to be as cheap as a Chromebook they skimp on quality. Second, Windows laptops are way slower than Chromebooks. Third, Chromebooks marks have double the battery life. Fourth, sure you might have more functionality with the Windows laptop, but you have to pay for it. Once you buy the Chromebook you really never need to pay for anything else. Finally, with a Chromebook you never catch a virus. For me, that is one of the best selling points for owning a Chromebook.

If you're going to buy a $200 laptop, buy a Chromebook. If you want greater functionality then don't buy a $200 Windows laptop. Buy a $500 Windows laptop and spend a little extra money for a better machine. In the end, if all you are going to do is some basic things with a laptop, save yourself the money and buy a Chromebook. I use mine all the time and enjoy it. I think it is the best value for the money market.

What do you think?

Wednesday, February 10, 2016

Nightcap 2/10/16

It looks like most stocks sold off at the close. The DOW and the S&P closed down. The NASDAQ was higher a bit. Oil also closed below $28. The FED chair was talking to Congress and stated that rates will not be cut, but that the rate of increase will probably be slowed. Fiorina and Christie are out of the running for president. That was quick. I am surprised Carson is not out yet. He has had a very poor showing so far. Bush should be out, but I think he still has some money left to plug along for a while. South Carolina will shake things up a bit more in about 10 days. That was all that happened today that was interesting besides the usual crime, mayhem, and disasters. Maybe tomorrow will be more interesting?

What do you think?