​A very dear, intelligent, and a most inquisitive-minded friend posed a very thought-provoking question to me some time ago. What is the relationship of energy and value in the universe? How is energy and value determined around the universe? For those of you who know me, surely you’re aware of me being a fan to the economist Steven Levitt’s work in Freakonomics. And one thought, that I gathered from that book, which would always be in my head was that surprising answers come about from the most peculiar questions. No one had ever asked me about energy and value and what they should do in the universe. Still…she asked me and I struggled to answer at first but as I gave it more thought throughout the next few days and weeks, I was amazed at the implications of the possible answers. Here’s how I answered her first part: energy distribution in the universe.

​When an object of great mass accumulates a lot of energy (like hoarding energy all to itself), the object can implode. Something the size of a galaxy can shrink down to the size of a grain of sand and then explode and release that condensed energy back out in to the universe. Almost immediately, other objects of great size start collecting all the dispersed energy from the imploded (now dead) object. Think of it like a big company that’s so successful and gets all of NYC’s customers to itself. It eventually gets too big. Too big for its own good. And then it collapses and fails. So, what happens to all its customers and assets? It gets dispersed and distributed in a chaotic manner. There is no order. Other smaller companies start gobbling up customer and market share, collecting and buying the abandoned assets that had once belonged to the original big company. A chaotic frenzy occurs where all the smaller players are now positioning themselves with their newfound energy in the form of market share and assets. Energy and its distribution is never organized. It is always chaotic, both in the universe and in human society (this last notion shouldn’t surprise us since, according to the late Carl Sagan, ‘we are all star stuff’).

​But now, what is the relationship of value in the universe? How is value determined? Simply put, energy does have value, but that doesn’t mean the universe sees it as such. Value is a human concept. But perhaps I can best define it like this: value is the result of a careful mix between need, desire, and supply. If something is needed by something (or someone else), then there’s value. If something is desired, it too has value. And if there’s a limited supply of what is either needed or desired, then the value of it is increased. The opposite is true as well: if something is NOT as needed or desired, its value goes down. At first, these concepts don’t appear to apply to the universe… but not so fast. Planets need sun energy, which makes sun power valuable. The sun needs stable gravitational positioning, which is caused by its place in the galaxy and its distance from the gravity of other stars, which makes gravity energy and position valuable. However, these massive bodies NEED the energy; they don’t necessarily DESIRE the energy. NEED and DESIRE are human concepts that we are conscious about because there’s always some form of energy we want or need from something to someone else. But the fact that we can desire it makes us indeed a unique species. Perhaps that is what is meant when it is said that ‘we are the masters of our own universe’, that reality is all in our head and that everything is real because we think it to be real. The very forces at work throughout interstellar space are also at work at the human level, both in mind and body and in between each other. And as we contemplate how energy and value is determined, we remember that no matter how small we are, our mind is capable of grasping and imagining such grandiose bodies in the universe, all functioning together in what appears like clockwork, but what is in fact a complete and grand chaotic interstellar and galactic mess, taking eons and eons of time to go through, as we live a whisper’s length of time, though just long enough to understand a sweet morsel’s fraction of it all.

Note: a picture of her handwritten question is linked below. It says “in the universe, the distribution of energy (any kind)… determined by… goods, money…”

But once that had been taken from her, and after her subsequent move to New York City, she abandoned her lifelong abstinence to what she now viewed as regular pleasures. With all of these thoughts in her mind, she attempted to scratch away a small patch of white powder that she noticed on her black pants, the result of the previous night’s small indulgence on some cocaine before bedtime. Her phone’s screen lit up with a text message she had been waiting for.
Heather – ‘Managed to get you in!’

Annabelle quickly typed back ‘thank you! appreciate it’

Heather – ‘Anytime! owe you!’

Annabelle felt uncomfortable with the way that her former college classmate would express that she still ‘owed’ her for something that Annabelle had done for her years before. They had one class together during her first year and they remained acquaintances until graduation and for some time after that, but the sole reason that Heather felt indebted to her was because Annabelle had written nearly all of Heather’s senior year term papers. Without her help, Heather would not have graduated on time and probably would not have landed the job she had now. Despite majoring in Art History, Heather Bailey had managed to land a job with the press corp in charge of mediating between politicians and the media. Along with others, it was Heather’s job to arrange who in the media would have access to candidates for interviews and press conferences. Since graduation, Heather had worked for various candidates from both major political parties, providing her services to facilitate their interactions with journalists. It had been many years since Annabelle had helped her, and she really thought nothing of it and would prefer that Heather stop mentioning it, but this time it became of good use. Despite that Annabelle no longer worked for HCN, Heather had managed to secure Annabelle a seat amongst the reporters covering a major announcement from the New York Senator Sara Blythesin occurring later that day. With the proper journalist credentials, courtesy of a very willing Heather, Annabelle could take a seat among her former colleagues and competitors and thus try at posing a few questions to the Senator to clarify details about an incident that had been covered by the press back when it had occurred. It was to be the first of hopefully many investigative journalism pieces that she was working on while she established her own independent news site/blog: Maverick News Online. It was a not-so-subtle reference to what her show on HCN used to be called: The Maverick Files. HCN would probably give her some trouble for using the word ‘Maverick’ being that she was no longer affiliated with HCN. But she didn’t care. All she wanted was to reestablish herself once again to regain what she had quite publicly lost in a humiliating way. Again, the memory of how her downfall occurred was one she would wish to forget, thus her often over-indulgence in alcohol and a bit of cocaine like the previous night and the many before then.

Today, however, she needed to summon back what had made her good at her job for a few yet glorious years. It was currently 1pm and the press conference was scheduled to take place at 3pm at an outdoor event on Columbus Circle, near the southwest corner of Central Park. She then took out her laptop and began to review her notes concerning the incident that she intended to ask the Senator about later on. She took one long gulp of her extra-large coffee and began to mentally process everything she had gathered about this incident.

Before Sara Blythesin became a two-term Senator, she had attained the rank of Captain in the United States Army. Not much is known about her roles in any missions due to most of them being classified and probably listed as special black ops, except for one that had unintentionally come to the media’s attention. The only publicly known mission that the Senator is known to have been a part of was Operation Free Home, during which she was the commanding officer over a task force of 9 army rangers. Their mission, according to what the Army provided after various Freedom of Information requests from the press, was to safely extract American citizens being held hostage by the QUA terrorist organization.

The QUA, Quantum Uniformity Alliance, were a group of renegade theoretical physicists turned armed rebels who fervently believed in the laughable sci-fi notion that all of existence was just a grand simulation inside an interstellar super computer. Their main objective was to challenge the rules and limits of physics by forcibly taking control over all the world’s hadron ion colliders and smash enough atoms together to create a rip in the fabric of space-time, potentially paving a way to a higher dimension outside of the grand simulation that they believed the universe was a hostage to. Among their lesser goals was to slow down the speed of Moore’s law, the principle that computing processing power gets predictably greater as time goes on. The QUA would infiltrate the many R&D facilities of the leading chip makers around the world, sabotaging their experiments and prototypes so that the computer and chip industry would not progress as fast and exponentially as Moore’s law dictated. Their obsession with slowing the progress of computing power was due to their rabid fear of the singularity happening; the time where modern science and technology would successfully engineer the first of potentially many self-aware, conscious, and autonomous artificially intelligent machines capable of learning and processing massive amounts of data. They believed that such a machine did not yet exist, but eventually would become a reality if the computational power of microprocessors continued to progress to better and faster thresholds. Annabelle couldn’t help but be both annoyed and amused at the same time as she reviewed this information concerning the QUA. ‘it’s amazing and yet embarrassing that these idiots have been practically allowed to get as far as they have’ she thought to herself. Clearly they saw way too many movies about the so-called robot apocalypse. She remembered the first time that the QUA had come to her attention during her senior year of college.

One of her philosophy professors, who would later become an active member of the QUA, would incessantly lecture about the futility of existence and of humanity’s desire to find purpose in life. “There is no purpose because we are not real! Me, you, they, us are all not real! If who you think you are and who you think I am is not real, then I have some liberating yet melancholic news for you. Free will is also not real!” He’d begin many of his lectures along the same lines while never assigning any work nor giving out exams. Later that year, she had learned that the school had given her and everyone in her class an A grade with 2 months still left in the semester. Gladly, she took the A grade and was glad to have an extra 4 hours to herself during the week now that the class was cancelled. That extra time allowed her to research and write Heather’s papers. What she discovered shortly after was that her professor had been caught with a device that would monitor and keep a record of every keystroke tapped by his students as they used their laptops in his classroom (most of which was to do whatever they wanted to, whether it be shop, write emails, work, or be on social media since there was no reason to take notes about his lectures anyway). With that information, it was believed that he intended to remotely gain control of his own students’ computers to frame one of them for a hacking of a new computer science/research laboratory in the school that had not been made public at the time. Thankfully, for his students’ sake, this plot was discovered and prevented when he was found with the illegal spying device. Despite being arrested and charged with a felony, he later skipped his court appearance and fled the country. It was later uncovered that he had been in collusion with other QUA members as they began their first of many attempts at technological sabotage.

Annabelle’s concentration returned to the classified operation that the then Captain Sarah Blythesin had been in command of. Ten prominent American scientists had died of natural causes throughout a span of 18 months. Through various autopsies, police reports, medical records and family testimony, none of the 10 deaths were suspected of having any foul play. It did appear strange that 10 perfectly healthy individuals would die of causes ranging from spontaneous brain embolisms, heart attacks, sudden aggressive spread of cancer in the brain, lungs, and heart, and even two cases where it was proven quite conclusively that they had simply died in their sleep. However, the CIA had managed to intercept intelligence stating that the 10 were in fact alive and in good health while being held captive in an abandoned weather facility in Montauk, Long Island by operatives affiliated with the QUA. The 10 bodies purported to have been the same 10 scientists were in fact forged bodies of 10 other unknown persons. For obvious reasons, the fact that they were alive needed to be kept away from the public’s knowledge and a top-secret operation was put in place to rescue the hostages as well as to capture and detain members of the QUA guarding the facility.

According to what was disclosed in the debriefing and the redacted deposition from a Senate Armed Services Committee closed-door hearing, both of which were gained with the Freedom of Information requests, what the public would come to learn was that Captain Blythesin, along with 9 Army rangers, successfully infiltrated the facility at midnight May 10th, 2020. Despite having practiced the infiltration many times in mock trials at an army barracks in a coast on New Jersey as they anticipated possible resistance from any armed militants, the actual infiltration met no resistance whatsoever. Captain Blythesin and her rangers were quickly able to find the captives and lead them out of the facility to a safe extraction point just half a mile from the old Montauk lighthouse. The primary objective of rescuing the hostages was complete while the secondary objective of collecting intel from the facility was still taking place. Since it appeared that the facility had been abandoned, Captain Blythesin allowed 3 rangers to stay behind in the facility to search and gather all records, hard drives, files, and to take photographs of anything of value that they would find. It was during this moment when the mission took an irrevocable turn that Blythesin did not plan for. As the 3 rangers made their way to exit the building, armed guards appeared from within secret corridors, hidden behind secret doors within the concrete walls and attempted to keep the rangers from escaping. Captain Sarah took it upon herself, single handedly, to go in and attempt to fight off the guards blocking the exit path for the three rangers still inside. Two managed to escape to a safe zone outside the facility while one remained inside, having provided covering fire along with Sarah for when the other two ran out. Sarah ordered private First Class Henry Mills to leave while she’d provide covering fire for him. However, upon his attempted run towards the exit, a bullet ricochets off Sarah’s helmet gear and struck private Mills in the head, killing him instantly. Sarah kept firing towards the shooters inside the facility as she attempted to pull Mills’ body out to carry it to the safe point but was met with heavier resistance from within the building. Ultimately, she gave up and returned to the extraction point where she and her remaining team and 10 scientists boarded two helicopters and flew back to New Jersey. Private Henry Mills’ body was later found along the coast of a Hampton Bays residence where it was retrieved, taken for an autopsy, and then given to his family for a funeral and burial that gained notable public attention. That was what the public was told about the events. Sarah was hailed as a hero for having rescued the 10 scientists and then her career successfully moved on towards politics.

“Would you like another coffee?” said the automated server screen at her table. Sarah touched ‘no’ on the screen and instead ordered another cheese Danish from the desert menu, another vice she had taken on as she no longer cared much about the rigorous fitness regiment that had been forced upon her when she had the contract with HCN. She then took out a small metallic folder from her bag and placed her thumb on the fingerprint scanner by its edge. A small red light turned to a faint green and then the folder opened from which she took out another set of documents. Her first reaction was to question the authenticity of these documents until she saw the blockchain signature at the bottom right corner of each page. A barcode, a set of numbers and letters, and a PIN number all were enough to authenticate that this document had at one point been part of the chain of possession of top secret documents circulating within the Department of Defense. Despite the meticulous steps taken to prevent the leaking of secret information out to the media, the leaks were still happening from within the government and the higher ups were always one step behind with trying to identify the leakers and stop it from happening. According to these documents, the publicly released version of events regarding Sarah’s rescue operation were all true except for two discrepancies: in an unredacted debriefing between Sarah and her unnamed superior ranking officers, taken hours after the failed rescue, Sarah mentions that she saw private Mills receive the shot to his shoulder from the same bullet that ricocheted not from her helmet gear, but from her own head. She survived the shot because 5 years before her enlistment, she had received a cranial metal replacement surgery, effectively removing a skeletal portion of her skull and replacing it with a thinner yet stronger sheet of metallic organic/titanium. When asked by her unnamed superiors why she had never disclosed this surgery in her enlistment form, her response is redacted off the debriefing documents and the questions revert to what happened with private Mills. Upon seeing that she had survived a direct shot to her head, he stood shocked in disbelief but then received a direct bullet shot to his head from one of the defending fighters inside the building. As more fighters appeared to gain on her position, Sarah left him, believing him to be dead.

The second discrepancy that directly contradicts the official public record is in another document which stated that a few months later, Sarah received a summons for another closed-door debriefing on the same operation. During this second meeting, she is asked if she is being truthful about having directly seen private Mills receive a direct shot to his head, causing his death. Sarah replies in the affirmative. It is then when the only unredacted name in the document appears and is mentioned only once; a person by the name General Arthur Turing. Mr. Turing then tells Sarah to explain why then is it that, after 4 months and after a very public funeral, private Mills was later found to be alive though unconscious in a forest less than half a mile away from the compound where the rescue had taken place. Though battered and emaciated without food or water for an unknown amount of time since the rescue operation, he did not have a wound to his head. He remains alive, though unconscious, under the care of a private clinic, with his family being given an extraordinary amount of compensation to keep his status a secret given how the public was given a different story at the time. Sarah remained steadfast in standing by her statement that she saw, with her own eyes, private Mills receive a direct headshot that, in her view, killed him in an instant. The document abruptly ends without an attempt being made by either party to clarify the discrepancies between the public and now classified record of the events.

At the zenith of her career, Annabelle Kelly was the sole journalist with impeccable credentials to cover politics in Washington DC. In that wild den of power brokers, it was Annabelle who commanded their attention and held their feet to the fire of public scrutiny. Without question, it was unofficially considered a rite of passage for any up and coming politician to appear on her cable news show, where their mettle would be tested against her uncanny prowess to cut through the clutter that politicians would speak with. She got to the point, she would stay on point, and she would whip her guests back to whatever point they were trying to avoid that was perhaps further from their comfort zone than they’d like. A comfortable politician is a lying politician, she used to say. The further she could steer her guests away from the comfort of their talking points, the greater likelihood she had to gain a better understanding of the truth.

It was human nature, and especially political nature, to hide the messy truths from ordinary people. To a certain degree, Annabelle understood that in their positions of power, politicians had access to information that would be best if kept from the public’s knowledge. However, all information is power. The greater the control that these otherwise ordinary yet elected humans amassed, the greater the amount of power they would be wielding. Power that had the potential to shape and alter the lives of millions of people in the country and around the world could not be blindly trusted in such ordinary hands. And that’s where Annabelle came in… and she loved every minute of making politicians squirm in their seats as her line of questions would find these uncomfortable truths.

Her viewers loved it too, which contributed to her ever stellar ratings for her show, and which brought great pleasure to the bosses at her network HCN: Heartland Cable News. For 5 years straight, her timeslot vastly overshadowed her competitors in the other networks, a remarkable feat for someone who was just turning 29 this year, on Election Day of all days. Despite her age and even younger appearance, her voice exuded an implicit authority supported by the rigorous research that she personally conducted before every show. With the help of her loyal staff, and an even fiercer producer, she had often thought of herself as the Joan of Arc of cable news: the young journalist who took on seasoned corporate executives turned politicians, special interest lobbyists, greying senators, three vice presidents, and a sitting president. Many of these Washington DC elite would praise her publicly but some had privately expressed their disdain at the way she appeared to salivate at the moment where she knew she had someone powerful cornered into a silent spot where no response would do justice to her line of questioning. Were it not for her popularity, many would have chosen to avoid appearing on her show all together. And just when it appeared that her career would go on to further heights, Annabelle’s fall would be swift and the death blow to her career a merciless one. The Joan of Arc of cable news had fallen, captured in a scandal from which there was no return.

    Annabelle reflected on all of this as she sat in her favorite corner of the BB’s Coffee Den just outside her apartment in the Upper East Side of New York City. At first, she welcomed the transition from her life in Washington DC, perhaps a bit more than she expected. Annabelle quickly discovered that New York City was a place that, during the day, could fill a person’s mind with limitless wonder where success was feasible, tangible, and edible. The nights, however, had a predictable habit of eating away the drive and energy that any ordinary person would need in order to make it through to the next day. She had grown used to the many pleasures and delights that the city had to offer. She had abstained from alcohol for most of her life, having her first social drink at age 25, and had completely avoided toying with any illicit drug use during her high school and college years. To keep her mind and body clean was a feat that she was extremely proud of as she felt that nothing should hamper her drive towards establishing a successful career. But once that had been taken from her, and after her subsequent move to New York City, she abandoned her lifelong abstinence to what she now viewed as regular pleasures. With all of these thoughts in her mind, she attempted to scratch away a small patch of white powder that she noticed on her black pants, the result of the previous night’s small indulgence on some cocaine before a restless bedtime. Her phone’s screen lit up with a text message she had been waiting for.

Our kitchen microwaves will get their revenge.

More on this later but let’s stop (but not too long), and think. This is all the more reason to never waste a day repeating what hasn’t worked.

Nasdaq and the S&P are at all time highs, Dow components appear to defy gravity, the so called Trump rally never hits the breaks more than a few days or so, and yet everyone is holding their breath wondering when the pull back will occur. And it doesn’t happen. The main reason IS the technology sector. Names like Amazon, Google, Facebook, and Netflix are leading the market higher because they represent a glimpse into a future that hasn’t happened yet. All 4 have established capital and infrastructure to make a reality out of the dreams and hopes that investors got drunk with during the initial technology boom of 2000. For a lack of a better term, this time it’s different. If investors do not envision what the state of the world may look like 3-5 years from now and beyond, they will miss out on never-to-be-repeated gains at such a pace and percentage rate that may not occur again for another 50 years.
Some view these new market highs as history repeating itself: investors getting caught up in a craze of wishful thinking for future profits to magically come out of current operating losses. To their credit, the startup losses are real and shouldn’t be ignored. The difference this time is that the technology has reached a point where human error is being phased out. Human error caused the technology bubble of 2000. But we didn’t have AI, machine learning, data mining, algorithm-based machine performance, and a plethora of smart devices connected to a global system of communication. The incessant drive towards efficiency that disruptors trip over themselves to achieve is only accelerating the rate of technological improvement. (So much so that technologies are rendered obsolete within a span of 3-5 years).
And that’s where I come to my thesis: invest in tech that doesn’t exist yet. Specifically, invest in technology that is phasing out the human element of every sector/industry.
Let’s begin with a safe investment (the first of a series of future focused technologies). I envision a world where waste will be managed to the point where we’ll have smart, portable waste management devices for the retail consumer. Human error creates a lot of waste. Technology is adapting to being able to use this waste a source of energy and natural resources. And as the world population increases, more waste will be generated. This is why WM (Waste Management), with its current 2% yield, is a safe long term investment. With their virtual monopoly on handling garbage, I wouldn’t be surprised if they soon become an energy and resource provider. They may always be a 2% yielding stock… but that stock price undoubtedly will increase and thus appreciate the value of the initial investment. When deep space exploration and colonization occur, whose going to be managing all of that waste?
All you need to know about the stability of WM’s stock is the 5 year chart. Enough said.
This future based portfolio would comprise of
WM, AJRD, OA.

Kids, don’t ever do what I did. But if you felt compelled to do so, this is how its done.Yesterday’s trade, as seen on my twitter and Snapchat, was a result of a few key points I gathered from the conference calls of two other companies. Seagate (STX) and PureStorage (PSTG). Seagate spoke about the increase in data generation as a result of more people being engaged on mobile applications. Every swipe, every tap, every location ping, everytime you do anything on your phone generates data. Data is the new gold of the common era, but only if you know what to do with it. Otherwise, to quote the movie There Will Be Blood, “its all just mud in the ground”. PureStorage repeated the same thesis: everything we do is making more data which is increasing the demand for data analytics which itself is demanding faster chips with greater fidelity to store more information. And that’s why I bough Nutanix, a company that helps other companies gather and organize the data they accumulate and then make sense of it in accordance to their respective sectors.

The Trade: buy a 5% stake at the opening, buy another 5% if it goes lower throughout the trading day. Buy 15% more near the end of the day. Leave 50-60% cash on the side JUST INCASE the earnings report disappoints. Were that the case, you can still buy more when the stock drops, minimizing your average cost basis, which then minimizes the size of your loss OR  it can allow you to profit off the short term bounce. THIS, as some of you may know, is called a deadcat bounce: a bad stock that drops and is destined to go lower but has a quick 5 minute rebound in the stock price between 9:45 am and 10:30am. NEVER hold a deadcat bounce beyond 10:30… it almost always ends up going lower.

 

Current position: long STX, YEXT. Got out of NTNX on a 16% pop overnight. Looking at getting back into AKAM at another 2% downturn

PS: Pre-earnings trades is pretty much gambling. DON’T DO IT. Or better yet, let me do it for you

 

http://keoler.com/storing-a-memory-involves-distant-parts-of-the-brain

Regulating the internet giants: The world’s most valuable resource is no longer oil, but data | The Economist

https://www.economist.com/news/leaders/21721656-data-economy-demands-new-approach-antitrust-rules-worlds-most-valuable-resource