Michael Rupp friendica

A Capitalism Market Pricing Fail

This post is appropriate for tumultuous times like the ones we are in now. People schooled in # are well aware of the way a # is supposed to automatically make sure the people who need goods & services the most during a shortage in the # will get them because they are willing to pay more because their needs are higher.

I had a minor epiphany today that saw that as the # that it is. It always rang hollow for me, but when I learned it I was part of the culture that wants to believe it. (side note: Now, I sincerely believe that # is mere # #, although the # types and other # based # seem to make it into "old-school" feudalism)

In a rare instance, I—a non-religious person—am going to quote the # # to help bring home my point. (#)

Luke 21:4 wrote:

For they have put in a little of the money they had no need for. She is very poor and has put in all she had. She has put in what she needed for her own living.

Our current free-market pricing, aka Invisible Hand Of The Market, is the type of magical thinking we expect from theology, so why do we think it's okay for economics; a science? I think it's because it's presented in the form of a false dichotomy in the first place. The offered alternative is fixed pricing. The logical conclusion is people overbuy because of their inexorable human fear of running out and hoarding happens as a result; obviously an inefficient market condition. # had a case of this early in the # crisis where we went insane for toilet paper.

Some retail vendors dealt with the potential stock-outage dilemma by limiting the number a person could purchase on a single visit; # goods. Despite this limitation being easily hacked by nefariously thinking people, it worked in general. All we needed was a nudge that effectively put across the message, "don't be an asshole." It's hard to pull off rationing in a population of cultural capitalists who, "don't like the guvement tellin' me wut ta do."

This next thought experiment is almost impossible to do in theory, but I'm putting it into writing anyway because it points us towards better thinking. Suppose that under normal market conditions we could statistically determine the "regular" pricing for a good or service. That is a feasible activity that is done by many people in many places all the time. Now add to that the idea that we could also know either the true # and/or # of people at all times. And the final element is to make the market price a linear formula of surge-pricing = regular pricing + (x percent of net-worth or annual income). This has the property of egalitarianism built into the pricing.

In our current system of capitalism, no wealthy person would ever weigh the surge-pricing of goods or services and think, "maybe I should wait." A majority of people in the middle class will be forced to think about it immediately, then others will be forced to overtime. People in poverty don't have the luxury of thinking it over, they have to do without or die. This is also obviously an inefficient market condition, except that people with power never viscerally feel its effects. Wealthy people only care about problems that hurt them personally.


!Stock Picking Discussion
!Atheists in the open
Stock Picking Discussion reshared this.

The stock market is not the economy, exhibit 3,443.62

This new episode of the Marketplace show called Make Me Smart with Kai & Molly is great at explaining the #Economics behind the #Decoupling of the #StockMarket in the #USA and the #Economy. Although the #Stock #Market has never been the Economy in the same way that the bread isn't part of the sandwich.

They get to the point in the first interview so you can be done listening by the 15:00 minute time mark

P.S. tagging !Stock Picking Discussion into this.

How to Lie with Statistics (in this case Police statistics)

This is a good post for the !Stock Picking Discussion forum because every #Investment decision is based in #Statistics for the purpose of limiting #Risk. Said another way, finding facts to predict outcomes, or at least to predict what can't happen. However, as was made famous by this quote, …

Mark Twain wrote:

There are three kinds of lies:
lies, damned lies and statistics.
…, statistics are at least a double-edged sword.

Linked at the bottom is a famous book that teaches people how to see the lies that duplicitous people will tell through statistics. The embedded podcast here is a recent episode of #TheGist by #MikePesca where during the interview portion (time 6:00 to 22:00), we hear the guest indicate a lot of the perversions of the data which helped the new GobbelsWilliam Barr—make his recent statements that there isn't #InstitutionalRacism.
Splashing Down on a Mountain of Racism

Barr isn't lying through his teeth, he's lying through other people's statistics. Please do whatever you can to educate yourself about statistics. It will help you to see the lies promoters of securities will tell. (skip to 8:25)
Attorney General Barr Denies Claims Of Political Interference In DOJ

And if you really want to take a deep dive on #American #PoliceBrutality #History, you need to point your browser to Behind the Police (by the makers of Behind the Bastards)

Code Switch | Why Now, White People?

Okay, this one is going into !Stock Picking Discussion but I don't think it's obvious as to why, so I will explain.

During the course of the show, they have a very wise discussion of the possible reasons so many #WhitePeople joined #BlackPeople in the #BlackLivesMatter protests. It's all sound reasoning. It's not what my point it though, but the details they discuss will be worth memorizing for your future.

Social Unrest is one of the most #powerful #indicators of how the real #economy is doing and also how well the current #Politics, #Laws & #Regulations are serving the people the #government is supposed to represent. It takes a lot for people to get off their asses and #protest in #hostile #environments. That's a big indicator of a shit economy and/or shit politics. So the #financial #news may tell you one thing, but the #social #unrest tells you the truth. The #Stock #Market has a generally repeating set of patterns after presidential elections, and I urge you to try doing some charting with the S&P500 to see what things look like and segregate your results by the type of leaders running and who won. They tell a story you should know.

What they discuss in the podcast will add to your personal set of market predictors. Leading indicators like this are valuable.

Why Now, White People?

Corruption - Society's Cancer | It has many forms

#Police #Brutality against a #countries #citizens is a #corruption, and for this post, I'm using the #USA in my examples, but it's a universal problem.

To address the "#WTF does this have to do with 'Stock Picking' since it's posted there (here)?", I'll first say corruption in a #social #system for any set of collective living things is the equivalent of #friction or #drag in #Physics; energy is dissipated in a way that it cannot be recovered. This means value is lost ubiquitously within society in a way that could be avoided where loss due to depreciation and wear of capital goods cannot be avoided. That loss damages the overall #Economy, and more starkly effects the subsystem of all things directly connected to the specific acts of corruption.

Society can collectively address that corruption if it is informed of it and if it affects all the individuals' value systems enough to motivate them to demand change.

The policing systems in the #UnitedStates do not even need to be #Mindfully aware that they are corrupt for it to be de facto corruption. The mindset of the systems pawns/soldiers wearing blue and black shirts—based on training and direction of commanding officers and their manuals—are jamming the court system and the prison system with people of meager means for the benefit of for-profit prison systems, and the excessive profit handed to the few is being taken from all of us in a very costly way. The benefit to society locally—if those put into the system were even really guilty of something—is negligible compared to the cost we all bear collectively when we unknowingly support the corruption in the system. Books can be written about the details of the human value lost to our society when a poor person goes to jail for smoking #Marijuana or making a #FurtiveMovement. Think of the change in your personal economic burden if you went from just looking out for yourself, to taking care of a parent who suddenly had a stroke and is now in an immobile state. That example is more #economically pronounced than when your pot-dealer goes to jail, but it's only a matter of scale in difference. The big difference in that metaphor is that your parent would have to have been medically forced into the stroke by their doctor, and it's not really your parent, but the hospital decided you had to financially take care of them, and the hospital will bill you annually for their services through your taxes so you can't see that line item.

The good news is there is a way to remove an #Insidious portion of the #Mindlessly administered corruption of #PoliceBrutality and it's proven effective. You may know the promoter of this method by his sky-blue vest appearing at demonstrations and rallies like #BlackLivesMatter. He displays a type of #Genius that almost hints of Asperger's Spectrum; he's DeRay Mckesson.

I heard him speaking yesterday on the Pod Save America #Podcast at about halfway through the show (skip to 44:35 and he's done by 55:40).

I heard him plug the webpage of his successful method, "Police Use Of Force Project", so I attached it below.
Spoiler Alert...
All it is is to alter the policies inside the existing bureaucracies for the use of force. Just 8 common-sense policy changes have reduced 72% of #Manslaughters / #Murders by the Police on our #Citizens.

So to bring this all back home, you can either think about who wins from the corruption and invest in that, think about who loses from the corruption and short-sell that, or start fighting the corruption and we all win together.
Do any combination of those including all of them.
!Stock Picking Discussion

#Bias #Knowledge #Media #SensationalNews #Disinformation #LoveThyNeighbor #PeacfulProtest #CivilUnrest #SocialContract #Vote #VotingMatters #CivicDuty

Movie Reccomendations

I don't know how long it was sitting in my #Netflix queue waiting to be watched, but The China Hustle is really on! It's a #GiveTheGameAway type documentary. It shows us that the King has no clothes and pulls away the curtain showing the Wizard of Oz is a meager humbug.

#StockMarket #Finance #Scam #InsiderTrading #ChinaMarket #ShellGame #PumpAndDump #BaitAndSwitch #Scandal #RipOff #Swindle #JustUs

!Stock Picking Discussion

Got any Hot-Tips on what or when to buy, sell, hold a Stock or Bond?

This is a universal concept for the @Stock Picking Discussion # because it has to do with a street-smarts that you as a # or a potential investor need to think about.

Some very basic human activities are #, #, #, and # (it might stretch the metaphor to include #). In all these activities # are the # and the rest of # is the #. The trouble with this is we don't very often get to think about some humans as the predators and other humans as the prey. I can guarantee Captains of Industry instinctively know that you are their prey and use it to their advantage; they also get away with it and get rewarded by society with respect and admiration. Think about this quote for a moment:

Eddie Izzard wrote:

Pol Pot killed 1.7 million people. We can't even deal with that! You know, we think if somebody kills someone, that's murder, you go to prison. You kill 10 people, you go to Texas, they hit you with a brick, that's what they do. 20 people, you go to a hospital, they look through a small window at you forever. And over that, we can't deal with it, you know?

Someone's killed 100,000 people. We're almost going, "Well done!

You killed 100,000 people? You must get up very early in the morning. I can't even get down the gym! Your diary must look odd: “Get up in the morning, death, death, death, death, death, death, death – lunch- death, death, death -afternoon tea - death, death, death - quick shower…"
(Link to quote source)
It works a bit like that in #, we only have show trials to convict insignificant #.

So back to the main point. If you don't know what the warning signs are that you are the prey in the securities business, you will be somebody's dinner entrée. If you have no experience as a predator, you should watch a bunch of nature shows or search the Internet for hunting tips. In lieu of that and to get you started, here are a few scenarios.

When fishing, a common formula is a lure, a hook, and a line. The lure pretends to be easy food for the fish. In finance, the lure can be two businessmen in a public place acting as if they are having a private conversation about a stock that is about to go big. Instead, they are having a purposefully public conversation about a stock they need to get suckers to buy, and you are the audience. They don't know for sure, but they think when you take that bait and get on the hook by buying the stock, you will unwittingly volunteer yourself as bigger bait to hook more and/or bigger fish. They expect you to tell friends and loved ones about the "hot inside info" you got by being lucky.

When hunting there are callers for a variety of specific animals; mating calls. Their's nothing better for attracting mammals than shouting "Who wants to get laid?" in public places, am I right? Well, it works in general. So how does the finance community use mating calls? They do it by proxy. They know people thing having more money is a proxy for getting laid more often. Their mating call is to make you think you are in for a lot of money if you do something that they are broadcasting breathlessly to the public in an urgent voice. The last wave I recall with a massive push was for "Pot Stocks". It was because some of the States in the USA decided to decriminalize or even legalize marijuana possession and consumption. It's almost a given that everybody instinctively knows that the demand for cannabis is huge so it's woefully assumed that stocks which do work in that newly freed industry will all be very valuable. That kind of assumption is what makes a duck swim towards a gun. Most of the ticker symbols being hyped during the mating call cycle are dead & buried already. Some of them were thin-air type shell companies, others were ill-advised entrepreneurs who were "high on their own supply," or "believing their own fever dreams." One way or the other, they took a lot of money from people thinking they were going to get rich quick and probably get laid next. They spent that money and nobody is getting it back. That doesn't mean there aren't reasonable companies worth investing in within the cannabis industry. I'm in one myself. It just means that if you think you're investing "of your own free will" after a massive broadcasting campaign urging people to do it, it was NOT your own free will.

When herding, the Shepard typically employs trained dogs that get special treatment for convincing the herd to follow a predefined path which is best for the rancher, not for the herd. The dogs see the rancher/cowboy give signals on what to do, and they go out and deliver the message by barking at the herd along the edges where the ranchers chattel starts to try moving off the course. In finance, the barking dogs are all over the place. One of the most iconic characters I love to hate is Jim Cramer of the show Mad Money. He is perhaps the least refined of all the dogs. I cherish the time Jon Stewart showed the world that Jim Cramer is one of those shepherding dogs. (see full interviews part 1 and part 2 on Comedy Central) In the part 2 segment it's revealed that he was causing the owners of his own hedge fund (his herd) to act in a way to depress its value because he took a bet that it would go down. It's akin to shearing sheep. It's really hard to find people telling the public how to invest who aren't just shepherding dogs for some wealthy rancher trying to turn you into chattel on their ranch. You don't need to learn everything about finance to be safe, but you do have to really understand where you will wind up if you take somebody's advice.

I think I made my point here. I hope this helps you to stay safe in your investing endeavors, and always remember ... stay frosty.

Why are the NYSE and private companies fighting over two-millionths of a second?

From the #Marketplace #Podcast I heard a real gem for the !Stock Picking Discussion #Forum. I forget the details of the whole backstory, but what I remember is this...

#WallStreet started wholesale hiring #Computer #Scientist's shortly after the #Y2K changeover; we were at a severe pay discount at that time. It was around 2002 that the hiring wave was more of an open secret. The finance people that were writing their checks didn't give them their due respect when they should have. This made an opening for the #Geeks to steal their bully #Jocks lunches. The CS people front ran the market based on AI automated trading and a shorter wire than the finance jocks had.

To more deeply understand the wire advantage an ordinary 2GHz speed processor (old and slow now), makes well over 2 billion calculations per second, and there are 1 million microseconds per second, and electricity travels at the speed of light, so in the same time data travels through six-inches of wire that 2GHz processor finished doing a calculation. The longer the difference between the connection to the data is, the more time a computer has to react to a change in the same data. Let's just say you have the new Intel 9 in a machine working for you today. That's 18 cores each doing 3 billion calculations per second. That's also way over 108,000 calculations in two-millionths of a second. And that's why the NYSE is making the news today.

This skimming by the geeks has gone on for a long time now, maybe a decade. Yesterday's story by Kai Ryssdal and Sabri Ben-Achour linked below is a type of "The Empire Strikes Back" by the finance guys.

It's short and worth your time to listen, BUT!!! I do not in any way condone this type of hyperspeed trading, it's bad for the market, bad for the environment and bad for other investors! The systems I am developing are designed to give you the mathematical minimum volatility in your investments while doing reasonable buy-and-hold ownership, in an ideal set of proportions, while still enjoying healthy returns tuned in by your risk tolerance.

Michael Rupp friendica (via ActivityPub)

What does the bond market tell us about the economy?

So why are # (or specifically #), going in the @Stock Picking Discussion you ask? Because their's very few long-range indicators of what the future will be like. (My personal favorite is population, but that will be another post because it's highly nuanced.)

Sean McHenry & Kai Ryssdal really condense a message and translate it well to normal language so that its obvious why you should care about the # and # / # on a daily or weekly basis.

# #

WTF is the DOW Index?

So this is for the !Stock Picking Discussion #Forum because as it turns out a lot of people who might want to invest don't know what those news-making indexes are or why they should or should not matter.

The attached article below is a link to a Google Spreadsheet document that calculates the Dow Jones Industrial Average live. You can click around in the cells to see how it's calculating to come up with the number talked about on the news. Their's lots to say about this one, so I'm going to thread comments below to explain more...
#BTW today's #Marketplace podcast is related...
The stock market is not the economy … so what is it?

Embedded player local to this post

Linked player via

After much procrastination, here is the S&P500 version of that linked DJIA Google Spreadsheet attached to the initial post:
The main difference is the DJIA is a badly planned average of prices and this is a weighted average where the size of the company relative to the other companies sizes will change its importance. That makes sense because if a $4-million company changed its price by 5% and a $3-billion company changed its price by 5% we wouldn't think they are equal with respect to the health of the overall stock market.

WTF is the DOW Index?

So this is for the !Stock Picking Discussion #Forum because as it turns out a lot of people who might want to invest don't know what those news-making indexes are or why they should or should not matter.

The attached article below is a link to a Google Spreadsheet document that calculates the Dow Jones Industrial Average live. You can click around in the cells to see how it's calculating to come up with the number talked about on the news. Their's lots to say about this one, so I'm going to thread comments below to explain more...

Michael Rupp friendica (via ActivityPub)

Episode 597: That Time We Shorted America, Part One

I'm posting this to @Stock Picking Discussion because it's informative but woefully wrong due to omissions in reporting about what # # is all about. They are # correct when they talk about having no theoretical maximum amount you can lose if things go the wrong way. They are terribly wrong in reporting as if there isn't a responsible reason for shorting securities. If you only listen to the embedded podcast below, you would wrongly assume that shorting is just gambling and dangerous gambling at that. That can be true but is not normally the case.

The # Buy of securities is simple, you hand somebody money and they give you a proportional right of ownership in a specific company. A Long Sale is merely the opposite.

A # Sale is when you sell shares that you don't own; this is possible if the finance company you trade through has a set of their own shares of the company you want to short. On the books, your account gets credited the cash from the sale to do with what you like, but your account is debited the quantity of shares you borrowed for the short-sale. You can't return the cash to settle the account, you must return the shares in their full quantity to cover the account.

As a metaphor, imagine your nearest neighbor owns a Ford Fiesta. Imagine you also think that something is going to cause the prices of all Ford Fiesta's to go down in the future. You short-sell their Ford Fiesta now and collect $10,000.00 then tomorrow you look on Craigslist or eBay Automotive or some newspaper want ad's and find one with the same color, options, condition, and mileage as the one you shorted for the price of $9,826.00. That one is what you will Short Buy to cover the borrowed one from your neighbor's house. You profited $174.00 on the decision. The reason the metaphor works is all shares of a specific class for a company are identical.

In that example, suppose you were wrong about the price going down. Suppose some news made them the best car to own on Earth! You might think, I'll wait it out. True, you will only lose money if you buy it back while it's high. While you were waiting, a lot of collectors start buying them and the pricing bids up by the minute. Do you wait even longer? What if the price got to $500,000.00? At what time do you give up hope and take the "L" on the trade? This is why there is no upper bound to how much you can lose on a short-sale. Obviously there's a slim chance that prices will run away like that, or that you wouldn't be able to wait till things got better, but if you have looked at enough stock charts, you will see steep cliffs that have happened in their history; violent price shifts are not rare in the market. They accurately point out that the long-run trend of the market is upwards. They were wrong to not state that most businesses do not last and their long term value goes to zero, although more new entrants appear than go out of business. That's all I want to say about speculative short trades.

If you know something about M.P.T., which in short is building a # # # of stocks and bonds, you would know that you have to buy shares based on a specific set of proportions in order to have the ups-and-downs of your total investment smooth out. Sometimes the calculation to set the proportions tells you to short securities that you want in your portfolio. This is not speculation, it's #. Many money managers talk about # versus #. The way you short-sell in # is a type of short-and-wait; it's a long-term short-sale akin to buy-and-hold. The reason this happens is the calculation takes into account the way every pair of securities in your set correlates over time. The # have determined that to reduce the ups-and-downs in your overall value the shorted security will act as a shock absorber to the total investment.

Michael Rupp friendica (via ActivityPub)

A funeral industry giant keels over

(This post looks best when viewed directly on #
This is another great # for the @Stock Picking Discussion forum. The detail I caught in the story making it worth mentioning is one that might go past people who don't think about #. It won't take you long to listen to this show, but here's the...
spoiler/rant alert:
Click to open/closeThe Financial Industry wanders from one type of thing to another with their big-money the way a grain farmer goes out to reap the crops, except the financial industry doesn't plant the crops, it just kills the farmer and takes the crops. The pattern is the money-hawks will look for where the middle-class stores or spends their cash, then they plot the attack, and you'll see them swoop in to monopolize things, pervert # # # so that you're "over a barrel", then they will take it all till the middle-class is on the edge of becoming lower-class again. Based on the podcast, notice the way there was no death-business, then there was a business contrived for it, then the Wall Street types noticed it, swooped in and started making people pay for their hole in the ground decades ahead of time so they could get rich by investing your promise to be buried in the dirt. Right now they are doing schemes with # # and other # a little different than they did earlier this decade. In the last decades, they were raiding retirement funds; even the Mafia made good on pensions. In the '80s & '90s, it was churn & burn the accounts because the youth of the day didn't believe their grandparents' stories of how Stock Brokers screwed them in the '20s & '30s. Almost every generation has had untold wealth extracted from its masses and funneled into the accounts of these industry giants and some to their minions.

The main point of all this is to beware of what the owners of & workers on # decide to make a run at. You don't have to get # by them. Innoculate yourself. If you know they are trying to do it (hint: they always are), and what they are trying to do it with, you're well on your way to preventing them from getting over on you. Your common sense will do most of the rest.

Politics Matter!!!

This is a very nuanced thing. I didn't say it was the only thing that matters. I didn't say all publicly traded companies are affected by politics.

To be clear, governments—even good democracies—will have some of the people holding political power who act in self-serving ways by sneaking in legislation that gives a company or group of companies they are allied with an unfair competitive advantage in the marketplace. Normally we only hear about it when it reaches scandalous proportions.

Typically we don't even think about politics because it's all so complex, and who's got time to read and understand the ramifications of all the laws passed in just their own home country? Nobody, that's who. In the long-range plans of #OutsourcedMath, there will be a group dedicated to the analysis of legislation who report on the expectations of those nefarious acts.

Method Man of Wu-Tang Clan fame has some investment advice

In the last few seconds, he reveals the secret to sage investing.

Sam Harris | Making Sense | #155 - Mental Models

I like all episodes of this podcast, but this particular one touches on #Finance and decision making early on. Pay close attention to how he claims top performers like Buffet reduce risk by focusing on stable knowledge of stable business types.

Link to the show's page

The Perfect Predictions Scam

It would be surprising if you were to be a victim of this scam in the future, but knowing how it works is important.

From the point of view of the person being scammed, you get a message that says somebody can predict price changes of stocks and that they do it for a fee, but you are getting a free sample; this letter/eMail/SMS includes a ticker symbol and an up or down prediction for this week. You discover that the prediction was correct. A week later you get another similar message, the ticker symbol might be different but it will have a prediction. Again you will discover that the prediction was right! Amazing? This pattern will go on for many weeks and you will be convinced that paying for the service will grant you access to this insiders club where you can make a fortune and fix all the problems in your life.

The way it works, in reality, is the scammer sends out a million messages, but half say the stock ticker will go up and the other half say it will go down. Some buy after the first week; they are done. Some got the wrong prediction so they get no more messages. On week two about 500,000 people get messages where 250,000 are told it will go up and the rest that it will go down. Of the 250,000 that got two correct predictions in a row some will buy the service and they are out. Another 250,000 never get the message again. The scammer runs this trick until the halfling runs out, but along the way, lots of people got perfect predictions not knowing that there was another much bigger group getting non-perfect predictions.

The length of the string of perfect predictions feels like the scammer is really good, but it's just the random chance that the scammed person was sent the correct prediction over and over again.

I'm still coding the back end software for the big Outsourced Math LLC project, but I'll say that what we're making is going to mitigate the problems outlined in this episode of @OnPointRadio where they scrutinize #IndexFund #Investing.
Callers to the show raised great points.
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