The Second Depression

Posted on December 8, 2015 by Tom Trimbath

If I was writing a book I could give this concept a better treatment, but practicalities inspire me to write about it anyway. We may be living within a spiral of history, when things repeat but not in the same way. It’s happened in other theaters before, and a trick of language emphasized the somewhat similar recurrence. Are we really recovering from the Great Recession, or are we in the midst of the Second Depression?

The ‘War to End All Wars’ was also known as ‘The Great War’. The ‘War to End All Wars’ didn’t happen only once; but the war that started in 1914 was the first one that was readily recognized as a world war. It was barely conceivable that a second such war could happen because surely we humans had learned our lessons. After the start of the second world war, the ‘War to end all Wars’ was seen to be a fallacy, and there wasn’t much about the first one that was seen as Great. It became ‘The First World War’ and ‘World War I’.

Pick your date, but 1929 is a reasonably accepted start of ‘The Great Depression’. The US had many depressions prior to it, but this one got the name ‘Great’. It defined a generation, dramatically redefined the nation and its government, and became something to avoid at all costs. America had eleven more recessions before the Internet Bubble, a bubble that will only happen once. Right? That was followed by a recovery and then – ‘The Great Recession’. For some, The Great Recession is past because stock prices are high, interest rates are low, unemployment is low, and housing is recovering. For others, the jobs and wages haven’t returned, many feel trapped by mortgages, and expectations of advancement are seen as fantasies.

Spirals are only circles from one perspective. Every rotation involves change. World War II was not World War I again. Many of the countries and battlefields were the same; but most of the people, technologies, motivations, and strategies changed.

The Great Depression is typified by the Dust Bowl, the market crash of Black Friday, bank failures, mortgage foreclosures, massive unemployment, and massive government intervention.

The Great Recession is typified by the housing crisis, failed financial institutions, massive unemployment, a market crash, massive government intervention, and is possibly exacerbated by changes in climate and weather (he types as yet another extraordinary storm storms through in an increasingly ordinary fashion.)

The Great Depression is also known by how people adapted. They grew more of their food. They lived in simpler houses. They shifted jobs as necessary. They fixed rather than bought. They saved rather than spent.

After the Great Recession, localvores are in fashion, tiny houses are in fashion, nomadic workers and coworks are in fashion, maker spaces are in fashion, getting out of debt is in fashion.

Within this spiral of history, many things are reminiscent, but are considered retro and fashionable instead of depressing and regressive.

Fashionable is a good word for people who grow their own food, live in tiny houses, abandon conventional careers, make things, and become debt-free by choice. For many people, there is no choice. Growing their own food is cheaper, living in tiny houses is cheaper, conventional careers aren’t available, making and repairing costs less than buying, and getting out from under debt is a financial necessity because that money is needed for food, housing, and the other necessities of life. Even with all of those efforts, they may not be able to afford health care, day care, or retirement.

If America never had another depression or recession, those past two events could maintain their unwanted titles of ‘Great’. On average, the US has a recession every 4.8 years. The Great Depression wasn’t the only depression, but it grabbed the title. For the many of the 37% of Americans who aren’t working, The Great Recession isn’t a bit of history, it is current events.

There are troubling signs in the economy; always. The wealth of China is hunting for safe havens because of uncertainties in China’s economy. Some housing markets are in bubbles. Commodities, even oil and coal, are declining. It’s possible that the main thing propping up the dollar is the poorer state of the rest of the world currencies. Financial institutions have changed so little that the Fed is calling them into meetings to warn them that the public may not bail them out next time. Climate continues to change, regardless of any human debate. Refugee crises have already begun.

Maybe everything will work out. Maybe we really have learned our lessons and a new economy will clear up the inequities and renewable energies will clean up the environment. This isn’t facetious. We humans are amazing and can make these things happen.

In case we don’t mature quickly, maybe it is time to consider at least a simple shift in nomenclature and recognize that we didn’t just pass through The Great Recession, but instead are trying to survive and thrive past the troubles of the Second Depression.

I’d delve deeper and edit more thoroughly, but there’s a job application to complete, a kickstarter campaign to manage, and an intriguing conversation with a local entrepreneur in the food industry to consider.

A Kickstarter campaign for a corworks for nomadic workers

A Kickstarter campaign for a coworks for nomadic workers

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A Second Step For ReCharging

Posted on December 4, 2015 by Tom Trimbath

One idea inspires another. I launched a kickstarter campaign to fund a coworks for Langley, WA. A perfect campaign would be launched with everything a perfect business needed. Perfection, however, is an illusion. Flip the switch and let the campaign and all its attendant parts run. Instead, I started with more than enough, but far from everything. There’s an advantage to getting started and then adapting, rather than trying to make the world work to an unachievably perfect model. Fresh ideas arise as soon as the first few steps are taken. The coworks is already evolving and improving. It even has a new name.

I’ve been thinking about a new concept for a coworks that might work in small towns since I participated in the most prominent coworks in Langley’s recent history: Fusion Spark’s coworksoffice photo 062813. It wasn’t perfect, but it had many of the basic and necessary elements: 24/7 access, a quiet environment, good power and internet, a kitchen-ette-ette, a bathroom, and a place for making conference calls. It was a good model that was closed for strategic reasons in the parent company. Very understandable.

Thinking and doing are very different. Pundits and politicians, ideologues and philosophers, are impressive with assertions and seemingly logical conclusions that can be best when never tested. Try to act on their suggestions, though, and reality begins teaching lessons.

Overthinking the new model of the coworks was a trap I wanted to avoid. I knew it could be a waste of time, and I knew I’d learn something as soon as I took that first step.

Langley and Whidbey are known for their populations of heavy thinkers. Advice is easy to find, frequently delivered even when it is unsolicited, and commonly contradictory, and inevitably valuable. Before I launched the campaign, I talked to some of the local business owners. They shifted what I intended to offer. After I launched the campaign, more ideas came in. Sitting back the next day, the various ideas swirling through my head helped align into new insights that I may act on – later.

In the meantime, I realized a few things.

  • If it works in Langley, variants may also work in Clinton, Freeland, and other small towns – but each model would require customization.
  • I can’t do it alone; which is one reason for the campaign, but also a recognition of the value of community.
  • New ideas need new names.
  • New concepts can benefit from new symbols.

And, I decided what to do about them.

  • The other towns will have to wait (unless someone is inspired to get there first).
  • I am lucky enough to know people who are willing and capable of helping.
  • The name that I thought of as general ‘Langley Coworks’ is too close to the name used before. I filled a blank sheet of paper with dozens of names that attempted to capture the difference, and found I liked the first one I wrote: ReCharge Langley. A later post may dive into the layers behind ReCharge, but there are other ideas to develop first.
  • Communications have gone visual. While names are important, icons and graphics rule online. With a name like ReCharge, I played with a white board at another coworks (one for writers that is hosted by the Northwest Institute for Literary Arts) and came up with an image of a battery. It is a work in progress, especially for someone who is not a graphics illustrator, but I like it as a good first step.coworks logos green battery

And then, there’s power. There are the ideas the world reinforced. Islands make people aware of things like power. In the city it is easy to assume the electricity will work, and if it does go out, it will probably come back on through some path in the mesh of powerlines. On the island we know it can go out, that the lines are long, not much of a mesh, and strung across open water; and that the work crews will get to us – eventually. Eventually isn’t good enough for people who must keep their businesses operating. For many independent contractors, without electricity and the Internet they can’t make money, and if they can’t make money, they might have to take drastic action. It sounds extreme, but even among the highest income Americans, at least 25% have less than $2,000 available for emergencies. A few days lost business can make someone lose their business. The idea of making reliable power and internet available sounded like a nice embellishment – until the power went out. That idea of having a generator, just in case, became a much higher priority.

The concept of the coworks is developing; but the narrative hasn’t changed, the implementation has only slightly shifted, though it does have a new name and image. It would have been difficult to appreciate the important elements without taking that first step.

Ideas inspire others, especially when they are introduced to the world, treated with a reasonable amount of care, tested with a reasonable amount of caution, and adjusted and adapted as they develop. It is true for my concept of a coworks. It is probably true of almost any idea but only if the idea is taken past the first step and encouraged to take that second step. That’s how ideas and people progress.

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Langley Coworks Kickstarter Launched

Posted on December 2, 2015 by Tom Trimbath

Fresh ideas are fragile. Fresh ideas require a fertile environment, which in America frequently involves money. I have a fresh idea for a coworking space, that might make such spaces work better in small, tourist towns like Langley, WA.

Here’s the link to the official campaign that’s running on Kickstarter.

If you’d rather just watch and listen to my talking head, here’s the video on YouTube.

If you want to know what’s going on inside my head, well, I might have a picture of something like that if I rummage through my photos of abstract chaos.

The reality of the idea is simple.

The old work environment is fading. People are increasingly working from home, coffeeshops, libraries, and anywhere they can find an internet connection. The problem is that those places may not have the right blend of accessibility, professionalism, and services. Home is great, but known for distractions and some clients don’t want to meet in someone’s house. Coffeeshops are convenient, but only open certain hours and can be noisy thanks to espresso machines and PA systems. Libraries are awesome resources, but aren’t open 24/7 and aren’t private. I know people that use park benches beside stray wifi sources, but that doesn’t work well in Puget Sound’s weather.

So, coworks were created. They’re a simple idea; somewhat like incubators, somewhat like communal shared spaces, somewhat like experiments in the New Economy. Coworks work best where there are plenty of people. By definition, small towns don’t have many people. That makes it tougher to become sustainable, at least with the conventional model.

For about a year, I used a Langley coworksoffice photo 062813 almost daily. It usually had several empty seats; and from my preferred window seat, I watched people walk by. I was surprised at how many visitors were simply searching for a seat where they could dive into their phone, tablet, or laptop. That was easy in August and tough in October. I noticed it myself. When the coworks wasn’t operating I knew I had to put off client video conference calls (unless I did them from my truck with the video off), had to scrounge for a signal if I was in town very early or very late (the work world operates outside of 9-5 or even 7-11), and if I used the bench outside the library I might have to share because I wasn’t the only one there.

Eventually, a possible concept of a space came to mind that was somewhat like a regular coworks that also provided space and services to the wandering visitors. I had one space in mind, and even a possible funder, but the pieces didn’t line up at the right time. Months went by. And then, a friend and bookseller announced that they were closing their shop. It was a two story where they’d opened the second floor to writers. I realized that the new model could work in that space. A professional setting upstairs. An informal area downstairs. Round the clock access at the highest subscription rate. Hourly access for those who just needed to check up on work. Various other services would be available, but that was the basis. Maybe providing better access and a street level presence would more than balance the business model.

Fresh ideas need fertile surroundings. Starting such a space would require more funds than I had. Well, I’ve been a fan of crowdfunding, wanted to have the money to be a contributor, but maybe I’d have to start as a recipient.

Clicking Launch on Kickstarter kicked off the project, but also kicked off a swirl of thoughts and considerations. What happens if it succeeds? What do I do if it doesn’t? What happens if it is over-subscribed? What would it be like to run a storefront in a tourist town? Fun things to think about, even the contingencies for if it doesn’t succeed.

It’s all good; but the internal swirl is fascinating to watch. It’s the same swirl seen by entrepreneurs, inventors, artists, and anyone struck by an inspiration that can act upon. It is easy to dream, but opportunity requires action. I’m glad I have the chance to act.

I am impressed with the talent and potential I see in my community. I know so many people who seem to be on the cusp, people with fresh ideas that need a space that supports them. They have a bit of that now, thanks to coffeeshops and libraries; but maybe they need a bit more. Helping provide that is enough to fill a brain with a swirl of thoughts. Amidst that, I’ve taken the first step by launching the campaign. I look forward to seeing where it goes.

I also have to practice being a bit more public, so here, allow me to give you another chance to click the link and help launch, not just a campaign, but a valuable part of a small town economy.

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Disappointed In MVIS

Posted on November 30, 2015 by Tom Trimbath

I am disappointed in MVIS and in MicroVision because of what has and hasn’t happened so far in 2015. I am also somewhat encouraged in MicroVision and a bit less encouraged about MVIS because of their progress towards their potential. Within the world of personal finance and investing, plans rarely operate according to plan – which may also explain what’s happening within the company.

Depending on how you look at it, MVIS is either up about 40% from twelve months ago, down 40% from its 52-week high, or down about 99% from its all-time high.

The stock is up because the company has made significant progress since 2014. Celluon launched two variations of a pico-projector in the spring, and SonyIMG_0417 launched a pico-projector in the fall. Both are commercial products in volume production. Both are receiving nice reviews. Both are earning money for the company. That’s a good reason for the stock to rise 40%.

The stock is down because many interpreted the company’s communications to suggest that there’d be “something to celebrate every quarter (or every month)”. A long list of possible products could become catalysts for the stock. Several large OEMs privately demonstrated products at last January’s CES event. Ford and another auto supplier were working on head up displays (HUDs). UPS was testing a prototype system to implement in their shipping centers. Celluon and Sony both alluded to the possibility of other products in 2015. The year isn’t over yet, but aside from a robotic mobile phone from Sharp (RoBoHoN) that won’t be available until mid-2016, nothing was announced. There were no products revealed prior to Thanksgiving, timed to capitalize on the shopping season. Announcements remain possible, but any sales have less time to reach significant volume, and any extra revenues for MicroVision won’t be recognized until 2016.

I’ve been tracking some of the catalysts for several months because it looked like there was about to be a lot more activity. If you’re going to get busy, get your tools in place early. As each month progressed I darkened it. The only real news to produce a change in the chart was the RoBoHoN announcement, and it shoved its line out into 2016.  An innovative smartphone was suggested as a Christmas product years ago. If that’s the only one, then it will have to be for next Christmas, and for someone else.

MVIS_Catalysts_113015
The most recent conference call didn’t include positive surprises. Congratulations on finding errors in your process. Improved processes are good, but the errors suggest near term delays, increased costs, and lowered credibility. The stock which had been above $3 is now hovering at $2.50.

The company and the stock have a long history of expectations exceeding accomplishments. At the peak during the Internet Bubble, the stock was about $510. I know. I bought my first small holding in the company as it was rising. The future looked bright, and profitability was estimated to be reached by about 2003-2004. I bought at an effective price of $220. That was before the 1-for-8 split, so the price looked like a more reasonable $27.60 (and the peak was closer to $64). Fortunately, through many subsequent purchases my cost basis has dropped about 90%.

Long term buy and hold investing (LTBH) is an exercise in patience. The lack of a positive surprise followed by the silence of all of the prospective customers is disheartening. I continue to wait for the stock to recover a bit more so I can sell 5%-10% to reinvest in companies with more progress that are creating positive surprises.

I plan to continue to hold onto the remaining 90%-95% because I continue to be encouraged by the company’s potential. Revenues are up. Technological hurdles have been cleared, and have led to technological advancements. Name recognition within the industry seems to be improving. The number of suppliers is growing, and the potential number of customers is far more than Celluon, Sony, and Sharp. The need and desire for very small, portable projectors is also growing. A more impressive list of potential catalysts is on PetersMVISblog. Management alluded to eyewear and game controllers, again. Maybe this time they aren’t just talking about bench models or prototypes.

There is a distinction, though, between the company’s potential and the stock’s potential. I don’t have time to update the chart today, but previously I published a chart that shows how, even when the stock price is stagnant, the company’s value is increasing. That increase is a sign of corporate health. That stagnation is a sign of investor dilution. Management may be proud of the growing value of the company at the same time that the shareholders experience no change.

MVIS 062115

Investing in small, startup companies carries many risks. Product failures, competition, poor financing can all collapse a company. Even in companies that succeed in terms of revenues, employees, and recognition, the stocks may not reflect the success. The reason I have invested in such companies for decades is because the success can become significant, can overwhelm any maturation foibles, and can create a positive impact on the world, for the company, for the employees, and for the shareholders. (Case studies available in my book, Dream. Invest. Live.)Dream Invest Live cover

Emotions are not on/off circuits. Emotions don’t have to exist in solitude. My disappointment lives in the same space as my enthusiasm. In December I hope to revise my estimate of MVIS’ value. Dilution has reduced the potential for the stock price for a given company value; but the growing roster of committed and potential customers may be enough to compensate. It is easy to guess, but in investing I prefer to use math whenever I can. Objectively estimating a stock’s potential value seems to be an obvious thing to do, yet I am surprised at how many base their buys and sells on subjective assessments of what feels right. Passion and emotion can be what make personal finance personal; but they get to co-exist with math and logic. When they do, they can tell a powerful story. Currently, the emotions are making their case. Soon, the logic will make its case. Until then, I am disappointed and encouraged in MicroVision and MVIS.

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What Everyone Else Expects

Posted on November 24, 2015 by Tom Trimbath
Squashed Pear Pie

From a previous celebration

Welcome to the holidays, one of my favorite times of the year; but then, I also enjoy something about every time of the year. (Except for rainy days in May and prolonged droughts into October.) I am looking forward to Thanksgiving, a time of traditions. Norman Rockwell set the standard, and many people try to emulate it. Martha Stewart is one of many who take that standard and amplify it. I enjoy innovation, but tradition has its value. The fun part for me is to honor tradition, do so in my own style, and not worry about what everyone else expects. It’s a tradition of mine, making up my own mind.

Everyone expects – right there you know no statement can follow those two words and be correct. Absolutes are only good at being absolutely wrong. Except for basic bodily functions, there are very few things that apply to everyone (and even then, some people only manage the basics with assistance). I’ll begin again.

Everyone is expected to expect – turkey, stuffing, mashed potatoes, cranberry sauce, a token green vegetable, gravy (which some consider a vegetable – really) and then a nice nap while trying to watch the football game while trying to be polite to the gathered family and friends. If you haven’t already found your personal deviation, I’m surprised. Turkey can be replaced with goose or ham. I’ve cooked duck to get something different, less genetically modified, and the source of crispy skin and marvelous stock. Stuffing is evil, at least according to Alton Brown (a great Food Network controversy). Skip potatoes and have yams or rice, or make potatoes by go au gratin. Cranberry sauce seems like a requisite purchase in a can, but from fresh berries it becomes something much better than a tick mark on the tradition to do list. Green veggies, the vegetarians and vegans would give them much higher priority. So would successful gardeners. Gravy, just in case something is too dry or seasoned wrong. The nap is natural; don’t fight it. The football game is probably one of the few times family and friends are watching a screen that isn’t held in their hands.

This year my Thanksgiving could be made to sound wholly traditional, or part of some counter-culture. Turkey, yes; but the smallest one I could find and I almost bought a duck. Stuffing, yes; and I know why it’s evil and I know why I’ll make it anyway – cautiously and gluten-free, of course. Mashed potatoes, yes, yes, yes; because it is one of the few times I don’t just roast them. Beside, where else would I be able to use that much butter on the plate? Cranberry sauce, nope; because canned is bizarre, fresh is too much work, and I may just replace it with a glass of juice. The token green vegetable will be Brussel Sprouts sauteed with onions, peppers, and garlic; because, even though green bean casseroles are required, I want something different. Gravy, no; too much work for too little chance of success. More butter, and maybe some cheese please. I hope to also make a pumpkin pie in a pumpkin shell, gluten-free that way. A bottle of 2004 Whidbey Island Winery Reserve Chardonnay, because I found it while poking around my wine collection that happens to live under my hardware shelf. Football, ha! No TV, no football, and I like it that way. Eventually every team wins about half the time and loses about half the time. Realizing that took the drama out of it for me. Realizing the weird finances and health hazards reinforced the feeling. Family and friends, well, they and you kind readers are all dear, but sometimes being alone is the best way to give thanks.

What everyone expects is a good thing to keep in mind. When it comes to celebrations and reflections it is better to keep in mind what you want. Friends and family matter, but you do too.

This post is being written a day early to free up Thanksgiving Eve. For me, Thanksgiving begins on Thanksgiving Eve. Making the stuffing and dessert the night before makes The Day much easier. It’s also an opportunity to crack open the cranberry juice and mix in some vodka or rum. Tradition reaches back to when my family served the meal around noon, so I am up early to stuff the turkey, put it in the oven, and hope I got the timing right enough. That leaves time for a walk or a run, maybe a couple of phone calls to folks on the US East Coast, and inevitably some computer game that will be played with occasionally. When I finally figure out the turkey’s schedule, I’ll make the rest of the sides, leaving the mashed potatoes as close to last as possible. The wine is open, the kitchen work begins, the turkey is pulled out, rested, sliced, and served with the rest. Then, a quiet, thoughtful, thankful meal when I can say what I am really thankful for without having to wordsmith something that fits what everyone else expects.

The nap is inevitable, even if it isn’t Thanksgiving.

The rest of the day is cooking and cleaning. There are lots of leftovers, but there’s also the best opportunity to make turkey stock, prep for weeks of sandwiches, and making progress on that bottle of Chardonnay. For me, celebrating food is essential to celebrating life.

Thanksgiving is called a holiday, which is derived from a Holy Day, but it is a national observation. I consider it to be one of too few feast days, days that balance frugality with an appreciation of abundance, a reminder that even when life has been difficult there are things to celebrate. If all I wanted was a meal, I could bake a chicken thigh or two, steam some rice, and microwave some frozen veggies. But, while we are living we get to celebrate life. So, Celebrate!

Even though I described balancing feasting with frugality, when frugality is defined as an appreciation of what we have available, then even a feast is frugal. That may not be what everyone else expects, but it is an insight I’ve gained that helps me celebrate, be thankful, and appreciate what it means to be alive, here and now.

Happy Thanksgiving, everyone.

PS As I wrote this post, the power flickered twice. (Oh no, not again.) I am thankful the power stayed on. I think I’ll fill a thermos or two after I post this, just in case. – T

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Investing Speculating Gambling

Posted on November 20, 2015 by Tom Trimbath

Step right up and take a chance. If you have money, you’re taking chances. Bury it or burn it. Spend it on assets or experiences. Money involves risk, even when we treat it as a boring piece of paper. The trick in personal financing, however, is to manage that money without it spending too much of your time, your emotions, or your energy. What we do with our money can be frugal or frivolous, necessity or luxury. Within that slice of money that we label as savings, it is easy to label all stocks and bonds as money spent on investments. Even there though, we can be investing, speculating, or gambling. Unfortunately, it’s hard to know which you are doing until years after you’ve done it.

First, if you are paying all of your bills and have enough money left over to buy stocks and bonds, congratulate yourself. “62% of Americans have less than $1,000 in savings.” You’re already in the 38%. I can almost pay all of my bills, and shortly will probably cross that threshold, but I have managed to maintain at least a small portfolio because I understand the power of using money to make money. Strange as it sounds, that means more than 62% of Americans are in worse financial shape. Such a majority in a representative democracy is an interesting thing to witness.

If folks ask me about my investments, I know that most are talking about stocks and bonds; so, I don’t get particular about the nomenclature. Even within the stock discussion boards on Motley Fool, Silicon Investor, and Investor Village, I only make the distinction during my semi-annual portfolio review. There are those, however, who rightly make that distinction in private emails, comments, and replies.

The distinction is made because the more people know about a topic, the more words they have to describe the nuances within the continuum. I buy stocks in small companies, with the intent to sell the stock when a large portion of the financial community thinks the company or the stock is worth a lot more than what I bought it for. Buy Small. Sell Large. It’s a slight variant on Buy Low. Sell High. The former is about the company. The latter is about the stock. Stocks aren’t companies; they’re merely the continually changing prices tags.

We’re told to invest. We’re told not to gamble. They’re treated as if they are different things, but to me, they are regions in a continuum and are reflections of perceived risk. A ‘solid investment’ is something that is probably boring, but if you give it thirty years can beat inflation and maybe help you retire early, or at least comfortably. ‘Gambling’ is usually exciting, or should be because it is probably more entertaining than profitable. The distinction, however, is really only risk. An investment supposedly has less risk than a gamble, but also a smaller near term return. Gambling at the extreme is pure chance, unless you believe in higher powers that will win the lottery for you. Speculation sits between, with risks that are higher than are expected with investments, but rewards that are smaller than pure gambles.

In money management, risk is mostly a function of information. The more you know about the probable outcome, the lower the risk; and because others probably know about it too, the lower the reward because the expectation is already accounted for.

Buy a bond and you are provided with a guarantee of a small reward. Sometimes they fail, but not often.

Buy a share of stock in a mature and large corporation, and eventually its value will probably rise as long as nothing dramatically changes. There is less certainty, but a greater reward. Both of those are considered investments.

Buy a share of stock in a company with great potential and promise, but without a history of making money and the risk is that they’ll never make money. They haven’t made much in the past. Maybe they won’t in the future. But, and it’s a big but (have fun with the puns on your own) if they succeed, the rewards can be headline news and a reason for celebrations. So much guess work in involved that buying such stocks is considered speculating, even if the word ‘investing’ is used in conversation. The risks are higher, but the rewards are much higher.

Buy a lottery ticket (come on PowerBall!) and there’s no information about the potential outcome except an estimate of the jackpot. The only way to increase your odds of success is to buy more tickets, and doing so doesn’t change your chances significantly. Buy one ticket and the probability of winning goes from zero to at least greater than zero (and someone will eventually win, right?). Buy two tickets and you’ve only improved the probability of winning by a few millionths of a percent. Welcome to gambling.

I invest; but as I wrote in my book, Dream. Invest. Live., Dream Invest Live cover

“My style could also be called speculating. It is riskier than conservative investing, but the strategy works when my portfolio contains enough successes to more than pay for the losses. Diversification, owning more than one stock, helps make the risk manageable.”

Notice, I used ‘Invest’ instead of ‘Speculate’ in the title of the book because most people don’t make the distinction. The more important message from the title is that to get from dreaming to living frequently involves investing. For a while, that worked for me (until my Triple Whammy), and I suspect it will work for me again.

Scroll back through my blog posts about stocks and find several posts that are about conference calls, earnings reports, and stockholders meetings. Those three sources are three of the primary sources of information for stockholders. Reliable substantive information reduces risk. Information is one of the key distinctions between an investment and a speculation. Speculating happens because stockholders have to fill in information gaps with suppositions, estimates, and guesses.

As a company progresses from a gamble to a speculation to an investment, its risk diminishes and its stock usually rises. When that information becomes suspect or decreases in credibility, the risk increases and the stock usually falls. I suspect (which is a speculation) that partly explains why MVIS dropped instead of rose after the recent earnings report and conference call. My perception, and apparently that of others, was that despite an agreement of the company’s great potential, the report and call were more obfuscation than information, that rather than knowing more we know less than we thought, and that what we do know diminishes the near term potential. A company that has the potential to attain a value of multiple billions of dollars is considered to be worth less than some houses in America. Those houses don’t have the potential of MicroVision, but the buying the house can seem like a low risk because it will probably still be a house and land in a year or a decade.

If you bury your money, there’s the risk it loses value from inflation or because a gopher ate it. If you burn your money, you’re certain it doesn’t have any value; except for the story you get from the stunt. Between those two extremes are many possibilities and probabilities. Unfortunately, within the endpoints of that great continuum, you won’t know for days or decades whether the way you spent the money was an investment, a speculation, or a gamble. Risks and probabilities are statistical abstractions that hope to suggest order. Any single event, like buying a stock, a bond, or even a house, is one bit of randomness that doesn’t have to fit into the rest of the order. It would be comforting to provide labels that made sense ahead of time, but reality isn’t interested in providing us that comfort.

Are you investing, speculating, or gambling? No one really knows; but I’m reasonably sure that ticket for a $240,000 jackpot is a gamble – unless I win it, then it’s may be some of the best money I ever invested.

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Power outage

Posted on November 18, 2015 by Tom Trimbath

Simply said, the power’s out; and may be out for two more days, making a total of three. There’s work to do; but evidently, it will get done later. In the meantime, I’m appreciating simplicity. (And very glad for LED headlamps.) Okay, that’s enough battery power devoted to the blog. Back to conserving power for later checks on the power company’s progress. Come on Puget Sound Energy!

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Why I Blog

Posted on November 13, 2015 by Tom Trimbath

Unintended consequences happen. I am known for my blogging (at least according to LinkedIn), and also known for the stereotypical struggles of the modern entrepreneur. Considering all of the things I could be working on, I’m asked why I spend time blogging. On a simple, objective analysis of costs and benefits it can seem that blogging, and writing, isn’t the best use of my time; and yet, things happen that remind me of how little control we have over our lives, how luck plays a role, and how adding value to the world can be returned in unexpected ways. I had a phone call today that was basically a wrong number that might work out right.

Blogging and social media in general are part of the modern landscape. They have non-digital analogues, but many prefer the previous means of communication; especially for businesses. Stuffing envelopes, making cold calls, hanging posters, and shmoozing at cocktail parties or the country club still work well enough that many people rely on them for their businesses. For me, they cost too much time and money. I’d rather spend the time on Facebook, Twitter, trading emails and chats (no texts, though, my phone isn’t that new).Photo on 2014-04-06 at 18.42 It may look frivolous to some, but it is a way to communicate with people who care, rather than deluging crowds and hoping for a response. Socializing through social media can be fun. Sending out newsletters is a lot of work and can come across as spam.

And yet, while my consulting business has grown (frequently in unexpected ways), the total revenues aren’t sufficient to appease the Internal Revenue Service. So, why spend time blogging?

Then I got today’s call. Skip the suspense. No money was transferred – but a contact was made.

You probably know the feeling. You get a call from an unknown number and wonder if it is spam. Who’s trying to sell something to me this time? I actually enjoy those calls because I back sell my services to them.

Them: “Hi, we’d like to interest you in our service which we know you need.”

Me: “I’m so glad to hear from you. Let me tell you about what I can do for you. Have you seen my books on Amazon?”

It makes for some wickedly fun phone calls. Today’s call, however, was completely different.

Paraphrased because I don’t do transcripts of calls. That might be icky.

Him: “Is this Tom Trimbath?”

Me: “Yes.”

Him: “I’m trying to figure out something about my Make Me Move price on Zillow and it isn’t making sense.”

Me inside my head: “Why’s he calling me?”

Me: “What’s the problem?”

Him: “I’ve put in all the data, but it doesn’t seem to be working.”

Me: “Yeah. That can be frustrating. But, why did you call me?”

Him: “Well, I when I couldn’t find an answer or a contact number on Zillow’s site I did a search and you came up.”

Me: “Really?”

A few years ago I filled out Zillow’s Make Me Move price information. It is basically a way to say, “Hey, my house isn’t on the market; but if someone walked up and handed me this much money, sure I’d sell.” Briefly back in the summer, Zillow’s estimate of my house’s value exceeded my Make Me Move price. No one made an offer, but a friend who filled out the information did get some traffic. I took the opportunity to blog about my experience, partly to see if it would generate any interest, but mostly to describe how yet another industry is shifting.

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The caller found my name because, surprisingly, I’m one of the few who’ve actually blogged about Zillow’s feature. When he couldn’t find help from Zillow, I was next in line – simply because I blogged about it. As we closed the call I pointed out to him that one service I provide is helping people sort through technical issues. It isn’t my main emphasis, which is project management for creatives and entrepreneurs, but I’m happy to help because I enjoy helping people. Launch a Google Hangout, or some similar video conferencing, and I could work him through the issue, or at least make progress. He sounded encouraged. Whether he calls back or not, he at least knows he has an ally that’s more responsive than the company he thought he’d called.

I teach classes in Social Media, not because I am an expert (I’m not), but because I appreciate the frustrations of modern communications. I don’t have all of the answers, but I can help most people progress. (Check my Events page for classes and workshops or my Consulting page for personal attention.) Attendees frequently want to know the direct cause and effect of using social media. It is an appealing notion, but it is no more valid in social media that it was with socializing or advertising. We put the messages out there, make ourselves available, and hope. Hope sounds like a lousy strategy, but it underlies every campaign, old and new.

One of my clients has just begun blogging. At the beginning, blogging, sharing, tweeting, etc can seem like shouting into a dark, empty stadium. Echoes are all you get. Audiences arrive at their own timing, and in their own way. Growth starts slowly with friends, family, and your existing network. Compound interest kicks in (hopefully), which finance and patient types appreciate, but it takes time. After a few months of my client blogging, they still couldn’t point to any extra orders as a direct result. Patience. Patience. As I was about to leave, though; they pointed out that since they’ve been blogging their web site traffic has already exceeded last year’s traffic. Something is moving, but who knows how long it will take? But it is progress in the right direction.

I may have a new client for a short gig. I may only have a story. But I also know that today’s call could be an introduction to someone who could need more significant help. Today’s call could be an introduction a network of people and organizations that can use my services. There’s no way to know except to be patient and continue and hope. He called a number expecting to get Zillow and got me. He was trying to get the attention of a multi-billion dollar company, couldn’t find anyone there to talk to, and got my business and me. The cost to me: time and a bit of creative energy. The benefit to both of us: knowing that someone is out there and that questions and answers can be matched.

We can’t know the impact we have on others lives. The world is too complex for that. But occasionally we, or at least I, get a response that encourages me to continue trying to connect. After one of these posts that I wrote without much thought (and almost no editing), someone wrote back to thank me because they needed to read those words written with that emotion at just that time. Why do I blog? With a response like that, how could I not?

PS Saturday, November 14th, I’ll be part of a panel of authors talking about the realities of writing and publishing in the modern world, which includes using social media to get the message out. Check the link for details about the event at Freeland Library. Contact me if you have an event where you want to me to relay some of my stories about writing, social media, and communicating in the modern world. The old rules apply, but in new ways.

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Full Pantry

Posted on November 10, 2015 by Tom Trimbath

A storm is blowing in tonight. The peak will be before midnight, but the house is already creaking with the gusts. It shouldn’t be a problem, but this is November, the stormiest season for the Salish Sea. Power outages are possible, but unlikely. Tonight’s storm is a Storm. In a couple of days we’re supposed to get a STORM. At least this is happening as I’ve reached a milestone on my financial recovery. My pantry is full. It’s been a while since that was the case. At times like this, it is comforting. There are several comfortable necessities yet to come.

Sale is a nice word. I like it. I don’t go shopping because something is on sale, but when I’m shopping I hunt for 20% off, at least. A skill practiced by many frugal folk is stocking up when things are cheap. That sounds easy, but that tactic falters when money gets as tight as it was a few years ago. I ate my way through my pantry. It was a necessary culinary exploration and experiment. It costs money to go shopping, even if you don’t buy anything. I only shopped when I was running other errands. Even then, I didn’t buy in bulk because I had to steward my cash and try to not put anything on the credit card.

Fortunately, I like to cook from scratch, buying real instead of packaged food is frugal and healthy, and I have simple tastes. It is fun trying to see what combinations can be made from variations of beans, rice, potatoes, onions, carrots, some herbs and spices, a bit of oil, and whatever meat was on sale. The past-date meat bin is a place to be cautious, but my best find was a mislabeled steak. It was supposed to be marked down to $3.40, but they marked it down to $0.34. Steak with gravy and roasted veggies for dinner!

There are many ways to measure wealth or its lack. Shopping without regard for prices is marvelous for cooks. Pick up the seafood, mushrooms, organic produce, and a good bottle of wine, and create a treat of salmon with asparagus, sauteed mushrooms, and some quinoa tossed with pecans, top it off with freshly grated parmesan, and wash it down with something with a dusty cork and the meal becomes an event. Some people can do that every night. For a while there, I would make a meal from a can of tuna, pasta, frozen veggies, and the splurge was a sauce. Now, I’m in between.

I knew finances were improving the first time I bought enough of something that it was silly to store any more. Yes, pasta is on sale, but when there are already six boxes at home, it may be time to stock up on something else. Which, I did. I don’t think I recorded the event, because it felt like a fluke. Within the last month, though, the freezer, fridge, cupboards and closets are full enough that I realized I’d have to eat my way through some of it to make way for Thanksgiving. No, this isn’t a hoarding situation; but after an empty cupboard, having to shift things around on the shelves feels like wealth. It didn’t happen all at once. Each shelf filled as sales happened, until finally, filled.

There are other ways to measure wealth or its lack. Are things repaired as soon as they look like they might be getting a bit of wear, when they’re wearing out, or after they’ve broken? Or, are things only repaired when they absolutely must. Or, are they jury-rigged in layers of temporary solutions that must be repaired again, but hopefully not too soon. The list is long, but the fence is the easiest thing for people, especially my neighbors, to see. DSC_4910Of the twenty 8 foot sections, about half of them have fallen at various times. a few construction flaws before I got here, plus the inevitable wood rot, plus the storms we get on the southern half of the island means the fence gets repaired almost every year. With enough money, some would have the entire fence replaced. With some money, I could see hiring someone to do the job right. With a bit more than I have, and the time to do the work, it could be gratifying to properly replace and repair, only getting rid of the rotten pieces. As things are, I propped up a support or two buttressing the wobblier sections, particularly the piece that holds up the shed roof, which is attached to the side of the house; which, if it failed could pull the siding off the north wall.

As I wrote that, a gust blew through hard enough to trigger my neighbor’s car alarm. It’s dark. I’ll check the fence later.

Wealth and poverty hit the news as statistics and anecdotes. Either it’s factual governmental economic reports, or human interest stories and celebrity gawking. Numbers are necessary, but they miss the reality. The amount you have in your bank account isn’t as important as whether you have food available. Your retirement fund isn’t as important as whether you’ve been able to get health care, not just health insurance, and whether you can afford the treatments prescribed. If your car has steering and braking issues, they have to be fixed or everything else can become permanently moot – unless you can resort to walk, bike, or bus. Financial planning for the long term is important; but, when the power goes out it is good to have food at hand, when your body does something unsettling it is good to get advice and treatment from a professional, and when basics like transportation are threatened it is good to get it fixed and afford alternative transportation in the meantime.

I’m getting there, but for now, I am glad I have a full pantry. On the list of life’s necessities, food and water are vital. I’m glad I’m developing that basic resource again. It can even be fun giving myself the occasional splurge like my Maxwelton MealP82A0176, and the holiday feasts.

The wind is cranking up. The Edmond ferry is reporting 33 knots in the middle of the Sound, just a few miles south of me. The peak is a few hours from now. I’ll hit save and publish before the power flickers.

The heat is up a bit, so it starts higher if it has to drift down. I’m glad I can afford that. Dinner is made. A nice, frugal, lentil soup made with beans from a few years ago. Food is sitting outside in a cooler, so if the power goes out I don’t have to open the refrigerator door. Aside from that, it is a good time to back away from work and pull out some other valuable resources: a good book and a nice cocktail. One of these days I’ll get back to buying new books. Tonight’s read is something I bought about twenty years ago. One of these days I’ll get back to buying local hand-crafted whisky. Tonight’s drink will be home-steeped spiced vodka. Not as fancy as possible. Much better than what many have. It is all good enough, for now.

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Startup Earnings Comparison – AMSC GIG And MVIS

Posted on November 5, 2015 by Tom Trimbath

I didn’t think they could manage it but they did it again. Well, actually, I thought they could; but surely with this much storied potential and decades of effort they were due for some good news. It is earnings season and three of my investments announced their earnings within the last few weeks. All of the companies had successes to celebrate. Only one of the stocks rose. The others definitely didn’t. Good news and positive management is not enough; especially, when investors were expecting better news and don’t care about management’s mood. My mood hung on the balance while I waited for today’s news from MVIS. It had great potential. Evidently, it continues to have great potential; eventually.

If investing was unemotional it wouldn’t require humans. That’s one reason to trust the computers, the math, and the data. Computers, math, and data, however, are not very good at understanding potential. Prediction and estimation is much more difficult than analysis and review. Hindsight is easy, and a skill computers excel at. Foresight is difficult, and a skill humans can claim but only imperfectly.

I am human. I am imperfect. I also am an investor. Large companies with lots of data and long histories are easier for computers to analyze. Rather than try to compete directly with them, or at least their institutional users, I focus on companies that are small because they have less data and can have impressive futures. Find their disadvantage and try to turn it into my advantage. Large financial institutions fight the equivalent of major battles. Individual investors can benefit from fighting skirmishes. The potential of investing in small companies is when they grow enough to catch the attention of the institutional investors. Buy stocks that are overlooked. Wait for them to become popular. Sell when the stock has risen enough, and possibly sell at a premium. That’s the plan. That’s how I’ve invested for decades. And then my Triple Whammy hit and only now is beginning to recover.

I’ve written about AMSC, GIG, and MVIS before. I’ve held each for years. Each was purchased before they were selling products. Each is now selling major commercial products and trending towards profitability. AMSC’s revenues grew 52%. GIG’s revenues grew 23%. MVIS’s revenues grew 150%. This is all good. Some of it even looks great. Since earnings were reported: AMSC’s stock was down 14.7%, GIG’s stock was up  16.7%, and in one day MVIS was down 9.3%. The company with the smallest revenue growth is the stock that went up.

Management was positive in every case. Of course, AMSC’s CEO makes $1.04M per year, GIG’s CEO makes $0.886M per year, and MVIS’s CEO makes $0.444M per year. They aren’t in the category of the mega-wealthy, but those salaries put them all in the 1% in America. With positive news in their companies, and compensation better than 99% of the populace, it might be easy to feel positive and confident. The investors can feel differently.

Even though it can seem capricious, the stocks moved based on basics, though not necessarily based on math. AMSC is making more money because of their wind power business, but there are doubts that they’ll win the intellectual property case in China, and the key technology that started the company, superconducting cables, isn’t sweeping through the industry. Maybe it just needs a bit more time. GIG is making more money (ironically, partly because of the technology they acquired from MVIS), but the key may be that they just became profitable as measured by one of the stricter accounting standards (GAAP). MVIS’s revenues sound great. A 150% increase is a dream number, but investors were expecting more revenue, more product releases this year, something besides RoBoHoN, and smoother operations.

I listened to MVIS’s conference call (CC) as it happened because there was so much potential discussed in previous presentations. Congratulations on Celluon launching two devices. Congratulation on Sony launching a direct competitor to one of Celluon’s devices. Congratulations to Sharp for inventing a robot mobile phone, that’s also mobile enough to walk. What investors haven’t seen, but have heard discussed were additional products from Celluon, additional products from Sony, products from several customers (OEMs) that were privately impressing people back in January back at CES, Head Up Displays (HUDs) from two auto companies, and a inventory management tool for UPS.MVIS_Catalysts_103115 There’s also been hope that MicroVision was involved in Lenovo’s Smartcast and the crowdsourced Cicret. Unfortunately, there was no news about specific new products and there was a supply line problem with the Sony product. Technologically, there is great progress. Business operations are being managed well considering the new technologies. Investor relations are evidently being handled less professionally because the news was met with a sell-off.

One comment from the conference call surprised me. It turns out that MicroVision has yet to look inside the device Sony is selling. I can understand a small company not having enough resources to disassemble every competitor’s product, despite the valuable competitive knowledge available; but to not even investigate how the company’s components are being used it a massive oversight. Design specs, quality inspections, and trusting your business partners are all useful; but so is real world experience and making sure your contribution is being used the way you expect. That’s key to continuous product improvement. It is also more than a disappointment, and a worrying insight into MicroVision’s business practices.

I own more than these three stocks. Check my semi-annual portfolio review if you want to see the rest. These three happened to announce earnings within a short enough time and in technological industries that it was convenient to compare them. I concentrate on MVIS because the company has the greatest potential, in my estimation. GIG is harder to understand because the technology is harder to understand, the products and their markets are harder to understand, and the company’s merger and acquisition strategy makes the finances harder to understand. AMSC has always had the issue of selling a disruptive technology to a conservative industry, and then had the complication of intellectual property theft, the subsequent loss of a major customer, and a change in management and strategy. Three companies. Three disruptive technologies. Three management teams. Only one is succeeding in a way appreciated by the investment community. These three plus the others in my portfolio demonstrate why diversification is beneficial. There was and is no way to know which ones will succeed commercially, and as investments.

Despite MVIS’ great potential, I am considering selling some MVIS to buy some GIG. The day before MicroVision was going to announce earnings I decided to buy a few shares with some of my remaining, small, reserve. On those shares I lost about what some people spend on lunch. As someone commented, it looked like an emotional decision. Of course it was. I am human. To suggest I am acting without emotion is denying reality. At some level, their comment was emotional. Every person and their emotions, make personal finance personal. If we didn’t have needs, wants, and desires we wouldn’t be human. As if it wasn’t enough to manage the data, histories, futures, analyses, and estimates of investing, it is also necessary to manage the investor, especially when it is personal.

Today’s MVIS news was objectively positive. Their business is much better now that it was last year. For some investors, however, it wasn’t good enough, objectively; and definitely wasn’t good enough subjectively. They expected more, didn’t get it, and sold. I expected more, intend to sell some because it looks like others in my portfolio are objectively better; but will hold the majority of my MVIS shares because objectively and subjectively I think their issues are temporary. Surely, MVIS won’t under-deliver again. GIG didn’t. Right?

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