MicroVision Has Real News – I Think

Posted on March 5, 2015 by Tom Trimbath

Pardon me as I pour a spiced martini in preparation for parsing a press release from MicroVision. Photo on 2015-03-05 at 17.51Yes. Believe it or not, MicroVision had news today. The last time I pulled apart a MicroVision press release it was to prove to myself that, yes, the news was insufficient for enthusiasm. This time, however, I parsed the news and found that it was sufficient for more than enthusiasm. The market, however, didn’t agree to the same extent; so, tonight’s beverage is a home-concocted spiced martini instead of a popped bottle of champagne. The cork stays in for a little while longer.

I write this post, not to make proclamations, but to show how I pull apart the news. The same methods apply beyond MVIS and stocks.

If you want the entire text, here’s the full press release:
http://finance.yahoo.com/news/microvision-licenses-picop-display-technology-140000326.html

“MicroVision, Inc. (MVIS), … today announced it has signed a multi-year license agreement”
Finally, an agreement that is for more than a month, a quarter, a year, or a study. This is multi-year and for licensing. It was targeted to happen by the end of 2014, so hitting March 5th of 2015 is a bit of a slip in that arrow, but at least it hit.

“with its Fortune Global 100 partner”
The general consensus is that this is Sony, but evidently the hurdle of being able to speak their name has yet to be cleared.

“for MicroVision PicoP® display technology”
Branding is good. Branding pico-projectors would’ve been good, too. I think they came up with the term, but didn’t hold onto it. That may be like letting go of the phrase “personal computer”.

“The license agreement marks an important milestone in the ongoing relationship between the two companies that began in April 2013.”
It seems like forever, but that’s less than two years. I’d like to know the date of the first contact. Was it April 2013, or did the relationship building take longer?

“The license agreement grants the Fortune Global 100 company a non-exclusive license”
Non-exclusive, whew. MicroVision has had previous relationships that were exclusive (NCR as I recall), that provided no alternatives if the arrangement proved dysfunctional. This time the door is open.
Licensing is one of three revenue streams MicroVision has mentioned. Evidently, this is specific to one stream, which opens the door to other revenues.

“for use in display modules it manufactures and sells”
So, no image capture; and, it is for units made and sold without requiring actions or expenses from MicroVision. Risk is diminished, and MicroVision can receive effectively passive income.

“As part of the agreement”
So there’s more, rather than less, that we could hear about.

“MicroVision expects to receive an $8 million up-front license fee”
Amazing, a specific number for a specific service, though the “expects” is a little unsettling.

“later this month”
They aren’t reporting a deposit in the bank, but at least something within the next few weeks. Every entrepreneur knows that feeling.

“In addition to the initial up-front license fee”
What? There’s more? How uncommon for MicroVision.

“MicroVision will also receive royalties for display modules sold by the Fortune Global 100 company.”
Royalties in addition to licensing fees. Very nice. Fortune Global 100 companies tend to deal in millions of units, if they’re in consumer electronics. We are talking about Sony, right?

“Further terms of the license agreement are confidential for competitive reasons.”
Yeah. We’re used to that. It’s all the other more substantial and positive bits that are uncommon.

“This is a significant step forward for MicroVision and PicoP display technology.”
Heartily agreed.

“By licensing our technology … we have the potential to significantly expand the reach … on a scale commensurate with a company known for technology innovation and its global reach,” said Alexander Tokman, president and CEO of MicroVision.
One of the good reasons why licensing with big firms leverages a small company’s intellectual properties. Minimize risk for maximize (or at least greater than otherwise possible) gain.

“This milestone is a credit to the hard work of both teams, and we look forward to making this endeavor successful and enduring for both companies.”
Agreed again.

“joint development – April 2013 /  development phase – completed in 2014”
Good turnaround, considering the complexities of business in consumer electronics.

“the Fortune Global 100 company contracted with MicroVision for commercialization support services which are ongoing”
In addition to licensing and royalties, there are support services, which are another revenue stream.

“The license agreement represents a milestone achievement in MicroVision’s execution of its ingredient brand licensing business model.”
Agreed, a milestone that felt like a millstone for years. They can finally get this off their shoulders and plant a flag beside it.

“The Fortune Global 100 company will also purchase proprietary components”
That’s a surprise. So, there are licensing revenues, royalty revenues, support revenues, and purchase revenues. Four revenue streams from one customer, and MicroVision (supposedly) has several customers that it is working with. Gulp. Good.

I woke at about 5 minutes to 6am, west coast time. The press release popped up while I lay there scrolling through news on my iPad. My first reading of the release was tinged with skepticism learned from over a decade of MicroVision press releases. My second reading was because I realized that the boy who cried wolf may have finally seen one. I had two quick responses: 1) check the message boards for other interpretations, because they frequently reveal the flaw I missed; and 2) check the pre-market trades to see what was happening to MVIS stock, was it moving or halted. No one was saying much. The stock was up about 20%, which was appreciated, but far below my expectations.

Hours later the stock closed for a 13.33% gain. Not bad; but not what I felt was representative of the news.

An $8,000,000 payment is much more than most of us will ever see, but small in corporate environments. And yet, an $8,000,000 payment with a price/sales ratio of 6 would suggest a market cap increase of $48,000,000. That would’ve been closer to a 50% gain, not 13.33%. The multi-year aspects, the multiple products, the multiple revenue streams, and the fact that this was just one of MicroVision’s customers suggests to me that the value of this announcement is far more than 13.33% over the previous day’s price.

Patience, Tom. Patience. Ignore the looming tax bill, for now.

As much effort and enthusiasm as were wrapped around MVIS today, it wasn’t the biggest influence on my portfolio. One stock, GERN was up 34.5% on no news, except that some pundit suggested the stock could double. Two other stocks, AST and RSGE, were up ~ 10% and ~ 8.1%. For the stock trades, AST was up on 6.8 times volume. GERN was up on 8.2 times volume. RGSE was up on 2.4 times volume. While MVIS was up on 6.6 times volume. And, only MVIS really had news. It’s almost as if the small cap companies were suddenly accepted by the big money institutions, regardless of news, and that MVIS wasn’t as well received because of its history of over-promising and under-delivering.

I don’t like to read between the lines when nothing has been written. GERN, AST, and RGSE didn’t write as much as MVIS. I’ll say thank you for the rise in their prices (thank you) but as I wrote in the previous post, stock prices and wealth are more than a bit ephemeral.

This good news comes quickly after Celluon’s launch of the PicoAir, which I’ve seen and which is receiving nice reviews. The PicoPro is due soon, too, right? See the hesitancy in what I just wrote? That may be what’s happening with MVIS. There may be a reluctance to buy in because of history, but it also may be because of the reverse split, a market cap that was close to but below $100,000,000 (though today changed that), or a stock that is priced below $5 (which is an arbitrary yet real limit for some.)

It is easy to skim press releases because we see so much information flow past us. It is easy to read what we want to think was written. In slower times, every word held more meaning. The words continue to hold meaning, and there’s a benefit to slowing ourselves down and paying them proper respect. I hope.

At the end of this day, the press release is impressive to me, and may eventually be impressive to others; but until it is sufficiently impressive, I’ll sip my home-concocted spiced martini instead of champagne and enjoy a homemade cheeseburger instead of a steak – and then relax and dream because I think something very real just happened.

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Wealth Evaporates Instead Distributes

Posted on March 4, 2015 by Tom Trimbath

Want to kick off a touchy subject? Talk about wealth in a group that isn’t all rich or all poor. We already have enough taboos about money. Talking about money is usually tough because we recognize how easily it can be lost, both from the perspective of folks who are trying to make sure it doesn’t happen to them, and from the perspective of folks who already know what it’s like to not have enough. Taboos and our reactions blossom under such circumstances. Whether you think wealth should be more evenly distributed or not, the taboo touches on the uncertainties and ephemeral nature of what we think of as money and wealth. It is rarely piles of cash, which makes any accumulation or redistribution more academic than realistic.

Forbes’ list of billionaires was updated about the same time as OxFam released a study claiming that 80 will hold half the world‘s wealth. That leaves over 7 billion to divide up the rest, including 1,746 billionaires. It is entertaining to imagine what would happen to the lives of 7,000,000,000 people if 70 or 700 of them donated almost all of their wealth (maybe keeping a few tens of millions for the essential comforts.) The only way such a redistribution would happen is if there was some sudden awareness of common consciousness that encouraged ultimate empathy. It could happen, but probably not. The fantasy version of the redistribution would be something like a cyber attack that shuffled everyone’s accounts and evened everything out. Wealth is not that simple.

Financial wealth isn’t a pile of cash in a vault. There’s probably some billionaire that has recreated Scrooge McDuck’s gold vault, or at least thought about it. The majority of wealth is not cash. Wealth is stocks, bonds, real estate, resources, assets – things that can be traded for cash, but are mostly left the way they are. If every billionaire’s cash was redistributed, almost all of them would still be billionaires because of their other assets (except for those folks just on the edge of the club.)

Wealth is fickle. Millions of Americans had the lesson delivered when their house’s value dropped 10%, 40%, 70%. The house hadn’t changed. The land hadn’t changed. The price had changed, actually, the supposed price had changed. Their wealth diminished. A drop of $100,000 in a house’s value didn’t show up in someone else’s account. The same thing is true in almost any investment. We trade stuff, and sometimes use cash, but frequently not. For very large transactions, cash is only the intermediary. Want to buy a billion dollar company? It’s probably done by first selling a billion dollars of another company, or bonds, or by going into a billion dollars in debt. It is easier to trade stocks than cash.

Watch a stock. There may be a billion shares in a company. If a trade for 100 shares moves the stock a penny, the company’s market cap gets adjusted by $0.01 x 1,000,000,000 = $10,000,000. Neither the company nor the shareholders suddenly made or lost ten million dollars, but the market cap and everyone’s portfolios got adjusted. If the company was bought, the difference becomes apparent. If every shareholder sold, the difference is moot because that many sell orders would change the stock by far more than a penny. If Bill Gates decided to give everyone his shares of MSFT, the price would drop and much of the wealth could evaporate.

Wealth redistribution may never happen. If it doesn’t, then wealth may experience the evaporation that’s been witnessed many times since we invented money. Our economic system is not static. Wealth inequality is increasing. Wealth concentration is increasing. A finite system can’t have an ever-increasing inequality or concentration. Extrapolating from the situation in 2015 means eventually one person has the majority of the wealth, and that isn’t realistic. No king or queen every ruled that much of the world since we left Africa.

It is possible that changes will be made to the system in terms of laws and regulations, or out of compassion. Two of the strongest proponents for change are two of the wealthiest billionaires: Bill Gates and Warren Buffett. Both have spoken up for more philanthropy and higher taxes for the rich.

If changes aren’t made intentionally, change will happen eventually. We witnessed the evaporation of wealth in recent stock market crashes. The wealth that is represented by bonds, real estate, and commodities are all subject to similar uncertainties. Bonds are now paying negative interest in Europe. Precious waterfront may soon be on the wrong side of the shoreline. Oil plunged when most expected an eternal rise. No investment is absolutely secure. People with wealth know this, which is why they worry more than most. Their fall can be greater, and they’re more likely to be aware of the fragility of the scaffolding holding up the system.

Despite the uncertainties, and the inevitable intentional or unintentional change, it makes sense to invest. The conventional wisdom that working harder is the best way out of poverty only made sense when working harder produced greater wages. Minimum wages increases are happening, but are insufficient. Money can make money. Investing can produce impressive results (the return of which is eagerly awaited). Investing with money, however, is best done with discretionary income. One approach: Pay all the bills for a frugal lifestyle, with a bit of comfort. Get rid of debt, without hurting yourself. Build up a reserve. Then invest. And modify to meet your wants, needs, and style.

Considering the uncertainties, one of the greatest wealthy lifestyles has nothing to do with the rich and famous. A person living sustainably on property they own in a place they enjoy can be wealthier than any of the billionaires that are worrying about market indices, interest rates, and commodity fluctuations. If our economic system fell apart through chance or action, the wealthiest people on the planet would be the people who were their own sustainable source of food, shelter, clothing, and healthy living. The wealthiest of them would probably be living in a community of such people. Such sustainable wealth costs far less than a billion dollars and is worth far more.

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A Lot Of Bland Versus A Bit Of Awesome

Posted on February 28, 2015 by Tom Trimbath

Frugal is mistaken for cheap. Frugal is realizing that a bit of awesome is much better than a lot of bland, and costs a lot less too. Tiny houses are getting busy. They were ignored, and then laughed at, and are approaching the point where they meet the fight. Do people’s needs and wants break through and past convention and regulation? I don’t know who will win, but the energies are building on both sides. Good.

I’ve long been a fan of tiny houses and frugal choices; but, I didn’t start out that way.

I made some of the conventional choices because it seemed like the right thing to do, there was a lot of encouragement to conform, and the pervasive message was buy big and grow. It was an easy comfort zone to settle into because there were so many other people there. I bought the biggest house I could afford, barely had any money left over for the first few years, sold it at a moderate gain to get married, bought a bigger house, sold it, tried a condo, bought a bigger house, got a divorce, and then re-evaluated everything. The divorce had nothing to do with the house; but as others who have been through the process can attest, divorces inspire intense introspection and retrospection – or fascinating denial. I like to think I opted for the internal inspections.

The first place I rented was smaller than any of my previous houses. The next rental was smaller. Then I bought a house. Unfortunately, I bought it at the peak (and sold stock that has since risen six-fold, FFIV). Fortunately, I bought a small, though not a tiny house. At 868 square feet (according to Zillow), it is the smallest house I’ve owned. It is also the only one that has felt like home. And, I only need about two-thirds of it.
DSCN5593
It was saddening to look back on the houses I bought because of other people’s opinions. Ah, but I was young, and when you’re young it is hard to hear your own voice – or at least it was for me. That advice had me carry far too much debt, put far too much money into interest payments instead of investments, and far too much time into maintaining a major asset when I lacked the proper skills. I still lack handyman skills, but at least the consequence is proportionally smaller.

For the last week in February I had fun writing about tiny houses. Other people are reaching similar conclusions about conventional wisdom. Curbed.com had Micro Week, a week devoted to everything tiny in real estate. I’m an contributing writer, so I got to contribute stories about tiny house builders and tiny houses that are for sale. Relative to the rest of the real estate market, tiny houses are inconsequential – at least from the perception of the conventional housing industry.

The economic situation has changed significantly for anyone who isn’t retired or well protected by a stable job. For many people, the Great Recession was the unexpected divorce from the old economy. Even if they found new jobs or started new businesses, they had to challenge conventional wisdom because the old wisdom wasn’t working. Stable employment was gone. Ratcheting social and economic status slipped several teeth without warning. Income wasn’t certain. Debt was too big of a threat. The wrong side of leveraging became apparent. Introspection and retrospection changed perception.

The job market is returning. Existing home sales are up. Interest rates are still low. Yet, people aren’t returning to the old ways. Wages are barely rising. New home sales are low because people are preferring to rent. Interest rates are low, but getting a loan is still difficult, and millions of people have damaged credit ratings.

Tiny houses appeal because, for about the price of a new car, people can own a home debt-free. The concession may be that they have to live in one-tenth the space, but the greater benefit is the release from conventional pressures.

Without the constraints of well-established tradition, people are being creative about how they want to live. Many identify tiny houses with Jay Shafer’s Tumbleweed Homes, high-quality wood construction, of houses that fit on trailers. The trailer limits the size of the houses to about 128 square feet; but the trailer and the size allows the houses to be considered RVs, which gets them past housing regulators. Seattle has its own Tiny House builders. Others are taking that same idea and getting creative with curved roofs and walls, because if you’re going to be different, be different. Others are finding a middle ground, building pre-fab houses that are small, not tiny, but also more likely to be accepted by the neighbors. Others skip the wood and peaked roof and repurpose modern shipping containers. If they’re strong enough to survive a hurricane at sea aboard ship, they should do fine on land. They may be metal boxes, but creativity softens that. And then there are the people who realize that 3,000 square foot houses are an aberration, so they rewind the historical clock to the nomads and find places for yurts and teepees. Settler’s cabins were rarely very large, and today’s tiny house owners are settling a new society.

Bigger can be better, but a lot of the bigness was built for show. Even for people who aren’t ostentatious, the majority of housing choices far exceed their needs, ignore their wants, impose designer’s wants, and commit owners to mortgages that measure debt in major fractions of a million dollars. The only way to fill such a house is to limit creativity or maximize debt.

The tiny house crowd has caught onto the positive self-reinforcing cycle of understanding the true basic needs for as little as possible. Today’s society and technology has made that much more attainable. Then, with the basics achieved, any surplus can be used for luxuries. High-end appliances, excellent materials, functional art instead of cheap furnishings with a few flourishes. Some tinies are shacks, because poverty is too pervasive; but the reason tinies are becoming popular is because people realize that being debt free allows them to free their expression and individuality.
A tiny house
According to Zillow, my house is finally worth what I paid for it eight years ago. That’s an effective interest rate of zero, and actually negative considering the expenses. I’ll probably stay here because the view is hard to beat, I don’t have enough to buy land, and the regulators are still fighting the innovators while defending an anachronistic standard.
DSCN5580
The people who are building tiny houses, living in them, and then engaging in the battle for the right to live in a house of their choice are basically the beginning of a housing rights movement, a movement that recognizes that the old attitudes no longer make sense. They’ve learned that a big box of bland paid for with debt is bizarre compared with totally owning a tiny bit of awesome.

PS If you happen to live on Whidbey, there’s an impressive development that is welcoming tiny homes. Check out Upper Langley.

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Hunting For The Funny

Posted on February 25, 2015 by Tom Trimbath

There’s fun in the dysfunction. There are also shouts and outbursts; but look at the industry that was built around Jon Stewart, Stephen Colbert, Jon Oliver, and Larry Wilmore. How can you laugh at a time like this? Because, it is the best choice available, even in the worst moments. Sometimes that is by choice, but a lot of times laughter is by necessity. Hunting for the funny is a valid strategy, but sometimes you have to keep the joke and the punch line to yourself.

I’m planning a sequel to Dream. Invest. Live.Dream Invest Live cover If you don’t remember the first book, know that it is the basis for this blog. Go back to the earliest posts and find a different tone and set of topics. Then, the Great Recession hit everyone, in the midst of which I was hit by my Triple Whammy. Scenarios that were imagined but not expected played out, usually moment by declining moment, and occasionally by abrupt drops. It can be inconceivable to find laughter in there. Comedy is about timing, and finding the right timing is a marvelous coping strategy. Now, I have to find the right timing for the sequel, and find the right way to add the funny.

In retrospect, the fears were funny. The fears I had about losing my wealth were academic, lacked perspective, and were concerned with only those things I could imagine. The real fears from the real threats weren’t funny because reality was revealed. The absurdity of the situation, however, eventually percolated through. At the start, the lag time was weeks or days. Years into this process, the lag time can be so short as to be inappropriate. That’s actually good, because realizing the unreal nature of reality is a sign of awareness.

A deal fell through. That’s a disappointment, but the good news is that I was considered as responsible contributor for yet another deal. One deal fell through because I happen to be friends with one group, and another group didn’t like that. What is this, junior high for seniors? One deal fell through because someone decided to sleep with someone that they weren’t supposed to, and someone else understandably got upset, which upset yet another someone that had the money. As if I had anything to do with that one falling apart. One deal fell through where the person with the money was going to hire me full time as executive director, but only after they had a bit more money, but before that happened the SEC froze their assets. That’s another one I won’t try to fix. But the potential was so great. I could go on, and probably will in the sequel.

Watching some underpaid young adult sprint to my house to play tag with it as some sort of proof of occupancy to the debt servicer. Watching another one drive by with hands off the wheel because both hands were being used to take a picture of my house then just getting control of the car before it veered off the road. Being followed through a local store I’ve shopped in for years by a police officer for no other reason I can think of other than I was wearing a hoodie. Really? And each of these people got paid to do this?

The people with the greatest fears about money are the people with the most money. There’s an appreciation for the fragility of wealth in the modern world, and I happen to be an example of what can happen because of a string of bad luck. That scares a lot of people; and while rationality assures others that bad luck is not contagious, many seem to play it safe by increasing their distance. Cough. Cough. Is there an hand sanitizer that fights poverty?

The people with the greatest concerns are those that have already lost, or have never acquired, wealth. Fears can be abstract. Facing the reality of the concerns of not having enough money to pay the bills becomes more specific because every life is unique. I live alone and have never had kids. I don’t worry about child care, saving for college, or finding ways for children to enjoy life without being ostracized. Others do. I, however, need to concern myself with the expenses that support my business which provides my income: computers, internet access, fueling and maintaining the truck that replaced my Jeep, taxes. They may not care about computers and transportation. When you don’t know what you’ll lose, you don’t know what you’ll have to protect. After you know what to protect, the list of concerns shrinks. Life becomes simpler, even as it becomes tenuous.

Watching my computer decide to not boot, that’s a worry that isn’t funny; until after it goes ding and remembers what it was designed to do. Watching my fence fall down for the third or fourth time, that gets to be downright silly; but it wouldn’t be for my friends who reduce expenses by growing most of their food. Watching a friend get upset about some slight to my situation can be hilarious; which can be a shared laugh, but is equally likely to be an opportunity to stifle it and show appreciation for how much they care.

About a month ago I came up with an idea that I thought would work well for a company. A couple of suggestions evaporated, and I put them aside to work on independently later. Ta da! Guess what they decided to launch as a national initiative? Wow that has an amazing resemblance to my idea. As a friend put it, I could either laugh or throw something. There’s nothing in particular that I want to throw because I can’t afford to replace anything that may break, so I laughed. About the same time, another friend commented on how hard I was working and how that probably wasn’t healthy. My laughter went straight to the border between hilarity and hysteria and danced along the edge. Of course, this is level of effort can be unhealthy. But it is the best choice available. Besides, the laughter helps.
Photo on 2015-02-25 at 20.08If you are going through a similar situation and find yourself stifling a laugh, go ahead and laugh. You might have wait until you get home, close the door, run the water, and turn on the radio; but laugh. There is fun in the dysfunction because society is really quite silly. It isn’t real. We made most of this up because it seemed like a good idea at the time, but we are only imperfect humans. Mistakes will be made. Be concerned about the legitimate concerns, laugh at the rest as you can. And, if you haven’t lost it yet, don’t worry, don’t fear. You may never get here, and it is only when you get here that you know what to worry about. Focus on the few key serious bits and realize you won’t have to hunt for the funny. It will be all around you.

(Really, advertisers. Do you realize how your serious ads quickly become comedies when viewed by people who know what really matters?)

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PicoAir Meets ShowWX

Posted on February 20, 2015 by Tom Trimbath

Finally. I got to see, hold, and use a PicoAir.  PicoAir and PicoPro are projectors that fit in your pocket, or at least mine. They, and the technology within them, have the potential to positively disrupt the electronic display industry. Academic and abstract discussions aside, there’s now a product to buy and hold, or in my case, to borrow for a few minutes. Peter, who is internationally followed (via his blog and tweets – dude, upload a profile photo, eh) for his tracking of the company that provides the enabling technology, MicroVision, is a fellow shareholder of MVIS. He was nice enough to drop by my office so we could look at the new technology, compare it to the old technology, celebrate the advance, and wonder why the stock hasn’t responded.

No product is a panacea. Yet some products dramatically change our electronic worlds. The innovation that was the iPhone may never be surpassed for its impact; and yet we said similar things about the personal computer, the microchip, and the transistor. Picoprojectors may not fit inside that camp, but if they don’t, they at least have the potential to live in that neighborhood. Take a look at almost any electronic device. Almost all of them have displays. Any display that is more sophisticated than monochrome text is an amazingly complex and delicate collection of microscopic circuitry and precise material processes. It is only through massive development efforts and the now common economy of scale that has brought the display prices down to the level of commodities. Regardless, displays that are now considered conventional (LCDs, LEDs, plasma, etc.) are amazing. They are also limited by power, size, manufacturing complexity, transportation and warehousing expenses, and ruggedness. As I’ve written before, imagine replacing displays that come wrapped in plastic, surrounded by plastic peanuts, stabilized by styrofoam, and boxed in cardboard – imagine replacing that with something that can be dropped in an envelope and mailed, and yet still produce images that are measured in feet.

The PicoAir is not a panacea. But it does show what is not only possible, but is actually for sale. It is a projector that is about the size of a smartphone. It displays an image that is always in focus and that expands in a cone one foot diagonally for every foot the projector is away from a wall. Stand two feet back, get a two foot image. Stand four feet back, get a four foot image. Stand ten feet back, and get a ten foot image, but one that gets progressively dimmer. Just like a flashlight, the farther the beam spreads, the dimmer the light. At one foot away from a wall, or seat back, or piece of cardboard, the image is larger than any pocket cell phone. Such a capability has been discussed, but it has yet to catch on with regular consumers – at least not with the previous products.

MicroVision produced one of those previous products. Five years ago I received my first generation picoprojector from MicroVision.

MicroVision's first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

MicroVision’s first picoProjector, the size of an iPhone. The newest models are much smaller and brighter.

My ShowWX showed up via UPS (and almost didn’t), and was used for a few years until the novelty wore off. Actually, the utility wore off because the room I was using it in caught the sunset which outshone the projector. I found that I could only use it after the sun went down, and with Seattle’s late summer sunsets, that meant it wasn’t good for many hours of the day. The other limit was that the ShowWX required cabling, some way of being propped up, and had to be hooked up to a sound system or the movie would be silent.

The PicoAir is brighter, wireless, and includes speakers. I can’t afford one, but Peter did, or at least considered it a bit investment research. He brought it by my office. We set the two machines beside each other, and considered the advancements. Image brightness is up. Speckle is down. Heat is less of an issue. Usability is dramatically improved. Price is improved. This is all good. About the only downside was that each still needed to be propped on something unless the person using it has tireless arms.IMG_0417
The simplest review of the PicoAir’s operation was that it was so simple, seamless, and superior that we soon turned to talk about MVIS. With such an impressive product, why hadn’t MVIS moved?

Estimating a proper value for MVIS has become a moot analysis. If the current stock price was based on rational, conventional valuations they would only make sense if it is assumed that the company will never have a product, won’t grow, and yet will somehow survive. If it is going to grow, then near term valuations of $20 are easy to produce. If it is going to bankrupt, then near term valuations of $0.02 are easy to produce. Yet, for the last year, the stock has bounced around $2 and a market cap of less than $100,000,000. Good news hasn’t raised it. Bad news, or at least the lack of news, hasn’t dropped it. And yet, the company is making progress with an impressive potential 2015 pipeline.

Individual investors should know other individual investors; especially since 2008. Sit together and commiserate. Conventional wisdom has proven to be less than wise, and the investing environment has changed. We continue to invest because we believe in and have experienced the potential rewards, and yet, just like with the Three Guys Walk Into A Bar, we can watch the trades and see what appears to be stock manipulation. Small stocks have always been threatened by illegal trading. The sums involved in trading are so large relative to the size of small companies that prices become set more by trading than investing. Trading is not illegal. Trading to manipulate a stock’s price and profit from that action is illegal, at least as I understand it. We both commented on the fact that, for the last year, MVIS has traded within about $1.50 and $2.50. Those may seem like large swings based on stock price, but they are within the noise of movement within a market cap valuation that is potentially above a billion dollars.

We conduct our analyses. Research the companies by talking with management, visiting the company, attending the meetings, and buying the products. Okay, I did that years ago but can’t afford to now. Peter, however does all that and more. Then, finally, a catalytic moment, a significantly improved product is released, it is met with impressive reviews, the company tweeted “The initial demand for #PicoAir far exceeded our forecast.“, and yet the stock doesn’t move.

Two concepts come to mind: delusional investors, or coiled spring stock. Until the stock moves, MVIS shareholders have to deal with people who consider them delusional. If the stock never moves, then the detractors are right. If the technology, the company, and the stock finally reflect the positive disruption that is possible, then the longer the wait, the greater the release and the steeper the climb in the stock – or at least that is the hope.

I’ve listened to detractors before. They were right about Iridium. They were wrong about Starbucks, and America Online, and Pixar, and F5, and others. For the last few years, they’ve been right about my portfolio, including MVIS. None of us know the future. But, what I do know is that when his Peter’s PicoAir met my ShowWX it was obvious that impressive progress has been made, and that maybe a bit more patience will produce much greater rewards. I certainly hope so.

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Three Guys Walk Into A Bar

Posted on February 18, 2015 by Tom Trimbath

A day trader, a commodities speculator, and a traditional investor happened to meet each other over a bar, or at least above a restaurant that serves beer and wine. It wasn’t a joke, but we had to laugh. We’re all witnessing the same behavior, realize there’s nothing we can do about it, realize there’s nothing the government is doing about it, and yet we all continue to invest. When your list of choices diminish, it is easier to make the choice, but you’re less likely to like it. Investing has certainly changed.

Whenever I sit down to write this blog I experience a frequent lament. I wish I had more time to research the data, analyze what I’ve found, check with other analyses, revise as necessary, and report the results. That’s what professionals get to do, and I suspect even they don’t get as much time as they’d like. Instead, I spend a bit more time than most checking news reports, perusing charts, checking in on online discussions, and reviewing my choices. My semi-annual portfolio review is the most structured of the exercises, but even that is far removed from the computations I’d enjoy producing. Data can be fun. Geek out!

But, I am not a professional and am only responsible to myself. I post my thoughts publicly via this blog and various discussion boards, but they are my thoughts about my situation. Your situation will be different. And yet, the lack of a difference is what I noticed during a chance meeting of three people that happen to continue to invest regardless of the current climate.

My office is in a coworks, a place where a mixed group share a space but rent desks. Interruptions are normal, and that includes visitors dropping by to check out the space. If you’ve been reading this blog you know I buy stocks in small companies, hold them for years, and then hope to sell them after they’ve grown. It is an old strategy sometimes called Long Term Buy and Hold (LTBH). One visitor sat down and started asking me questions about the space, and the topic of bandwidth and internet access led to the topic of high frequency trading. Another visitor happened by, recognized me from one of my talks, and mentioned that he was a commodities speculator as well. All of us were investing. All of us were interested in economical office space for jobs that had nothing to do with investing. Our investing was encouraging enough to occupy some of our time, but not profitable enough to negate the need for regular income.

We were all also about the same age. We had all experienced an earlier era in investing that was more rational, more regulated, and more enticing. We all recognized that we are in a new era.

Investing has never been completely free of inequities. There have always been people with unfair advantages. As civilization has matured, there has been a trend to minimize the disparities; and yet, within the last decade or so, the regulations and regulators aren’t keeping up with imbalances and improprieties. It seems that the inequities are increasing.

Here’s where I’d like to pull up the data, reference specific events, analyze money flows, and contemplate core trends. In the meantime, through that conversation and others, it seems that the imbalances and improprieties are outside the control of individual  non-accredited investors.

High-frequency trading is happening at such a technical level that large financial institutions are moving their trading computers as close as possible to the market’s trading computers because the time it takes electrons and photons to move a few extra feet is a disadvantage. Seattle is much more than a few extra feet from Wall Street.

Market manipulation hasn’t been proven, and may be unprovable except by a whistleblower, but flash crashes are effectively approved because the trades aren’t negated. There are regulations and mechanisms in place to manage such irregularities, but none of us had seen them exercised. Small investors get dropped out of stocks, and large investors step in to take up their positions at a bargain.

Wealth accumulation means larger portfolios are larger, that there is less for the smaller portfolios, and that the big money is chasing the big investments while ignoring the small investments. The demand for large cap companies increase because they are large cap companies, and small cap companies are more likely to remain small because there isn’t as much money left to invest outside the large portfolios. Unfortunately, small companies are where innovation happens; so subsequently innovation isn’t encouraged.

We’re all seen the activities, and yet we invest because we must. When there are fewer games in town, and games are the only way to “win”, then you have to play to games that are available.

Many investors no longer invest: 43% of Americans are only invested in cash, which is another way of saying they have a checking account and nothing else; and 53% of Americans have returned to the Great Depression habit of hiding cash somewhere around the house because they don’t trust the banks.

I wish I had the time to draw together the amount of involved in high frequency trading and the trend with time; the number, severity, frequency, and consequences of flash crashes; the numbers of small cap versus large cap investing capital; and the total wealth accumulating in cash in working class households. But, I don’t have the time to do more than draw my own conclusions.

My conclusion is that I will continue to invest because of another trend I’ve witnessed (and for which I’ve seen data that I can’t find quickly enough), and that is the fact that working harder no longer is effective for financial mobility. Wages are stagnant. Living expenses are increasing, regardless of the official inflation numbers or the temporary blip in gas prices. I continue to work seven days a week because that’s the way I pay the bills, or at least most of them. I even have hope that improvements will come my way – but I’ve held those hopes for years. My stocks are a hope. I’m invested in disruptive companies, which hopefully make enough money for the stock to attract the large investors, while also positively impacting the planet. That isn’t the refined, sedate, conservative investing strategy from years ago, but that was a different era. Or, at least that’s the way it looks to a trader, a speculator, and an investor who all have seen the old era, and the new – and who are all sitting at the same bar and continuing to invest and work.

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Passionate Hope

Posted on February 14, 2015 by Tom Trimbath

Seven billion people can’t all be right or wrong. If we were all right about the same thing at the same time it would be spooky. Of course, maybe that’s what a common cosmic consciousness would be like. If we were all wrong about the same thing at the same time, that would potentially be tragic. Somewhere in the universe, that’s happen to a civilization. We never have unanimous agreement. There are even people who place the planet above all, and think the only way for it to thrive is to get rid of us. Fortunately, we rarely all agree. That may seem like a bad thing, and the cause of much suffering, but it is also the reason we may yet find solutions to our problems. Cheer the innovators.

My passion is for people and ideas. It makes for some fascinating conversations. It is one reason I enjoy consulting with artists and entrepreneurs. They are people with passions as well, and most of their ideas are aimed at solving problems. Somewhere between where we are and where we need to get is a bridge that will be built by someone with the right idea.

My other passion has also been stymied lately. The corporate version of the artists and entrepreneurs is the startup company with a disruptive idea. There are companies that aren’t just trying to build a better mouse trap. They’re trying to trap the mouse and get it to work for us. The body is confused about how to fight cancer? Retrain it rather than launch a separate assault. Electricity has a bottleneck called copper cable? Superconduct it. Signals need to be switched faster than materials allow? Build a switch with almost no moving parts. TVs and monitors are too fragile and bulky and use far too many resources? Throw away the screen and play with the light. Those are the stories of Dendreon, Geron, American Superconductor, GigOptix, and MicroVision. I act upon my passion for their ideas by buying their stocks (DNDN, GERN, AMSC, GIG, and MVIS.) That outlet for my passion has been stymied because, even when the companies make progress, their stocks languish – and in some cases become involved in bankruptcies.

A long time friend, fellow blogger, fellow ex-aerospace engineer, and fellow inventor has lived within the realm of invention for years. That’s how he makes his money. Over on his blog, ideaworth, he points out the realities of pursuing your passions. Most ideas fail. That’s an oversimplification though. The ideas don’t fail. What fails is the implementation of the idea. If an idea was obvious everyone would already know it. That means the inventor needs more than the skill of inventing. The inventor must also develop the skill of convincing (and recognizing when a great solution can’t find a problem to solve). The data show that persuasion is not as prevalent within the inventive. Many good ideas never get their opportunity to meet the people who need them.

(He’s also one of the most articulate and vocal back channel commenters to this blog and I encourage you to encourage him to post his responses as guest posts to this blog. The man has good insights and a slightly different perspective, which I appreciate – and which I think should be made more public. That offer is also out there for folks that have more to say than will fit into the Comments section. If you have something to say, say it, or better yet, write it down. It may get posted.)

The world does not lack ideas. Even in the small community that is Whidbey Island, I’m asked about a new project every week or so. Some are simple solutions to small problems. Don’t underestimate how much people will appreciate good granola or biscotti. People laughed at the concept of high-end coffee and now Starbucks is responsible for inspiring thousands to open independent gourmet coffee shops, and has dramatically improved the lives of coffee growers.

 

 

On a grander scale, graphene continues to amaze engineers and scientists with unexpected properties. Go check my Pretending Not To Panic blog for links. Graphene was an accidental and innocuous discovery. Ever since we began burning candles we’ve been making graphene, but we didn’t know it. It is deceptively simple. Graphene is simply a sheet of carbon. But, because that is all it is, it can do amazing things. A sheet of it isn’t like a regular material. Most materials are made of lots of chemicals, collections of molecules held together with chemical bonds. A sheet of graphene is a molecule. There is no upper limit to the size of a sheet of graphene. A house-size sheet of graphene would be a house-size sheet of one molecule. Molecular bonds are far tougher than chemical bonds. The frequently sited example is that an elephant standing on a pencil couldn’t poke through a sheet as thick as plastic wrap. Imagine roads and houses built from such a material, which just happens to be trapped carbon. Weirdly enough, use it right and it filters hydrogen out of the air, fuel from thin air. Use it right and it is waterproof, so that extra strong road and roof don’t leak. Bullet-proof clothes can become common, which raises additional issues.

As much as I am a fan of graphene, I am a fan of the people who are willing to take risks and examine the accidental outcomes. The stock market currently doesn’t acknowledge innovation. The great money pouring into the market and driving it to new records is coming in from large portfolios and is directed at conventional companies, or companies that received massive cash infusions at their start. To some, Microsoft and Apple may be innovative, but they are decades old. Most truly innovative firms are starved for funding, then either collapse or are bought out and absorbed. While it would eventually beneficial if their innovations were then championed by the larger firm, they are more likely to be sequestered so they don’t challenge conventional products. Fortunately, that doesn’t stop passionate people from innovating.

What do you see when you look at a seed? Do you see something to sprinkle on a bun? That’s where millions of sesame seeds go. Do you see something to plant? That’s how you can get another plant. Do you see a forest, that just needs fertile soil and patience? Innovators, dreamers, inventors, and entrepreneurs can be considered nuts. What do I see? Nuts grow trees. Trees grow forests. Forests can cover continents. Our world needs more forests. A person who simply needs the right environment and a bit of time to create something far larger, grander, and globally pervasive than one person – they are my passionate hope.

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A Quiet Graduation Day For GigOptix

Posted on February 10, 2015 by Tom Trimbath

Did you ever have a party, and had no one show up? I’ve almost had that happen. Did you ever have something to celebrate, and find yourself in a crowd of strangers? That’s happened more than once. GigOptix hit a critical day in the maturation of a corporation. They made more money than they spent. They made a profit. Based on the market’s reaction, no one cared – well, except for a few folks like me. The lack of thunderous applause doesn’t change the fact of the accomplishment. Maybe the celebration comes later.

There was a good chance that GIG, which is GigOptix’ stock symbol, was going to have a good day. Yesterday they announced profitability. Every company has two main phases, when they are young and spending far more than they are making, and when they are old and making far more than they are spending. There are infinite variations on that norm, but the day to celebrate is when a company graduates from the first phase and enters the second. In a simplistic view, the company and the stock go from being a speculation to an investment. Graduation day has some weird mathematics though.

Math geeks know what happens when we try to divide by zero. Things blow up; at least mathematically. FigureB When a company is losing money, even if they are growing revenues and decreasing expenses, the price to earnings are negative because the earnings are negative. When a company is making a profit, the price to earnings is positive; and can be used to evaluate the company and the stock. When a company crosses that point when revenues and expenses are exactly the same, the earnings aren’t negative or positive because they are zero. Divide by zero and the result is infinity. Infinity to and beyond is a great attitude, but a lousy mathematical situation.

Great debates transpire about what is the proper price to earnings ratio. Mature conservative companies may have a value of about one. Disruptive companies in an enthusiastic market can have ratios about twice their growth rate. A company that is growing about 10% a year is doing reasonably well and can have a ratio of about 20. (P/E = 20) Above that and the stock may be pricey. Below that and the stock may be a bargain. Pay attention to the words just used: debate, about, may. Bull markets shift the numbers higher while bear markets shift the numbers lower, and all that is altered by the general market versus the specific industry versus the specific competitors. Like I said, great debates transpire.

GIG has traded at about a P/E of one. GigOptix makes very high-end electro-optic switches. If that last phrase didn’t mean anything to you, don’t be surprised. GigOptix makes things that let us stream movies without hesitation, but they do it in a way that may be hard to understand. The demand is easy to appreciate. Very few companies can do what they do. I think their technology is disruptive. I think their industry is growing. I think they have a lot of potential. The market is pricing them as if they were a construction firm that isn’t growing. That may be because the analysts understand something I don’t. It may be because the analysts don’t understand the technology, aren’t allowed to look at such immature companies, or are too busy chasing around the mega-bucks from the mega-wealthy who are most interested in the mega-corporations.

GigOptix made $32.9M in 2014, a 14% increase over 2013. Take that 14% growth, multiply by 2 to get a P/E of 28, and realize that the E was nearly zero so the math falls apart.

That’s why I look at Price to Sales for small companies. If you want the details, go buy my book.Dream Invest Live cover In the meantime, I use a Price to Sales of about 6. Revenues ($32.9M) times 6 equals $197.4M That’s my estimate of GigOptix’s worth. Even after the good news, the market thinks GigOptix is worth $32.8M (based on market capitalization). Divide my estimate by the market cap and get about 6. If the market drove GIG from today’s $1.19 up to $7.16, I’d think it was finally recognizing GigOptix’s current conservative value.

But, it didn’t. GIG barely moved. About 118,000 shares traded, which sounds like a lot, but at $1.19 that’s only $140,420 traded. That’s not even a real estate deal.

And yet, that’s what I’m watching happen to many of my stocks, most of which were bought with the strategy of buying small companies and selling them after they are large.

MicroVision had good news too. A product that they are key to (PicoAir & PicoPro) inspired the following tweet; “The initial demand for #PicoAir far exceeded our forecast. We are working hard to get the devices to you ASAP. Thank you for your support!”

– @Celluon News like that should be news. MVIS was even quieter than GIG.

I sit back and watch good news go unnoticed, except by the loyal stockholders, and I wonder how much has changed. In rational markets, stocks move based on math and logic though with some psychology shifting the outcome. In irrational markets, emotions rule, the crowd rules, and math and logic are inconveniences. The markets are hitting record highs, but the markets represent the large companies and therefore the large portfolios. Every large company started small. Does this mean that these small companies will eventually reach such large valuations, or has something fundamentally shifted such that they won’t get that chance? Dendreon’s bankruptcy reached a critical point today too. They were small, disruptive, and technically successful; but failed financially (and arguably through purposeful intent.) Has the corporate, industrial, and financial immune response developed an actively negative reaction to anything new? Or, is it just a matter of time before the good news filters through?

When I bicycled across the bridge to Key West after riding across America, and when I stepped onto the bridge over Aberdeen’s train tracks after walking across Scotland I did so alone and relatively quietly. Both of those accomplishments deeply improved my life, regardless of the size of the celebration. The changes just took time to filter through. Maybe the same will happen here, as we pass through this investing phase.

I’ll quietly lift a glass to all three, GigOptix, MicroVision, and Dendreon for different reasons; and hope to have a more boisterous party some time soon.

PS To the fellow MVIS shareholder who was planning ahead, when in doubt, Glenlivet and the older the better. Some good things just take time.

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Dance When You Can

Posted on February 8, 2015 by Tom Trimbath

Swing, waltz, salsa, or just shaking it. Has it really been that long since I blogged about something light and easy? The local children’s theater held a dance-a-thon as a fundraiser. The last full day I took off was Christmas, and my next day off is hopefully some time before the end of February. (My Rule of 7 continues.) The holidays, and then the start of the new year are hectic times. We’re living in fascinating times. The effort and the issues are wearying. Life isn’t just working and surviving. Life is also about the dance.

Personal finance is personal, and lately my personal life has been driven by the need to make enough to pay the bills. The good news is that I’m almost making enough; but almost isn’t enough. The other good news is that various stocks in my portfolio supposedly can do well in 2015; but five weeks into the year they haven’t. My other blog, Pretending Not To Panic, is gaining in popularity; and the research for it continues to uncover reasons for great optimism and great pessimism. Sorting it all out has given me a headache that was exacerbated when I tried to decide which timely topic to write about tonight. It took a bit of homemade beef stew and a nice glass of boxed red wine to remind me that sometimes the most important thing to do is to forget to do the things that seem important.

When I dance, I smile. That’s simple enough. Not everyone likes dancing, but I do. Throw a multitude of issues at me and, except while in the depths of my personal financial downturn, dancing with a partner makes me smile. The rest of the day can be intense analyses or tedious research; but, eventually that has to be put aside. What is really important? Being responsible is really important; otherwise, there’d only be a lottery ticket’s chance of me paying my bills. Being responsible is more than just responding to money issues. Being responsible to community, to other individuals, to myself, is also important.

Responsibility isn’t just altruism. Society and civilization survive because we respond to each other. If everyone only worried about themself then everyone would have to be a farmer, rancher, doctor, policeman, mechanic, and self-schooled in a long list of craft skills.

Responsibility is, however, also about self. If a person doesn’t take care of themself, they can’t take care of others. The harder I work, the longer I go without a break, the less effective I become. Health, relationships, and attitude degrade when the only thing in life is survival. Take it too far and words become more difficult, simple math requires a calculator, schedules are missed. Fortunately, the solutions aren’t expensive.

A couple evenings ago I went for my walk. The Powerball lottery was up to over $300,000,000 and I had a ticket. (Now it is over $400,000,000; so, I guess I didn’t win the jackpot.) As I walked I thought about how I would indulge myself. It was a fun exercise, especially when I realized that it would cost far less than $1,000,000 for my indulgences: a campfire by the beach, I already do that in my neighborhood; a long hike or ski trip, which might cost a few hundred for some new gear; a long schedule of massages, which cost less than many people spend on dinner. I enjoy my own cooking, so maybe a nicer kitchen and better ingredients. I enjoy talking with my friends, especially when the topics are substantial; so, maybe some extra wine or whiskey as lubricants. (Hey, this is Washington. We can add cannabis to the conversation.) The greatest indulgence is the one I evidently least afford right now and that is time. Having the bills paid, the debt eliminated, the repairs completed would ease my mind and my time so I could sit and enjoy whatever.

Oh yes, and there’d be dancing. There’d be dancing because, as I said above, when I dance I smile. Finding that one simple thing that creates that reaction is precious, and highly individual and personal. Amongst the great concerns about the planet and its people, we lose something if people don’t also find what makes them happy. I’m lucky. Most of what makes me happy are things that aren’t things. Experiences are marvelous. A few things may help them happen. (I really appreciate good dance shoes.) Experiences are actions. They take time. Life is nothing but time. Experiences are living.

My needs and wants may disappoint the advertisers, but they can go sell things to people who find joy in things. Go back and check my review of the Super Bowl ads. Very few of them made a direct connection between a thing and joy. They make allusions to enticing notions, but almost everything uses sex to sell, and almost none of the things had anything to do with sex. At least the Fifty Shades of Grey and Victoria’s Secret ads weren’t as much of a stretch.

There’s a storm coming in tonight. The rain isn’t here, yet. I’m going to close now, so I can spend a bit of time doing something I enjoy. The issues and concerns probably won’t change much (though earthquakes do happen, so you never know). I suspect the bigger change will be in myself. And, who knows? Maybe it will start raining and I’ll start dancing. As long as it makes me smile.

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Real Wealth Inequality Worries

Posted on February 4, 2015 by Tom Trimbath

A cascade of thoughts can become an avalanche of insights from one piece of information. I’ve been tracking wealth inequality for years. Data drives most of the thoughts, but after consuming dozens of articles and videos it only takes one extra story to crystalize my concern. The snowball that started the avalanche was a local NPR story. The insight convinced me wealth inequality is different this time, despite what some say it isn’t just a bunch of poor people complaining, and the situation is getting extreme enough that something is going to change whether by choice or chance.

The global story that caught my attention was the fact that about 80 people have as much wealth as the poorest 3,500,000,000.

The local story that caught my attention was that less than 5% of the people moving to Seattle are considered middle class.

We become numb to data. If we weren’t, Federal spending and personal priorities would shift from destruction and junk food to construction and healthy habits. Eighty people have this. Five percent fit here. Just numbers. Trends can be ignored, too; but maybe I notice them more than most.

Eighty people own half the world’s wealth. Four years ago it was 388, and we were shocked. Before that it took so many to not warrant being counted. Unfortunately, at this rate, in four years half the wealth will be owned by 17 people. I doubt that it would ever get down to 1 person owning more than half the rest of the species; but ask yourself how few would it have to be before you thought the situation should change.

Only 5% of the people moving to Seattle and King County are middle class. That’s odd enough, but if middle class is a narrow definition, then a small percentage makes sense. Middle class was defined as making $35,000 to $125,000 per year. That’s a broad range. The good news is that the area is attracting a lot of high income jobs. The bad news is that the majority of new residents make less than $35,000.

As wealth inequality increases, and as income inequality increases America loses its status as a classless society. When there was an even distribution of income and wealth, there was mobility, hope, and a reason to work harder. A chasm, a moat, is widening that can’t be crossed with attitudes and stereotypes that were valid ten years ago.

The main reason I am worried about the economy is that, as wealth accumulates, spending stagnates, businesses stagnate, jobs stagnate, incomes stagnate, the country and the world stagnate.

Give a billion dollars to a multi-billionaire. If they spend it, the only way to spend all of it in a year is to buy very expensive things from other very rich people. To spend a billion dollars in a year a person has to spend $2,739,726 every day. Buying a sports team isn’t enough. Buying companies works, and if done right, creates more wealth – which exacerbates the inequality. The greater likelihood is that the billion won’t get spent, and the life of the multi-billionaire wouldn’t change.

Give a billion dollars to a thousand people and they each get a million. It’s possible to spend a million. Many would. Many would also say thank you and reinvest it because so few folks have retirement accounts. Much of the money would get spent, and many people could relax a lot more. There might even be a vacation in there.

Give a billion dollars to a million people and they each get a thousand dollars. A million lives would create a million variations. For some, a thousand would be nice, but soon blends into an existing portfolio. For some, a thousand would let them take a short vacation, or fix the house or car, or pay down a bit of debt. For some, it would be the greatest windfall of their lives and would arrive just in time for some to avoid bankruptcy, foreclosure, default, homelessness, or hunger. A lot of the billion would be spent.

Give a billion dollars to a billion people and most Americans wouldn’t notice, but large parts of the world’s population would immediately put the money to work. Very little would languish.

Wealth is accumulating. Productivity is up, but wages are flat. Profits are up, but wages are flat. Jobs are up, but many are for lower wages, or temporary, or part-time, or without benefits.

The trend is continuing. Wealth continues to accumulate. Luckily, at least the American part of the story happens within a representative democracy. With enough votes, anything can happen; and while the lower classes are growing, the power remains elsewhere. A few of the ultra-rich are advocating for change, but they are in a minority within their ranks.

Ironically, a possible source for change may come from the recently ultra-rich. The ultra-rich shrank from 388 to 80, which means there are 300 people who are now excluded from that club. Just a bit poorer than them are the multi-millionaires who may be realizing that they won’t get to be billionaires. They don’t need the money, but humans have other motivations. People with tens of millions or more are also more likely to be able to exercise the money is speech is power process that is operating in America’s government and media. While the greatest collection of votes may be in the lower class, the greatest collection of political power may be in the bottom 99% of the 1%.

Historically, there have been very few peaceful resolutions of wealth inequities. I look forward to hearing examples. Asking around, the most common example I hear is the French Revolution, the source of the fictional “Let them eat cake” and the source of the very real guillotine. Wealth redistribution is not a case of someone writing billions of checks or some hacker redistributing cash. Much of the wealth is in real estate, stocks, bonds, and commodities. Even if the wealth of Microsoft was redistributed by giving one share of MSFT to everyone one the planet (with about a billion shares left over), everyone would get about $42. The stockholders meeting would be awesome and could stand in for the United Nations. It is unlikely to happen. The wealth has taken decades to accumulate. It might take just as long to distribute.

My worry is that I see no significant effort to curtail the trend; the trend accumulates wealth outside the mainstream economy; any movement of that wealth tends to be from portfolio to organization, not from person to people; and that a peaceful resolution has no historical precedence.

The timing is not academic. At this rate, with potentially only 17 people owning half the wealth in four years, the imbalance within lives and the economy should become more pronounced. I have a difficult time believing that political pressures or revelatory compassionate responses of the ultra-rich will move faster or prove stronger than the possible populist desire for dramatic change.

Pardon me as I sit back and continue pretending not to panic.

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