The University of Chicago "Bump" for iPhone: Innovation Can Be Simple

Today, I read an article in the Chicago Tribune that caused me to experience one of those "slap your head - why didn't I think of it!" moments.

President Obama, a former U of C professor, helped to popularize the fist bump.

Now, two students at the University of Chicago business school developed a company called Bump Technologies. Their iPhone app, called Bump, lets users transfer data from one iPhone (or iPod Touch)to another by bumping them.

You can transfer all your contact info or just some data (like phone numbers).

This shows that there are always simple and elegant opportunities waiting to be capitalized on.

Nassim Nicholas Taleb, Financial Risk, and Black Swans

The February 2 issue of Forbes featured an article on Nassim Nicholas Taleb, the "Oracle of Doom" who wrote the best selling books "Fooled by Randomness" and "The Black Swan: The Impact of the Highly Improbable".

For years, he has been warning that the world is like the titanic - "sailing at night in iceberg-strewn waters, just a few feet from diaster."

Taleb, an options trader, complains that the financial crisis was caused because Wall Street "is in the business of hiding risk, and greatly underestimates the probability of outsize moves."

The name of the book, "Black Swan", comes from the fact that Europeans had only ever seen white swans - until black swans were found in Australia.

Besides Wall Street, Taleb also blames economists who were "overconfident" that their risk control models falsely showed that banks were profitable and in control.

He is a big believer in "fat tails" - or the idea that events predicted with low probability under the standard bell curve, actually occur more frequently.

As an investor, for both his personal account and his hedge fund, Taleb puts most of his money in Treasurys, and uses the rest to bet on volatility with options. He sells options that pay off with moderate volatility, and buys options that pay off with high volatility.

This strategy "has delivered a string of mediocre results interrupted occasionally with spectacular years" like 2008. He told Forbes that he personally took home "in the low eight figures" last year.

Taleb has been criticized for giving general warnings of doom, but no details about what to do. In response, he offers these suggestions for reforming the system:

1. Complex derivatives (like swaps) should be banned because they are tools for hiding risk.

2. There should be a two-tier financial system. Banks that might need to be bailed out someday should be treated like utilities, and only allowed to invest in simple stuff. Hedge funds that invest with private money could so more sophisticated investing, but with the knowledge that they will never be bailed out.

Don't Be Too Pessimistic About the Financial Crisis

"The most dangerous words in investing are: 'This time it's different.'"

- the late John Templeton

Usually, investors are warned against excessive optimism during bull markets, but Forbes publisher Rich Karlgaard recently had a column where he cautioned against excess pessimism in bear markets.

He went on to write about 1975. At that time, even Berkshire Hathaway stock had been cut in half. New York City was almost bankrupt, and the mood was extremely pessimistic.

As we all know, New York City and Warren Buffett recovered just fine.

Then, as a further mood lifter, Karlgaard mentioned a long list of successful companies that were started during hard economic times:

1. General Electric - one year before the Panic of 1893

2. Disney - the recession of 1923-24

3. Hewlett-Packard - 1939

4. Hyatt - the recession of 1957-58

5. Intel - 1968 (year of assassinations and political upheaval)

6. FedEx - launched during the Arab oil embargo of 1973

7. Microsoft - 1975

8. Apple and Genentech - 1976

9. Wikipedia - 2001

Seychelles: Tropical Paradise Files Bankruptcy

The Seychelles Islands, the Indian Ocean archipelago off the African coast, filed for bankruptcy.

Long the playground of the rich and famous, the Seychelles' private and public debt total $800 million - the size of its whole economy. With a population of just 87,000 people, the Islands might now be the most indebted country on earth.

The country got into trouble due to decreased fishing and tourism revenue. Last year, the islands defaulted on a $230 million euro-dominated bond arranged through Lehman Brothers (before its collapse).

Can Airlines Differentiate Themselves By Managing Ground Delays?

These days, airlines are having a hard time.

First, it was high fuel prices. Then, just when the airlines locked in fuel hedges, oil prices dropped - and the airlines were stuck paying above-market rates.

Now the recession is keeping passengers away, and news of AIG greed is causing companies to cancel trips to retreats and trade shows.

On top of these issues, overcapacity at airports like O'Hare make flight delays inevitable. All it takes is a little bad weather to cause major problems.

Notice that I highlighted the last part in bold. The reason is that, if I was running an airline, that condition would present me with the opportunity to differentiate my airline.

While the in flight experience is governed by strict regulations, airlines are free to innovate and get creative on the ground.

With all things being equal, who wouldn't want to fly out of busy airports with the one airline that takes care of delayed passengers.

The thing I would do is interview the ground crews and customers to find out what goes on during delays. What are the frustrations that come up again and again. My guess is communications, comfort, and ease of making alternate plans would be near the top.

Then, since delays are more common and inevitable, I will organize around this. I would have teams at each airport dedicated to delays.

Since airlines don't have much money these says, I would partner with companies that deal in comfort and want to attract travelers. Hotels, for example.

Suppose my airline partnered with Hilton to create a special lounge at O'Hare - just for passengers on delayed or canceled flights.

The lounge could be set up with sofas, recliners, desks, phones, snacks, and airline reservation people. The bulk of the costs could be picked up by Hilton. In this way, they will have branded advertising in the middle of the airport. This would be "active advertising" - instead of being intrusive, they will be providing a free service which would build goodwill.

Sean Penn, Jim Carrey, Benicio Del Toro as Larry, Curly, and Moe?

Possible Three Stooges Movie...

Madoff's Prison Number, Random Coincidences, and Lottery Picks

After Madoff pleaded guilty, 501 people played the last 3 digits of his prison number (61727-054) in the March 15 New York lottery - and won. This is another reminder that random lottery numbers can create a lot of coincidences: On Sept 11, 2002, the first anniversary of the 911 terror attack, the winning NY lottery numbers were 9-1-1. On Nov 12, 2001, American Airlines flight 587 crashed in Queens.  The New Jersey midday lottery drawing was 5-7-8 and the evening draw was 5-8-7.

Amazing: Paraplegic Can Walk After Spider Bite...Then Arrested On An Outstanding Warrant

A Guy who had been in a wheelchair for 20 years (after a motorcycle accident) can walk now after being bitten by a poisonous brown recluse spider: http://www.youtube.com/watch?v=c29hME7P0ig The story takes a twist because he was arrested the next day on an outstanding warrant.

Excellent 20/20 Special Edition Episode with John Stossel

A few days ago, ABC showed a special edition of 20/20 with John Stossel, who is a skeptic of big government.   This is worth watching. The episode is on You Tube, divided into one video for each of the 6 topics in this special edition: Part 1 - The government's financial bailout and why it's hurting the economy more than helping it. Part 2 -  Private highways providing much better quality roads than governments. Part 3 - Medical marijuana, the federal government's fight against it despite states' approval. Part 4 - Obama's universal pre-kindergarten program will worsen our education system. Part 5 - Why the border fence is a multi-billion dollar waste. Part 6 - Is the American Dream and middle class dead? A recent college graduate gets successful without using his degree, starting with $25 in his pocket.

It's Still Early in 2009, but I think We May Have Found the Knucklehead of the Year...

This Swedish truck driver at a furniture maker tried to warm up by taking a quick ride on the conveyor belt through the shrinking oven. Unfortunately, his weight broke the conveyor belt - stranding him in the middle of the 365 degree oven. He got dragged to safety, but got seriously injured Now the Swedish Work Environment Authority is playing nanny and investigating the company - that maybe they should have had surveillance. Come on, how much can you guard against utter stupidity?

Carnival of the road to financial independence #5

My article on my latest completed round of web site sales page testing is included in the
Carnival of the road to financial independence #5
I'm very impressed - this carnival has a lot of great articles!

Video of the New Japanese Fashion Model Robot

The Japanese are pretty advanced at robot design.

They have an aging population and I think they want to eventually depend on robots instead of immigrants.

More Republican "Family Values"

According to a recent Tribune article, Gary Skoien, Palatine Township GOP committeeman and former Cook county Republican chairman, sought a restraining order against his wife. She was charged with attacking him over the weekend after she discovered that he had invited two women to their Inverness home. Skoien said that two female friends were visiting around 1 am Sunday, when his wife, who had returned home a bit earlier, came downstairs and attacked him. The police report, though, says that his wife Eni became angry when she discovered that "Gary was downstairs in the children's playroom with two prostitutes." The report says she punched him and hit him with a guitar. (And, before anyone complains that I only pick on Republicans, I know that democratic politicians are hypocrites also - everyone knows about our former governor Blago)

Indian Mom

A Mom comes to visit her son Kumar for dinner...who lives with a girl roommate named Sunita. During the course of the meal, his mother couldn't help but notice how pretty Kumar's roommate was.  She had long been suspicious of a relationship between the two, and this had only made her more curious. Over the course of the evening, while watching the two interact, she started to wonder if there was more between Kumar and his roommate than met the eye. Reading his mom's thoughts, Kumar volunteered, 'I know what you must be thinking, but I assure you, Sunita and I are just roommates". About a week later, Sunita came to Kumar saying, 'Ever since your mother came to dinner, I've been unable to find the silver chutney jar.  You don't suppose she took it, do you?' Kumar said: "Well, I doubt it, but I'll email her, just to be sure.' So he sat down and wrote:    Dear Mother, I'm not saying that you 'did' take the chutney jar from my house, I'm not saying that you 'did not' take the chutney jar. But the fact remains that it has been missing ever since you were here for dinner. Love, Kumar     Several days later, Kumar received an email from his Mother which read,   Dear Son: I'm not saying that you 'do' sleep with Sunita, and I'm not saying that you 'do not' sleep with Sunita. But the fact remains that if she was sleeping in her OWN bed, she would have found the chutney jar by now under the pillow.... Love, Mom. Lesson of the day: Don't Lie to Your Mother.... especially if she is Indian

Another Round of Website Sales Page Testing Completed

I just completed several additional rounds of split testing on my Stock Trading Riches website, similar to the testing I did last March.

In last year's test, I pitted the original long one-page site against both a short one-page site, and a multiple short page site. The original page beat them badly.

In the recent tests, I compared:

1. A repeat of last year's test. This was a waste of time - I got the same results as last time, and just need to accept the fact that my "amateurish" page works - there is no reason to feel envious of professionally designed pages.

2. The large picture of my book cover against an Amazon widget. The big picture won.

3. I tested whether to continue giving the spreadsheet as a bonus for purchasing the book, or giving it as a free download from the sales page.

(First, a little background. When developing my system, I had written the testing scripts in Awk and Perl. I included these scripts in the book, along with instructions for downloading free versions of Perl and Awk.

A reader of my book, who works at a hedge fund, wrote to me and suggested the spreadsheet. It turns out that a lot of traders and investors like using Microsoft Excel. So, thanks to the reader, I now have an Excel spreadsheet version.


The results of allowing anyone to download the spreadsheet were that only a small percentage of readers downloaded the spreadsheet, and sales decreased.

Now, the sales decrease was similar to the decrease early last year, when I briefly offered my book for sale as an Ebook. This reinforces the conclusion I reached then, that sales are maximized when a prospect to your sales page only has one decision to make.

Here I was again offering two choices: yes/no to buy the book, and yes/no to download the spreadsheet.

4. I tested opt-in boxes and free offers. I created a whole series of autoresponder messages. My personal feeling is that I don't like autoresponders. In this case, it proved true. My long one-page sales letter beats opt-in - even when including orders that came in during the autoresponder series.

Conclusions - why my website sales page works:

1. To put it a little crudely, the Stock Trading Riches sales page gets in your face. It uses a large font in bold. It uses a large picture of my book cover, which beats the smaller picture in the Amazon widget. But, people read it. I get a lot of sales and Google Analytics shows that the average time on the page is high - almost 5 minutes. It beats the time people spend reading individual blog posts.

2. The text is broken into "chunks" with red subheadings. I use yellow highlighting. This makes the page easy to scan. My tests on this long page versus multiple short page site shows that readers are more willing to scroll than click links.

3. The page focuses on one thing - promoting my book on Amazon.com. Whenever I add any other links besides the link to the Amazon.com page, sales go down.

3. There is a call to action. Near the end of the text, I actually tell the reader to invest in their future and buy the book from Amazon.com.

Rare Superman Comic Sells For $317,200

It's a copy of Action Comics #1, which is the first comic book with Superman. This is the highest price paid for a comic book, but they think it might have gone at least $100,000 higher in a better economy. The seller bought it in the 1950's, at the age of 9,  from a secondhand store for 35 cents. Here is a link to the article.

Troops to the Mexican Border?

They should just legalize drugs and get rid of this second Prohibition...   Looks like Mexico is becoming unstable like Iraq or Afghanistan , with all the drug wars and killing on the border.   The drug cartels are now crossing over and killing people on the U.S. side of the border.   Obama is considering sending troops   http://www.mcclatchydc.com/227/story/63800.html

Sears Tower Getting a New Name

http://www.npr.org/templates/story/story.php?storyId=101808507&ft=1&f=1006

A Voice of Reason In Government: Ron Paul on D.L. Hugley's Show

Bank Bailout Not Working

If they actually did think that the bailout was meant to help, I hope they now realize it is a waste of money.  I think the government will have to bite the bullet and acquire Citigroup (and maybe BofA), restructure and break it up, wipe out the shareholders, and make the bond holders whole.  Then, sell the restructured companies back to the public. From yesterday's Washington Post: Shares of Citigroup stock peaked in 2006 at $55.70, which gave the company a market capitalization (price of stock times number of outstanding shares), or value, of $277.2 billion. Today, Citigroup's market cap is $5 billion. But keep in mind that the federal government has already plowed $45 billion into Citigroup, which means the company is worth far less than the actual amount of cash it has received. Astounding. The bank has become a black hole. Cash goes in and never comes out. Citigroup and Bank of America are deemed by most analysts as being the sickest of the big banks -- the ones whose balance sheets are most poisoned by toxic assets.

Square Root Day

Today is Square Root Day (03/03/09).