Monday, August 31, 2015
Saturday, August 29, 2015
Financial Fridays: The WTF! On This Stock Market ‘Crash’
Shit, I’m about to break all the rules of selling and marketing but I don’t care. People need to stop being fooled. It has to end.
I write every day. I publish something here and on my email list maybe 5-6 times a week.
These emails are very important to me and they are about 500-2000 words. Short, to the point, life lesson, anecdote, and what I love to do more than anything in the world.
The emails go for free to about 200,000 people a day.
But there are some messages people need to know to further enhance the work they are doing, whether its financial or starting a business, or part of my daily practice of physical mental emotional and spiritual health.
I put my heart into that also.
So I write up to 10,000 words once a month for that. That’s probably too much. Almost like a mini-book. But it won’t fit into a Facebook status update.
For instance, this month, I write about 20 reasons for the crash and I found a super guest writer to basically write the BIBLE of angel investing.
And I have about 10 people helping me research, do the tech infrastructure for this, etc. And the whole thing I sell for about $5 and some renewal rate a year from now with money back guarantees.
But I’m not writing this to sell. If the guys I work with find out (and they will once I hit publish), they will probably be upset at me.
I’m sorry: Jeff, Mark, Adam, Dillon, Tim, Emily, Mae, Mary, David, Garin, Peter, Ksusha, Dominic.
Don’t buy it. I don’t care.
I just want to tell people how much BS the news vomits every day and how it’s effected the markets.
Instead of the 20 reasons I wrote this month, let me give the 3 or 4 most important (all 20 took up 5000 words, with another 5000 words on angel investing).
A) CHINA
China growth is slowing. So the Wall Street Journal, which I used to write for, is saying “Chinese economy reeling”.
Oh my god. Please please please. Stop that.
China is GROWING. It used to grow 10% per year because it was communism and 2 billion people were farmers.
Now it’s “going down” to 7%.
Horrors! The world is over.
But what if it continues?
Who cares!?
Guess how much we “sell” to China per year. I put “sell” in quotes because newspapers make it sound fancy and say we “export”. BS economics writers.
Less than 1% of our Gross National Product is sales is to China.
So even if CHINA DISAPPEARED COMPLETELY the US would still have a growing economy.
Oh, did I mention China is not disappearing. It’s GROWING. At a faster rate than the United States.
B) INTEREST RATES MIGHT RISE
Are you kidding me?
Let me explain simply please.
The Fed lends money to banks. When the Fed rate is low, savings rates are low.
When savings rates are low, people put money in higher risk stocks than in savings.
When savings rates are high (7%+) people put money in their savings account because its safer (it really is).
That’s why people say “when interest rates go up, stocks go down.”
Oh my god! (sorry for the repeat).
The Fed Rate is at 0.25% and has been for six years.
They SHOULD raise it to 0.5% or even 2%. Nobody is saying, “Oh, now I should move out of the stock market and get 2% savings rates.
And, by the way, the Fed only raises rates when every indicator suggests that companies are growing at a fast rate.
Let’s look at recent times the Fed raised rates. Through most of the 90s (the markets went straight up). 1999, the Nasdaq 100 went up almost 100% over the next year (and value stocks continued to go higher ever after the crash).
From 2002-2007 the Fed raised rates every chance it could get. The market went constantly up.
And none of that was from such a low base of 0.25%.
So newspapers, PLEASE STOP LYING
C) IS THIS LIKE 2009?
In March, 2009, the market hit an all-time low.
Fortunately, I ended it and saved the world. No kidding.
I lived at 40 Broad Street, directly across from the New York Stock Exchange.
On March 9 I went out and bought 100s of Hershey’s chocolate bars.
Chocolate makes people feel like they are in love. And willing to take risks.
All of the traders walking into the exchange were depressed. They were all looking at the ground.
I started to approach with my chocolates. At first the guards stood up and gripped their guns. Dogs were barking.
But then I handed out chocolates. Traders would look up, smile, and take the chocolate. Nobody refused me.
And yes, that day was the bottom of the market. I documented on Twitter before I started handing out and when I was done.
It’s not bragging if it’s true.
BUT, I can’t take all the credit.
People blame the 2009 crash on the housing crash. This is not true.
Housing prices peaked in 2006. The housing crash was only one small piece of the puzzle in the 2009 crash.
I won’t get into all the details of how banks account for mortgage debt.
But basically, the FASB (financial accounting services board) changed the rules mid-flight on how banks should account for their debt. It was a horrendously strict rule change that forced banks out of business.
When did they make this rule change? Late 2007, at the peak of the market. Then the real crash happened: the banking crisis.
Everyone begged them to change the rules back. When did they change it back? March, 2009. Coincidence? The market went straight up.
—
In my newsletter coming out on September 1 I give 20. I wish I could give all 20 here but there’s not enough space.
But three is enough. We covered the main issues: China, Interest rates, and the post-traumatic stress everyone is feeling about 2009.
I admit I simplified but this is just a simple post. I’m happy to answer questions and I go into more detail elsewhere.
Finally I called a friend of mine who is the head of wealth management at one of the largest (top 3) banks in the world. He’s the real deal and I just make status updates.
He said, “our traders saw everything. Hedge funds trying to protect their fees would automatically trigger millions of sell orders and that kept triggering sell orders. But now it’s done.”
I get it. I used to run a hedge fund. This is how it works.
I don’t know if it’s done. Everyone says the “market crashed”.
Guess what. The market is FLAT in the past 12 months. What crash? So it can go up or down from here.
But here’s what we know at the very least:
- It’s not about China!
- It’s not about the Federal Reserves Interest Rate!
- And it’s nothing like 2009!
I wish I had room for all 17 items. But if all you know are these three, avoid the newspapers, take a deep breath and relax.
The world is a hard place to live in.
People always say, “you’re the average of the 5 people you spend time with”.
But this is true also: “you’re the average of the five things you read”.
If all you do is read newspapers (and the major ones lie the most) then you will mis-informed and in a constant state of anxiety.
I know I was until I STOPPED reading them. Then I felt free.
And then I ate chocolate. And then I fell in love.
—
[Oh, and so Jeff, Mark, Adam, Mae, Mary, Emily, Tim, David, Dillon, Garin, Peter, Ksusha, Dominic:
Don’t kill me, here’s the link to the $5 offer where you get my book for free, the other 17 reasons, the text on angel investing, and all my back and forward issues, with a full money back guarantee.
Believe me, I don’t make anything on $5 and you can get your money back the second you download everything anyway. Or wait for September 1 when that 10,000 word letter goes out. Then get take your $5 back.
Go for it. (sorry Jeff. Please don’t be mad. This will help people). ]
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Friday, August 28, 2015
EP: 128 Josh Foer: Mastering Memory
Today James welcomes Josh Foer to the podcast. Josh is a U.S. Memory champion, award-winning journalist, and bestselling author of Moonwalking with Einstein, which details his journey to becoming a U.S. memory champion.
Taking some of the ancient memory techniques he learned during a yearlong trip to Europe, Josh was quickly able to master techniques that have not yet made their way across “the pond.”
Having this advantage over American competitors allowed him to become very successful in a short amount of time.
Once he brought these European techniques back to the U.S. and started sharing them, the U.S. record for memorizing a deck of cards went from 1 minute 40 seconds to just 30 seconds.
One concerning question that comes to mind for both James and Josh is whether some of the modern technologies in our current world are reducing our capacity to remember things.
Is Googling making us less smart?
And this is not a new question, it dates all the way back to the days of Socrates, and the advent of the written word. These concerns may be valid, but it often just means a change in both how and what we remember.
One of the most common questions that Josh gets is about remembering people’s names. For this he has a great memory hack: Create a secondary association with the thing you’re trying to remember. For people’s names this can be a funny association with the sound of their name.
For prose, associate it with a song or rhyme. Anything you can do to give your brain another method of associating will help you better recall it later on.
Resources and Links:
Moonwalking with Einstein by Josh Foer
TED talk – Feats of Memory Anyone Can Do
Nelson Dellis – Current US Memory Champion
The Pridmore System for Card Memorization
Get in Touch:
To learn more about Josh and stay up to date with his newest book, check out joshuafoer.com.
Josh is writing a second book on Hunter Gatherers, which explores how the oldest remaining tribe operates and compares to some of our more modern members of society. Sign up for his mailing list to learn more about it and when it is coming out.
You can also connect with Josh on Twitter @JoshuaFoer.
Special Note: Both Josh and James will be presenting LIVE at next month’s Stansberry Conference in Las Vegas. If you’re interested in joining them and over 30 additional speakers for two full days click here.
This year’s Conference will take place at one of the newest and most luxurious destinations on Las Vegas Boulevard — the Aria Resort and Casino.
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The 1% Rule for Creating All Habits
She kept throwing food at me. I was 19 and bought two tuna bagel sandwiches for myself for breakfast. That was the way I rolled.
We were arguing. She took a sandwich out of my hands and threw it all over the street. Tuna everywhere.
I bet the Old Man and the sea never knew he was catching tuna so it could lie dead in pieces in the street because of my ex.
Everyone was watching and sort of laughing. I bet everyone was thinking, “He’s the man!”
No. Scratch that. More like, “What a loser.” Or, “thank god that isn’t us.”
I think I wanted to die.
Then there was the time in the movie theater. I had a large popcorn. I didn’t want her to touch the popcorn until the movie started.
I’d get very upset if popcorn was started before the movie. So I said to her when she reached for it, “No!”.
She took the popcorn out of my hands and threw it all over the theater.
If I could say “Advice to myself at 21” would I avoid her? Of course not. Without her, maybe only now would I be with a woman who threw my food everywhere.
I gradually started improving what my line was in terms of what I could handle in a relationship.
“I don’t want someone who throws my food everywhere”. This became rule #1.
Over the next 20 years I felt I got better and better. Sometimes I slipped. But mostly I got better.
But it took 20 years.
I wish I could go back and tell myself one thing: nothing is going to change for you tomorrow.
Diets don’t work tomorrow. But every diet works.
Habits don’t change in a day. But 1% a day makes every habit work. Every.
The reason is: they work if you do a little each day. If you relax and give yourself permission to only improve a little each day, then a good habit works.
It’s permission to improve. It’s also permission to fail. Because when you first start something, you’re on day one.
If you want to succeed at anything, you have to give yourself permission to fail twice as much as you thought you would.
If you insist, I need to change RIGHT NOW, then it won’t work. You’ll only get worse.
If you insist the habit changes tomorrow, then the habit will certainly fail.
Coolio, the rapper, wrote lyrics every day for 17 years before having a hit.
Commander Hadfield, the astronaut, improved his skills every day for 20 years before getting into space.
Kurt Vonnegut wrote every day for 25 years before he had a major bestseller.
Even Mozart, despite being a prodigy, wrote music for 10 years every day before becoming a true master.
Improve a little each day. It compounds. When 1% compounds every day, it doubles every 72 days, not every 100 days. Compounding tiny excellence is what creates big excellence.
You can’t be a master in one day. You have to improve a little every day.
Picasso created 2 works of art a day. That’s 50,000 in a lifetime. It adds up.
“But it’s too late for me!”.
No, it’s not. Compounding creates fast results.
If I read 5 pages a day from non-fiction books, then in a year I will have read 1830 pages of knowledge. And each page I read will build upon the pages I’ve read before.
And it’s 1830 pages 99% of people won’t read. Most people don’t pick up a book after age 20.
If I write 1000 words a day, then in one day that’s nothing. In one year that’s the equivalent of 6-8 novels.
Also you can also decrease 1% a day. We can say, “aww, it’s only one day. Don’t pressure me!”
Such an easy choice. It seems trivial. 1% up or 1% down. But it sneaks up. And then we’re old and lonely.
Every day matters.
When I was losing all of my money, and hanging around with the wrong people. And taking the wrong drugs and dating the wrong people, It’s because I was saying, “it’s just 1 day”. Or, “I don’t need to improve every day, it adds up to nothing”.
Because I couldn’t see how it was adding up at first. And that became my trademarked technique for losing everything, For losing my mind. For being lonely.
It was the one thing that worked: 1% decrease a day cost me everything. I had to get back to 1% up a day.
The 1% Rule can be applied to everything. If I spend 1 less minute feeling regret and use that to feel gratitude, how much better for my stress levels will that be in one year’s time.
Stress is 100% reverse correlated with longer healthier happier life. With more money. With more love. With more creativity.
Every habit can be built using this technique.
Thoughts are in the head. Thinking, “this seems like a good habit” is a start. Reading about it is a second start. But…
Actions are outside of the head or body. Take 1% action per day.
More than that and you’ll give-up (“diets don’t work!”). Less than that and it might take too long (“diets don’t work!”).
It doesn’t happen in one day. There are no goals. There’s only practice. Practice never makes perfect. Practice makes happy. Practice makes habits.
I started writing 23 years ago. Every day I read a little. Every day I wrote. I wanted to get better.
I was very bad at the beginning.
I just looked at some fiction I wrote 23 years ago. WOW! Very bad.
Every day I wake up and think, how can I be a little better? Just a tiny bit. Because I know it will make me feel good today to practice. And I know it will add up.
- Can I read a little more
- Can i write a little better
- Can I walk a little more
- Can I improve my emotional relationships a little more
- Can I eat a little better (just a tiny bit. One time I switched from all-meat to all-raw. Blehh!)
After Tracey threw the popcorn at me in the movie theater I thought to myself, “That’s it. I’m over this.”
I went to the popcorn guys. I got another larger popcorn. I sat on the other side of the theater. Betty Blue was the picture. I can remember.
Did I break up with her? No. I was a chicken. We stayed together another two years. I didn’t have the strength to change my life in one day.
Or I could measure it in broken windows. Three broken windows later we broke up.
Time is relative.
But every day I got better. Now I’m happy
Unless Claudia throws popcorn at me (“wait until the movie starts!) at the movie theater later today. Then I’m back to square one.
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