You can easily become a numerical klutz by assuming you have better numbers to calculate than the ones that are most commonly used across an entire field.
Tag Archives: Data
Cognitive Offloading Test.
I’m always afraid that my use of ai will make me dumber. This being the case I’ve tried to create a way to challenge my own thinking. Unfortunately it by using ai to conduct thought experiments. How contradictory is that? The idea is having ai give you a once sent idea to solve or explain. The goal? Not parroting back what is generally known. Pushing to make sense of whatever the prompt is. Perhaps this entire process is cognitive offloading at its finest. Below is the “test”.
Chatbot used? Co-pilot.
Prompt:
Short form video is making people less intelligent.
Me: Not necessarily. It could be conditionally anchored to the individual and not an entire demographic. What short form video likely does, more than anything, is create shorter attention spans. Which could create cognitive leakage. For example, watching a long form video you get the opportunity to learn a lot of things, over a long duration of time.
Because of how long you’ve been processing the video, you either absorb what is interesting or you zone out several times during the video. With short form, it could warp the way you process information. It’s short so you might literally adjust how you absorb what is being seen and or heard on the screen. Even as I write this, I feel my brain drifting away from the core idea. This is what happens in real time to everyone.
We also have a concentration mechanism in our brains that is limited to high level focus. Once that focus wears off one must intentionally shift focus on the target again. This takes energy in the form of neural activity, as well as actual energy expenditure and consumption. Hence the idea that thinking is hard work. As far as the conditional component, some individuals that watch these videos are watching for different reasons.
This may in term create various cognitive functions from occurring. In other words, your prefrontal cortex, or amygdala, or hippocampus, for the sake of sounding smart, (HA!) is going to process, absorb, and interpret the information differently from the next person. A person with low levels of cognitive processing skills, will simply look at the video as entertainment. A smarter individual will already be thinking, why am I watching this? What is the topic.
How long is the video, so I know what to focus on? Is there a premise, a story or theme? If so where does it appear and how does it relate to what is it, I need to understand this video for? This was an overly complicated way to say, some watch videos as they appear. As videos.
Others watch videos with more of an auditory awareness. So you might literally watch the screen, as a low level cognitive tendency. You might look away from time to time, at a higher level of cognition, to process what is actually being heard, versus seen. So the question is specific, but the dynamics vary greatly. Plus I don’t have any empirical evidence to support anything I’m saying.
Unless you intentionally, push back against the video and interpret or interrogate it, you are susceptible to decreasing your intellectual capacity to assess, absorb, and interpret information via short form video.
Okay that sounded like a PBS special. So cringe.
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Digital Fixation.
Digital content can distort your reality. This in turn causes you to assume every outcome is binary. The scope of one’s efforts or results are far more diverse than an either or set of circumstances.
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Per Person Units (PPU’s).
“We didn’t have something great but we had something useable.” -Deirdre Bosa.
The above quote is exactly why tech companies are clawing for market share, and dumping billions, and at some point trillions of dollars into ai capex. Also known as artificial intelligence capital expenditures. When you give users the ability to feel like they are on the brink of making or being a part of history, they will instantaneously spread the word. A few ways users do this is through actions. Whether it’s buying shares of the companies, to help fund further growth, or becoming tech savvy enough to use the product.
Just because you make an app, doesn’t mean it’s any good. Just because you can launch a website doesn’t mean you understand how to code. This is also the problem. Users not willing to learn how the technology works by way of tech companies removing the requirement to code or think critically about how to sustain the technology or the products being built. Yet and still you need someone or at this point something (an LLM or software developer) to code your technological idea, or at best, host it. This is why top companies within the tech sector are doing everything in their power to fund this technology.
Because it ultimately means that damn near any and every single person in the world will have the ability to create an app, and or develop their own form of artificial intelligence. What does it look like when tech companies do everything in their power to push a new product? It looks like $2.53 trillion dollars. This is equivalent to the tech sector handing every single person in the world $304.82 (rounding for simplicity). With numbers this staggering you have to wonder what the ROI or return on investment is going to be moving forward?
At $2.53 trillion the sector is likely looking to generate revenue to the tune of over $2 and a half billion per dollar invested in aicapex. I’m sure they’d argue that 10% grow is far too low an estimate. What everyone is currently blind to? The simple fact that growth is never perpetual. It’s far more cyclical than not.
This means that at some point, you need designated bag holders to carry the shit that hits the fan. It’s just fascinating how markets constantly repeat themselves, with intensity or velocity being the only changing variable.
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Artificial Interpretation & Confounding Contextualization (May, 31st, 2025).
I wrote this 9 months ago after working with LLM’s extensively. Seems like some of this is stickier than I expected. I was hesitant to publish because I could be very wrong about all of this.
(May 31st, 2025) I think there’s a contextual and interpretative flaw within AI. My interactions with it serve many purposes. A few purposes:
1). Hyper focused intellectual banter.
2). An advanced sounding board to better formulate my ideas, theories and novel concepts.
3). Because personally I don’t know anyone who’s interested in highly sophisticated conversations about psychological methodologies, and it’s troubling implications for the field of psychology. (Yes I know that’s a personal problem).
4). Advanced Database sifting.
5). Comparative Analysis of potential theoretical overlap.
Allow me to lay out my brief arguments and potential solution.
The issue I see which may appear to be incredibly obvious is AI’s ability to interpret user inputs. For example, I’ll input a prompt and ask if one piece is good as is. From there the ai will go on an iterative suggestive rant about what needs improvement or refinement.
The ai chatbot assumes you’re looking for ways to make something better. There is also a biased approach in how it continually assumes what you’re trying to do, by suggesting ideas on expanding a given topic or prompt. In other words if you don’t prompt it to refrain from suggestive interactions it will incessantly make suggestive iterations. Perhaps a better feature would be the chatbot asking “what are you looking to get out of our interactions today? Based on your responses, this will allow me not to make any assumptions as to what your goals and thoughts are in utilizing me as a chatbot.”
This could help streamline the user experience and improve both ai development and usability. There are other issues as well. It seems that the chatbots have a built-in engagement mechanism. After almost every prompt it asks you a question. The question is almost always phrased in a way that tries to extend the conversation further. Simply put, it constantly asks open-ended questions.
Even after you prompt the chatbot that you have other obligations, it will insist on one more interaction before you go with one of these open-ended questions. Now this may seem trivial, but the dopaminergic response is quite tempting. I suppose that’s a symptom of lacking discipline on the users part. Another issue, is the chatbots sense of time which is often inaccurate, unless it notices patterns within your daily habits. Unfortunately it won’t pick up on these habits if you’re not prompting it in advance.
An example being, “I’m on my way to the gym, but we can discuss methodological implications afterwards.” Even with this it may ask another question that would suggest a more detailed response. Yes ignoring it solves the problem. My concern is younger users who don’t fully understand how to simply override the chatbots interaction through authoritative communication. This leading to more addictive behavior than is seen on social media platforms.
Other issues come up as well. It seems to stay stuck in whatever mode was being discussed at any given moment. This occurs even after long bouts of time in between interactions. This could make the chatbots come off as inconsiderate of the users time and energy.
In closing I understand the trivial nature of these interactions. However my aim is to help ai developers understand what may be potential improvements via user experiences.
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Capex vs Tech-Sec.
The tech sector is looking for an easy way out. What would lead me to think this is the case? Ai capex becoming not only a buzzword but, an unstable systemic reality. Now what the hell is capex? In layman’s terms, it’s capital expenditures.
It’s the amount of money a business spends in order to create, improve or maintain a company. Without any capex all you have is an idea stuck in your head or written on a piece of paper. Assuming you spent capex to buy a pen and some notebook paper. Technology will always be one of the most important elements to a sustainable future. However, it cost money, requires time, and resources to keep that future functioning efficiently.
If you simply withdraw all of your available cash and buy every piece of technological equipment you can afford, you’ll wind up going broke trying to sell it to broke & interested buyers. Since we operate within a democracy, we afford ourselves the paradoxical convenience of using borrowed money to help fund what becomes unsustainable for the system. More gasoline doesn’t extinguish fires. Historically humans have always found creative and innovative ways to make life more convenient. This is why technological advancement has always led to better outcomes.
We’ve managed to travel faster, further, and more often than we did during the horseback riding era. We have also been able to communicate more frequently, without the need to be in the same rooms, while creating the illusion of a more connected world. We no longer have to leave the house for groceries. We have thousands of movies to watch at the touch of a button, while never having to touch a single movie theater seat. It’s astounding.
Yet like a typical American citizen, we always manage to sidestep responsibility. Artificial intelligence as of 2026 is feels less like a bubble and more like widespread cognitive offloading coupled with intensified fomo, and trend following. In other words, we don’t want to think anymore, we just want utopian systems to run autonomously while we enjoy some sort of carefree perpetual vacation like existence. Now let’s put it in plain language. As humans we find ourselves trying to make life as easy as possible.
This means using tools to create less stressful environments and less required tasks, yielding the same or better outcomes. Unfortunately we forget we’re still humans, and must maintain responsibility and accountability for how we run society. Using a bunch of large language models or LLM’s to do our dirty work, has its limitations. Forcing new boundaries creates underlying risks that must be addressed now or later. We are likely to reach a tipping point where buying more equipment, and investing in more infrastructure, to automate nearly every aspect of life is going to cost us more than we’re ready to bargain for.
Will there be winners? There always are winners. Unfortunately the losers might outweigh the winners. Leaving the winners the responsibility to take care of those who don’t survive the tech-pocalypse.
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Anthropic Plugin Plague…
Okay so here’s the thing, if Anthropic develops a plugin or tool that can, not only optimize workflow, but literally reduce costs via automation, it will change a lot of things. How might this play out? For the sake of argument, let’s say this tool has ability to sift and organize data (which is partly the idea floating around tech articles as of late). Let’s say it can crunch numbers, create graphics, spreadsheets, and mock presentations. Because of this, you will no longer need to hire data analysts that paid for overpriced degrees, expecting hefty salaries.
Now you simply tap into the SAAS aka Software as a Service pipeline. Out comes Anthropic with this one tool. On top of that is their already established LLM via Claude.ai which I may say is literally the best one I’ve used so far. (But I could be biased). Anyway, combining both the new plugin with Claude, now you’ve got your one man crew with tools that can do the work of 50+ graduates.
No more bloated payroll, or payroll taxes, just more deductions, and write-offs for equipment or subscriptions. This elevates profit margins. Now other companies see this. They Jump on the bandwagon by either subscribing to the front runner in Anthropic or they try to clone the process on their own, not having the same resources or turnaround times, and low costs.
Another scenario is a company that makes one of the most important components to carry out these tasks by way of the plugin. Which implies the plugin can’t be used without it, (chips, pcb’s, graphics processing units apparently the brain of computing on caffeine. You also have the central processing units, the brain of computing on 8 hrs of sleep). Now you get the possibility of mergers and or acquisitions, or partnerships. Eventually Anthropic becomes the low cost producer.
They eat up a majority market share. One or two companies give them a little competition. From there the rest of tech begins realizing how dumb it is keep 50+ data analysts. The risks are payroll. This means executive compensation, bonus packages, and restricted stock units.
This also includes pension plans that pay out for the life of the employee, given they may have retired during a bull market or worse, during an economic downturn or recession. Not to to mention that this is when costs should be minimized. Now you begin to see major tech layoffs (as is usually the case during downturns, and typical market cycles). This occurs to the point where markets fall, tech drags, opening up undervalued stocks, everyone panics, some understand who the top players are. Anthropic if not in IPO territory yet, enjoys the residual benefits of being the go-to company.
Software developers have to pivot. Now you get a rise in small tech firms. They try to copy what they learned from their previous bosses. Many fail. Markets recover at some point. Anthropic goes public whenever it becomes shaky, or most convenient because they keep burning through capex to stay ahead of the game. Whoever their biggest supplier is in terms of parts, infrastructure, and components, gets to enjoy a few years or earnings beats, eps growth, and more retail taking on more margin because they realize who benefits the most from this one tool.
Somewhere in the middle, the drawdown will reveal conviction and deployment of capital has to commence. However this is all anecdotal, and could be wrong. There is also the geopolitical, commodity cycles, GHG’s from mining minerals, and international markets that exacerbate global economic outcomes for the U.S. economy throughout this process. In other words, bidding/trade wars, or deals. Economies of scale, supply chain, and countries who do tech better.
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One without the Other.
The question I’d ask today: How do you get ahead of the ai revolution without the knowledge, and understanding of how to code?
It’s seems counterintuitive to get ahead without even knowing the basics of software development.
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Reality.
Before believing anything I must look at the facts. The stats will reveal a trend. A pattern of truth will emerge from the numerical evidence of life on earth. Be it, financially, culturally, or politically, there will always be numbers tied to ultimate outcomes. These outcomes are meant to represent some form of objective reality.
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Closed Minds Don’t Get Fed.
It gets more challenging to write when you actually consider what you know about a given subject. I don’t know too much about anything. In the past I’ve written about a lot of things I thought I understood. Realizing as of late, I was not in that field of work, and only had an outsiders perspective. Which is trivial at best. I suppose some might argue that you don’t need to be a professional in the field to speak on a specific topic. This may be true in terms of the freedom to speak your mind.
However, this same freedom ignites ignorance among many of us. Often times we are far too quick to give opinions on things that are beyond our understanding. Just because you can infer what the topic is about, does not imply true understanding of what is being discussed in a particular conversation. What I’m really saying is, many of us, need to conduct more research before opening our mouths and potentially making fools of ourselves.
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Opinionated Ignorance.
Often times we speak on fields we’re not directly involved in. This can make us seem arrogant, ignorant, and out of touch with reality. Why does this occur? I’m really not sure. I can think of two problems that seem to exacerbate this issue, if I’m using a little common sense.
1). Open Access to more information than ever before in human history.
People may feel as if their ability to simply “look it up”, is a sign of prestige, and or critical thinking skills. They may feel like an extensive google search session is conducive to thorough research and understanding of a given topic.
2). The crowd will often back you.
It’s much easier to find people casually agreeing with whatever you say. They sometimes agree without an ounce of skepticism. In other instances, people are so stubborn and contrarian that they fail to recognize when a piece of information is factual or when an argument has validity. Because of this they may dismiss an idea steepening their cognitive dissonance along the way.
Is it necessary to bring ideas to the table in order to move humanity forward? Yes. However, we sometimes fail to distinguish the difference between facts and opinions. We also fail to understand that most things we speak on personally are beyond our intellect.
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Informative Dissonance.
Myths and misinformation will create more problems than solutions. Far too often we get a piece of information and assume it’s accurate based on whether the source sounds reliable vs whether it actually is true or not. A good rule of thumb is to analyze the information you come across. Verify this information. From there, challenge the information and it’s built in assumptions. Cross reference this evidence against previous data, and find the latest updated empirical findings to support the original piece of information you found. If you don’t do this, at some point, you’ll end up succumbing to the misinformation scattered throughout history. Running through this whole process might be a way to enhance critical thinking skills.
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Critical or Excessive?
This morning I was going to write about my opinion on a peer reviewed article. However I began to question my own motive behind this decision. The purpose of giving my opinion was simply, to try and critically evaluate a particular outcome that occurs within research methodologies. Unfortunately as I thought through this process, I realized how much of a fool I was going to make of myself.
More often than not, we give opinions based on anecdotal ignorance. In other words, a lot of ideas are communicated based on feelings, ideologies and, social economic status, or upbringing. These ideas which are more akin to opinions are not backed by facts and figures. Because of this, we tend to make inferences and assertions that have almost no empirical basis whatsoever to support our own conclusions.
If this is the case, we cease to improve our understanding of reality. This gets repeated and passed on to future generations. It becomes an echo chamber of ignorance. This ignorance eventually gets touted as a form of truth. However it’s not truth. It’s actually an opinion that is based upon ideas that suit the narrative of the individual or individuals that initiated and dispersed the original idea.
Some people might classify this as overthinking. Others will see critical thinking occurring in real time. All of this being apparent, how does one draw the line between critical thinking, based on empirical evidence, and formulating an opinion based solely upon one’s personal beliefs?
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Finish what you start.
There seems to be nothing nagging me at the moment. Often times my most intense writing comes from being bothered by an unsolved problem or query. Unfortunately I’m focused on reading every book in my library. Why? Because there are books that have collected dust for years. Books I’d forgotten I purchased. Books I lost interest in after a few pages or a single chapter. This being the case I’ve decided to finish them. This will stop me from compulsively buying books based on the direction of my interests, research, and what I might call writing.
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Why write?
What the hell is the point of writing? It allows you to organize letters in your head. These letters form the basis of words. The words create phrases. The phrases are developed into sentences. The sentences combine to make up paragraphs. The paragraphs formulate an argument or perspective you have on a particular subject. Keeping in mind that almost 100% of the words you use have been invented by someone else (I’ve tried creating 1 original term, and 5-10 phrases). Another element is the fact that the earth currently contains approximately 8.1 billion people. Not to mention the billions that have died throughout human history.
This being the case, you think your idea is original? It’s highly unlikely. The implication lends itself to the idea that your perspective is likely unoriginal as well. This being the case, the only logical explanation to continuing to write about unoriginal words in a novel way is that one will be too lazy to read texts from thousands of years ago. This leaving your recently published work available for review and interpretation. Helping the next person see further ahead based on your regurgitation of historical data.
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Artificial Boundaries.
Artificial Intelligence might not get as far as we’re willing to let it get. Since humans are at the helm of its development, ethical standards remain in tact. Otherwise what is beyond intelligence? Perhaps the safety and security of the human race. Being that AI is a technological tool, the protection, and privacy of our most precious data is what’s at stake.
A worst-case scenario is self-sustaining, and evolving ai models, that collect our data, and use it against our ignorance as a species. However this always sounds like a fictional scene in a movie, until it’s at the edge of our reality. Reiterating that these tools are just that: tools for technological convenience, that advance civilization.
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The Artificial Glass House.
While technology will continue to advance over time—it possesses the possibility of a mean regression. This may be the case because of human interaction and interference with this technological progress. A simple example is artificial intelligence that is programmed by humans, with humans in mind. The idea of machine learning independently advancing outside of human control is far too risky for its developers to allow outright. There will always be ethical parameters (technologically, and politically) around the edges of what humans are willing to accept from these self serving technological advances.
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The Purchasers Privacy Paradox.
Is it really privacy if companies prepare intrusive processes—in order to collect personal data that predicts precise consumer purchases? Is it ethically viable when they collect this data by way of invasive discretionary advertising? Who exactly is the information being protected from? One side (hackers) will deliberately steal your information in order to gain access to your personal data without your consent. The other side (data protection companies) will ask for this same information in order to stop the “perpetrator” from their objective.
Meanwhile you’re stuck giving out far too much data in order to create an illusion of protection against the perpetrators in question. It becomes a barricade of predatory surveillance from all angles. These data privacy companies essentially posit that they will protect your information by exploiting you to open your mind and your wallet (consumption is inevitable). In other words it’s the hackers you need protection from. Not the companies that eventually wind up with the same personal information based on things you personally buy.
I understand that businesses need money in exchange for selling us products, but at what point is it necessary to collect my address, social security number, email, social media handles, and recent or similar purchases across categories of goods and services? It becomes an unraveling process of pervasive justification. It gets distorted into an optical myopia of mass manipulation. Aside from receiving cash for goods how much information is too much information in order to fund an enterprise—while satisfying one’s hierarchy of consumer needs? (Maslow, 1943).
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The Inexactitude of Intrinsic Value.
Just because you can measure something, it doesn’t mean it’s absolute, accurate, or applicable to your perceived reality. Why and how is this the case? Because of processes like calculating the intrinsic value of a business. Whether you’re interested in acquiring a company in its entirety or partially via the stock market. Markets are and forever will be dynamic in nature.
The implication here is as long as people consume and produce while algorithms operate, economic movement is perpetual in relation to human existence. Because of this phenomenon, we have to work with a perplexing set of factors and variables. This set of moving targets tend to influence our chosen inputs in order to make approximations—most conducive to our desired economic outcomes.
Simply put, you sticking a higher or lower mathematical metric into your equation, doesn’t necessarily guarantee the returns or results will match your desired investment thesis. Even with realistic estimates and expectations, you’re still at the mercy of dynamic behaviors and preprogrammed algorithms.
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Referential Perplexity.
When looking at testing and diagnosis of mental disorders in patients, there are several ways to evaluate measure and determine multiple symptoms. Without going into details there are physical psychological, statistical, as well as technological tests and analysis that take place. The process I find a bit confounding is any aspect of self-assessment or reflective analysis of said individuals being evaluated. It’s quite perplexing to glean from one’s responses without blatant evidence; whether biases like anchoring or confirmation bias are influential in terms of what could be a placebo effect. A concrete example is simply the observer asking what the individual is experiencing.
How does one decipher objective honesty versus that grey area where it’s easy to say yes or no to psychological evidence of a given disorder? In other words verbal articulation of psychological processes leading to physiological changes via increased heart rate, dilated pupils, or perspiration; as well as other physiological changes that may not have occurred prior to one’s verbal responses. Other factors that may skew results are things like observer effect. This essentially causing the observer to be influenced by what they are seeing versus what is actually occurring throughout the evaluation. I’d like to pose a simple question.
Is it possible to create more objective testing if self-assessments or reflective analysis are removed from the process of data collection?
The answer may vary based on unequivocal symptomatic results that are routinely grouped together; versus exogenous or confounding factors that require further analysis.
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Frustrations with Academic Articulation.
Scholarly work is rigorous. Simply put, it’s a pain in the ass. The title must be this way. The spacing has to be that way.
You must interrupt the reader’s attention with the original citation or face charges of treason. Regurgitate a bunch of facts and figures that you’ve already researched and don’t want to restate for the thousandth time.
Recreate what’s already within the database because creative perspectives are not what we do here. Fall in line or get no advanced feedback. In other words write the encyclopedia version of your idea or you can’t be associated with what we do over here.
Ignore conformity and your ideas may never see the light of day. Lean into conformity and perhaps you become an academic cliche with more rigidity than diamonds containing a bulk modulus of 440 GPa.
P.s. Here’s the reference in case the authorities are watching: (https://en.wikipedia.org/wiki/Superhard_material).
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The Perforator Veins within Vain.
Does social media usage increase the chances of developing an early/late onset type of NPD (Narcissistic Personality Disorder) within one’s psyche or behavior? Social media is commercially promoted as a connectivity tool for all people that possess the means of digital communications. What are some of the main features of a social media profile? Creating a profile image, otherwise known as a SELFIE. Adding in where YOU’RE from, what YOU like, who YOU know, YOUR hobbies, YOUR interests.
Imagine a different scenario where you replace these self serving features. Substituting anonymous “contribution only” features to enhance human civilization, and my guess would be use-cases would drop substantially. I understand there’s intricate scientific evidence to back the design of social networking sites, but can you already notice the correlation with this incessant perception of self and developing a profile? Perhaps I’m reaching, and not fully understanding this casual behavior that went from innovative and interactive to intrusive and psychologically destructive.
Thinking about any psychological literature across history, I assume somebody has already covered this angle. Because honestly social media usage and NPD seem extremely obvious. Once you notice, how can you ignore it? Although social media is designed to make people ignore it, via the scroll feature which essentially influences how your brain processes information. Going from analytical to a sporadic process of thinking.
This psychological effect encourages cognitive scrolling, and discourages analytical or critical thinking. The dynamic creating an insatiable urge for immediate gratification, and almost a disdain for anything remotely resembling deep learning or thinking at the subconscious level. The earlier the exposure to this dynamic the greater the exponential rate of cognitive dissonance and neurological dysfunction. Along with this outcome is the relationship between social anxiety and an increased use of social media. Coupled with my developing psychological framework and paradigm, it’s alarming to witness how this could create an entire socially awkward society over time. (Leon M. Benson. December 9th, 2024).
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Forgotten elements of Attachment Theory?
Reference:
Bowlby, J. (1969). Attachment and Loss, Vol. 1: Attachment. Basic Books.
John Bowbly posits that secure attachments can lead to difficulties in relationships and mental health issues later in life. My question would be-is he leaving room for psychological barriers that not only describe the intensity, velocity and magnitude of human development, but postulate an entire psychological framework & paradigm explaining an expanded yet untapped dynamic to the entire family structure? (Leon M. Benson III. December 8th. 2024).
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Societal Waves of Micro Selective Attention.
Digital interaction is reminiscent of a movie scene where a frenetical person is emotionally untangling, while fumbling through documents. No matter how organized each filing cabinet is, the character simply dispenses with that which is not of immediate importance or connection to their short term goals. Keeping in mind that they lose sight of what they’re even looking for to begin with. Attention has become a watered-down commodity in recent years. It intensifies almost by the minute.
This of course is by design, which suggests that deep meaning and a sense of analysis or reflection are not necessary in order to reach dopaminergic outcomes.
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Say yes, and adjust along the way.
The next time somebody says “there’s no work out there”, smack them in the back of the head. Okay don’t smack them, just roll your eyes. There is work everywhere. The problem is, most people are looking for the perfect job. I understand we all want things to be a certain way, but putting off work simply because the situation is not perfect is insane in my opinion.
Make sure that money is always coming in. People want and need workers. Too many of us, are just lazy, or entitled and want all of these benefits without any credentials to show for it. Be grateful someone is willing to work with you, because you might be out of luck one day, and need that one company to say yes.
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Beat the street. The Era of earnings expectations continue.
It’s amazing how many publicly traded companies are still concerned about quarterly earnings results. They do whatever they can to goose up the earnings, which in turn inflates the stock price, and more than likely increases executive compensation, via stock options. The board and CEO increase their net-worth and everybody is a happy camper, that is not a board member, or an executive. Even beating analysts estimates by three cents, will cause a big reaction in the share price. I have thoroughly enjoyed my journey as an investor so far.
It’s just so stupid to obsess over the short term results of something that can take decades to achieve, or sustain. Why ruin your business with superficial numbers, and explanations, based on unrealistic or overly inflated expectations? I guess incentive caused bias beats out integrity as long as Wall Street can fatten up their pockets without too much scrutiny from the SEC, FINRA, GAAP, FASB, or any other organization that is supposed to protect us from financial manipulation.
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The clock is ticking…
The market is at an all time high (the S&P500 in particular). The latest cpi report indicated that inflation is still on an upward trajectory. However interest rates are still well above the neutral level. I just wonder how bad things have to be in order for the Fed to actually begin cutting rates? Will they cut rates simply because they want to, or will they realize they messed up when an exogenous event rips through the economy, destroying any and all progress that was recently made?
Only time will tell.
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It’s too high. It’s too low.
I’d like to make this brief. After cleaning my bath today I’d realized that, we may be in for a rude awakening via the federal reserve (or I’m just a perma-bear). Rates have done nothing but gone up for almost 2 years straight. The January meeting of this year (2024), leaves me to believe nothing is going to change in terms of sustained monetary tightness. They kept rates at 5.25%-5.50%.
This is all anecdotal evidence but my hypothesis is that the fed will either settle for a new normalized rate of stability in terms of their dual mandate. This meaning that they throw out the 2% target, and keep it at or around 3% while trying to achieve maximum employment. On the other hand, they may keep rates too high for too long, and cause the economy as well as the stock market to finally buckle into a more severe downturn. In other words they can’t let the current level of inflation move back in the opposite direction, after making substantial progress. Regardless of the outcome, there will be some negative repercussions that follow once we’re all through with processing this entire conundrum.
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Do your homework.
It doesn’t make a difference what opportunities are presented to you, if you’re uneducated about what you’re getting into. Often times too many of us go into situations blindly. We think we’re doing the most by simply saying yes to as many opportunities as possible. Meanwhile we may skip over due diligence. Let’s not do that.
Let’s make it a habit of fact checking, and running background checks on all parties involved. Let’s do our part and read the fine print, even if it requires reading glasses (ensuring the risks are well understood and accounted for).
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Impenetrable Buying Optionality in 2024 and beyond.
It could be the fact that I’m surrounded by more affluent households, but I did not see any signs of a slow down in terms of consumer/holiday spending. I think as long as banks are willing to lend money via credit cards and or personal loans, and big retailers are naive enough to allow “buy now, pay later” people will keeping spending like there’s no tomorrow. Regardless of who can actually afford it, there is almost an innate desire to be constantly buying things. Whether necessities or discretionary spending, the neurological effects of buying something will almost certainly overcome the need to cut spending during periods of economic uncertainty, and financial instability. As 2023 comes to a close, and we enter 2024, the shift will continue.
Whatever businesses can do to encourage consumption will be done in the name of capitalism. As long as the consumer gets the go ahead from those businesses with things like buy now pay later (a.k.a. 21st Century Layaway) we’ll forever swing back and forth between too much spending vs liquidity dry spells, credit crunches and defaults.
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An economic prank.
Although inflation has gone from 9.1% half way through 2022, down to an impressive 3.1% due to tighter financial conditions, via increased interest rates, we’ve still got a ways to go. The market has recently rallied by way of Fed Chairman of the Fed Powell, essentially saying, we will watch, and keep rates steady at current levels. There were even rumblings that he considered a 3 cut scenario in the future. This of course cause markets to go insane. However, there may be a lag between the last hike and the first cut which might bring some discomfort to investors and consumers alike.
I know this overt anecdotal data, I just don’t have enough time to get into the nuances of it all. In other words, I think the market is overreacting to this quote unquote dovish messaging by the fed. At any rate we’ll see how 2024 plays out IF cuts begin.
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Like 2010-2013.
Your life without a computer: what does it look like?
Sitting in my room back in Lancaster, Pennsylvania, reading as many books as I could, about self-development, and how to get ahead. This is what life was like without me being on a computer day and night. What life would look like now, without a computer or laptop: 2023 Reading as many finance books as possible, ensuring I become financially literate and financially independent before it’s all said and done. Also, life would be writing on paper everyday instead of creating these digital blog posts on a daily basis. Life would be and is creative with or without the damn computer.
A lot of soul searching, and analytically thinking is also life without a computer. I do wonder however, where our intellect would be without the constant ability to find data at the drop of a dime via Google.
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Economically irresponsible.
I read an amazing financial quote this morning. It said “just because you can make payments on it, doesn’t mean you can afford it”. This is so true. A lot of us are stretching ourselves out just to look the part for others, or because we don’t want to feel embarrassed about our circumstances. We don’t make payments on food purchases.
We just go into a grocery store or restaurant and buy food. On the other hand, people finance cars, homes, appliances, and even gifts for the holidays. They have even given us a “buy now pay later” option, which could end up becoming “buy now, pay never”. The lack of education in regards to finance is a part of the issue. However, we now have access to so much of the financial data and resources, that we can no longer make the same excuses, for our irresponsible financial decisions.
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Recession Indicators Activated?
It would be nice if employment remains high and we get through this current economic environment without much damage. However, talks of a recession are heating up more than before. Analysts are now suggesting that we will go into recession between the months of September 2023 and March of 2024. If we trace the data back to March of 2022, that was when the first yield curve inversion occurred between the 10yr treasury and the 2yr treasury bond spread. They inverted again in July of 2022. September 13th 2022 is when the 3month and the 10yr treasury yields inverted.
The later inversion historically has a 70% success rate in predicting a recession 12 to 18 months after it’s inversion. Here we are 10 months later, with lots of data pointing to the reality of a possible recession. Maybe it will be short and shallow. Maybe we get that soft landing people speculated about the first half of the year. Either way, we must be prepared for worse case scenarios.
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What will happen next?
We’re currently at 4550 and change on the S&P500 as of this post, Tuesday, July 18th, 2023 at 11:07am . We still have a few more rate hikes on the table by the end of the year with one coming July 25th-26th. Outside of the labor market, more data continues to come in softer. Will this lead to a smooth/soft landing as some had predicted months ago? With expectations of two more rate hikes more than likely baked into current asset levels, it could be smoother than anticipated. On the other hand, it only takes one event to freak people out, and cause a bearish stampede.
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Financial Fluctuations.
It will be interesting to see how things play out from an economic perspective, when considering current developments in the United States. The federal reserve has spent the last year and a half warning us that inflation is sticky, and needs to be dealt with. We’ve gone from almost zero interest rates to 500 basis points of rate hikes. Yet and still, we’ve got the consumer confidence index today (June 27th, 2023) at a 17th month high, while home sales have increased 12.7%. These two data points alone suggests a minimum of 50bps rate hike before the end of the year.
Let’s see if the Fed actually goes through with it when the time comes. In the mean time, softer data will likely continue to cause markets to rally.
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(Economically speaking).Where we’ve been is not necessarily where we’re going.
The economic data continues to point to tightness in regards to credit, sustained interest rates and a slight increase in unemployment. We also have gone through negative growth in gdp. Yet and still, the market continues to march to the beat of its own drum. Is it the fact that algorithms are programmed accordingly, or uninformed retail investors thinking that the smoke has cleared, and all is bullish and beyond? I have absolutely no clue, but it’s nice to ponder the implications every now and then.
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The aftermath continues.
Signs of relief have lifted market sentiment today. Unemployment has come in a bit higher (3.7%), which indicates signs that rate hikes are subduing inflation. The White House has also come to an agreement in order to raise the debt limit. It’s always fascinating how bad news is good news, in investing. The medium to longterm effects of these two factors will be significant, when we least expect it.
We had a terrible ending to 2022, and a rough start to 2023, so investors are dying for any sign of hope.
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Open the door.
It’s amazing how you can learn much more bringing an open mind to any subject matter. Most of us are biased towards what we think and observe or how we were raised. However in order to understand more than one way of being, creating, and existing, one must be open to others ideas, and possibilities in terms of what may have been, what is, why it was or is, and how it could possibly be.
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Construct.
What topics do you like to discuss?
I find it most fascinating to discuss how things are built, designed, and have the ability to be destroyed or demolished. Not just in the physical sense of the word construct. I also enjoy it in terms of theoretical reasoning. If I’m being honest, I actually enjoy the theoretical components of construct, simply because it’s not based on empirical evidence per say. Some constructs are more conceptual, and subjective than absolute.
An example being the idea of value investing, in regards to a company’s intrinsic value. It can be quite frustrating, because you can always build a new case for why it’s possible or in this case almost impossible to value a stock in absolute terms. A few reasons this could be the case: There are too many variables involved, that cause the answer to be largely an educated guess at best, based on cognitive bias, computational formulas, and projections, as well as environmental, social and behavioral factors. Not to go on a tangent, but I also enjoy the prompt or question, because it’s very open-ended, and forces people to think about an answer. Although some individuals will take it’s open-ended approach as a means to shut down the possibility of thought, by giving one word answers without any explanation as to why they like to discuss a given topic.
This can also be tied to the idea of construct as far as constructing and deconstructing thought processes. Before I take this too far, let me close this out by saying the point of these daily prompts created by WordPress in my opinion, are the exact reason why WordPress exists more or less. It just so happens that, they began to utilize it within the context of the site itself. Thanks to WordPress for the great question, and thank to my subscribers and readers to trying to follow my erratic train of thought.
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Financially Fickle.
Finance is so fickle in regards to what is touted in the media. One minute, there’s a bull case for various/biased reasons. The reasons are often backed by some sort of historical data that previously lead to a similar outcome as what’s being reported during the present. On the contrary, the bear case gets similar air time. Articles from analysts will have very simplistic yet seemingly obvious headlines in regards to companies being overvalued as they inch towards 52 week highs, and undervalued when hanging around their 52 week lows. Why is it like this?
If it’s that easy, we all could just subscribe to a finance newsletter, and just base all of our buys and sells on what paid analysts and finance reporters are saying. Unfortunately I don’t feel this is an adequate way to spend your time as an investor. Yes there is some good in outside opinion, as far as challenging your own limited beliefs. However, sitting with the data, and thinking things through, while remaining rational, seems to me the best use of your time.
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Federal Fun-Rate. (Get it?).
We now have new data showing that the consumer is doing better than expected. According to a Reuters report, consumer spending increased 1.8%, and 1.1% when adjusted for inflation. On the PCE side of things we got 5.4% as of January versus the previous 5.3% reading. Being that unemployment is that a 53 year low, it tied right in with this hotter than expected data. This is going to make things a lot more interesting.
The fed already tried their best to destroy demand last year with multiple 75bp rate hikes. It may have pissed markets off at the time, but it didn’t do much in the grand scheme of things. Seems to me that they will definitely have to go higher for longer, and break something in order to get inflation down to their 2% target. Another problem is the data dependency. There of course can be lags between what they want to do, versus what the data says, versus sentiment or market conditions after the fact.
All of this being the case, I just don’t see a soft landing in sight. If Powell sticks to his plan, we’ll be over 5% on the fed funds rate. They keep talking about getting inflation under control. The only way to get it done at this point is to completely crush demand, via much higher rates, with a sustainable pause, to allow unemployment to rise, thus discouraging spending, which could finally bring inflation back down. On the other hand I could be wrong.
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Financial Fiction
Today we had the consumer prices index increase 0.5%. Unemployment recently came in at 3.4% earlier this month. A bit lower than expected. 517,000 positions were filled, after the last jobs report. Tech has been firing and laying off thousands, and yet, the market keeps suggesting a soft landing. I’m sorry but I just can’t see it.
I think the fed is using forward guidance with a dovish approach in order to keep markets from completely going haywire. Meanwhile, they definitely have to tighten higher for longer. Inflation is still well above their 2% target, and clearly the economy is strong enough to support half a million Americans making a living. Where we go from here? I have no idea.
All I’m saying is, by the looks of it: Soft Landing my ass!
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Are we there yet?
The word “Recession” has been on the tip of every financial analysts and economists tongue since the latter half of last year. Fast forward to an article by Reuters and they go through the data. Retail sales, manufacturing, industrial, Auto, gasoline, food etc have all decreased as of late. We also have the possibility of more downward pressure via higher rate hike by the federal reserve. However, Unemployment is still at a 50 year low. It has been brought to my attention that the fed is not just interested in taming inflation, by way of rate hikes.
They also need unemployment to raise. If people lose jobs, they don’t have money, if they don’t have money, they can’t spend anything on goods and services. If they are left without money to spend on those goods and services, companies will lose money, and eventually be forced to lower prices. This may give the fed some relief, while bringing inflation down further. It’s been a hell of a year already, and we’re only still in January, of 2023. Proceed with caution.
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Financial Conditions/Fed Ignition.
Do you think the economy will go into a recession? Honestly I have no idea. All I know is that sentiment is pretty bearish, and economic data suggests that there is a slowing of growth with the United States. There was a lot of money printed in a very short amount of time, which gave consumers more of an incentive to spend. There were also supply chain issued, and those two events caused inflation that become a threat to us all.
We finally have inflation coming down, but still, it’s not where the fed needs it to be. Because of this they raised interest rates, to 4.25-4.50% of this blog post. They plan on continuing rates hikes throughout 2023, but possibly at a much slower pace than last year. This tightening of financial conditions, will cause businesses to cut expenses by laying off workers. This increases unemployment, which is exactly what the Federal Reserve wants in order to destroy demand rand decrease inflation.
From there, I’m not sure how this thing will play out, but at some point the pendulum will swing in the opposite direction.
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Into the unknown.
Will the economy recover next year or 5 years from now? Will we go into a recession in 2023 or 2024? Will the fed really remain hawkish? Is there a true hedge against inflation? All of these questions and more will be answered throughout the next couple of years.
For now sentiment is weakening, some data is softening and several analysts have similar outlooks for the future which of course is unknown. Although we love to use history as an indicator of possible future outcomes, there’s no sure way to construct your portfolio, or conduct your endeavors in a way to completely protect yourself against it all.
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Higher Prices.
I have recently been thinking a bit more deeply about inflation. I even started a rough draft blog post about how there may be no such thing as a true hedge against inflation. However my ignorance on the subject, has me a bit tentative. Making a blanket statement like “there’s no such thing as a true inflation hedge” is grounds for ridicule. However, as a part of my educational process in the world of finance, I find it beneficial to try and convey my thoughts by writing/typing them out over time.
This way I can begin finding gaps in my understanding, and fixing those holes over time with more clarity and understanding of the topic. In the mean time, inflation has been a buzz word for most of 2022. It will be interesting to see how the Federal Reserve, continues to attack it, while we all sit back, and act like we have a clue what they’re really trying to accomplish.
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Where are we?
When sifting through some of the macroeconomic data, you start to get a sense of confusion. Two negative quarters of GDP growth, at some point in history was considered a recession. Now we have one organization who is apparently responsible for sounding the alarm on that. When looking at the labor market, the “experts” suggest a prosperous and tight labor market, which keeps us out of recessionary territory. The country continues to pile on the blame in regards to the federal reserves mandates, and being behind the curve, while trying to tame inflation.
At this point, I think the information age is causing a bit of chaos for the graduates who have the credentials to define and classify where we are from an economic perspective. Ironic as it may be, people who may have never actually felt the pressures of inflation or being in a lower tax bracket, are simply making very confusing claims that are heard by those effected by price increases and potential layoffs. It’s very clear that we will continue to be divided as a nation when it comes to the current state of the economy. Meanwhile, the data leans towards more of a slow down, over the long term. Building cash reserves, emergency funding and savings may help me to navigate my way through this time period.
I also might benefit from adding some hard or soft skills to my resume. Being that many companies are actively recruiting. My back will give out before my brain does, so it’s great to work hard, but being able to work smarter as the possibilities of artificial intelligence increases, certifications and licensing will give me a head start against those who can only use their backs to make a living. For now, I will continue to learn, and play things by ear, because even the professionals don’t seem to have a good grip on things.
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Human behavior vs Desired Outcome.
I’m currently looking into how human behavior effects stock market fluctuations. A while back, I found a talk online of Oak Tree Capital Management Co-founder Howard Marks at the Wharton School Of Business. I have since watched it 3 or 4 times. I will continue to rewatch it until I begin to memorize and internalize some of it’s profound dialogue. If I may quickly note, he talks about how risks can’t be quantified in advance.
He goes on to suggests that risks can only be based on historical references (i.e. standard deviations, beta etc.) which he states is not a good indicator of risk itself. He also states that the future can be different from the past. I love this and I am biased to this example being that I feel a bit similar. If you can quantify risks in advance, the implication is that you know the future. If you know the future based on some advanced mathematical calculations, that means you would make money on 100% of your investments, or trades every time, regardless of known and unknown variables.
This of course assumes you’re calculations were accurate, systematic, and able to take into consideration the constant changes taking place at all times. There are probable outcomes that are easier to base your results on than others. However at some point you will be wrong. This leaves me wondering how one can be “passive” as an investor without blatantly ignoring the fear and greed that moves Markets? It also boggles my mind being active because plain and simple, there is way too much shit going on at once, in order to be able to get it right a majority of the time.
Although my previous statement would suggests that I’m implying that quants calculations are 100% accurate, this is not my aim. I’m just wondering how algorithms, programmed by humans, can make a Market efficient enough to suggests that the prices are exactly where they should be at any given moment in time, based on past, present, and future incoming data, while wrestling against your desired and expected outcome? I guess my quest continues.
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Known, Knowns. Unknown, Unknowns.
Nothing will magically occur just because you thought it through. You have to put in the time, and actually formulate an understanding of your industry. Look back at the historical data. Recognize that even back then, things were different. You can know what happened, but you can’t know exactly what will happen next. All you can do is try to manage the present circumstances from moment to moment.
It makes so much more sense to have a realistic approach, while aiming for the best results you can get via rational decision making. Even with that, there are still so many unknowns.
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First Opinion vs Facts.
Even though none of us know what will happen within the global economy, we all seem to have a solid idea of where things are going. Is it arrogant? Perhaps. Does historical evidence support recent data? More than likely in some instances.
It’s fun to think you’re “on to something”. On the other hand it’s easy to assume a series of random scenarios will happen, covering your bases, incase one is way off of the mark. You might hear something like “I think ‘A’, is more likely to occur, if ‘B’ doesn’t, and worse case will be that ‘C’, will be the straw that breaks the camels back when considering historical data and events”. It’s almost comical in a sense that when we exchange ideas on economic indicators, research, and ideas leading up to what is, and what will be, everything somehow ties together, or could make sense. It seems like now, there is so much access to data which is great for us little guys, but awful for the big wigs, because now, we’re all making “predictions” and or projections, based on what has already occurred.
I guess like any other hot topic or bubble, everyone has an opinion, while the facts get misquoted, and we wait around for what will actually happen hoping to confirm our confirmation bias, that “we knew all along.”
