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The Collapse of Societies

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The success or collapse of societies depends on five components:

  1. Natural Environmental Evolution
  2. Environmental Evolution by Residents and Neighbors
  3. Hostile Neighbors
  4. Trade Partners
  5. Response to Problems

Narrow and myopic attention to environmental change due to recent man-made advancements as the reason for all past and present collapses of societies, from far and near, is absurd. The collapse of Carthage at the hands of the Romans in the Punic Wars nor the Soviet Union collapse during the 80s and 90s had anything to do with man-made environmental change. The 1815 eruption of Mount Tambora was one of the most powerful in recorded history, reaping death-and-destruction worldwide over a period of decades. The ash from Mount Tambora spewed into the atmosphere for nearly a year. This resulted in the reflection of solar radiation to the point it caused unseasonably cool summers. Following the path of one plus one equals two, below average temperatures and monsoon rainfalls devastated crops in China, Europe, and North America. During the monsoon season, the Yangtze Valley flooded, tens of thousands fled to the coasts, and food shortages followed. China, Europe, and North America all have well-documented below average temperatures, which devastated harvests. In 1816, New England received six inches of snow in June and every month of the year had a hard frost. Temperatures dropped to as low as 40 degrees in July and August as far south as Connecticut. Death, illness, poverty, and political turmoil all resulted because farmers gave up and people got hungry.

There are ample modern and ancient history and data sets that can be extrapolated and incorporated into basic business principles of success if only the politically motivated revisionists will let the fact speak for themselves.

Our approach is one of collaborative intelligence by way of qualitative and quantitative analysis, and takes into consideration the revisionists and spin-masters of the day; however, facts-are-facts, and it is the way it is.

Think about it.

Tower Records

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Russ Solomon, the man who created music mega-chain Tower Records in 1960, died on Sunday at the age of 92. Solomon died from an apparent heart attack while watching the Academy Awards with a glass of whiskey in hand. Tower Records began in 1960 in Sacramento, California and operated until the company began bankruptcy liquidation in 2006, the last of the stores closed, and the website was sold. Today, Tower.com is merely a placeholder website after opening in 1995. Nobody has picked up the Tower brand as of this date.

In 2002, Tower Records settled with 41 states over CD price fixing. Musicland and Trans World Entertainment were also included in the litigation and all agreed settle. It is estimated that between 1995 and 2000 customers were overcharged by nearly $500 million and up to $5 per album.

Tower Records was a powerful force that could have continued for decades; however, the company took on a massive debt load in order to aggressively expand in the 1990s. Bad timing and debt killed Tower Records. As the 1990s began, deep discounting for music and online piracy, coupled with complete mismanagement and incompetency ended a journey that could have continued and beaten Beats to Apple’s list of acquisitions.

All Things Must Pass is a documentary that is currently running on Netflix. Directed by Colin Hanks, the opening of the first Tower store in Japan fueled a company-wide certainty that the run would never stop. The failure of Tower Records is thought to be the advent of Napster and other streaming services that began in the 1990s; however, Tower Records suffered profoundly for its inability and unwillingness to adapt and evolve.

The story of Apple under the first reign of Steve Jobs could have turned out like that of Tower Records. Apple had a Board of Directors that knew it was time to Jobs to leave. Mature management was brought in and the Apple stabilized. Eventually, Apple stumbled and Jobs returned with maturity. The rest is history known to all. And then there’s Russ Solomon, the founder, of Tower, a high school dropout who took a few community college courses, but in essence, caught a wave and succeeded, despite being overwhelmed by the nuts-and-bolts of business operations. Solomon needed an experienced management team to do the things needed to successfully grow an extremely popular and profitable business. Solomon failed and in the end, “having fun” at work, is not a sufficient business plan.

The documentary is well worth watching with an eye on business principles; it’s also a nice trip down memory lane.

Let's Start a Business

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Let’s start a business; this is something that people do every day. And so, what should your company culture look like?

Naturally, all employees should love their work. They should want to come to work early and stay late. Everyone should feel that formal business hours are obsolete and because it’s so much fun, nobody should watch the clock.

No more offices. The workspace should be open and without walls. All workers should feel at home with beanbag chairs and ping-pong tables, and Nintendo’s. Massages, sushi chefs, dogs, cats, and unlimited candy dispensers are a must. And do not forget the whimsical and mythical corporate mascot.

What’s wrong with your new business? Everything.

While Silicon Valley has made famous the “perk-daddy” approach and atmosphere, nothing replaces the fact that a startup is hard work. A startup is successful because of a handful of team members are on a mission like dogs with a bone. The beautiful décor and fun times are nonsense and meaningless when the purpose is to launch, grow, profit, brand, and expand.

If you want a good culture, start with hiring only those who understand that it is critical to do what you like, are good and profitable at, and can control; this applies to the individual and the company. Anything less than a 100% commitment to this principle will result in eventual failure.

Morning Coffee

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Monday, February 26, 2018 - Who's In Charge?

Facts versus Emotions

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The Chicago Federal Reserve released economic calculations that indicate that there was a slowdown in factory production and orders in January. Some news organizations that tend to lean more heavily in one political direction are headlining the report as stalled economic growth. We do not agree with the headline writers. We also disagree frequently with economists who make long-term conclusions based on short-term data-points; especially those that have little correlation but fit a predetermined narrative.

Bank of America has become politically involved in a way that we find disturbing. There are reports that they are now actively engaging clients of theirs who are manufacturers of handguns and rifles and insisting that their customers take an active stance in reducing handgun and rifle sales to the general public. The “me-too” syndrome has now moved into the political arena involving the NRA with Delta, United Airlines, and other companies instituting backlash policies following the Parkland shooting.

Another example of biased reporting in the financial and business arena involves the Associated Press which blames the Trump Administration for a Chattanooga, Tennessee tractor-trailer accident that killed six people. As a result of self-driving vehicles becoming a high probability in the next decade, the Department of Transportation has set aside many rules that were scheduled to go into effect following the Obama Administration. One of these rules was to require electronic governors and tracking systems on semi tractor and trailers. Despite the fact that the Obama era rules would not have gone into effect for years, the Associated Press stated “… like many other safety rules in the works before Pres. Donald Trump took office; it has been delayed indefinitely by the Transportation Department as part of a sweeping retreat from regulations that the president says slow economy.” The AP article is an example of biased and untruthful reporting and something one could easily call fake news. The Department of Transportation under Secretary Elaine Chao has pushed the pause button on all regulations in light of sweeping technology changes and the need for "out-of-the-box" thinking when it comes to rules and regulations.

These three items are being brought to your attention in today's blog as examples of the type of economic and business reporting that is now common. The days of hard facts with an unemotional and non-political flavor are long gone. As an investment advisor, we must take into consideration the emotional and political fluff on a short-term basis, but on a long-term basis, 1 + 1 will continue to be 2.

Data Aggregation - We call it the way we see it.

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Data aggregation is not all that it's cracked up to be. The conflicts of interest among those offering, selling and promoting are significant and it's time for an alternative view. Through direct sales, academic babble, and advertising influenced media reporting, the consumer is being snookered into thinking that DA and AI is the next great thing. The rank-and-file consumer deserves to know the rest of the story.

Outline
  • What is old is new to many.
  • Texas Instruments BAII
  • The Slide Rule & Abacus
  • Carbon Paper
  • Before Cell Phones, Scanners, & Today's Easy Peasy
  • Technology Dependence
  • Habits - Good, Bad, Micro, Messo, Macro
  • An Efficient & Effective Life
  • Good, Like & Profitable, & Control
  • Time, Money, Effort
  • It's There or Not There
  • Pen to Paper and Retention
  • Quantitative and Qualitative
  • Data Aggregation is one of the biggest ripoffs going on today
  • API and Screen Scraping
  • Consolidated Laziness
  • The Evil Side of Data Aggregation
  • The Days of IBM Punchcards
  • Just Because You Can Doesn't Mean You Should
  • Traditional Bookkeeping
  • Double Entry
  • Failure To Do Your Own - You Will Fail
  • It's Not That Complicated
  • Hogwash
  • Data Security / Your Neighbor the Part-Time Clerk
  • Too Lazy To Do It
  • Wells Fargo & Equifax
  • Too Easy - Pay No Attention
  • The Problem With Payroll Deduction
  • Low Engagement: Low Knowledge, Low Ability
  • Retirement Dummy: Target for High Commission Wall Street Salespeople
  • Over 30 Years of Experience With Tens of Thousands
  • Clueless and Alone in a Gated Community
  • Spending Whatever Comes In
  • Direct or Indirect
  • Read the Terms & Conditions
  • Marketing, Selling, Conflict of Interest
  • Money In Motion or You Are Dead To Me
  • Stuck With Selling Sammy, Locked to Bob the Financial Planner
  • Paying Through The Nose
  • Retail versus Hug & Mug, or Professional
  • They Hooked You
  • Anything To Make A Commission
  • 99% Chance You Are Not That Complicated
  • Delegation, BBOBI - Do What You Like, are Good and Profitable at, and can Control
  • Don't Be An Idiot
  • Jack of All, Expert at Nothing
  • Mountains or Molehills
  • DA is a Hug & Mug Technique
  • Who Enters The Data?
  • $500,000 @ 2% = $10,000
  • Minimum Wage Data Entry Clerk
  • Identity Fraud
  • Enough Juice at $10,000, Darn Right
  • Everybody Has a Conflict
  • We Are Passionate About Non-Discrimination
  • Faster With Pen & Paper Than Complex Charlie
  • Advice NOT a Financial Planner
  • 15 Minutes, Down To Business and To The Point
  • The Power of On Demand
  • DA as a Crutch
  • Grandma and Grandpa & King Tut
  • Old School but It's Better, It's Simple, & It Works
  • Just Like Us

Audio Blog

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A comparison of what others do versus the way we do it. A real life example based on a firm in Tampa, Florida. All information about the other firm comes from the Investment Adviser Public Disclosure website of the Securities and Exchange Commission.

THE OTHER FIRM - NOT TrueStar Advisors, Inc.

THEIR Maximum annual investment advisory fees for portfolio management are based on the following tiered schedule that is based on asset levels: Assets Under Management - Maximum Annual Fee

First $250,000
2.00%

Next $250,000
1.625%

Next $500,000
1.50%

Next $1,000,000
1.25%

Next $3,000,000
1.00%

Over $5,000,000
0.75%

Bicycles

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Today we posted several videos, stories, and gave our views about a trend that has its ups-and-downs, that trend is bicycle renting. Commonly called bike-sharing, the idea of being able to get from point A to point B, with less effort and by way of a bike that you can drop off easily, is something that is not new on a worldwide basis. In addition, we discuss the economics and investment aspects.

Our Thoughts & Business Practices

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Mint Millionaire Mindsets

Learn Money, Investments, and Business (MIB)

Modern Minimalist Methods

Own Everything You Use and Use Everything You Own

Paetro Principle

80/20 Rule

The 10Ps

People Product Process Price Performance Professional Philosophy Passion Persistence Patience

Time Horizon

Edward C. Banfield

Like, Good & Profitable, Control

Just Because You Can Doesn’t Mean You Should

Good Habits

Micro > Messo > Macro Automatics, Effort, Time

Focus, Aware, Ignore

Ignoring is as if not more important

Five COWS

Physical, Emotional, Intellectual, Relationships, and Financial In the Order of Importance

Delegation

Efficiently & Effectively Retainer, User, Delegator, Abdicator, Ignorer

Be Selfish