Christopher Reid's Blog

My musings on the economy, life, technology, business and things I find interesting.

Sunday, October 2, 2011

You Can't Dance

Seriously, I want to dance like this, pure awesomeness.

Saturday, May 14, 2011

Silver and RIM, Timeframes, Luck and Patience

RIM
Silver and RIM have been on my mind of late.  I like being a calculated contrarian.  I have enough risk flowing through my veins running Snapsort, so I tend to be pretty conservative with my other investments.  I do love finance though and there are many investors I respect.  Most businesses are about arbitraging inefficiencies/disadvantages and investing is no different and the reason why the little guys gets so thoroughly screwed.  In February 2010 I wondered Can RIM maintain its stellar growth, yes it was a negative piece for sure, but negativity does not beget a negative reality, especially with the right time frame at play.  In August that sentiment became mainstream and I figured it was time to go against the grain, PUTs at 30 and 35 strike prices had fantastic yields and it was time to, synthetically at least, support RIMM. Even having arguably failed 3 product cycles RIMM will not go to zero, fear can be your friend in these circumstances.  I think that time has come again with the markets recent flogging of our star co-CEOs.  30 and 35 strikes are again loaded with decent risk premiums, you almost can't say no as long as you keep the time frame tight, six months seems good to me.

Timeframes
Time frames are an important part of any investment operation, something like RIMM puts has a simple setup, option A you generate yield like an insurance company and you stomach very reasonable risk, option B you get called and are happy having acquired assets what you believe to be well below market.  RIMM is already down 70% from its peak, conversely GOOG is about even from its top in 2008.  70% is a big number, another 30% drop for RIMM would put its P/E below 5, legitimate value territory, in a 6 mos time frame the chance of any legitimate reasons RIM would trade at 4x future earnings seem low so as long as its a metered bet and you can follow it to even better prices it seems pretty good.  Timeframes are interesting because you need to understand the potential cycles you're working with.  Even if we're in a bear rally six months can't really hurt you historically, you'll get an exit, especially with 30% downside protection.  If we're muddling here with 5 years of anemic growth ahead, the resultant undulations will be great for options traders.

Luck
Snapsort is my biggest investment, its taking a significant amount of my money, most of my time, and nearly all my capacity.  The timeframes here are different and the market cycles for VC capital, startups, m&a activity by google/facebook and IPO appetite will significantly impact the course of our and every other North American software startup.  Now IS a good time to be running a startup, we're fortunate (here's where luck comes in), guys like Marc Cuban owe a lot of their success to market cycles lining up well with when they launched and sold their businesses.  A lot of this is about luck, I'd wager most of the people with big exits in the dot com boom weren't waiting 10 years for a ripe market to do an internet play, they just made a lame website, raised money, bought a userbase and hopefully exited before the greater fools ran dry.  I'm sure there are a lot of opportunistic and pragmatic people who play business cycles like a fiddle, I don't think they're super common in tech.  Warren Buffet is one such person, he's not into tech, he likes underwear, ice cream and cherry Coke.  He is also an incredibly patient person, most people in tech are wired permanently to a red bull vat and are looking to conquer the world next week.  I think patience is key to leveraging business/economic cycles to your benefit and not your detriment.  VCs are likely more constrained by cycles, but I think that's more a function of the economic cycle impacts on GPs vs stated business plan, Angels seem less so, especially the ones who recently exited at a peak.  Bottom line, timing/luck matters.

Silver
Silver is starting to unwind a parabolic move, parabolas are not nice charts for investors, they rarely end well, but we're now seeing SLV puts at 20/25 coming with reasonable premiums, there is support for silver around those levels so if you have legitimate concerns on monetary inflation this is a pretty good hedge, 13% return will surely outpace inflation and owning silver in that range is a lot smarter (not necessarily smart) than owning it at $50.  Given there isn't much support before the 20s you can probably wait it out. I have no idea when people take concern with the massive printing in China (Google China ghost cities - interesting stuff), and general debt overhang in Europe and the USA (25k euros for every man, woman and child in Ireland pledged to bailout the banks).  I do know that those looking for an Apocalypse wont get it and those looking for some kind of new growth supercycle wont get it.  Likely what we get is low growth and crappy markets undulating +10% ~ -30% from current levels and cash cows like Google and Facebook buying up hundreds of startups.

Thoughts?

Tuesday, June 1, 2010

BP Oil Spill vs Ontario

Interesting visualization of the BP oil spill overlaid against southwestern Ontario.  Pretty scary proportions.

 For some perspective on scale:

Saturday, May 1, 2010

Living in a really really tiny house

We downsized recently to a much smaller house, 2500 sq ft 6 bedroom down to a little 3 bedroom townhouse which we gutted and did all kinds of crazy things to make the little space feel bigger and more efficient than our previous house. We couldn't be happier, everything is better about our new house and we have a much smaller mortgage as a bonus. At some point I'll do a post with before and after shots and detail the work we did to gain enjoyment and utility while shrinking space.

Our work at simplification pails in comparison to this Hong Kong residents ultra maximization of his 350 sq ft apartment.  I love the concept, basically even in the smallest of houses you're often only occupying 1 or 2 rooms at a time which means all the floor space in the unused rooms is wasted.  Gary Chang has decided to let every room be as big as possible, by having moving walls he allows the apartments floor space to constantly be re-purposed to a virtual room.  Done sleeping, turn the space into a bathroom, done bathing and dressing turn the space into a kitchen, done eating, turn the space into a living room, ready to entertain, open the whole darn thing up and pour some drinks - way cool.



Some Photos of Gary's 25 Rooms in One
All photos by Marcel Lam for the New York Times.

A Space to Entertain
Incredible light pours in from the yellow tinted windows, with all the sections pushed in you get a nice open entertaining space. The ceiling mirrors create the illusion of a loft space which is pretty neat.  

Photo of Gary Chang's apartment with the sections closed out
 The Guts Exposed
Exposure of the panels which form the front rooms.  Very cool and beautifully executed.
Fold Out Master Bedroom
The large murphy bed and close proximity to the wall of light creates an incredibly peaceful master bedroom.  Awesome.


via Man Over Board and New York Times

Monday, March 15, 2010

Lvl 20 Up!


Unfortunately I don't get to choose my cats friends, but if I did.........

Saturday, February 20, 2010

On either side of Fail Fast is Stupid

Lets get it straight, I'm a big believer in fail fast.  Failure is a magnificent tool for improvement - its raw, unforgiving and truthful.  Quite often its the only way people will except reality.  Failure ain't no model T Ford though, it comes in all shades of grey.

The crux of it is that everyone has a different definition of failure.  Imagine for a moment a passionate and energetic individual who believes in themselves.  Mary Jane left the corporate world to develop Property Barron.  Mary believes she's got the perfect product on hand: a unique mix of Monopoly and Risk.  She has a fun way for everyone to satisfy their real estate investment urges.  Mary believes she's going to sell a million copies.

When Does Mary Fail?
  • If Mary's idea is rejected by angels - has she failed?
  • If major distribution channels reject her idea after prototype development - has she failed?
  • If Mary makes the equivalent of minimum wage after pushing her game for 3 years - has she failed?
  • What happens if Marys family begins to fall apart - has she failed?
  • If Mary needs to pour her life savings into the idea to move it forward - has she failed?
  • If Mary ties her self worth to success - has she failed?

Don't Wait for Failure - Define It
If you define failure you'll have a path to get there.  This is the point of fail fast, it means literally to get to a point where you've proven or disproven your business model / midterm goal / concept / etc.  It also means you're setting acceptable investment risks for each stage vs a loose concept of product success.  Without this you are the proverbial bird with it's head in the sand, the entrepreneurial ignoramus suspended in their own delusional disbelief.  I like to be harsh here, Kevin O'Leary style - harshness is needed to cut through the bulls___ that people put up around them.  Be harsh, be real.  Why is this so important?  Entrepreneurs often confuse their own self worth with success and failure - but fail fast methodology says something else entirely: that success shouldn't be expected every time and that failure is part of long term lifetime success.  Being harsh and hard helps you embrace failure.  Sugarcoating is for losers because failure is by definition for winners.

Stupidity on Either Side
When I say fail fast is surrounded by stupidity I'm talking about the extremes to either side.  On one side you give up too early and on the other too late.  Lets take a look at both and how one might end up there.

Failing Too Early
  • Unrealistic understanding of time and resources required (ran out of money on a viable idea)
  • No gut for controversy, failure, challenges
  • Impatience
  • Misprioritization
  • Fear of invalidating a larger goal (where the larger goal sits in the Giving up Too Late category)
  • Not accepting investment and the business dying on the vine
Failing Too Late
  • Fear of failure
  • No goals/failure points set to gauge success along the way
  • Stubborn about beliefs
  • Self worth tied up in the businesses success
  • Belief that the money spent on the idea converted into a valuable asset and thus the unwillingness to "waste" the investment (note: it was likely wasted a long time ago)
Some Thoughts on How to Fail Fast
  • Set tight failure points - be very raw about why they constitute failure
  • Set failure points well before you become emotionally attached
  • Spend as little money as possible between failure points
  • Get lots of feedback from smart people - set failure points to prove them right or wrong then show them proof and why they're wrong or adapt/shut down as they're proven right
  • Learn to love failing - this is the same as learning to acknowledge reality
  • Help others fail fast
As we build Snapsort we're trying to fail fast, this helps us refine the business model and our assumptions around it.  Failure is painful but as they say change or die.

Tuesday, February 16, 2010

How to see Real Time Google Analytics

Although this is a pretty simple fix, it was one that helped me out.  By default Google shows you a rolling month window up until yesterday, to the casual observer it looks like you'll have to wait in order to see today's stats.

Not so cheerio, simply bring up the date picker and choose the current date and enjoy all the real-time google analytics chart porn your heart desires.  Just remember looking at traffic is a lot like planning how you're going to study for the exam that's tomorrow afternoon - it's basically a time waster.

Notice how by default Google wants to hide today's date from us:











Since launching www.snapsort.com I've become aGoogle Analytics junkie, hoping to have some fun with Google Optimizer in the short future.