onsdag 20 april 2011

Thoughts and reflection – The Winning Investments Habits of Warren Buffet and George Soros

Thoughts and reflection – The Winning Investments Habits of
Warren Buffet and George Soros

Before I’d go to university, I worked in Norway for two years, I worked in the construction industri.
I started to work June 2007, the first weeks was just general labouring, or more like a period of ”work experience”. When i came back in August, after the summer vacation, I met a guy, who I hade the big honor to work with by my time in Norway.
I recognized this guy, but I can’t say I knew him, we was about the same age so I think I’m recognized him from school or something.

Anyway we worked together for two years, we shared the same company car and always worked in the same team. He was pretty restricted in the beginning, so we didn’t talk that much. After some weeks together we started to talk more, sharing our thougts and so on.

This guy wasn’t the social party type, he rather stayed home at the weekends worked for his father och just did some gardening at his parents house. That was a completely contrast to me, I was partying two days a week and always prefered to have people around me.
But he was so simple, his common sence was incredible. Even if we as very different, we became as best friends, I think the reason for why we aggreed so good was because we both had the same target – to become economically independent.

This guy saved all his money i stocks, he worked up 60 hours a week, earn good money and never spended a cent, in opposite to me, I spended much money.
He learned me much about money management, how all the habbits affects your life.
This man was a big fan of Warren Buffet – One of the richest persons in the world.
He talked a lot of him, a started to read books about Buffet, and I found out that my friend and Buffet seemed to share much of their values in life.

This short history made me choose to read the book ” The winning investments habbits of Warren Buffet&George Soros”.
The book is written of Mark Tier, an australian writer and buisnessman.

The book deals about how the mental habits affects the results in your investments.
Both Buffet and Soros main reason for investing money is for preserving them. They have criterias over when they will buy or sell stocks. They never deviate from the buy or exit strategies – something who is more than common for the average investor.
When the ”masters” see something that suits their criterias, they make it big – ”When we see something that makes sence, we’re willing to act very fast and very big”(page 152)

The book deals of lots of different views of the mental habits, and how hard it is to really follow your strategies. I think I’ve read 5-10 book about Buffet, and for each book I read am getting more and more convinced over that my ”buddy” will became a master investor.

Everything they do, act or say is very similar.

I feel very happy for my friend and his succes, Buffet have an an annual return on about 20% (page 8), and my friend had 200000 kr on the stock market when we met each other in 2007, now he commutes between 3 and 3,5 millions – Good result!

The books I have read about Buffet has learned me alot, but I think my friends behaviour had affect me even more, I hope I can adopt their habbits and become a successful investor.

Buffet and Soros always analyze how to avoid losses, they don’t just concentrate on the big profits, when avoiding the losses, the profits will come (page 17)!
It’s a tuff rule, especially if someone gives you an insider about a stock, and you don’t really have a clue about the stock, you just trust him. In that situations you get sick of the chance to make a huge profit.

Buffet is a big man, he has donated most of his fortune to Bill&Melinda Gates Foundation!

söndag 3 april 2011

Material economy

Annie Leopard talks about, what she is calling it, ”The materials economy”. What she mean is; the life-cycle of the raw-materials on earth, from raw-materials, to the producers, to the distributions, to the consumers and finally to the disposal. In this document I’m going to discuss each part of the ”materials economy”, first I will give a retell from the video, after that I will try to dispute or agree her statements regarding each part. Finally in the end of the document, I will try to summarize my own opinions.

She has a very critical view on the”materials economy”, I can definitely agree with much of her assertions, but she is very critical on, kind of, everything.  

The first step in the”materials economy” is according to ”Annie”, the extracting of raw materials.
She states that 30% of the world resources have been consumed in the last decade.
US represent 5% of the world’s population, but consume 30% of the resources.
80% of the original forest has been devastated.
If every country would consume as much as US, we need resources from 3-5 planets for supplying the human consumption.

Can we conclude she’s states an objective view of the ”materials economy”?
Does she give us, her subjective view?
Does she get paid from any organization, to mediate their cardiac issues?
Who does the calculations she is using?
What is the definition on original forest?

The second step is the production, the place where the raw material goes to a product.
According to Annie, the producers put lots of synthetic chemicals into the products. She talks about a fire protection that is called “BPR”. Which is one of the most dangerous chemicals?
She states that pillows are treated with a very dangerous chemical; she declares how dangerous it is to use those pillows.
She talks about moving the production to other countries, to the “third world”.
Reasons for that is lower cost, and that the people in those countries work in a very bad environment, without any complain at all.
She states that people, working in those factories/plants will get exposed from lots of toxics, and that women might not be able to give their babies breast milk.
According to Annie, the US producers pollute the environment with 4 billion pound of toxic chemicals.


Annie only talks about the problems. What about the positive effects of using the chemicals?

BPR – a chemical who is fire resistance- is that overused?
Is BPR used on other products than those that need fire protection?
The chemical used on the pillows, if it is that dangerous she states?
Moving the production to other countries, is that just bad?
What about the job opportunities? Isn’t that a change for the “third world” to develop their social standard?
4 billion pound sounds a lot, but what is a lot? Our world is big!

The third part is the distribution of the products.
This is the place where the product reaches the consumers.
Those companies working in this area just want to sell everything as fast as they can and make as big profits as possible.
This is the place where the companies are driving the prices as low as it’s possible.
She talks about how cheap some products are; how she gets embarrassed, buying products with a very low price.


Is it just problems with cutting the costs, so you can offer cheap products? Is that wrong?
Why should some people gamble with their money, putting their money into companies, without the possible to get any interest on their money??
Isn’t it that system that drives the development?

The fourth part is the consumers.
Annie calls the consumers the “golden error”, she states that the big problem in the “cycle” is that everything is constructed for consumption, a phone is constructed to last one year, and thereafter you buy a new one, and so on.
She states that 99% of all products are thrash within 6 months.
-          Is it possible to run a planet like that? (question from Annie)
According to Annie, the consumption in the west is the reason for the fraction of the world’s economies – of the 100 biggest economies, 51 is companies, a horrifying number.
Annie, want more education, everyone wants to use/wear the latest trend, and that’s increasing the consumption to the sky.
Annie states that the happiness decreasing all the time, and that the peak of happiness was 50 years ago, when the “consumption society” started, is that a coincidence?

99% of all products are trash within 6 months? That differ from person to person, some are violent and others are careful!
The advertising affects people? Yes it does, but it also gives us lots of opportunities, isn’t that good?
If you have the possibility to be a “shopaholic”, thus you can decide what to do, does that make you happy?

Disposal
Almost all our products goes in the garbage, then we put it in the ground, or we burn it up, and put the ashes in the ground. When doing that, the toxics in the products, get released.
It also increases the concentration of CO2 in the air, which contributes to global warming.
She talks about recycling, which is good. But most of the populations don’t do that.

She talks about some good things, all the interventions, and all the work for
-          Sustainability
-          Equity
-          Green Chemistry
-          Renewable energy
-          Local living economies
-          Closed loop production

Discussion

I think what Annie talks about a very important subject, even if I don’t think it is that bad as she states. But it is good that she talks about the subject, people open their eyes, getting more interested of the environment, and therefore might buy products with stamp requirements. The problem is, those products are so much more expensive.

By talking about the subject, getting people updated with information, they might change their view and might pay a little extra for “green products”.

She states that we move our problems to the third world, and uses the people. Low salaries, bad environment and so on. But what happened if we don’t move production to those countries? What would their occupation be?
Developing-countries, getting better and better standards, they getting more freedom, higher salaries and so on. Would that have happened if the big companies never had put their jobs in the country?
No, I don’t think so.
If you ask them whether they have a better life now, or 50 years ago?
I’m convinced they think their life is better now.
But off-course, the environment for the productions-workers must be good. I’m sure that the companies follow the   laws of every country (where they have factories).
So the problem maybe is the authorities in the third world countries?!!
As the situation in North Africa right now, they are fighting for their freedom, to live in democracy. When they get their democracy they will fight for the people, and force the authorities to set up stricter rules for the companies.
That’s one step for the third world, as long as they don’t live in democracy; I think it is hard to push the authorities to increase the welfare for the people.

In fact there are some companies who try to affect the authorities, for example Richard Branson. When he planned to open an airline in Kenya he had some demands toward the government. He promised to bring lots of work to the country, in good environment. Suddenly the government refused to arrange anything, Branson didn’t start an airline and the country lost lots of works.
So to blame the big companies, for treating and using the “third world countries” bad, isn’t the whole story. Some company act in an inappropriate way, but not all.
It isn’t just negative placing the production in the third world; I think it accelerates the pace for them to get better lives.

 Annie’s main statement is the over consuming society and high energy use.
I definitely agree with her about the energy waste.
We are using way to much energy, what happens when the oil I used up?
How will the food be transported around the world?
Will we go back to society where you produce your own food?
NO, we don’t have enough space for that, especially not Asia.
So we have a big problem to deal with.

And the global warming?
What happens if the water level will keep on increasing?
What happens when it will get warmer in Africa?

I think that is a bigger problem, than the toxic that might decrease the health on some people, if it even does that!
Those toxics are in such a low concentration, that’s not dangerous for the whole world, but global warming is!
She point out some toxics, but why are they using them?
I guess they have purpose!

The global warming is the main problem the world must deal with!!!
Not the toxic we put in our products.







 



   

tisdag 15 februari 2011

Snooping Bosses

Thoughts and Reflections of article; Snooping Bosses


Monitoring, whether it’s in the private life or at work; I think it’s a big violation against us all. An exception is if you are suspected for any crime, or if your work, interests the authorities. In that case I definitely think that the use of the technological advances is justified.
I know that many companies from the area I’m from uses an “internet blocker”. It may seem as a fair and good solution, but I think the interaction between owners, company management and other employees should be very confident. The owners and the company management primary target have and will be a desire that every employee should work with a high level of efficiency and productivity. When working, know you will be monitored, must feel uncomfortable. I think it really impedes the confident between the employees, and a consequence of that will be a decreased efficiency and productivity.
When using surveillance equipment to find out what your employees does, you almost forces them to focus on their work duties every second of the day. I don’t think many people around the world whether have moral or strength to implement a working day like that. I think that a few minutes every day at facebook or some other “for fun homepage” creates more prosperous employees. It could be something else too, a phone call to a friend, just something that moves your thoughts away from your work for some minutes. Just to get some peace of the mind. After doing such a thing I’m convinced that the efficiency and productivity will improve along with the wellbeing during the working.
The big problem is of course all these employees, with no moral at all against the company they working for. Those spend hours on facebook or some other inappropriate homepage, taking the car spending hour’s downtown with friends or something like that.
I definitely understand that the company management reacts, but to restrict the use of internet or any other communication tool for everyone is going too far. Everyone shouldn’t be punished because someone have made a mistake and violated the company police. That is a very difficult situation for the companies, where do you set the limit?
I think one solution is to work towards targets, as long as it’s possible. In some professions it can be hard or impossible to set up measureable targets. But if you work toward a target and meets up to it, the company management don’t need to care about what you are doing during the working days. Except if you in any way are contrary to company policy.
In those companies who it is impossible to set up targets, the company management has big challenges, to find employees who can work with freedom and responsibility is very difficult. That’s a tough problem to deal with!!

If the company uses any kind of monitoring, I think that should be performed by an outside company, working under secrecy. If they control the information from the surveillance equipment, the employees don’t need to feel so observed from anyone in the same company. In all companies that use surveillance equipment it’s just the company management who got access to the information. That opens for the question, if the company management uses the information in a proper way!