Friday, April 20, 2018

In Silicon Valley, "Endemic" overvaluation

A new study cited at Techcrunch by  Ilya Staebulaev found that "One in 10 unicorns is overvalued by at least 100 percent, and on average a unicorn reports a valuation 50 percent above the fair value, citing the problem of post-money valuations.
"The common shares are overvalued by 58 percent on average, and for almost half of unicorns “fair valuation” dips below the billion-dollar threshold."
"Whether or not we will see a crash on anything like the scale of the bursting of the Dot Com bubble is similarly difficult to say with certainty, depending as it does on which dominoes fall first and how hard investor confidence is hit. But suffice it to say, there will be some major casualties." -IS

Reference: Gornall, Will and Strebulaev, Ilya A., Squaring Venture Capital Valuations with Reality (February 27, 2018). Stanford University Graduate School of Business Research Paper No. 17-29. Available at SSRN.

Sunday, April 15, 2018

10 Questions - 10 Answers for a better life

Today I am taking 10 questions from the readers and answer them swiftly.

Question #1 comes from reader John:

1. Max, I work in the intelligence community . I'd like to know how do you deal with haters. Thank you.

A1: Alas, John, my take that's not some non-sense Internet "haters" but an actual person in your life who doesn't like you. I've got haters peppered high and low. There are two things that you should do, actually, three:

a) Get yourself stronger. Stay in shape, stay crisp, stay lean. Be unaffected.
b) Ignore them.  For most haters, for 80% of them, that should do it. Stay on your mission.
c) Continue reading this blog.

Question #2 comes from reader Stowe:

2. Hello. I am a business owner with around 50 employees (tech industry). How do I assess the people working for me. I am hiring and promoting now. Thanks.

A2. Assessment is contiguous , and you should have your metrics, your KPIs, which I'm sure that you do.

Why don't I give you a quote from the book I am working on, book to be released this summer:
"According to science, grit appears to be correlated with the Five Factor Model (FFM) or Big Five Personality traits: openness to experience, conscientiousness, extraversion, agreeableness and neuroticism. Neuroticism has been correlated with the so-called “mental noise hypothesis”.  Scientists have scaled the “mental noise” and you can test yourself by taking a Cognitive Failures Questionnaire (Broadbent, Cooper, FitzGerald & Parkes, 1982, available here in 25 questions). Hopefully the score is low."

If you want a high "grit" person, this is something worth looking into.

Question #3 comes from reader Charlie

3. Max, who is the alpha male of the week. Thanks.

A3. Charlie, I have somebody in mind, who is very strong.  But these people receive already a lot of media attention. So on this website I've concentrated (so far) on Hollywood characters and actors. Mads Mikkelsen comes to mind from Hannibal.

Quote of the Day: "Breath on a nostril of a horse.
                  And it could be yours for life,
                  But you have to get close" -David (Alien: Covenant)

Wednesday, April 11, 2018

Cambridge Analytica is coming for you

Yesterday there was a lot of talk  about the Facebook CEO hearing when the real stuff is happening behind the scenes.

We know that Cambridge Analytica harvested data of up to 87 million FB users -in actuality that number could be lower, but you can bet all of them, regardless of their numbers, were eligible voters.

But who is behind Cambridge Analytica ? Also, what does that firm (now suspended from Facebook, but not from government work) actually do ?

The company does psychometric analysis of big data. "The firm claimed to have developed psychographic profiles that could predict the political leanings of every American adult." (NYT) Read: Facebook Fallout by N. Confessore and D. Gelles. The company has a commercial, as well as a political practice. I'm thinking: Hey cowboy, I know someone who could use some of that.

Who are its backers ?

Its backers are the father-and-daughter power couple of Robert and Rebekah Mercer, also backers of Trump. If you're like me, you're naive to think Trump has used his own money on the road to the Presidency. Well, maybe to a point. When things started looking good, you bet on the right horse, which they did. More power to them.

Quote of the day: "Victory goes to the one who has no thought of himself."- Shinkage School of Swordsmanship

Who is Bob Mercer ?

Saturday, April 7, 2018

Awesome Tony Robbins fails flat in face of woman's solipsism

Tony Robbins is a first class act. He is the kind of super-charged, benevolent hero who wished that everybody bettered their lives.

In this video, we see Tony Robbins trying to make sense of a woman who indulges in the victimhood play of the metoo movement. She takes offense in Tony's advice which was not to use the sexual harassment tag to make yourself "significant" [At the end she's acknowledging that she's misunderstood him.] Tony tries to reason with the woman. I am playing the full video here, background amateur phone shot  (I don't know for how long this video is going to be up, so you better hurry). A short version, which is less than 1:45 minutes long, viewed 1.9 million times, has been carefully cut with text/titles to show indifference, even hostility (?) on the part of Tony.

Note that Tony is not debating the movement, nor is he in any way dismissing the claims those women (might) have. On the contrary, he gives them legitimacy and respect. He says that, however, "you don't grow" if you use use anger. "Anger is not empowerment. Don't "use the the metoo movement to try to get significance by making somebody else wrong. And there's nothing wrong with that. It just won't make you happy."

Tony Robbins is making a stage demonstration.

Robbins instructs the woman to put out her fist and starts walking against her. Why ?

As she is pushing back, he tries to make her realize something: **that more pushback is NOT helping her**.

Did she understand it ?

Quote of the day: "You are either a victim of circumstance or you're the creator of circumstances. There are no other options." -Unknown

What are your allegiances ?

If you are a social media influencer, journalist, editor, correspondent or blogger, expect the DHS to track and catalog you. The DHS is asking for a contractor to develop password-protected "Media-Monitoring Services".
"One aspect of the media coverage to be gathered is its 'sentiment.'" If you are a Trump supporter, you're fine. If you're may wish to  reconsider."The details of the attached Request for Information, however, outlines a plan to gather and monitor the public activities of media professionals and influencers."-Forbes.

What if you are neutral, but you are the top blogger on strategy and personal strength in the world ? This blog is the most unorthodox, and also the most powerful blog on Wall Street. It is The Number One. I know it, you know it, they know it. For clarification purposes: the blog gets 1400 views a day (or some 42,000 monthly) which is very light by blog standards. Check out this free report at MySiteWealth. However, some 14% of readers are in the highest-income bracket (over $130K/year which is the highest bracket on this scale), and some 60-65% work in the technology sector. In other words, my readers are influencers themselves ! The one thing the analytics report doesn't give is sentiment bullshit, which would be the percentage of haters who come to read me. I'd say that's sky high, since haters dutifully and religiously log on to see what I write. They are some of my most loyal readers.

 A friend of mine told me: "Hey, man. Have a gun. Always be ready. Spread your bets. Be ready to move at a moment's notice. Have money parked overseas. Have three passports" Yes, but how many of us can do that ?

Quote of the day: "Any enemy may be defeated-at the right time". -Master Bondara, Star Wars Darth Maul: Shadow Hunter

Tuesday, April 3, 2018

Manliness in the age of fools-with a surprise instead of a brain quiz

In episode 12 of the Part One series "Blood and Sand" Spartacus is put to test by Legatus Glaber and has to fight a couple of Roman soldiers. Spartacus's master, Batiatus, agrees to the fight, although Spartacus is not in a fair fight (he holds a wooden sword). Batiatus does so because he seeks Glaber's favor.

Is it ever a fair fight ?

Earlier in the episode, Solonius is executed ad glatium, but not before Spartacus gains the inside knowledge that it was Batiatus who ordered his wife finished. Bingo !

 "Underneath the sands, in the holding area, a chained Solonius is visited one last time by Batiatus. Batiatus gloats and ridicules Solonius, Solonius then asks if Ashur was always Batiatus' dog. Batiatus takes great pleasure in telling him that "His loyalty never wavered". (Ashur became Batiatus's fixer. If you've watched the series, you know Ashur becomes the next Master's fixer, working for Claudius Glaber this time) -From Spartacus Wikia Fandom

Throughout the series Batiatus, as the owner of slaves is referred to as "Dominus" (Master).

How many Dominuses do you have in your life ?

I'll be making some observations today on the WSJ weekend interview with Harvey Mansfield, a Harvard faculty who's just turned 86.  In his interview with Tunku Varadarajan, Mansfield makes some comments about manhood. These aren't new to those in the manosphere.
"Trump is an image of [his base] notion of what money can buy. They rather like and appreciate his vulgarity and his baseness, his impulsiveness." Trump won a majority of white women-and women are attracted to manly men, I think." 
"Trump's success was a backlash in favor of masculinity." "You could look at 2016 as a revolt of the lower-IQ half of America against the upper half, which is dominated by the universities. -a replacement of the people who reflect the values of American universities, where manliness is taboo." 
"We haven't had a real political debate about manliness and maybe Trump is the first stage of it."  -all quotes from Prof. Mansfield's interview
Yes, Mr. Mansfield, except that manliness doesn't belong in the political debates, nor in universities.

It belongs in the ring.  With people like Spartacus, God bless him, and myself.

Sunday, March 25, 2018

This is heavy: Stormy Daniels

I watched the 60 Minutes Stormy Daniels interview with Anderson Cooper tonight and wanted to jot down a few things.

I am a businessman, like Trump, and I don't pretend to see or know everything. This is better than the Apprentice. It can bring Trump down.

 1. I believe in fights to the end. Fights where the parties can lose everything. **It's everything or nothing in my book**. Stormy Daniels fits that description (and so does Trump, albeit he will lose more). Knowing Trump, you can assume he will double down.

 2. Stormy is credible. I believe in a court of law, she stands a credible witness. Notwithstanding her profession, she is a strong witness.

 3. I don't know how much duress can be used as a defense. I mean, you can say I signed this and that under threat or pressure. I think financial hardship constitutes duress at this point, as a destitute person can't provide for themselves the most basic needs: food and shelter.

 4. It won't be the first time men lose their titles for laying with the wrong woman. Men I've personally known have lost position, businesses over poor choices.

5. Here's what nobody else tells you:

So Trump sits down with a magazine in his hand. Ok I got this magazine, I'm on the cover of it, I built 5 companies, blah-blah, whatever. What he doesn't realize is that the woman is not impressed because she is at the top of her game [in her industry] herself. **You can't sell yourself to someone who is not impressed.** You'd think somebody would tone it down but...A lot of men communicate they are inferior by trying to impress women. So you've got your own TV show ? I've won the movie awards, I'm one in a 1000, what's the big deal here.

Let me make it easier for people to understand it here. For a guy who is handsome and works out and is "in demand", the beautiful woman that sits across the floor at the restaurant, let's say, is not much of anything. Her value is very little to him, but for the rest of "average" guys ? She's out of their leagues, they drool over that because of their own "average" SMP value. Same thing with meeting people, I'm not impressed by you, whoever you are, if I am a top biologist [if that was my trade]. 

 Thought of the day: "Accept responsibility for everything that happens in your life. That's what separates the men from the boys." -Max Cantor maxim

Saturday, March 24, 2018

Best Strategy Book: 100 Tricks to Appear Smart in Meetings

When people ask me what's a best book on strategy for a corporate hog they might have in mind Roger Aisles: Off Camera by Zev Chafetz or the 48 Rules of Power by Robert Greene. They expect me to start digging through Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger or start pulling out Valuation: Measuring and Managing the Value of Companies (Wiley Finance) by Marc Goedhart which was the "bible" when I was working in M&A.

Don't hold your breath, boys. Instead, but this book: 100 Tricks to Appear Smart in Meetings by Sarah Cooper, former Yahoo! and Google employee. Some might try to dismiss it as humorous and an attempt at ridicule; it is far from that. I have worked alongside 12 CEOs and have attended dozens of C-Suite sessions, what Sarah Cooper writes here echoes reality.

Are executives that rotten ? No, they're not. However rotten you've pictured them, they are worse. You see, those Harvard and Stanford grads they think they got a license to screw, and screw up they do.  It's the way of the world. So the humor in this book is only as much as the fucked up reality.
My blog is about giving you an advantage over the competition. Any advantage will do it, and in meetings, you need to look important, you need to look engaged, you need to look upbeat, you need to look informed, you need to look fabulous.

We'll list some of the "tricks" from the book. I urge you to buy the book to get them all. Furthermore, hide it from your boss. Don't share it with your colleagues (do I really need to say this everytime, that the good stuff you don't share ?) Let it be your pocketbook reference (the book is illustrated). You now have an advantage over your coworkers. My numbering here does not follow the original numbering.

1. Translate percentage metrics into fractions.

2. Say: "Can we take a step back here ?"

3. Repeat the last thing the engineer [in the room] said, but very, very slowly. Let me just repeat that...

4. Pace around the room

5. "Sorry, can you go back back a slide ?" Ask the presenter to go back a slide. 

From Whiteboard tactics:

Sunday, March 18, 2018

On Jordan B. Peterson's new book, 12 Rules for Life: an Antidote for Chaos

The Toga Virilis is the white piece of cloth assumed by the boys of ancient Rome at age 15 as a symbol of manhood.

In episode 10 of the Spartacus series: Blood and Sand: "Party Favors", young Numerius, son of the Magistrate Calavius, gets an overview of gladiators training on the ludus (gladiator school) grounds from Spartacus.
"Spartacus walks Numerius through the training grounds. They witness an intense sparring match between Crixus and Duro. Throughout the match, Crixus taunts Spartacus and tries to persuade Spartacus to fight him. However, Duro insists that the fight is only between himself and Crixus, as he relentlessly attempts to overpower Crixus. Crixus easily bests Duro again before leaving. As Duro sits in defeat, the gladiators unexpectedly applaud him for his courage. Agron, too, is proud of his brother for his display of bravery." (Spartacus Wikia)
The youngster is dumbfounded.
Numerius: "The man is defeated yet treated as a victor. Why ?"
Spartacus: "A sign of respect." **There's a lesson right there. The man who rises and fights, although he may have lost, is deserved the respect for doing it.**

The Party Favors episode doesn't end well. Spartacus ends up forced to kill his friend Varo when commanded so by Numerius at the B-day party. Numerius himself being puppet mastered by Ilythia who lays with Numerius in order to manipulate him into giving that order. (If you haven't watched it, the entire episode is narrated at Spartacus.Wikia -link)

Today I'll give you some thoughts on Jordan B. Peterson. This is the post my youngest readers have anxiously been waiting for. If you are over the age of 70, we understand, you can skip this post. I may be doing a Part 2/3 on this, since I'm not covering enough here.

I've watched a few videos and interviews with JBP. He is an erudite and eloquent orator. His speaking skills are remarkable.   The 12 "Rules" are all relevant. They're not "new", however. For example, "clean up your room (Rule 6)" is a banality, yet few people do it.

Quote of the day: "There is no justice in this world." -Spartacus (in agreement with **billionaire** Marcus Crassus)

Saturday, March 17, 2018

Do you have a black turtleneck ? Stanford stamp ?

You may have heard of the Theranos company spiral down. Its star founder is Elizabeth Holmes. I don't have prima facie knowledge of this case, but I found a good introduction in an Oct. 2016 Vanity Fair exclusive,  How Elizabeth Holmes House of Cards came down, by Nick Bilton.
" Holmes preferred that the temperature be maintained in the mid-60s, which facilitated her preferred daily uniform of a black turtleneck with a puffy black vest—a homogeneity that she had borrowed from her idol, the late Steve Jobs."
What do I tell you every time ? You either control your environment or you don't.

If you watch the Jim Cramer interview with Holmes from back in 2015, you'll see that Holmes is more alpha than Cramer.
" Cramer generously began the interview by asking Holmes what had happened. Holmes, who talks slowly and deliberately, and blinks with alarming irregularity, replied with a variation of a line from Jobs. **In Silicon Valley, you're either a Jobster or you're a toaster** “This is what happens when you work to change things,” she said, her long blond hair tousled, her smile amplified by red lipstick. “First they think you’re crazy, then they fight you, and then, all of a sudden, you change the world.” When Cramer asked Holmes for a terse true-or-false answer about an accusation in the article, she replied with a meandering 198-word retort." -Nick Bolton
What I am interested is to find out how investors gave money to a 19-year old college dropout (15 years ago is when Holmes started out). She got her first angel money at 19 !