Monday, December 29, 2008

Oatmeal in a Rice Cooker: The Oatmeal Wars: Part IV

A few people including myself commented that the previously written blog that cooking the Bob’s Red Mill Steel Cut Oats (determined to be the best after a number of taste tests) resulted in an overflowing rice cooker. The obvious solution is to reduce the amount of rice and oats proportionally. Since I wanted at least two servings I tried 75% and that still resulted in overflowing. However, I recall that Stacey washes rice before cooking it and the result was better tasting, fluffier rice. I decided I’d try the same thing with my oats. Result: worked like a charm. Ended up having no bubbling over of the oatmeal and it tasted great. So, new rules: reduce water and oats to ¾ cup of oats and 3 cups of water, stir/rinse in a colander until the water is almost clear. It will start milky and get clearer the longer they are washed. If just running the colander under water than just work them for about 60 seconds. I think you’ll be pleased with the results.

Starbucks Oatmeal: The Oatmeal Wars, Part III

I was walking through the airport one day a few weeks ago on my way to LA, saw that Oatmeal was now being offered by Starbucks. Having an idea of what good oatmeal should taste like, I wanted to try some but wasn’t particularly hungry. This week, with 14 inches of snow on the ground christmas day I decided to walk over to the local starbucks at 21st and overton and give the oatmeal a try. Blech! Its advertised with this picture of beautiful oatmeal and all these fluffy letters talking about ‘wholesome and nutritious’. Turns out, its just rolled oats with some hot water poured over them. nothing more than instant oats. For fruit: some really dry and hard raisin things, its clear that craisins are superior topping for oats. The brown sugar wasn’t awful, and a little packet of nuts (no, nuts do not go on oatmeal).

Avoid the Starbucks oatmeal. For the price of it, you can buy yourself a box of quaker oats, ask for some hot water, and be just as well off.

What they COULD have done, to actually do something truly customer oriented, would have been to have real oatmeal cooked up in each store in the morning, served fresh with craisins and some organic brown sugar. Charge 3.25 and everyone would be happy. When you attempt to cheat customers with solutions that only go half way you can tweak your balance sheet in the short term but in the long term you create negative value. Starbucks no longer has any brand trust with me. I can’t trust their baristas to have any pride in their work and I can’t trust their food to have any authenticity to the ‘premier experience’ they are trying to create.

Economic reflections, Gold, and Peter Schiff

While taking a little vacation time I’ve been chewing on my investing strategy for 2009, changes I want to make to my portfolio, etc. I grabbed a couple books at Powell’s the other day that, after sitting down, I discovered were actually written by the same author, Peter Schiff. The two books were Crash Proof: How to profit from the coming economic collapse and The Little Book of Bull Moves in Bear Markets. I had seen Peter on a few Youtube CNBC videos discussing his views on the economy and decided I want to get more of his perspective. I’m not sure about some of his conjectures: in one sentence: buy commodities (think mostly gold), and foreign stocks. Duh. Fundamental to his premise is that we incorrectly give faith in statistics compiled by a government whose vested interests to maintain stability is to keep these numbers in check. Perhaps even worse, we put faith in Wall Street itself to provide us things like bond ratings (whoops!) or give merit to investment houses who make more money the more often we buy and sell stocks. A question that’s been looming in my head about the past 8 years is this: did we create any real wealth in the past 8 years? If we really calculated what I might call a ‘true GDP’ would it have gone up? It seems to me the answer would be NO. Essentially, consumers used inflated home prices to justify loans to get money to spend on krap to fill their gigantic spaces of suburban sprawl. Money changed hands, but the fundamentals of a strong economy would be if that money was used to buy things like manufacturing tools and technology to get better productivity: more chemicals for cheaper prices, more efficient fuel consuming devices, longer lasting paints, stronger structural materials, more efficient fabrication facilities (intel calls them ‘fabs’). How much of this occurred relative to people acquiring buying higher end coffee that has turned into the swill that any sufficiently advanced capital market provides? (TODO: short essay on the decline of quality and value during the maturation of a capitalistic enterprise as investors seek to maximize return). There is a difference in the dotcom boom. This was fueled by real value. Metcalf and Moore’s laws observed real productivity boosts for business. The consumer was given a greater degree of choice and price transparency.

Schiff has an important thesis about the stock market and its ‘true value’ has declined over the past 8 years. To draw this conclusion, he uses gold instead of US dollars. The US dollar, and all other major currencies, are fiat currencies—backed not by anything real but instead by the faith and credit of the institution that issued them. If you assume the real rate of inflation is 8% (and I agree with something closer to this number than the CPI the government gives) then the Dow has lost 42% of its value. If you use gold, the Dow was worth 43 oz of gold in 1929 and is worth less than 12 oz today. (granted, gold rallied over the past few years) [page 26 of author’s note]. My question is simple: why is gold any better than the faith and credit of the us government? One might say ‘because its real’. What does that mean? Its real? You mean its physical? Oh, okay. folks, IT’S A SHINY ROCK. It has no more intrinsic value than an economy. Its pretty? Its limited? To a similarly artificial degree, so is land. so what would we obtain if we divided the Dow by the avg. price of a square foot of land in 1929 vs. 2008? I don’t understand humanities fixation on gold as a ‘gold standard’. By the way, I can pound lead with some additional goodies (protons, neutrons and such) and make gold. At some point, this becomes economically feasible, so the ‘gold is fundamentally limited’ premise is simply not true. What about oil? Well, oil is only good so long as it’s the most cost effective energy source. As soon as it breaks that barrier, oil is just some dirty junk better left underground. I simply don’t have a good way to measure any real value..I can observe relative fluctuations. Is economy science, religion, or math? We use math as a tool in our economic arguments but this does not make it math any more than using math in science makes science any more than a religion backed by math.

Philosophical arguments aside, Peter’s book has been a good read so far, and I do think it is influencing my investment thinking. The last influential author was Benjamin Graham who advocated a 50/50 strategy between stocks and bonds. This adjustment in thinking has had benefits in the recent past. With that said, I should point out I was pummeled in 09 regardless of the diversification, just less so than I might have been had I not taken his advice. Now, I’m challenging the current ‘US as stable place for my money’ and entertaining thoughts of more direct international exposure and commodity markets. The bubbles in India and Shanghai have burst, and this may have provided good entry points to these markets.

XBOX and the battle for the living room…

Changes…changes…changes….was looking at my stack of XBOX360 games and thinking about the conversations 8+ years ago about ‘the battle for the living room’ that PCs were going to face. “How could the PC ever get in beyond the hardcore hobbyists?” Recall the conversations of how futile it would be for Microsoft to even try to get a Windows machine into the sacred living room. I now have 2 xbox 360’s, 10+ titles purchased at $60 each, a number of online transactions for movies or the yearly XBOX live accounts renewed for the third time recently (approx $600+$600+$150+$50 > $1400). They consume a significant portion of my entertainment dollars as well as my time for relaxation in every form: alone and with friends in both meatspace and cyberspace. When we have parties, some portion of the guests end up on the xbox for some portion of time, typically playing guitar hero style or trivia style games. While it may not have reached its full financial payoff yet for shareholders, I think this XBOX thing has been a monumental success, 25 million units in living rooms throughout the world and growing. A more interesting analysis would put together the amount of money made per title, avg. # titles purchased per year in each geography as well as online content amortized over the 5-10 year life cycle of the console and get a number that I think more than justifies their decision to enter this ecosystem. Way to go Microsoft. Might be good lesson for other large companies to learn from when entering entirely new ecosystems, seems their persistence and bringing in the right talent allowed this battle to be won. I appreciate, as both an investor and consumer, Microsoft’s permission to let the inmates run the asylum. In many cases, this would have been a catastrophy, but in this case created a more interesting world for us all.

I’ve heard people say ‘the wii has won’, as if that was a competitor. Sure, people split their dollars between these devices, but ultimately they also compliment and reinforce the acceptance of similar play metaphors for the living room. Similarly with the playstation’s of the world, they will compete for the split of consumer’s wallets but validate the battle because they all can be successful in this space. In this round, Sony seems to not have gotten the numbers MS did, but this will reinforce their vigor to get it right the next time around. In the end, humanity benefits in this competition, despite the Orwellian oligopoly this ecosystem has become.

Sunday, December 07, 2008

Me at the top of a hill in Mendoza Argentina.


Me at the top of a hill in Mendoza Argentina.
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Me in China
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Mike's dog Murray!
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on top of mt. st. helens.
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testing the blogthis feature in picasa2...
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Gears of War 2: Insane checkpoint glitch in Act III

On insane mode, in Chapter 3 Act 3, when you have reached the entrance to the temple at the top of the mountain, it seems there is a bug in the checkpoint system. When you go through the temple entrance, it does not register the checkpoint. To address the issue, go backwards to the start of the chapter. There will be a giant tree fallen across the path, drive to this point, then turn around and go back to the temple entrance adn the checkpoint will clear. I hear this also affects hardcore mode.

Gears of War 2: Killing Bloodmounts

The Gears of War fest continues. Yesterday 5 of us managed to hit the 50 horde levels achievement. So, the bloodmounts, how to kill?

Two relevant facts: a well placed shutgun shot will dismount the rider on the mount. Additionally, shots at the head of the mount itself will cause it to pause to knock off its metal facemask. while the mount is performing this action, one can continue to pump rounds into its head. If you haven't dismounted the rider yet, he will fall off, then get back up but a quick chainsaw will take care of him. If you have dismounted the rider, remember he's still alive, just knocked off, so he will come after you, but he's relatively weaker and less of a threat than the szhizophrenic mount, so take care of the mount first.

What best to shoot the mount in the head? We've varied through just about every weapon here, pick your favorite. Typically the Lancer is good because you can leverage the chainsaw when the rider jumps off.

Thursday, December 04, 2008

Gears of War 2

Been online for several nights this week with friends blasting away through Horde mode on Gears of War 2. We're through 48 stages, 50 we get an achievement. Its been an awesome awesome trip.

Kim P. also recommended Left 4 Dead...have to check that out as well. But first, we get through 50 levels of Horde!

Impressive new robot

Just watch!