George Gilder's Life After Google (Book Review)

Technology oracle George Gilder's writing output is nothing short of  prolific with twenty books published during his long career. I read his broadband manifesto Telecosm at the height of the dotcom boom where he declared the age of computer over, and the beginning of infinite bandwidth with ubiquitous networks. His main premise was correct, but didn't come to fruition for about fifteen years with the cloud computing phenomena. Now that we're fully entrenched in the "big data" era, Gilder is rocking the boat again with prognostications about the next telecommunications phase. Published in 2018, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy, is Gilder's latest pronouncement of what may be coming in the not-too-distant future. 

I didn't like this book one iota. I liked a lot of what Gilder had to say, just not the way he said it. The former gold bug, now cryptocurrency crusader, was erudite with long winded sentences. There was too much fluff in Life After Google, and it read like a mashup of a philosophy book and a technology manual. Lots of minutia about the structure of semi-conductors, data centers and networks. Although Gilder is very smart and has a great sense of humor, much of the work was self-serving. He positions himself as part of the resistance against the Silicon Valley technology giants. It came off like the John Connor character in The Terminator fighting against Skynet and the cyborgs that protect the network. In reality, if blockchain circumvents "big data" and ushers in a new era, Gilder and his bitcoin (BTC) buddies such as Peter Thiel, Chamath Palihapitiya and Marc Andreessen, are going to hit the mother lode. Palihapitiya already cashed in some bitcoin and bought the NBA franchise Golden State Warriors. We're talking about a lot of money here.

The title of the book is Life After Google. Not Amazon (AMZN). Not Apple (AAPL). Not Facebook (FB). It's Google (GOOG)(GOOGL) Gilder sets his sights on. This is because, "Under Google's guidance, the Internet is not only full of unwanted ads but fraught with bots and malware. Instead of putting power in the hands of individuals, it has become a porous cloud where all the power and money rise to the top.". Gilder believes that security in the first iteration of the Web was fine because there were no such things as financial transactions.  When credit cards and cash exchanges were introduced, new security regimes become indispensable. He goes on the say, "The crisis of the current order in security, privacy, intellectual property, business strategy and technology is fundamental and cannot be solved within the current computer and network architecture.".  This is where the distributed network of blockchain comes into play and the cryptocurrencies that accompany it. The most notable cryptocurrency is bitcoin. 

"Warren Buffett dismisses bitcoin as a 'mirage'. Jamie Dimon, the CEO of JP Morgan Chase, calls it delusional. The Nobel laureate economist and Times columnist Paul Krugman declares it 'evil'."

It should be noted that JP Morgan Chase (JPM) now has the Quorum platform that utilizes blockchain. It's gaining traction, but as an evolution, not a revolution, at least on Main Street. 

Gilder explains Markov chains, where the outcome of a given experiment can affect the outcome of the next experiment. Google's entire architecture is dependent upon Markov chain technology. "By every measure, the most widespread, immense and influential of Markov chains today is Google's foundational algorithm, PageRank. Treating the Web as a Markov chain enables Google's search engine to gauge the probability that a particular Web page satisfies your search.".  The author takes swipes at the "titans of the cloud" from Amazon to Facebook for using Markov models to predict what customers will do next. Gilder also discusses hedge fund Renaissance Technologies, and its stellar performance with a dependence on Markov chain technology. He calls Renaissance the Google-era titan of finance and investing. Yet, he is betting against all of them in that a non-Markov model will win, aka, blockchain. I found some of the technological writing difficult to read and understand, especially when discussing Markov chains. I had to go over it a few times, which I prefer not to do. Some of it can be chalked up to my own lack of knowledge. Some of it can be attributed to the stream-of-conscious style of writing that felt like a nod and a wink to Gilder's associates and techie followers.

Gilder devotes a lot of pages refuting Google's head engineer Ray Kurzweil, an "inventor-prophet". I took this to be a backhanded compliment. "Google enlisted in a chiliastic campaign to blend human and machine cognition. Kurzweil calls it a 'singularity', marked by computation over human intelligence.". A Markov enthusiast, Kurzweil maintains that in recognizing patterns, "hierarchical hidden Markov models are a guide to the mind.". Gilder believes that the intellectuals of this era are simply blind to the reality of consciousness. He rejects Kurzweil's doctrine that consciousness can be put to the side as was inferred in Kurzweil's How to Create a Mind. Gilder is a staunch believer in AI, but nevertheless, spends a lot of time invalidating the teachings that machines will overcome human beings. You don't have to worry that a Cyberdyne Systems T-800 Terminator is coming to get you.

A big clue about the contents of Life After Google is the publisher Regenery Gateway.  On their Website the company states that, "Regenery Gateway, dedicated to serious works of cultural, social, and political analysis, is a reaffirmation of Regnery’s tradition of publishing original and penetrating conservative thinkers.". You don't get much more conservative than George Gilder. I get the impression after reading the book that he's in the libertarian camp, and influenced by the Austrian School of Economics. He wants to blow up the whole system. "The premise of the cryptocurrency movement is the recognition that the old bureaucracies of socialism and crony-capitalism have failed. That is the problem, not the solution.". He goes on to say, "Blockchains, smart contracts and cryptocurrencies are new ways to address the evils of the Google Age: porous internet security, unmoored money, regulatory overreach, network concentration and diminishing returns of big data.".  Gilder believes that the move to blockchain and cryptocurrency will happen in his lifetime, and he's 80 years old now. 

I couldn't read the book in long sessions because there was so much fluff. It just bogged me down. That said, I highlighted relevant paragraphs and sentences, and on my second pass through, it made much more sense to me going over the condensed version. Gilder goes into great detail about the resumes and histories of obscure computer scientists that are well known in the bitcoin universe from their blogs and whitepapers. Hackers. programmers, electrical engineers and bitcoin miners could probably benefit from reading Life After Google. I read for information and pleasure. Although there's a lot of information in the text, it wasn't a pleasurable experience. About the only investment in the book that bridges both eras is Nvidia (NVDA). It will be successful with parallel processing if blockchain becomes mainstream. Like they say in the business world, the squeeze was not worth the juice. A better book on cryptocurrency and blockchain is Bitcoin Billionaires by Ben Mezrich.  

Tech Titans of China (Book Review)

Forbes columnist Rebecca A. Fannin recently published the definitive guide to emerging technology investing in the PRC, Tech Titans of China: How China's Tech Sector is Challenging the World by Innovating Faster, Working Harder and Going Global. What Yelp is to restaurants, or, Lonely Planet is to travel books, Tech Titans of China is to technology companies in the Middle Kingdom. From startups to venture capitalists to publicly traded companies, some household names, some not, most are covered in the publication. It's a blueprint for allocating assets to China. With plenty of bullet lists and descriptive tables chock full of information, readers get their money's worth. If there's such a thing as a user-friendly technology investment book, this is it. A fine piece of journalism. 

Although there's nothing like American ingenuity, from Silicon Valley to Silicon Alley and all the flyover states in between, China is nipping at our heels for global technological dominance. It has a ways to go before catching up, but it's encroaching. Equity investors may be familiar with the BAT companies, Baidu (BIDU), Alibaba (BABA), Tencent (TCTZF) (TCEHY), but not as knowledgeable with some of the up-and-comers. Ms. Fannin refers to the next tier as the XTMD firms: Xiaomi (XIACF) (XIACY), Toutaio, TikTok (subsidiary of ByteDance), Meituan Dianping, and DiDi. Some of these stocks are controversial and in the news. For instance, this week a Microsoft (MSFT)/Walmart (WMT) consortium is attempting to buy TikTok because of a mandate from President Trump. Oracle (ORCL) is also in the running. Tech Titans of China is a book, so you're not going to get up-to-the-minute updates on current events, but you will gain a deep understanding of what these companies do. Detailed resumes of the founders and brief business histories, too. 

With roughly four and a half times the population of the United States, there's a huge untapped potential in China. Internet penetration is 58 percent in the PRC while in America, it's 89 percent. Twenty years ago, China was decades behind the United States in regards to technological advancement, but that's all changed now. The BAT firms rose from the ashes of the dotcom bust and were primarily copycat companies of the American high-tech conglomerates. China went from a technology backwater to a wireless powerhouse in a matter of years by leapfrogging the personal computer era and going straight into smartphones. Mobile payments, e-commerce and electric vehicles are niches where Chinese corporations best the United States. In the large urban areas, it's all mobile thanks to the backing of the Chinese government. "Even beggars in China's major cities carry smartphones with QR codes to receive donations. Cash and email are things of the past.".

The BAT companies have worldwide ambitions, but expansion into the United States has been thwarted from political pressure from both countries. "A takeover of San Diego-based chip maker Qualcomm (QCOM) by Singapore rival Broadcom (AVGO) was shot down over potential security risks in 2018, as an example of the tightening of foreign ownership.". This is from the Trump Administration. The powers that be in Beijing have also cracked down on Chinese firms acquiring American organizations. One way to get around this conundrum is for Chinese conglomerates to take a percentage of the American firms. In the past few years, Tencent has taken a 12% stake in Snap (SNAP) and a 5% stake in Tesla (TSLA). As the saber rattling continues between the two superpowers, China has partnered with Israel marrying capital and market potential in the R&D arena. They've also expanded into Southeast Asia: Vietnam, Indonesia, Malaysia and India, where the cultures are more similar with China. These Southeast Asian countries lag five years behind China's technology advances, so there's plenty of room for adoption and profits. 

On the surface, it would appear that there are just two forces at loggerheads, the governments in Washington DC and Beijing, but don't forget the third force, big money.  Venture capitalists have saturated China going back twenty years and expect to hit the mother lode. David Lam, general partner at cross-border investment firm Atlantic Bridge is quoted in the book: "Global supply chains are international, and the movement is unstoppable. It's already happened. So it's hard to turn back the clock.". I agree. It's beneficial for both China and the United States to work out their differences to help buoy their respective GDP's. In the current state of funding, "A two-way highway runs from Beijing's Zhongguancun Software Park to Menlo Park's Sand Hill Road (the miracle mile for VC firms), raising capital and funding startups hinged from both coasts of the Pacific Ocean.". These investments have been increasing even though tensions from the Trump Administration have been rising.

A good portion of the publication is dedicated to the venture capitalist firms. One such company  highlighted is Sequoia Capital China, a subsidiary of Sequoia Capital know for funding Apple (AAPL), Alphabet (GOOG)(GOOGL), and Oracle in their salad days. "Today, with nearly $20 billion to invest in China, Sequoia Capital China is the largest Valley-anchored firm prospecting in the Middle Kingdom and has an unbeatable track record.". Sequoia Capital China has invested in China Unicorns such as Meituan Dianping, Pinuoduo, Kuaishou, and NIO (NIO). China's mobile and savvy Gen Z and millennials make up more than half of China's population, roughly 700 million, compared to 100 million of the same demographic in the United States. These are the generations that are moving technology forward at an accelerated pace. With the Chinese government funding the race to be the global leader in 5G, those 700 million teens and young adults have the potential to incubate and deploy disruptive technologies in the next five years. 

The latter section of Tech Titans of China features chapters dedicated to specific sub-sectors in technology: AI, ride sharing, e-commerce, drones, robots, and electric vehicles. Like the previous sections of the book, all the chapters are well documented and researched. A Who's Who of up and coming companies are highlighted. I will briefly discuss the Electric Vehicle chapter because Tesla (TSLA) has been one of the hottest stocks of 2020. They have a lot of competition with the BAT companies funding startups such as NIO and Xpeng (XPEV), an IPO that went public the past few days. "Xpeng intends to have 1,000 super-charging stations nationwide in China by 2022 and partner with third parties to bring on 100,000 charging spots.". China is also producing fifty percent of the world's electric car batteries, but have a long way to go to catch up with Tesla's 300 mile range. The Chinese EV's are subsidized by the government. According to the author, when that practice stops and tariffs are lifted, look for Tesla to make more inroads in China as the playing field is leveled. 

About 100 years ago, Edwin Lefèvre wrote in Reminiscences of a Stock Operator, "There's nothing new on Wall Street. Speculation is as old as the hills.". There's plenty of speculating going on with Chinese securities. Many of these young firms operate at a loss. However, you can say the same thing about many of the cloud companies stateside, or Amazon for the first 15 years of its operating history. Although earnings count, young companies plow revenues back into the organization to to expand and make acquisitions. Out of all the companies that are featured in the book, my favorite is AI firm SenseTime, a $4.5 billion unicorn. Would I try to invest in it if it comes public on one of the American exchanges? No question about it, but only if I get my price.    

The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution (Book Review)

Veteran Wall Street Journal reporter Gregory Zuckerman has come up with another gem of a book in The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution. I read one of Zuckerman's previous works, The Greatest Trade Ever, about John Paulson and the fortune he amassed during the financial crisis of 2008-2009. The Greatest Trade Ever is equally as good, if not better than Michael Lewis' book The Big Short, which primarily covers the same topic. Zuckerman's an outstanding storyteller. A non-fiction piece that reads like a novel, The Man Who Solved The Market is a page turner from cover to cover unearthing the tale of Jim Simons and the hedge fund he founded, Renaissance Technologies [RenTech].

A trailblazing quant firm, RenTech is renown on Wall Street for its flagship investment product the Renaissance Medallion fund. Although closed to outside investors, the Medallion fund is revered in financial circles. "By the summer of 2019, Renaissance's Medallion fund had racked up average annual gains, before investor fees, of about 66 percent since 1988, and a return after fees of approximately 39 percent.". That betters George Soros' Quantum Fund, Steven Cohen's SAC, Peter Lynch and the Magellan Fund, Warren Buffett's Berkshire Hathaway, and Ray Dalio's Pure Alpha; all in their heydays. As The Economist put it in 2010, "There's Renaissance Technologies, and then there's everyone else.". They discovered the secret sauce. 

Jim Simons didn't get into the investment business until he was in his 40's. Before launching his hedge fund, he was an award winning mathematician, a code-breaker during the Cold War, and built a world-class mathematics department at Stony Brook University. He could have stopped there, but wanted to conquer the world of investing, too. "Simons didn't have a clue how to estimate cash flows, identify new products, or forecast interest rates. He dug through reams of price information.". Not just opening and closing prices, but the upticks and downticks of currencies, commodities and bonds. Securities would come later, but were more vexing. He and his team utilized the stockpiles of information competitors weren't interested in. RenTech was mining "big data" before there was such a thing which is why they were probably given the moniker of 'rocket scientists' by the established Wall Street firms. Like Vanguard founder John Bogle, they were ostracized but got the last laugh.

Working for the Institute of Defense Analyses in the early 1960's, Simons learned how to "develop mathematical models to discern and interpret patterns in seemingly meaningless data. He began using statistical analysis and probability theory, mathematical tools that would influence his work.". Simons concluded that "markets don't always react in explainable or rational ways to news or other events, making it difficult to rely on traditional research, savvy and insight.". As a result, he didn't hire economists or experienced traders for his fledgling firm. Instead he employed not only PhD's in mathematics, but award winning mathematicians. Some having had influential algorithms named after their discoveries. The cream of the crop. They also hired top-of-the-line astronomers to glean their research techniques.

"Just as astronomers set up powerful machines to continuously scan the galaxy for unusual phenomena, Renaissance's scientists programmed their computers to monitor financial markets, grinding away until they discovered overlooked patterns and anomalies."

With the aid of ever increasing computing power, Simons and crew bucked the old financial convictions that the markets are efficient and investing is a "random walk". RenTech continues to have a leg up on the field gathering as much data as they can. Everything from earnings reports, press releases and the aforementioned tick data. "IBM has estimated that 90 percent of the world's data sets have been created in 2018-2019 alone, and that forty zettabytes - or forty-four trillion gigabytes - of data will be created by 2020, a three-hundred-fold increase from 2005.".  

RenTech's approach is to carve up the trading day into five minute segments or bars, and compare small slices of historic data. For instance, "Perhaps bar 50 in the gold market saw strong buying on days investors worried about inflation but bar 63 showed weakness.". Then they would bet accordingly. It's a dynamic system that adapted to the real-time analysis, "then adjust the fund's mix of holdings given the probabilities of future market moves - an early form of machine learning.". And this was decades ago. Simons and his colleagues were way ahead of the curve. They bought and sold on the most desirable days of the week and at the ideal moments of the day. One employee is quoted, "The name of the game is not to be always right, but to be right often enough.". Former CEO Robert Mercer succinctly stated: "We're right 50.75 percent of the time...but we're 100 percent right 50.75 percent of the time. You can make billions that way.". Which they did and still do. They programmed the software like a gambling casino where the house always wins. 

RenTech invented and developed many strategies that are copied by competitors to this day. As an example, "profitable trade ideas are only half the game; the act of buying and selling investments can itself affect prices to such a degree that gains can be whittled away.". To combat this, they made more frequent trades, with larger amounts of money, dispersed throughout many trading platforms. A no brainer in today's world, but RenTech pioneered it twentysomething years ago. Almost like high-frequency trading in some respects. Throughout his life, "Simons has been driven by two ever-present motivations: proving he could solve big problems, and making lots and lots of money.". Staying a mile ahead of rivals, he accomplished both - exponentially. 

So how much money is a lot of money? In the 2016 presidential campaign, Jim Simons was one of the biggest supporters of Hillary Clinton. Conversely, then RenTech CEO Bob Mercer was one of Donald Trump's largest financiers. Mercer accumulated so much money at RenTech, he purchased nearly 50 percent of Breitbart News in 2010. If you aren't familiar with Breitbart News, it's the voice of the alt-right. That must have made for interesting water-cooler conversation at the office. Mercer eventually sold his share in the news company to his daughters. As the author asserts: "Money is seductive, even to scientists and mathematicians.".   

Although the book keeps your interest from page one, it begins to really start cooking around page one hundred because it's established in a more modern setting, and discusses computerized trading in practice. There's also a section about market history. Those that have tried and failed going back to Babylonian times to the present. This is especially true for technical analysis which, according to the author, is best utilized for short term trading. If you are an investor looking to place your assets with a quant fund, Zuckerman sums it up best near the end of the story: "For all the advantages quant firms have, the investment returns of most of these trading firms haven't been that much better than those of traditional firms doing old-fashioned research, with Renaissance and a few others the obvious exceptions.". 

The Future Is Faster Than You Think (Book Review)

In the dot-com boom of the 1990's, technology evangelists foretold of a not-so-distant future where Star Trek Communicators and Dick Tracy wrist watches would become commonplace. That time has come and gone with the advent of smartphones, and more recently, the Apple (AAPL) watch. Forward thinking investors that got in near the ground floor benefited tremendously. Apple is closing in on a two trillion dollar market cap at $440/share. In 1997, split adjusted, it traded for under a dollar. Market participants looking for some foresight as to where technology may be heading in the next few years, should look no further than The Future Is Faster Than You Think by Peter Diamandis and Steven Kotler. Clear, concise, full of statistics - you'll be hanging on every word. This is the duo's third collaboration. Their two previous works are Abundance and BOLD. Neither is required reading to take advantage of the new offering.

I believe what makes this book unique is that not only does it report the futuristic projects of the usual suspects, corporations such as Apple, Alphabet (GOOG)(GOOGL), Amazon (AMZN), Facebook (FB) and Microsoft (MSFT), but it also includes the not quite ready for prime-time players. Smaller companies, some public, some not, that can be monitored for portfolio inclusion at the appropriate time. Better known examples are the peer-to-peer insurer Lemonade (LMND), or, the cloud based realtor eXp Realty (EXPI) which ditched brick and mortar for cyberspace. One "affective computing" startup discussed is Ubimo which was recently acquired by Quotient Technology (QUOT). However, most of the trailblazers are very small organizations funded by venture capitalists. Cluep, Lyrebird, Betterment, and v7Labs are just a few of these businesses. The authors give a theoretical blueprint as to what type of firms could become mainstream in the next five years. 

Steve Jobs liked to quote Wayne Gretzky's famous chestnut: "Skate to where the puck is going, not where it's been.". Diamandis and Kotler believe that exponentially accelerating technologies are converging with other independent waves of exponentially accelerating technologies to create disruptive innovation on a scale never seen before. Some of these applied sciences include augmented reality, sensors, artificial intelligence, blockchain and nanotechnology. One example of this inevitable amalgamation is: "When we combine autonomous vehicle technology with smart traffic systems and sensor-embedded roads - two developments that have already begun rolling out - transit risks don't just plummet, they mutate.". That's a more pedestrian case in point. If we include the aforementioned "affective computing", "Or the science of teaching machines to understand and simulate human emotion. It's the intersection of cognitive psychology, computer science, and neurophysiology, combined with accelerating technologies like AI, robotics and sensors.". It sounds creepy at times, but that's where we're going. 

It's all about large corporations adding to their war chests by increasing productivity and cutting costs. For instance: "In 2001, sequencing the entire human genome took nine months to complete and cost $100 million. Today, Illumina's latest generation sequencer can do that in an hour and for $100 - or 6,480 times faster and a million times cheaper. And what is true for gene sequencing is true for dozens of fields. Tools only accessible to only the wealthiest companies and the largest government labs are now available at near-zero prices to just about anybody.".  With cloud based services such as Amazon Web Service and Microsoft's Azure at hand for the masses, the future is now.

The authors appear to be influenced by Alphabet director of engineering Ray Kurzweil who came up with the concept of "computer singularity" where humans and machine intelligence merge. Although this phenomenon won't happen for another decade or longer, it's coming. This will be ushered in by the era of quantum computing and Rose's Law which has been described as "Moore's Law on Steroids". In Moore's Law, computing power doubles every two years. In Rose's Law, the number of qubits (a quantum bit) doubles every year. They mention Rigetti Computing that manufactures quantum integrated circuits. Already rumored to be coming soon to the public market. "Established organizations will have a hard time keeping pace. Our biggest companies and government agencies were designed for another century, for purposes of safety and stability. That is why 40 percent of today's Fortune 500 companies will be gone in ten years, replaced, for the most part, by upstarts we've not heard of.".

This is not to say you can just scoop up these young upstarts when they come public and make your fortune. A technological advancement Diamandis and Kotler discuss, and one that I am particularly interested in, are holograms, a form of augmented reality. They give a cautionary tale of Magic Leap, an organization that wants to eliminate video screens by manufacturing AR glasses. They were leapfrogged by another young company, Mojo Vision, that is developing AR contact lenses. Theoretically, you no longer have to wear a headset, the screen is mounted on your cornea and projects onto the back of your retina. It's not science fiction anymore. However, public AR company Microvision (MVIS) has been trading since the 1990's, and has given investors nothing but heartaches. It shows a lot of promise, but never seem to come through in the clutch. Perhaps these companies are ready for their close-ups now that 5G networks and other converging technologies are being rolled out nationally. 

The authors claim theirs is not a techno-utopian thesis. They're just telling it like it is. To use the old cliché, "The genie is out of the bottle". For instance, the largest increase in productivity historically is augmenting machines with humans. They state, "Workers have been on the fast track to obsolescence since the Luddites took sledgehammers to industrial looms in the 1800's. Automation produces job substitution far more than job obliteration.". To reinforce the fact, they give the example of the bank ATM. "Because ATMs made it cheaper to operate banks, the number of banks grew by 40 percent. More banks meant more jobs for human bank tellers.". That may have been a convincing argument in a previous era. I have my doubts with these large corporations. Plus, Diamandis and  Kotler rarely discuss the privacy aspect of all our personal information flowing to the digital oligopoly. Early in the book, they did touch on the subject: "While knowing everything about one's customers presents an alarming privacy concern, it does provide organizations with an incredible level of dexterity - which may be the only way to stay in business in these accelerated times.".

I have no doubt that this is a book worth reading. I have no doubt that I may profit from becoming aware of some of these startups. I also have no doubt that these converging technologies are on my doorstep. What I do doubt are the motives these powerful West Coast technology companies have with too much of my personal information. Maybe it's a generational thing. I was always taught to question authority. Although I benefit from lower prices, split second communications, and information at my fingertips, I am not so sure that's such a good thing if left unchecked.           

Charles Schwab's "Invested" (Book Review)

The Charles Schwab Corporation (SCHW) is synonymous with discount brokers and rightfully so. Charles Schwab was one of the first to give individual investors the tools to fight against the Wall Street establishment by offering discounted commissions. Unheard of forty-five years ago. Before Schwab formed his eponymous company in 1975, retail investors primarily paid sky high fees, usually 10% of the investor's money. By offering a plain-vanilla service of just trade executions, he slashed prices dramatically, by as much as 75%, and opened the floodgates for self directed, Do-It-Yourself market participants. The company's namesake is equal parts financial visionary, trailblazer, and leader of the pack. Recently, Mr. Schwab penned Invested: Changing Forever The Way Americans Invest, a first person account of his life in the trenches. If you enjoy reading about modern stock market history, good business autobiographies, or tales of perseverance, this book is for you.

The narrative begins on May Day of 1975, when government deregulation of the brokerage industry ensued. This allowed Charles Schwab to offer a cut-rate investing service in a cut-throat business. Soon after, the author does a quick flashback to his youth. What really stands out is that Schwab has dyslexia, which makes reading and studying very difficult. With moxie and determination, he made it through Stanford, undergraduate and B-School. Schwab sites other business leaders such as John Chambers of Cisco (CSCO), Craig McCaw who pioneered wireless telephone services, and Richard Branson of Virgin Galactic (SPCE) that all experienced successful business careers despite the disability. He also has a hard time writing which is a surprise by the smooth prose in the book. Schwab said the dyslexia taught him to think conceptually which enabled him to think of something as far fetched as a discount brokerage company. These days they call it "thinking outside of the box".

Throughout the work, Schwab makes no bones about being a renegade startup going after the White Shoe firms such as Merrill Lynch. At times, it has the vibe of investing classic Where Are the Customers' Yachts? by Fred Schwed. Schwed's book was written at the tail end of The Great Depression, and pokes fun at the financial industry. According to Charles Schwab: "We didn't want advice from brokers, because we knew that advice was tainted. How could a broker truly have my best interests at heart when his livelihood depended on generating commissions?". He also says: "A traditional broker is trying to take your capital and turn it into his income as fast as possible.". Schwab wanted to do it completely different than Wall Street. It's an authentic David vs Goliath story. Like the Charles Schwab Corporation which is headquartered in San Francisco, he notes that other successful discount brokerage firms were all located far from Manhattan, most notably E-Trade and Ameritrade (AMTD).

Recently, the industry has marched lockstep to zero commissions. However, historically Charles Schwab has never been the least expensive discount broker, but they always tried to offer their customers the most value. That dyslexic mind and his team introduced many of the features that pushed investors to their service in droves. They got into technology early and in a big way to increase efficiency. Without the technological advancements, they would have been dead in the water. In pre-internet days, they were the first firm to offer touch-tone trading on your telephone and updated that service with reliable voice-recognition software. Schwab wasn't the first company to offer Web based trading. That distinction belongs to K. Aufhauser & Co. in 1994 (they were later acquired by Ameritrade). Nevertheless, once Schwab established a digital presence, they were the innovators by introducing after-market-hours electronic trading, wireless stock alerts for pagers, and the first wireless trading platform for cellphones. They became a self-sufficient technology powerhouse.

Although the hardcover version of Invested runs approximately 330 pages, the majority of the book takes place before the year 2000. Mr. Schwab goes into significant detail about Black Monday in 1987, and the dot-com crash. In fact, he discusses boom and busts several times in the book, noting he's seen nine market crashes in his life. Some of the notable manias he's been a part of are the housing bubble of 2008, the color television bubble, the photocopier bubble, and least we not forget the bowling bubble of 1961. That said, the most noteworthy market busts that impacted him as CEO were the 1987 crash and the dot-com implosion. His company went public just two months before Black Monday. Talk about being at the right place at the right time. If he hadn't raised that capital from the IPO, the company probably wouldn't have made it. But they did. If you were an original investor and held your Charles Schwab stock from the 1987 outset, "With dividends reinvested, you would have had about 19% average annual growth rate for the stock, twice the rate of growth for the S&P 500.".

It wasn't always smooth sailing for the company. He began during the soft market cycle of the 1970's. The underlying theme for Mr. Schwab and his team is that they aren't afraid to make changes in order to remain ahead of the curve. In the early 1980's he sold the company to Bank of America (BAC) which gave legitimacy to the fledgling industry. Three years later, when Bank of America got into financial trouble, Schwab bought the company back with a leveraged buyout. The years immediately after the dot-com bust were particularly difficult for the Charles Schwab Corporation. He restructured the organization numerous times with plenty of layoffs. As the founder put it: "We had been the Forbes magazine's company of the year in 2000 at the height of the dot-com bubble, the top-ranked securities firm in Fortune's Most Admired listing in 2000-2002. But by the middle of 2004, our brand and reputation had slipped and we'd fallen off those lists.". But he came roaring back. In fact, he came back so strong that the Great Recession of 2007-2008, wasn't particularly challenging for the business.

Peppered throughout the narrative are what can best be described as Schwabisms, small quips that reminded me of a Twitter (TWTR) tweet. Some examples are:

• We were all a little guilty of assuming that since things were going so well, we must be geniuses.
• There is a central truth about investing: time is on your side when there's plenty of it; it can be your worst enemy when it's scarce.
• I've gotten comfortable with the roller-coaster ride that comes with a market correction and the resolve it takes to ride through it successfully. It's not easy and I don't believe it comes naturally.
• Social Security is at best a minimal standard of living. If you want anything beyond that, you've got to be an investor.

About every ten pages they pop up; just sit there on the page and don't detract from the overall story.

The Charles Schwab Corporation has been a category killer from day one. It was created to be the kind of firm that the founder and Chairman would want to do business with. Originally a Wall Street pariah, now the company is a member of the S&P 500. Many times Mr. Schwab bet the farm and came out on top. An avid golfer, he just plays it as it lays. Although he's seen plenty of booms and busts, Schwab's always been optimistic about the market. How else are you going to make money? Recently the Charles Schwab Corporation agreed to buy TD Ameritrade. The combined companies should be an investing powerhouse for years to come.

Ed Yardeni's "Predicting The Markets" (Book Review)

On July 6th, CNBC's Squawk on the Street featured economist Ed Yardeni who called for a market melt-up despite the ravages of COVID-19 on the economy. This probably didn't surprise most market followers since Yardeni is considered a permabull in investing circles. What the interview didn't tell you is that Yardeni made a prescient call of a market pullback of around 20% early this year before the market cratered. He also gave clients sell signals for financial stocks in 2007, and dot com stocks in the late 1990's. He was bearish then, but not bearish enough as stocks sold off more than Yardeni anticipated. He doesn't hit the bullseye every time, but he gets pretty close which is why he's had an illustrious 40 year career on Wall Street. Yardeni has a lot of street cred coining phrases such as "Bond Vigilantes" and "Hat Sized Bond Yields". He recently published Predicting The Markets: A Professional Autobiography. A better subtitle may have been: Everything You Wanted To Know About Economics But Were Afraid To Ask.

Yardeni is not a maverick economist, but he does march to the beat of his own drum. What makes him unique, is that he wears two hats. The first being chief economist, and the other is chief investment strategist at his own firm Yardeni Research. He began this dual role when working at Deutsche Bank in 1999, which was new among the major Wall Street firms at that juncture. He's an eternal optimist about the American economy because, "recessionary quarters accounted for just 15% of all quarters from 1948 to 2016.". Recessions tend to be quick. He sees a lot of room to run, particularly with the BRAIN [Biotechnology, Robotics, AI, Nanotechnology] revolution. With the advent of quantum computing, Moore's Law may have a much longer future than some technologists predict. Yardeni emphasizes that pessimism sells. He quotes Warren Buffett to buttress his point: "Fifteen hundred different individuals have been featured on Forbes' list of 400 wealthiest Americans since 1982. You don't see one short seller among them.".

Predicting The Markets is a treasure trove of economic history and market intelligence going back to the Great Depression. At 550 pages, you don't have to be a glutton for punishment to read it cover to cover, but it sure helps. That's why I believe it's best used as a reference book. Read a section at a time. Skip the ones you aren't interested in. Chock full of dense data, you may lose interest if going too quickly. Information from chapter to chapter overlaps because Yardeni repeats some of the facts and advice which I think is helpful. It reinforces complex statistics and concepts in a readable format. For instance, the chapters on Consumer Behavior and Demographics seem to converge, especially when discussing the Baby Boomers and Millennials. Many economic concepts are joined at the hip. The author also gets deep in the weeds breaking down various economic sectors and sub-sectors. As an example, when discussing the FOMC [Federal Open Market Committee] statement, he includes explanatory paragraphs concerning: Staff Review of the Economic Situation, Staff Review of the Financial Situation, Committee Policy Action, and so on and so forth.

Yardeni is a self-professed "recovering macroeconomist". Throughout the book, he takes jabs at academic macroeconomists and their theoretical models. And I quote: "Macroeconomists are professional meddlers who feel a calling to make the world a better place. Our ingrained conceit is that without our meddling, the economy would perform pitifully, stumbling into recessions on a regular basis. It might never even regain its footing without our help...I often must remind myself that my day job is to predict how the policy wonks will do their job, not tell them how they should be doing it.". As a microeconomist, he believes financial prognostication is better suited for a jack-of-all-trades, master of none (although a proficiency in economics is required). A simplified definition of a microeconomist is one that focuses on the catalysts of companies and individuals that dictate their buying patterns. As a result, he puts a large emphasis on human behavior.

What I found particularly refreshing throughout the narrative is that Yardeni admits to his mistakes. For instance, he comes clean about being early in his cautionary statements concerning the dot com craze. He began to lighten up on technology stocks in 1997, but was eventually vindicated when the market imploded. One of the main reasons he is probably so honest is that there's no place to hide being a public figure. All of his calls are well documented in the financial press or on his Website www.yardeni.com. One instance is when he was on the PBS News Hour in late 2006 doing a point/counterpoint with Nouriel "Dr. Doom" Roubini about the outlook for the housing market. Roubini won the debate, but Yardeni changed his stance in early 2007, and concluded the subprime problem was as large as the S&L crisis. You don't hear much about Roubini these days which is one of the underlying themes in the book: doomsdayers may get it right once, but rarely ever achieve a command performance. Yardeni doesn't name names, but talks about the bearish soothsayers that claimed the market was at an "endgame" or on a "sugar high" back in 2010. Better to be long the S&P 500 and get the 7% uptrend since its inception in 1935.

Artificial Intelligence is everywhere these days. It's so pervasive that saying your organization has A.I. is like saying you've got corn in your Cornflakes. Although very bullish about the American economy, Yardeni discusses the impact Schumpeter's process of creative destruction and the "paradox of progress" in the era of A.I.: "On balance, society benefits from creative destruction, as this creates new products, better working conditions and jobs. But it also destroys jobs, companies and industries - often permanently.". He speculates about moving forward: "In the Brave New World that is rapidly evolving, technology might make the situation worse as automation, robotics and A.I. displace workers. We may have no choice but to impose a tax on robots and provide a universal basic income [UBI] to support lots of people who are unemployed in the world.". For a conservative, he seems like a rational thinker. That's probably why he's remained relevant for four decades.

There's been two big knocks on the book. One I agree with and the other I don't. The one I concur with is that there are no charts or graphs in the text. You have to go to www.yardeni.com to access the tables and diagrams which takes away from an uninterrupted read. Granted, they're updated regularly, and they would have added another 100 pages to an already large tome, but I would have preferred to have everything in one place. The other criticism that I don't understand is that the book is a big public relations stunt to induce people to subscribe to his services. Writing is about informing and selling, either the book or the subject you're discussing. I think Yardeni did a great job at both. He's got game and the résumé to back it up. Predicting The Markets was selling for $40 at the time publication. You can buy it for $16 now on Amazon. In addition, if you are cost conscious and don't want to subscribe to his service, he has a blog at blog.yardeni.com which is free.

I Had Too Much To Dream

With the COVID 19 pandemic roaring across the globe, I've been put in a situation where I've got too much time on my hands. There's the mandatory lockdown; lots of time to read, write and ruminate. Plus, watch TV if I'm so inclined. Many ideas are percolating, but I'm not taking action. Just want to write this blog until a vaccine is discovered, or the virus subsides on its own. Then I can travel. If you've been following these posts, you've probably noticed that I've recently transitioned to writing financial and economic book reviews. It's just something I'm going to do for awhile. They keep me current. Plus, I don't like doing crossword puzzles to keep my mind active. It also gives my day more structure when I'm on a reading and writing schedule. Seeking Alpha has published some of the reviews, and I am grateful for that. It gives me more exposure and that's what you want as a writer.

Business and economics is primarily fixated on Artificial Intelligence nowadays. I have a love/hate relationship with these technological advances that move at light speed, and we're just getting started. Don't want to be left behind. Having a grasp on what the digerati are doing will keep me off life support. It's the surveillance economy with "Santa Claus is Coming to Town" as the rally song: "He sees you when you're sleeping, He knows when you're awake, He knows when you've been bad or good, So be good for goodness sake.". They're everywhere. Especially Facebook and Twitter. You can go from headliner to also-ran in a heartbeat with the ubiquitousness of social media platforms. You've got to be careful what you're saying and watch your step. It's like a minefield. At my age, I should know better, but that may not be enough.

Recently, I've seen a television commercial for a meditation smartphone app called "Calm" on frequent rotation. The thirty second spot has no dialogue, just footage of a rainstorm soaking a sunlit meadow with the mellow ambient audio accompanying it. Ripe for a rainbow. Seems too touchy-feely to me. I tend to drink a lot of coffee and listen to Heavy Metal music from a forgotten era. I'm a relic now. Way out of step with what's deemed popular culture. When you get down to it, it's been that way for thirty-five years. Ever since I began reading to a fault. My tastes in creative video content seem to be archaic, too. Turner Classic Movies is my preferred cable network. Even with my contemporaries, I'm out in left field. Back in the 1980's when my peers were climbing the corporate ladder, I was down and out in Philadelphia. No phone, no food, no pets. I ain't got no cigarettes. You know the old song.

Although we're in Phase III of reopening in New York State, I'm still very cautious when I go out. Masks and social distancing are the norm. Plus, I stay in a lot, and as a result, am experiencing some déjà vu because of the isolation. It brings me back to my first year in Philadelphia when I was alone. Television reception was lousy in Center City with no cable, no Internet, and it cost an arm and a leg to call long distance. I wrote a lot of letters. 1984 at its finest. I had a futon and a boombox in a three story walk-up studio apartment. Didn't have many cassettes, and would listen to The Minutemen Double Nickels on the Dime endlessly. One song on the album is "There Ain't Shit on T.V. Tonight". Apropos then, and apropos now, even with being inundated with multiple options on Netflix. I just can't get into binge watching.

Since there's hardly any televised sports except for NASCAR and golf, and the movie theaters are closed, I recently signed up with Netflix for the third time. Tried the free trial month twice and dropped it. I tend to tune into baseball during the summer months, so Netflix hasn't been a priority in the past. I opted for the least expensive package - one screen in standard definition even though I have an HDTV. I just don't watch enough of their offerings to justify the extra money per month for High-Def and a second screen. I'll see how it goes. If I view one movie every thirty days, it pays for itself. In June I watched the Netflix Original Da 5 Bloods directed by Spike Lee. Not one of his better movies, but the acting was superior. I'm tending to spend more time streaming The Roku Channel for their retro options. Some of the television series they feature are in the same vein as Turner Classic Movies, in black and white instead of living color. Shows such as The Outer Limits, Roger Moore in The Saint and Peter Gunn.

(Craig Steven as Peter Gunn)

If you're not familiar with Peter Gunn starring Craig Stevens as the title character, you may have heard the theme song written by Henry Mancini. It's been performed by almost every bar band from here to Helsinki. My favorite cover version is by The Cramps off their album Big Beat From Badsville. The series ran from 1958-1961 during the tail end of first Golden Age of Television. An era that has greatly influenced me. Gunn is a suave gumshoe from the Cary Grant school, and keeps running into members of what they used to call The Syndicate. He gets into lots of fights and shootouts, and always seems to land on his feet, sometimes with the help of the Hepcats that hang out at Mother's cocktail lounge. Gunn uses Mother's as his office, and the smoke filled bar's house band is fronted by sultry songstress Edie Hart played by Lola Albright. She's Peter Gunn's girlfriend. A real corker. The double entendre banter backstage between sets is good old fashioned dialogue. The band plays cool jazz that was popular at the time, reminiscent of the Chico Hamilton Quintet featured in the Burt Lancaster feature film Sweet Smell of Success. One of my favorites.

I've watched a few of the first season episodes of Peter Gunn with mixed feelings. Some of the thirty minute segments are good, others not so hot. It takes me back three decades when I first got cable, and there was a 48 hour Alfred Hitchcock Presents marathon on Nick at Nite. They were promoting it to go on regular rotation. I used a VCR to record almost every episode. I must have taped close to 50 of Hitchcock's best stories. Found out that for every five segments, one was a gem. Some of them classics with great actors such as Joseph Cotton and Ralph Meeker. Was it worth all the time and effort I spent in front of the tube? Probably not. That's why I'm reluctant to spend too much more time with the smooth shamus in Peter Gunn. That said, I'll give it some more time. There's something about a guy in a sharkskin suit with a skinny tie and a small brimmed fedora chain smoking Chesterfields that keeps me wanting more. Desperate times call for desperate measures.

Always Day One: The Mantra for Mega Cap Tech (Book Review)

Damon Runyon is famous for saying: "The race may not be to the swift, nor the battle to the strong, but that is how you bet.". And that's the way technology investors have been wagering the past decade, on the swift and strong; companies such as Amazon (AMZN), Facebook (FB), Alphabet (GOOG)(GOOGL), Apple (AAPL), and Microsoft (MSFT). Although household names, retail investors may not have an understanding why these companies have propelled the overall market since 2009, and why they may continue to do so for the foreseeable future. Market participants just stay long because the stocks keep going up. A no brainer. Always Day One: How The Tech Titans Plan To Stay On Top Forever, is a new book by Alex Kantrowitz, and answers all these questions and more. It's about what it takes to remain number one. Part prediction, part computing history, part human resources, and a whole lot of organizational behavior, Kantrowitz sets the record straight about the digital oligopoly with its tentacles in every aspect of our day-to-day lives.

The book's title Always Day One is the current version of a technology motto of yesteryear: only the paranoid survive. It's the mantra of the digerati, fashioned from Amazon's quest to make each and every working moment like the inaugural day of a startup. Don't look back, somebody may be gaining on you. As Kantrowitz states: "In the 1920's, the average life expectancy of a Fortune 500 company was sixty-seven years. By 2015, it was fifteen.". You have to stay hungry. Amazon started the trend years ago with founder Jeff Bezos. He entrenched "Day One" thinking into Amazon's corporate culture. Almost like a cult of personality, only it's the cult of an idea. "Day One" is the name of an Amazon building, it's the title of the company blog, and it's the recurring message in the annual letter to shareholders. Amazon is like the Pied Piper of the mega cap technology elites; it blazed a trail and was so successful, the others followed suit. As a result, instead of experiencing the corporate life cycle of a previous era, these companies have become more powerful as they've aged. Whatever it takes to remain numero uno.

So what is Amazon's secret sauce? For one, open communications in a horizontally structured work force unlike hierarchical silos in the more traditional organizations. Out of the five companies covered in the book, it's only Apple that's vertically organized. Secondly, Amazon, Facebook, Alphabet and Microsoft are all engineering centric. Again, Apple remains the outlier with more of a sales oriented structure. In development and production, Apple begins with a model or rendering created by their design team, then the supporting cast amalgamates the accoutrements including the operating system. Apple tends to work in secrecy. The other four companies don't. They begin with an idea and work backwards. Every person in these companies has a say with their respective internal communications systems that flow from the bottom of the pecking order to CEO. Legacy products and systems can be given short shrift if they don't move the company forward in the rough and tumble world of technology. Microsoft made that mistake by milking Windows under the Steve Ballmer era. His replacement Satya Nadella turned things around.

It's only Apple that Kantrowitz believes may have the toughest time remaining on top. According to the author, "Apple is having its Windows moment. It must leave iPhone orthodoxy behind and reinvent itself again to compete in the age of voice computing.". He makes a valid point with the iPhone thirteen years old. Other Apple products didn't take off or have been put on the back burner. For instance, Apple TV and the HomePod have inferior market share compared to the competition, and Apple Car has yet to come to market. CEO Tim Cook has a background in operations and is not a visionary. He's done a great job of leading the company since the passing of Steve Jobs, but Kantrowitz infers that Apple needs a major overhaul. This structural renovation can happen with or without Cook. The railroads went out of business because they thought they were in the railroad industry, not the transportation business. Apple is a communications company.

One trait the leaders of these organizations have in common is that they're great listeners. Especially Mark Zuckerberg of Facebook. That surprised me because his public persona appears to be more dictatorial. Facebook is vulnerable because they don't have their own operating system. Plus, the nature of social media firms is that it's a zero sum game. You're either on Facebook, or you're surfing the competition such as Snapchat (SNAP) or Twitter (TWTR). MySpace, Foursquare, Tumblr, and Friendster found out the hard way. Zuckerberg took a page from the Amazon playbook with their own company slogan of "One Percent Done" instead of "Day One". The CEO stays one step ahead of his adversaries with continuous feedback from not only the C-Suite, but the rank and file, too. He also likes dissenters to play Devil's Advocate. There's no "Corporate Yes Men" at Facebook as they used to say in the old days. Employee input has saved Facebook's bacon a number of times. Most notably, when they transformed from a desktop to a mobile corporation a decade ago. It was touch and go then, much the same way when they blatantly stole the "Stories" concept from Snapchat five years later. It kept the patrons coming back for more.

If you've been on the Internet since the launch of Amazon, you're probably familiar with the fates of search engines such as Northern Lights, AltaVista, Lycos and Ask Jeeves. You don't find Google in the dead dotcom group. Google rolled with the punches, and seemingly stayed on top under the direction of Larry Page and Sergey Brin. However, current CEO Sundar Pichai was instrumental in jettisoning the company from search, to a juggernaut in AI. Pichai came to esteem within the company with his work with the Chrome browser and Chrome operating system. Google became a formidable opponent to Microsoft that previously had a stranglehold on desktop applications. Under Pichai's direction, core productivity programs run through the browser. He also transitioned the company from a desktop, to a mobile computing organization. The current battlefield is in voice assistance with their product Google Home. Pichai runs the organization like an open source software project. It's a collaborative effort in company communication. As a result, Google Home is the biggest threat to Amazon's Alexa, not Apple's HomePod with the Siri voice recognition software.

Always Day One is a fascinating book. Because you're so familiar with the companies and products in the narrative, it reads a lot like Walter Isaacson's Steve Jobs. If popular music is the soundtrack of your life, then technical innovation is the film that accompanies it. Reading this is like watching a movie of your communications history for the past 15 years. But instead of being just about Apple's iterations as in Steve Jobs, you get the gamut of many of the major players in our digital lives. I believe technology investors will benefit tremendously by reading this. Although there are regulatory threats for all five of the companies covered in the text, they've all been winners from their adaptability. Kantrowitz has no kind words for former Microsoft CEO Steve Ballmer, but praises Satya Nadella. Microsoft is the Lazarus company of the group coming back from the dead under Nadella's leadership. He's not so sure about Apple. Lots of changes could be in store for the Cupertino, California mainstay if Kantrowitz had his way. From the book, it sounds as if Apple co-founder Steve Wozniak would like some changes to the organizational structure, too.

Book Review: The Deficit Myth: A Modern Monetary Theory Primer

Hot off the press is Stephanie Kelton's The Deficit Myth: Modern Monetary Theory and the Birth of the People's Economy. Although an economics manifesto, the writing style makes it easy to read. Nevertheless, it's a difficult book about a difficult subject: Modern Monetary Theory [MMT]. After finishing it, and rereading everything I highlighted, I still can't wrap my head around it. I bought the book wanting to learn more about our deficit, not only how it affects my investments, but my future as a whole. Instead, I got a narrative about MMT, and yes, the deficit is discussed in length. However, in the traditional macroeconomic sense, the only solution to the mounting deficit is for Uncle Sam to utilize MMT. At the outset, I believed that MMT would be an alteration to our current capitalist economic system, but it's not. It upends everything that's been taught in universities, and practiced by economists and politicians for eons.

Dr. Kelton has great credentials in her area of expertise, and currently teaches economics and public policy at Stony Brook University. Back in 2015, she was hired by Bernie Sanders to be the chief economist for the Democrats on the US Senate Budget Committee. Kelton is a crusader for MMT, not just a run of the mill maverick economist. Her beliefs are so far-flung, that Bernie Sanders is considered conventional in her eyes. His Robin Hood approach of tax the rich and give to the poor is yesterday's thinking. Not that she doesn't want to help the poor, she does, it's just the way you go about doing it. This, along with balancing the budget is antiquated in the era of fiat currency, which has been around since the early 1970's. Too many decision makers still have the mindset of the gold standard. According to Kelton, "It's got a folksy, kitchen table feel to it.".

Financier Warren Mosler, who is not an economist, is considered the father of MMT with his seminal book Soft Currency Economics, published in 1995. He believes that with the advent of sovereign nation fiat currency, such as the US Dollar, the government can just keep the printing presses running. This is in the form of hitting a keystroke on the FED's computer to create more money. According to MMT, there's no such thing as a deficit too large, unless inflation grows too fast. Then you have to pump the breaks until you get inflation under control. You do this by increasing taxes and/or decrease government spending. In addition, MMT advocates believe balancing the budget means full employment to insure price stability. Currently, congress looks at balancing the budget as a zero sum game. You need to tax more to offset expenditures. Because the government spigot is usually open in the MMT world, the mantra is spend first, tax later. In our current system, it's just the opposite.

In the MMT model, you always have full employment by creating government jobs when the private sector begins layoffs. The type of jobs Dr. Kelton suggests are in the health care sector for Senior Citizens, infrastructure and anything that helps society. In our current system, there is the FED dual-mandate framework where a certain amount of unemployment is considered beneficial to society as a whole. It's a balance between too much employment and too little to ward against inflation. According to the author: "The FED uses unemployed human beings as a primary weapon against inflation.". With the kinder, gentler MMT, nobody is on the dole, everybody that wants a job will have a job buttressed by a generous federal minimum wage.

There's an old Wall Street quip that astrology was invented so economics would seem like a more accurate science. Ninety-nine percent of economists didn't see the 'Great Recession' of 2008-2009 coming. They didn't forecast the bull market that began in March 2009, either. One economist that benefited from the 'Great Recession" was Hyman Minsky. Considered an outlier for 40 years, until his economic theory was utilized by the Ben Bernanke FED. However, Minsky didn't blow up an entire economic system, he built upon it. Minski believed in the free market economy until asset prices collapse, then you utilize government intervention. What MMT disciples are suggesting is a whole new way of looking at things. It's all government intervention. It's a tough sell.

According to Dr. Kelton, "About half of Americans say that reducing the federal budget deficits should be a top priority for the president and Congress. The book aims to drive the number of people that believe the deficit is a problem closer to zero.". She didn't convince me. A big problem she has is that she is equally critical of both sides of the political aisle. President Obama didn't get it, and President Trump doesn't either. If they don't understand the radical concept, then the masses don't have a clue. The only way you can make changes is through Congress. That's a body elected by the populace. The only elected official that seems to be on the same page as Kelton is Congresswoman Alexandria Ocasio-Cortez. In Philosophy 101 they submit a question to you: If a tree falls in the woods and nobody hears it, does it make a sound?

One thing I liked about The Deficit Myth is Dr. Kelton's stance on social issues. She believes in more assets allocated to healthcare, education, climate change, and infrastructure. One suggestion she has is a "Green New Deal" where we would have a 21st Century Civilian Conservation Corps. A practical solution to a very complex set of problems. What she doesn't address is all the displaced workers coming down the pike in twenty years from the roll-out of Artificial Intelligence. The government can only hire so many people to mow lawns and take care of the elderly. In addition, our current government is inundated with Milton Friedman disciples such as Larry "Lawrence of America" Kudlow and his minions of free market economists. For her ideas to come to fruition, she has to go through Congress, and the Republicans aren't going to have anything to do with MMT. Even if Kelton is correct, it's going to take decades for her ideas to be accepted, if at all.

If we go back a few generations of technology, there was the VHS vs Sony Betamax debate. Although Betamax was the superior product, VHS tapes won the war. Why? Betamax recorders cost more, so people opted for the less expensive product. In the public's eyes, traditional macroeconomic teachings will be perceived as the less expensive option. That's because our current system makes a fleeting attempt to balance the budget. It doesn't matter if intellectually her ideas are sound, it matters what the voters think. Kelton and the MMT crowd needs Congress. They won't get it. Personally, I lean left of center politically, and am still not sold on the idea. That said, I think it's a book about a concept that merits discussion.

It took a lot of courage to go out on a limb and write this. Dr. Kelton, the current public face of MMT, is probably going to get a lot of flak for it, too. It comes off as a Utopian ideal, an economic Shangri-La. Nevertheless, it's very well researched and written. Clear and concise, you will be informed by the plethora of economic statistics throughout the work. If you watch financial networks such as CNBC, and want to understand what talking heads such as Steve Liesman are talking about, this is a good place to start.

Book Review: Billion Dollar Fantasy

If you enjoy business stories about the digital age, then look no further than Albert Chen's Billion Dollar Fantasy. Not only is it a good first book, it's a good book, period. Ranks right up there with the more prolific writings of the current era, books such as Nick Bilton's Hatching Twitter, and Ben Mezrich's Bitcoin Billionaires. Subtitled "The High-Stakes Game Between Fanduel and Draftkings That Upended Sports in America", it's the story of aspiring unicorns duking it out for pole position in the burgeoning world of Fantasy Sports. Because of their global brands, sports fans and investors are probably already aware of the outcomes of the narrative: Draftkings (DKNG) is a recent IPO and Fanduel is controlled by ADR Flutter Entertainment (PDYPY). However, that doesn't take away from the sizzling story of how they got there. If you enjoy Fantasy Sports, investing, or tales of perseverance, this book is for you.

The account is told in chronological order, but also jumps back and forth to shed light on the history of Rotisserie baseball and fantasy football leagues. It's been said that you can't tell the players without a scorecard, and because there are so many major personalities in the book, the author includes a "Cast of Characters" before the preface. I found this beneficial because not only are the founders of both Fanduel and Draftkings highlighted, but some of the minor players which contributed to an interesting read - venture capitalists, professional gamblers and Fantasy Sports pioneers. Without it as a reference, I may have been confused as to who was who as the reporting progressed, except for the two CEO's.

Die-hard sports junkies have been playing handwritten Fantasy Sports games among small groups of friends for fifty plus years. As the Internet evolved, Fantasy Sports evolved, too. Electronic spreadsheets and personal blogs moved the betting pools to cyberspace; a cottage industry on the fringe. The multi-billion dollar industry as we know it today was launched from the loins of the demise of online poker. In the early 2,000's, the double-aughts, online poker was the craze where players could make life changing money overnight. Then the government shut down the industry. Uncle Sam deemed it a game of chance. However, as Chen writes: "Daily fantasy, like poker or blackjack, resided on a grey area on the spectrum: they were games of skill with an element of luck involved.". Fantasy Sports flew under the radar for years. Professional gamblers that made a living in online poker, made the switch to Fantasy Sports where unsuspecting minnows were ripe for the picking.

Although difficult to win consistently, the basics of Fantasy Sports are fairly easy: you pick a team, you make a bet, when your team wins, you get the purse. Between 2010 and 2012, aspiring entrepreneurs took notice, and professional websites for Fantasy Sports began dotting the electronic landscape. Beforehand, Fantasy Sports were occupied by media giants such as ESPN, CBS, and, Fox as tuck-ins to their digital empires. Mom and Pop bloggers working from home were on the other end of the scale. The middle ground was unexplored territory. When developers and avid Fantasy Sports fans discovered YouTube offered no original technology, just a website where you posted things, a land rush to be the next billionaire ensued.

Primarily, Web development is a young person's game and many wannabe Web kings emulated too cool for school Mark Zuckerberg of Facebook fame. It was also a time when the Great Recession of 2008-2009 became a distant memory and venture capital firms began to seed startups again. Now the game was who wants to be the next unicorn. If Zynga and Groupon can do it, why not me? Many Fantasy Sports sites were soon created, but it was DraftStreet and Fanduel that dominated the fledgling industry once the dust settled. Two lean startups before the lean startup rage in Silicon Valley. DraftStreet was the brainchild of Mark Nerenberg and his partner Brian Schwartz. Located in Great Britain, Fanduel was the innovation of Nigel and Lesley Eccles, a husband and wife team. However, that lead didn't last for long. There was a new kid in town, a johnny come lately called DraftKings.

Before DraftKings entered the picture, there was a piece of the pie for everybody. DraftKings, lead by CEO Jason Robins didn't see it that way - it was a winner-take-all game. They went hell bent for destruction. Robbins changed the rules of the game using a scorched earth policy and is described as crazy, reckless and ruthless. While competing executives utilized sensitivity training, Robbins went for the jugular. Draftkings was formed in 2012 by three Vistaprint middle managers including Robins, and by 2014, they were so aggressive that they devoured industry trailblazer DraftStreet. I'd rather be a hammer than a nail. That left two in the game with 90% of the market in tow - Fanduel and DraftKings. They were at the right place at the right time.

In 2015, both companies were worth a billion dollars. That watershed year also catapulted them to the forefront of American product branding as the two combined for $750 million in television advertising. Sandwiched between the GEICO and AT&T commercials, television viewers were carpet-bombed with 30 second spots hawking Fantasy Sports. If the two entities had combined resources, the excessive advertising spending could have been avoided, and the government scrutiny that came with unbridled promotions may have been minimized. A merger was bandied about, but they couldn't agree on who would run the new company. We're talking big egos here. Instead, they were stuck in the paradox known as the prisoner's dilemma where two individuals acting in their own self-interests do not produce an optimal outcome. The squeaky wheels got the grease, but the feds were hot on their tails with all the publicity.

I don't want to ruin the book for you, or make this a CliffsNotes review, so we'll cut to the chase. This is about the winner in today's investing and business environment. That winner is Jason Robbins and DraftKings. You may not like his tactics, but he followed the rules in the digital arena. They play hardball on Wall Street. To the victor goes the spoils. DraftKings went public in late April 2020 with Robbins at the helm. The stock has tripled in a few short months. Fanduel is controlled by an Irish bookmaker now. Both companies are battle tested, but DraftKings won the war. The story contains plenty of government intrigue, smoke filled barrooms off the Vegas Strip, and all you need to know about developing a startup. It's tale similar to Apple overtaking IBM or Facebook demolishing MySpace. If the movie rights haven't been picked up, somebody should get on it. I think you will really enjoy the ride. It's a page turner.

Book Review: Stephen Schwarzman's "What It Takes"

In high finance circles, Steve Schwarzman needs no introduction. He's the chairman, CEO, and co-founder of The Blackstone Group (BX), the world's largest private equity firm. If you aren't familiar with private equity, they deal in alternative assets, anything that's not stocks, bonds and cash. Blackstone buys, fixes and sells companies and real estate to large institutional clients such as pension funds and institutional investors. With the encouragement from former Treasury Secretary Hank Paulson, Mr. Schwarzman recently published What It Takes: Lessons in the Pursuit of Excellence. This is not an autobiography per se, but more of a business memoir. If you are business student, or have an interest in finance, this book is for you. However, because he goes into great depth about specific business deals, the general public may not enjoy it as much.

This is no rags to riches Horatio Alger story. Schwarzman comes from a middle-middle class family from Philadelphia back in the 1950's. A common and comfortable demographic 60 plus years ago. An outstanding athlete, he did his undergraduate studies at Yale and was a member of the Skull and Bones club, the secret society known for powerful alumni. Schwarzman also received an MBA from Harvard. A natural-born salesman, he was a go-getter from day one, and parlayed the enthusiasm and ambition into becoming king of the hill, A-number one.

That's not to say he didn't have his obstacles. In the late 1960's, Wall Street was controlled by white shoe WASP firms. At that time, there was only one Jewish partner in the investment banking universe. Being Jewish, he knew the odds were against him. Despite that, he took a job at Lehman Brothers. There was a glass ceiling, but it was beginning to crack. Schwarzman hit the ground running and broke that glass ceiling. He made partner in 10 years because of his excellent performance in Mergers and Acquisitions. It's a big feat when you consider how rampant Antisemitism was half a century ago. Although the movie Gentleman's Agreement won Best Picture in 1948, a film which is about Antisemitism in America, twenty years later, there still weren't many inclusive promotions. Schwarzman is a pioneer in leveling the field in investment banking where religious prejudices were rampant.

The rich are different than you and me. After 10 years at Lehman, Schwarzman had a house in the Hamptons and an apartment in Manhattan. Tells you a lot about investment banking, but you pay the price. As he reflects on his thoughts after his first assignment a Lehman, "This isn't Harvard Business School. These people don't fuck around. I'm living according to their rules. I had better learn to play by them.". And so he did. A quick learner, he acclimated himself to the rough and tumble world of finance: "Every point in every negotiation was a fight, with a winner and a loser. People in the business weren't interested in carving up the pie so everyone got a slice. They wanted the whole pie for themselves.". They eat what they kill.

With plenty of experience, and being frustrated with the corporate culture at Lehman, Schwarzman and Pete Peterson left the company and formed Blackstone in 1985. According to the author, "I had wanted out of Lehman because the ethics there had become so awful - the greed, the fear, the gutlessness, the hunger for power, the dishonesty.". This is about a third of the way through the book, and this is where he lost me. Much of this had to do with the fact it rehashes details about deal after deal after deal. If you're in finance, or an aspiring entrepreneur, the minutia would be a great value to you. But as a casual reader, I couldn't identify with the narrative. For instance, in Walter Isaacson's Steve Jobs, every page was engaging because most people have lived through the iterations of Apple (AAPL) consumer products. You could relate to it. Likewise, books about old school tycoons such as Howard Hughes have all the gossip about affairs with starlets above and beyond the business success. Despite Schwarzman's accomplishments, very little kept my interest until the last 50 pages.

I thought the book would have been much better if written as strictly a business text, or, as a more in depth look at his personal life. Instead, it's an amalgamation of the two which left many questions unanswered. As an example, his first marriage ended in divorce and he immediately goes into therapy. Schwarzman glosses over it with little explanation. Divorce is a big emotional event in one's life. Throughout the narrative, his two largest losses after founding Blackstone are Larry Fink exiting the company to form Blackrock (BLK), and Blackstone not financing Michael Bloomberg's fledgling firm. Those are missed opportunities, and Schwarzman took the blame for money left on the table, but they aren't life or career altering. I was interested in what made him tick, what motivated him.

Blackstone had the second largest IPO in the 1990's, second only to Google (GOOG). The section about the IPO was instructive, although Schwarzman didn't go into great detail about the corporate "road show". I believe his perspective would be educational to aspiring entrepreneurs. Also, the chapter about the 'Great Recession' of 2008-2009 is enlightening. Although Blackstone foresaw and prepared for the economic free fall as early as 2006, they got hurt, too. However, he doesn't mention the Crash of 1987, and, what implications it had on his two year old company. The Savings and Loan Crisis of the early 1990's (which cost taxpayers a bundle) was just a way to make a buck. But that's the nature of the beast. Investment banking is a grownup's game, and Blackstone is successful at it. As Schwarzman stated: "Deals that used to go to Goldman Sachs were now coming to us.".

Peppered throughout the book are subchapters with common sense advice and business tips. Subjects such as the trials and tribulations of being a startup, interview techniques and life lessons. Many times in the narrative the author emphasizes the network effect in human relations: it's not what you know, it's who you know. Social connect the dots. Schwarzman has a great sense of humor which makes the story more enjoyable than most finance publications. This comes to light when discussing all the pitfalls he faced. He's from the school of grin and bear it, and always seems to land on his feet.

The last section of What It Takes is about Mr. Schwarzman's philanthropic endeavors. I found it uplifting. In 2004, he became chairman of the John F. Kennedy Center for the Performing Arts in Washington, DC. This is in addition to his duties at Blackstone. His Rolodex filled with business contacts now includes the upper echelon in arts and entertainment. Plus, he made many political contacts to expand his investment banking firm. In the field of education, he established the Schwarzman Scholars at a prestigious university in China. An Asian version of the Rhodes Scholarship at Oxford. He's done a lot for investment banking, the arts and education, especially building relationships with China. The world needs more leaders like Stephen Schwartzman, especially with the country divided and burning. Nevertheless, it still doesn't take away from my view that in 200 pages of a 350 page book, the narrative wears you down if you aren't an industry insider.

Book Review: A.I. Superpowers

With the saber rattling and threat of a Cold War between the United States and China grabbing headlines, Kai-Fu Lee's A.I.Superpowers: China, Silicon Valley, and the New World Order is a topical read. Mr. Lee is the experts' expert on all things A.I. with impressive credentials. Kai-Fu began his career in academia where he obtained a PhD in artificial intelligence, then branched out into the private sector with stints at Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOG)(GOOGL). He's currently founder of venture capitalist firm Sinovation Ventures located in the Zhongguancun neighborhood of Beijing, often referred to "the Silicon Valley of China".

Although born in Taiwan, Mr. Lee spent his formative and academic years in the United States. I found the writing primarily apolitical, where the author took sides with the technology, not a particular country, but a few times he leaned towards Red China. Perhaps it's a bias because his bread and butter is now incubating P.R.C. startups. For instance, he warns in working with Chinese companies that "Silicon Valley looks sluggish compared to its competitor across the Pacific.". Based on the data in the text, I thought he was being objective, but others may take offense. Nevertheless, it doesn't detract from the fact you will learn a lot from reading A.I. Superpowers.

Kai-Fu states that there are four waves of A.I.: internet, business, perception and autonomous. Internet A.I. began fifteen years ago as recommendation algos for companies such as Amazon (AMZN) and Google. Business A.I. mines structured databases for information; mortgage defaults, stock price patterns and credit-card usage are all common practices. Perception A.I. uses "deep learning" or "neural networks" to digitize the world around us with the proliferation of sensors and smart phones. Facial recognition is one of the essential technologies in this stage. The autonomous phase will amalgamate the previous three iterations. An example is self-driving vehicles. The science fiction of my youth is now imminent technology, or, just plain old current events.

So who are the leaders in artificial intelligence? The usual technology suspects that have made investors increasingly rich the past decade: Google, Facebook (FB), Amazon, Microsoft, Baidu (BIDU), Alibaba (BABA), and Tencent (TCEHY). The author dubs them "The Seven Giants of Artificial Intelligence". I would think that Apple (AAPL) would be included, but it was omitted.

According to Kai-Fu Lee:

These Seven Giants have morphed into what nations were fifty years ago - large and relatively closed-off systems that concentrate talent and resources on breakthroughs that will mostly remain "in house".

It's a winner take all world in the race for singularity, or, Artificial General Intelligence [AGI], the hypothetical future creation of super-intelligent machines. Three technologies have changed humanity: the steam engine, electricity, information and communication science. In the future, AGI will be included. Although the corporate behemoths of the A.I. age will see profits rise exponentially to previously unfathomable levels, the first company that cracks the code for Singularity Technology will be the last company standing. AGI is so difficult to invent, it will be like discovering nuclear fission. Unlike popular science fiction, Lee doesn't foresee this taking place for decades, if not hundreds of years. Cyborgs with machine guns are not on the horizon.

It was only a decade ago that China was considered a technology backwater, but times have changed. They are currently slightly ahead of Silicon Valley in the development of artificial intelligence according to Lee. How did China get an edge on their American counterparts? The country had their own Sputnik moment. You may recall that the United States pushed the envelope to get to the moon before the Soviet Union when the USSR launched the Sputnik satellite. Beijing took notice in 2016 when Alphabet's AlphaGo, an A.I. game algorithm, trounced the world champion in a series of matches. It induced A.I. frenzy in the Chinese populace and the government made it a top priority to beat the Americans. With the backing of Beijing, Chinese firms leapfrogged an entire generation of data science, going from a copycat country, to an A.I. juggernaut. For instance, Baidu used to be called the Google of China and rightfully so. The Baidu website was formally a carbon copy of Google. That's history now. Google and Baidu are now equal as powerful leaders of their respective countries in A.I.. However, Kai-Fu states that, "no amount of government support can guarantee that China will lead in autonomous A.I.".

So where does this leave us humans? Basically out of luck. Lee believes that in twenty years, 40%-50% of work will be done by machines, "A.I. algorithms will be to many white-collar workers what the tractors were to farmhands.". However, no social strata will be left unscathed. Robotics is going to affect all of us. Lee warns that if left unchecked, A.I. will exponentially increase inequality on an international level. Poor countries will stagnate while the A.I. Superpowers escalate their economic dominance. The author gives a workaround for the vast amount of the potentially unemployed stateside, but it comes off a little too much like Universal Basic Income, which he doesn't believe in. I thought that was the weakest part of the book in an otherwise strong narrative.

Artificial Intelligence gravitates towards monopolies. One way to take advantage of the inevitable is to directly invest in The Seven Giants. If you prefer diversification, then Internet sector exchange traded funds could be up your alley. The popular First Trust DJ Internet Index ETF (FDN) invests in domestic securities. KraneShares CSI China Internet ETF (KWEB) focuses on Chinese firms. Invesco Exchange-Traded Fund Trust - Invesco NASDAQ Internet ETF (PNQI) blends equities from both countries. There's two caveats here. Because of the tensions between both countries, the Senate recently passed an oversight bill on Chinese companies, The Holding Foreign Companies Accountable Act. President Trump is also putting pressure on American technology giants such as Alphabet and Facebook for monopolistic practices. As a country, we need A.I. superiority, so I believe this too shall pass.

Book Review: The Age of Surveillance Capitalism

Harvard professor emerita Shoshana Zuboff's opus The Age of Surveillance Capitalism is equal parts economics tome and public policy manifesto. Five Hundred page economics and public policy books aren't usually slated for the bestseller list, and this treatise is certainly no exception. Although filled with a cornucopia of information, it's not a page turner, but more of a niche play for those in academia, government or finance. That's too bad because what she has to say is important, but the erudite writing style makes it inaccessible to the masses. Plus, it's redundant at times. It should have been edited down. That said, stock market participants may glean knowledge for technology investing if they decide to plow through it.

The book is primarily about Alphabet (GOOG)(GOOGL), the holding company of the Google empire, and to a lesser extent, Facebook (FB) and Microsoft (MSFT). Apple (AAPL) and Amazon (AMZN) are afterthoughts throughout the narrative. Alphabet is the trail blazing pioneer in surveillance capitalism. According to Zuboff, "Google is to surveillance capitalism what the Ford Motor Company and General Motors were to mass-production-based managerial capitalism.". What began as an altruistic search company that scoffed at advertising, clandestinely became a marketing juggernaut to avoid the unprofitable netherworld that doomed many dotcom companies.

Google mined the mother lode of what Zuboff coins "data exhaust" early on in its existence before other organizations were aware of the value. It began with cataloging and storing search results in their enormous server farms, but branched out to encompass e-mails, texts, photos, songs, messages, locations, communication patterns, purchases, and whatever else you can think of. Google is able to do this with the quid pro quo relationship it has with its users. The company gives away the Android mobile operating system, and lets people use loss leader YouTube for free because it enriches the dossiers they're compiling on each and every one of us. With the advent ubiquitous sensors in our lives and the adoption of "the-internet-of-things", there's nothing they don't have. Facebook utilizes the same game plan, and most other major technology corporations have followed suit. As the author states: "Once a third party captures your surplus, it is shared with other third parties, who share with other third parties, and so on.".

In the A.I. world in which we live, it's size and scope that counts - data begets more data which produces better search outcomes. Google does a land office business in A.I., but the author spins a cautionary tale about not only the company's underlying motives, but the underlying motives of the digerati as a whole. It comes off as a mashup of science fiction movies The Terminator and Minority Report. If you recall in The Terminator, Skynet, an artificial intelligence network, masterminded by Cyberdyne Systems, has become self-aware. In Minority Report, the pervasive network has precognition capabilities and can alter events before they happen. In Zuboff's not too distant future, behavior modification techniques by the digital industrial complex turn us into sheep with no free will. Anything against the norm decreases revenue streams. It's much more than state-of-the-art, high-tech, subliminal seduction.

George Orwell's Nineteen Eighty-Four features Big Brother, a fictional character that's the symbol of a totalitarian state depicted via cult of personality television transmissions. In Surveillance Capitalism, we have Big Other, an always connected network that "renders, monitors, computes and modifies human behavior". It's a new form of fascism. "Big Other acts on behalf of an unprecedented assembly of commercial operations that must modify human behavior as conditions of commercial success.". Just like Skynet in The Terminator without the search and destroy cyborgs. Zuboff believes this takeover will be a market driven coup from the powers that be that control the network, or at least this is how I interpreted it. "It is not a coup d'état in the classic sense but rather a Coup de gens: an overthrow of the people concealed as the technological Trojan horse that is Big Other.".

So how did we get to this point? To paraphrase the author, US privacy laws have failed to keep pace with the march of instrumentarianism, the 24/7 machine intelligence apparatus with the goal to automate us.

There was a time when you searched Google, but now Google searches you.

Zuboff states that Alphabet has been in bed with the CIA ever since the aftermath of the 9/11 attacks on the World Trade Center. The government needed Google's search algorithms to fight terrorism. In the book, former Alphabet CEO Eric Schmidt quotes an Andy Grove formula, "High tech runs three-times faster than normal businesses. And the government runs three-times slower than normal businesses. So we have a nine-times gap.". Uncle Sam just can't keep up with Silicon Valley.

CNBC's Jim Cramer is known for saying we live in a world of, for, and by the corporation. It's only getting worse as small and medium sized businesses in the COVID-19 pandemic are falling by the wayside. Corporations have been trying to control us from time immemorial. In addition, behavior modification has been around since soap companies convinced us to bathe every day in the 1920's when radio became mainstream. In The Age of Surveillance Capitalism, Zuboff warns that it's much more severe than "business as usual" now. We are becoming puppets of a digital totalitarian state fueled by the public's addiction to an always connected cyberspace. The benefits we derive from companies such as Google, Facebook, Microsoft, Amazon and Apple, have a double edge sword element to the relationship.

In aggregate, I tend to agree with Zuboff in a majority of the points she makes, including the creeping engulfment of the ubiquitous network 'Big Other'. I realized twenty-something years ago my privacy was a thing of the past when the first cookie was placed on my browser. Being a Baby Boomer, some sort of a cloaking mechanism is important to me. That may not be true for younger generations. Baby Boomers, Great Depression Kids, and the Greatest Generation who fought WWII are technology immigrants; they had to learn technology as adults. Gen-X, Millennials, and Gen-Z are technology natives, where computers have been part of their lives from womb to tomb. They appear not to care about privacy which can be demonstrated by the personal information they post in e-mails, texts, social media, photos and videos. For me, Zuboff is preaching to the choir. To the younger generations, her message may be falling on deaf ears.

I found The Age of Surveillance Capitalism equally fascinating, and equally bogged down by the academic narrative. If this is a warning sign to the masses, she did a poor job of reaching her audience. A more succinct book covering the same subject is The Four by Scott Galloway. Galloway also discusses how the large Silicon Valley companies evade paying taxes at the public's expense while taking advantage of lax government regulation. Although the Department of Justice recently announced an antitrust lawsuit against Alphabet, this isn't Alphabet's first rodeo. As in the past, they will probably be fined and get a slap on the wrist. After all, we are in a technology war with China, and the digital oligopoly has the best A.I. on the planet.

As an investment thesis, the surveillance capitalism equities are probably a good bet. They've been working and will continue to do so until major government intervention ensues. In the 1960's and early 1970's, we had the Nifty Fifty stocks that everyone owned and only went up. Now it's the FANGMAN (Facebook, Apple, Netflix (NFLX), Google, Microsoft, Amazon, Nvidia (NVDA)) stocks. If you are uncomfortable owning individual securities, then First Trust Dow Jones Internet Index etf (FDN), could be for you. The only free lunch in investing is diversification.