Observations of a trucker from the trucking community

  • Beliefs and behavioral profile
    • doesn’t believe in paying for an apartment
    • strong desire to be free
    • lives out of his truck
      • has bed
      • microwave
      • heater
      • storage
    • stopped over at truck stops when he used up his daily miles
    • gets to shower for free at pilot truck stops because of the amount of fuel he purchases
    • World view
      • References EpochTimes as a news source. Distrust CNN
      • Trump supporter – sees him as the only president that is not drawing a salary for his work.
      • Believes Democrats want to turn the country socialist by controlling the media and its messaging hence concludes the media is rigged
      • Further believes Democrats want to ban guns so as to exert more control over its people like a policed state
      • Believes in the ownership of guns to as a means to counter balance the power of the state to prevent involuntary drafting likes those imposed upon the people by the Confederates during the American civil war
  • Truck stops
    • Pilot Travel center
      • sells a lot of the equipment needed by truckers
      • showering facilities
      • internet and resting facilities
  • Technology usage:
    • Truckers have their own social network which is ran on Garmin.com
    • they text each other using the app
    • the app also tracks where they drove
  • Federal Law restrictions
    • Truckers hour limits by
      • 70 hours of driving per week
      • 11 hours of driving per day
      • 14 hours of working time per day which includes loading time
    • Yearly health checkup is required to operate a truck
    • Speed and alignments during operations after actively monitored by the Federal government through an onboard Qualcomm system
  • Technical details
    • A typical truck runs at 7.7 miles per galleon
    • weight
      • back axles 18000 pounds
      • front axles 18000 pounds
      • fully loaded truck 80,000 pounds
    • 3 separate braking system
      • regular brakes using air
      • parking brakes
      • emergency brakes  which will damage the axles if used abruptly
  • Trucking economic
    • A brand new trucks cost around USD150,000
      • Truckers can enter into a lease to own agreement with the trucking company to eventually own their truck.
        • typical monthly installment is around USD500 to USD1,000
        • installment payment accrues based on miles driven USD0.15/mile
        • a truck which has accrued 300,000 miles will sell for USD50,000. Value of the truck is depreciated at USD0.33/mile
    • operating profit and loss
      • Trucking contract typically paid revenue of approximately USD2/mile
      • Gross margin from a truckers point of view for an assignment is around 50%
      • net profit should be around 25% of that
      • Example:
        • Long haul job for 500 miles
          • revenue USD1000
          • variable expenses USD 500
            • gasoline
            • tolls
            • loading fees
            • etc
            • trucking company dues
          • amortized fixed monthly expenses USD 250
            • insurance
    • assignment details
      • when operating with truck leased from company, assignments are provided by company. Company takes 50% cut in exchange
      • if own truck, can take assignment from a trucking company which has cargo to be hauled
      • can opt to generate lead to assemble own cargo to be hauled.

Weapons of Math destruction by Cathy O’Neil

Weapons of Math Destruction

Key take aways

  • Human values like justice and mercy is hard if not impossible to encode as rules
  • Data scientist use proxies as an approximate gauge for the existence of values. These are inherently inaccurate if not downright wrong
  • While using of race as a feature to determine if loan should be approve is obviously racist, the use zip codes though not obvious is equally racist since race tends to segregate around geographical territories
  • Models are increasingly used to across various domains to help increase the speed of decision making. This increases the negative impact of badly designed models will have on humans
  • A feedback is necessary to ensure continuous correction of badly design models – transparency of how your credit score is calculated
  • Regulations are necessary on the use of models as companies driven by quarterly reporting requirements of shareholders are primarily be focused on the bottom line

 

A weird 2020 when 2008 repeated itself metaphorically

Unfortunately my earlier prediction of wildfire spreading from the US west coast as far as inland as Montana is once again spot on.

https://www.nifc.gov/fireInfo/nfn.htm

Give the long amount of time I spent in the woods in these sections conducting my hobo experiments, I could have easily became one of the 33.

https://www.usatoday.com/story/news/nation/2020/09/13/western-wildfires-monday-forecast-california-oregon-washington/5786311002/

I had a hunch that this year was going to be weird when I landed on the wrong side of the Lotte building during the 2020 new years count down in Seoul only to manage at catching the last 5 seconds of the fireworks after making a dash for it.

Things really started getting weird when COVID broke out in Europe and it seem to be always just 1-2 days behind me as I traversed the cities of Eastern Europe. And that saga came to a climatic end when I scuttled my way back to Singapore just hours before borders shutdown around the world.

Also not to forget mention me cutting all my long positions in oil hours just a day before it experienced its largest crashed in 30 years.

This weirdness got compounded when I started making my way overland eastwards and entire sections of the route I took got shrouded in inferno just a few days after my departure.

I wonder when I do eventually make my way back eastwards end of this year would I past through on the way back be flooded shortly after my departure…

It does remind me of 2008 when I slowly made my way westwards overland from Asia to Europe. Shortly after my departure from Szechuan the earthquake, broke out. This was followed by the Tibetan riots shortly after my departure from the Tibetan highlands and finally the Uighur riots shortly after I crossed the border from XinJiang into Kazakstan.

Chat with Quynh on trading

News sources utilized

  • Zacks
  • Motley Fools

Buy rumors and sell on news

  • rumors are not official news but signals that a news might be coming soon
  • continuous upwards movement of share price for few days means news might be announced soon
  • once news is out share price will adjust based on actual numbers

Buy on over reaction to bad news and sell on recovery

  • There is usually overreaction

The dichotomy between privacy and health

1984: Big Brother is Watching
Across multiple literature, its been stated privacy versus health will be one of the primary dichotomy societies around the world will need to juggle with as technological advances are made in the fields of artificial intelligence, communications (surveillance) and medical science (genetic research).
 
What is surprising was the rate at which the Corona pandemic catalyzed this change. In light of this, it is fascinating to observe how different societies position along the spectrum. Some societies has opted for surveillance to the maximum extend possible with current technology while others opted for its polar opposite going to the extend of staging mass protests against it use. 
 

Related readings:

  • The AI Economy, Roger Bootler
  • To Be a Machine, Mark O’Connell
  • Irrational Exuberance, Shiller, Robert J.
  • Life 3.0: Being Human in the Age of Artificial Intelligence, Max Tegmark
  • Mind Children The Future of Robot, Hans Moravec
  • The Singularity Is Near, Ray Kurzweil
  • 1984, George Orwell

Liar’s poker by Micheal Lewis

  • Michael Milken:
    • between perception and reality there is a gap
    • herd instincts: investors are constrained by appearance. A manager of a respectable financial institution will shun “fallen angels” so as to avoid appearing imprudent to his colleagues
    • forces wishing to keep a large company afloat are far greater than those that wish to see it perish
    • credit rating systems are flawed. It focuses on the past instead of the future. Ignore large fortune 500 companies in favor of ones with no credit standings to find a good deal.
    • The market which may be quick to digest earnings data was grossly inefficient in valuing everything.
  • Lessons from Solomon brother traders
    • I don’t pat myself in the back, because the next sensation is a sharp kick lower down
    • those who say don’t know, those who know don’t say
    • Despite the valuable lessons history can offer us, its shown that man does not learn any of these valuable lessons.
  • Benjamin Graham: The more elaborate the mathematics, the more uncertain and speculative the outcome. Avoid substituting experience with theory.
  • Key historic events:
    • 1933 Glass Steagall act: separation of investment banking and retail banking
    • July 1944 Bretton wood systems: World currencies agree to a fix exchange rate against the USD, USD agree to fix exchange rate with Gold.
    • 1971 Collapse of the Bretton Wood systems: US, faced with increasing pressure to maintain the USD gold exchange rates as its foreign reserves were depleted by a extended Vietnam war, went off the gold standard to prevent a run.
    • 6th October 1979 The Volcker Act : money supply will be fixed, interest rates would float
    •  12th Nov 1999: repeal of the Glass Steagall act: banks can now take use consumer deposits for investment purposes.

Related references

The trouble with markets by Roger Bootle

  • Wealth is really a subjective reflection of how we feel about the current state of things.
  • Finance unimpeded by dealing with physical objects tend to respond faster to news and sentiment than physical operations which are tied to physical infrastructure
  • Credit which the modern economy is built upon trust. In times of uncertainty, trust evaporates credit becomes unavailable. Credit crunch ensues.
  • Austrian economics versus Keynesian economics
    • Austrians economists, subscribe fully to the Adam’s invisible hand theory, hold the view the market is always rational, crashes are a necessary catharsis and central banks should not intervene to prevent the crash in this process of creative destruction.
    • Keynesian economists believe the markets are rational most of the time but malfunctions somethings. In these exceptional times it is necessary to step in to fix the malfunction so as to avert unnecessary hardship. Central banks are the lenders of last resort.
  • Keynesian economics on handling market malfunction
    • All market malfunction usually stems from an economic shock
      • the IT revolution shock lead to heavy and ultimately unsound investment in software technology. The period of rapidly advancing DotComs share prices, the underlying manic optimism, the resultant excess infrastructure capacity and excessive use of leverage marks the initial phase of this malfunction
      • at the height of the euphoria, market participants start to come to their senses, share prices start softening as demand fails to catch up with excess capacity.
      • fear sets in when market participants start exiting the market. Panic ensues, rapidly declining share prices and triggered margin calls compounds into a vicious cycle.
    • The key challenge for central banks in such turbulent times is to act with resolve to provide dollops upon dollops of credit all the way to infinity if necessary to tame the turbulence and to restore proper market functions.
    • Japan’s 20 years of stagflation and slow recovery post 2008 are outcomes of mild central bank response to stimulate the economy due to concerns over inflation
  • The real economy
    • aggregate demand – consumer side
    • aggregate supply – production side
    • availability of credit – money supply in the market
  • Sources of low inflation rate – lack of demand or excess production capacity
    • East Asian behavior which tends towards saving a larger portion of their earnings compared to the west
    • Aging population world wide which results in lesser consumption versus a younger population
    • Automation which allows for higher throughput volume given the same amount of resources.

Related references

Minsky moment and the three types of borrowers

Types of borrowers

  • Hedge borrowers – cashflow can pay both debt and interest
  • Speculative borrowers – cashflow can pay only interest. Needs to regularly refinance to repay debt
  • Ponzi borrowers – believes future appreciation can finance both debt and interest

Crash happened when too high a percentage of borrowers in the system are Ponzi borrowers.

https://en.m.wikipedia.org/wiki/Hyman_Minsky

Observations on our news reporting system as well as investment bank forecasting.

On the quality news reporting

Good news reporting should seeks to inform rather than sensationalize with attention grabbing headlines. Its easy to appear data driven but still be misleading if you do not use the proper frame for understanding the numbers

An example of bad news reporting
An example of bad news reporting
An example of quality news reporting

On investment bank predictions

When on the receiving end of predictions made by external parties it is important to understand the underlying agenda they are trying to achieve. When examined thoroughly, predictions made by investment banks are so bad and contradictory, they should just stop making public declarations.

However if taking into account their objective is not to inform but to incite a trading decision by their clients so as to make a commission or offload losing positions on their trading books, it makes perfect sense.

Related references