10 Daily Observations
Today: The ISM index hits a new high, Tesla misses production goals, 4 money tips from personal finance legends, what do financial bigwigs make of Bitcoin, the shorter you sleep, the shorter your life, and a profile of the author Dan Brown.
Economic News
ISM hits the highest level since 2004 coming in above 60 on expectations of 58.
Why the ISM index is important.
The ISM manufacturing index is one of the first pieces of news released during the month. It is a quick glance into the health of the economy during the previous month.
The ISM Manufacturing Index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production, inventories, new orders and supplier deliveries.
A reading above 50 indicates expansion, while a reading below 50 indicates contraction. See chart below.
For more information, check out Investopedia.
Raoul Paul, the founder of Real Vision TV, explains the business cycle and how he uses the ISM Index to predict economic cycles.(30 min + watch)
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U.S vehicle sales surged last month sending the closely watched seasonally adjusted annual sales rate to 18.6 million, ahead of analyst estimates of 17.15.
What happened? Why the rapid gain? Well, all those cars that were flooded in Houston had to be replaced.
Corporate News
Tesla misses model 3 production goals. [WSJ]
From the article:
It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain,” Tesla said in a statement. “We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.
This has had no effect on Tesla’s stock as it is trading higher on the week. Betting against Elon Musk has been a losing proposition since 2013.
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Speaking of Elon Musk, he has plans to start colonizing Mars within 7 years.
Tim Fernholz writes in Quartz.
From the article:
Musk’s new plan envisions sending a cargo mission to Mars without humans on board in 2022 — the next window when it is easy to fly from earth to the red planet. Then, in 2024, he hopes to follow up with human colonization. The BFR is designed to carry about 100 passengers, with 40 cabins and several community spaces during a mooted three- to six-month voyage.
Such a mission is far more ambitious than anything currently contemplated by space exploration agencies, and for that reason many are skeptical of the timeline described by Musk, who has been a serial over-promiser when it comes to delivery dates.
Many people dismiss this and think these goals are silly, however, we need people like Elon Musk who is willing to risk his own money and reputation on things that seem impossible.
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Warren Buffett is betting against a future of self-driving trucks — Quartz — qz.com
Warren Buffett doesn’t seem too worried. The billionaire investor’s conglomerate, Berkshire Hathaway, announced today (Oct. 3) that it had entered into an agreement to acquire an immediate 38.6% stake in the truck-stop company Pilot Flying J. In 2023, that stake would increase to 80%
Warren Buffett and Silicon Valley’s investment philosophies are in complete opposition. Warren is betting against change, Silicon Valley is betting for change.
Personal Finance
4 Money Tips from 4 Personal Finance Legends | The Art of Manliness — www.artofmanliness.com
Building a strong financial base starts with 4 simple steps. While the road to wealth is long, there are things you can do today to put yourself on track.
My comment on rule #4- understanding the d/f between an asset and a liability(Robert Kiyosaki).
From Robert:
You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is Rule №1. It is the only rule. This may sound absurdly simple, but most people have no idea how profound this rule is. Most people struggle financially because they do not know the difference between an asset and a liability.”
He makes this sound simple and in theory, it is. However, which assets you buy, and when you buy them will make a large d/f in your wealth. Buying stocks or real estate(assets) in 2007/2008 produced large losses for millions of people. Timing matters, a lot. Just something to keep in mind.
Investing
Micro(1st chart) and small-cap(2nd chart) stocks are breaking out to all-time highs.
Some analysts are worried because the Nasdaq 100, which is made up of the largest tech stocks in the US, is starting to lag.
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What Jamie Dimon, Warren Buffett, Ray Dalio, and others say about bitcoin and blockchain — Quartz — qz.com
Bitcoin has risen from an obscure experiment in cryptography to the topic du jour among the masters of the financial universe in a few short years. These days, if you’re a business bigwig, you’d better be prepared with a considered view on bitcoin.
The vibe on Bitcoin today is very similar to the vibe surrounding the internet, during its early days.
Many initially doubted the viability of the internet. Here is a 1995 article from Newsweek.
The article was titled-The Internet? Bah!
A few selected highlights: Remember, this is 1995.
Visionaries see a future of telecommuting workers, interactive libraries, and multimedia classrooms. They speak of electronic town meetings and virtual communities. Commerce and business will shift from offices and malls to networks and modems. And the freedom of digital networks will make government more democratic. Baloney.
The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.
In fairness, the original author has admitted his call was a bad one.
My main takeaway- When people say something is stupid, will blow-up and never succeed, take note and dig deeper.
With any new technology that fundamentally changes society, there will be speculation, charlatans, and a host of bad actors. Eventually, they will be weeded out and the strong hands will survive, much like the companies we now know(Amazon, eBay to name a few) that survived the tech bubble in the early 2000's.
Are you getting enough sleep?
Quartz did a well-researched article on the negative effects of sleep deprivation. A few excerpts.
What is sleep? And why do we need it?
From the article:
As far as scientists can tell, sleep is characterized by three things:
1. It paralyzes us and makes us unresponsive to our surroundings.
2. It can be abruptly ended (unlike a coma).
3. Without it, we’re less energetic.Why do we need it so badly? It gives our muscles and organs a chance to recharge. Most importantly, it allows our brains to organize the information we gathered in the previous day — and often that means forgetting a lot of it. Some scientists think it’s essential to the process of consolidating new memories.
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Read also-The shorter your sleep, the shorter your life: The new sleep science.
From the article:
But Walker believes, too, that in the developed world sleep is strongly associated with weakness, even shame. “We have stigmatised sleep with the label of laziness. We want to seem busy, and one way we express that is by proclaiming how little sleep we’re getting.
I can relate to the above quote. In my 20’s, I associated a lot of sleep with laziness. It felt cool to say I only needed 3–4 hours of sleep per night because I am hustling. How foolish I was. 😅😅😅
Below the Fold
A profile of Dan Brown, author of The Da Vinci Code. [NYT]- (h/t M.G Siegler)
I haven’t read any of his books, but he has been immensely successful in writing mega hits. His process for writing is what caught my eye. See below.
From the article:
Mr. Brown, 53, spent four years writing and researching the book. He is nothing if not disciplined. He rises at 4 a.m. each day and prepares a smoothie comprising “blueberries, spinach, banana, coconut water, chia seeds, hemp seeds and … what’s the other kind of seed?” he asked. “Flax seeds, and this sort of weird protein powder made out of peas.” He also makes so-called bulletproof coffee, with butter and coconut oil, which he says changes “the way your brain processes the caffeine” so as to sharpen your mind.
His computer is programmed to freeze for 60 seconds each hour, during which time Mr. Brown performs push-ups, situps and anything else he needs to do. Though he stops writing at noon, it’s hard for him to get the stories out of his head. “It’s madness,” he said of his characters. “They talk to you all day.”
Whatever your opinion of him, he is remarkably disciplined in his approach to writing. I have to admire that.
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A chart on poverty since the 1820’s. We all need to count our blessings for the time we live in.
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Have a great day and thanks for reading. If you have feedback, good or bad, let me know in the comment section.
Caleb
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