Articles for Daily Endurance Investing

Posted:

Posted:

This gives you a breakspace in an MDX post.

Everyone at the chocolate factory was in shock, especially the owner.

“It's gone! It's gone!”

Fifty pounds of unwrapped chocolate was stolen.

“If they get to my chocolate before we put the gloss on, they will be able to unlock the secret recipe just by tasting it.” He said in a frenzy.

Billy was sitting in a corner. He started to laugh.

The owner composed himself for a second. Then he shouted.

“What's so funny?”

“I am thinking about the thieves. Boy are they in for a surprise.”

“Yeah. A $2 billion surprise. My life's work.”

“Boss, I put my formula inside the chocolate. Until the chocolate is glossed and wrapped, my formula turns all the sugar into salt.”

“What?”

Billy took a piece of the chocolate that fell on the floor.

“Try it?”

The boss took a bite, then spit it out.

“That's disgusting. It's just lard and salt.”

“Yeah. Anyone who tries to get access to our candy before it is available to the public is going to gag. I put the second part of my formula at the glossing stage. The salt becomes sugar right after our chocolate is sealed inside its shipping crate.”

He walked to a crate, took out a double fudge square, and dug in. Smiling, he motioned to the boss.

“Want some?”

What is Tokenization?

Tokenization is the process of replacing your data with a reference instead of sending it out so outsiders cannot steal your information. It's like turning chocolate into lard and salt while anyone has access to its secrets, only to turn it back into chocolate when anyone can open the wrapper and take a bite.

When someone needs to use your data, something that represents the data being queried is sent. It's called a token, and it can be submitted to an approved query point, called a tokenization system, which uses the token to access your data without giving it to whomever is requesting it.

The tokenization system is isolated from the application that is storing the data so any user querying the data is in between two systems that have it. The user gets the token from the source, sends it to the tokenization system, and the system answers the query. The user carries from one point to another a turkey sandwich; a reference to the data that has no relation to the data itself.

Any application, system, or point of service going from the original point of data to the tokenization system is not carrying the data, but a token that can be exchanged for access to the data, or to events it can or cannot perform based on the information retrieved and processed by the tokenization system.

Tokenization is used for personally identifiable information (PII) like medical records, financial information, even a driver's license which holds a person's home address.

The most common use for tokenization is credit card processing.

The Need for Tokenization

Why the need for tokenization to keep a party out of the loop when they want to use your data for a productive purpose?

Say you are driving late at night on the freeway to an early meeting. It's 4AM, and you need something to keep you going. The next rest stop is about 50 minutes out. You park your car and make your purchase.

At the register is Eddie. He is a simple storekeeper in this quaint rural town.

You want Eddie to process your credit card, but you don't want him to use it. He needs to access the $3.75 for the tuna melt and diet coke, but not the credit card number or expiration date to pay for his next shipment of Hootie and the Blowfish CD Sets.

That's what tokens are for.

When Eddie swipes your card, all the register gets from your credit card is a token that represents the data Eddie needs to get paid.

His register uses that token to contact the credit card company. The credit card company uses the token to access your credit card data only to tell Eddie whether or not they gave him the money from your account. That's all Eddie needs to know. Once the company returns yes, he has his money and you get your card back.

This is the need for Tokenization: Enabling applications and people to use your data without seeing it.

Tokenization vs Encryption

Why not use data encryption?

Data encryption can also protect your data, and it sounds a lot cooler.

Data encryption is altering your data, making it unreadable to anyone who doesn't possess the encryption key. The strength of the key is based on the algorithm used to secure the data.

The more complex the algorithm, the stronger the key, and the more protected your data.

The risk is that a malicious attacker can try to crack your algorithm. They can replicate the key to decrypt your data. Using data encryption, even if the data is encrypted inside the digital equivalent of a steel safe with five locks around it, the user is still carrying the data.

Tokenization empowers the owner to decide which users never get to hold the data.

Tokenization replaces the data with a turkey sandwich. Those parties that need to use the data, even for necessary purposes, are given a turkey sandwich, or Converse sneakers, or an old Rubik’s Cube.

The only use the turkey sandwich has is for the tokenization system to reference this particular lunch with its specific trove of information. Even then, the tokenization system does not give the third party the data, but rather instructions on what events come next based on the data it is querying.

Tokenization prevents source of truth information to be shared along any points the owner wants it to be kept private.

Benefits of Tokenization

This brings a lot of additional benefits:

  • Regulatory compliance. GDPR standards are met, as are other local and regional data privacy standards.
  • Reduce exposure to data breach. A loss of data can cost millions, just ask Facebook.
  • Reputational compliance. Nothing can destroy the reputation of a company name more than a data breech. Minimizing the risk of one is like owning the best “reputation insurance” on the market.
  • Data Access. You control of who sees your data. You control of who holds your data.
  • eCommerce today. Tokenization is most commonly used to protect people's money. Your customers will appreciate this.
  • eCommerce tomorrow. As more companies migrate to the cloud, and the types of devices and IoT microdevices we use to make and accept payments continue to expand, tokenization is at the heart of it's enablement, making sure we can all do business anyplace, anytime, with anything while protecting ourselves in the process.

Better Compliance Through Tokenization (PCI DSS)

The Payment Card Industry Data Security Standard (PCI DSS) requires organizations that use debit card and credit cards to comply with their standards.

Their third requirement obligates the protection of data at rest. The aim is to minimize the amount of sensitive data that is stored in third party servers.

Tokenization meets this standard by making sure there are no third-party servers with sensitive information. They are all holding tokens, which reference such information only in approved tokenization systems.

The data is never at rest with Eddie, or in any other location that might not have enough resources to adequately secure information about where your money is.

A Better Approach to Tokenization (Data Products)

A quality tokenization provider can offer additional benefits like adding a layer of encryption to your tokenization, using variations of the process like vault less tokenization, consolidation of multiple data types from different technologies, and achieving compliance using only their platform.

All the major cloud platforms have tokenization solutions. Security companies and service providers offer tokenization solutions, you just have to make sure their tokenization offerings are their prime product, and not a secondary addition to what they focus on. Cloud providers offer tokenization-as-a-service options.


For my first post, I decided to work smart.

Since I started using MDX for my posts, I kept some notes on what I could do. Instead of hiding a file somewhere, I thought why not post this as a page on my app? It would be a lot easier. Especially as I try to use tags to make the last phrase italicized. All I had to do was look down a few lines and I figure it out using markdown syntax.

See the point?

Here is a nice reference guide to all the things you can do with markdown, especially using MDX

H1 text uses a single #

h2 uses two ##

h3 uses three ###

up to h6 where you use six ######

this is a value statement using h3. How does it look?

note: use a \ to use a command like # that you want to see, but not render

italics uses * at the beginning and the end of what you are italicizing italics also uses an _ underscore strong gives you bolded text. Use ** double asterik strong also gives you bolded text using double underscore __

~~ strikethrough uses the double tilde (on top of the back tick) ~~

create a horizontal line to seperate sections with a triple ___ underscore or triple --- dash



This is a quote. Use it by starting out with a >

This is the text inside the blockquote. Use >> double if the blockquote doesn't work -- that's fine. Create a styled react component that takes two props. One prop is the quote, the next is the person who said it. call the component, add the props.

[text](https://link) this is the anatomy of a markdown link. [] in brackets go the text. () parenthesis for the link. inside the parenthesis, after the link use "" quotes for the title text

example: [GatsbyJS Home Page](https://www.gatsbyjs.com/ "the gatsbyjs home page")

GatsbyJS Home Page

blockquote

If you cannot do great things, do small things in a great way.

unordered lists

  • item 1
  • item 2
  • item 3

that's all. just put one * in front of every list item.

* item 1 * item 2

if you want to nest lists inside lists, put the * indented

* item 1 \ [tab indent] * nested item

  • item 1
    • nested item

ordered list: replace the * with 1.

\1. item 1 \1. item 2 \1. item 3

  1. item 1
  2. item 2
  3. item 3

code blocks ```js use three back ticks FOLLOWED BY the language you want to show. You can use "js" for JavaScript. For instructions on what to install "npx install ..." - don't use a language indicator

<p> this is a p tag </p> function (num1, num2) { return num1 + num2; } npm clone my-repo.git

here is the use of a picture component

images are the same as links, just with an ! in front. The alt text goes at the end of the () with the image link. You should be able to call images from graphql queries inside of MDX.

A Gatsby Logo

task lists -- checklists

  • task 1
  • task 2
  • task 3 returns checks and boxes -- pretty cool

* [x] task 1 * [x] task 2 * [ ] task 3

In MDX, you can import components:

import Youtube from "/src/components/youtube"

then, you can call them

<Youtube url="https://www.youtube.com/embed/k4I3bcDC4rE?start=454" />

In MDX, you can import components:

You can also use any type of html in html code

<button>a button</button>

Here is another component you made. It's important to realize that you can create React components with props, then render them in a page going to gatsby. This is one of the ways you can use react in a gatsby app.

import Number from "/src/components/number" <Number number="5" />
Go Back

##Hey, why not wrap it up with a global component?

While I write these words in my Afula office, an Arab is upgrading our internet. He comes from the neighboring village of a Druze Muslim who was murdered by an ISIS terrorist while serving in the Israeli Defense Forces (IDF).

About 100 miles south of where I am sitting, the foreign ministers of Egypt, the United Arab Emirates, Bahrain, Morocco, the United States and Israel are meeting for a regional summit at the home of Israel's founding father David Ben Gurion.

Twenty years ago, these words would be considered a fairy tale. Much like twenty years ago the implosion of the BRIC nations would be considered a fairy tale.

How BRIC is BROKEN

Chinese stocks are 13% off their recent highs, bouncing off a low where they were 33% down. They are recovering from a bear market led by imploding builders such as China Evergrande Group, bad loans, rising commodity prices, and a regulatory system so unregulated they have been deemed "uninvestable" by the rest of the world.

Their government orchestrated $661 billion wipeout of Alibaba has spooked investors.

Russia has been suffocated by sanctions. Their entire financial system has been frozen by the west as they dedicate the lions share of their resources to swallowing up Ukraine.

As we speak, Russian elites are being smuggled out of the country as their assets are transferred elsewhere.

Dare to Dream?

The distance from Abu Dhabi to Cairo is 3,000 kilometers. That's two thirds the distance from New York to Los Angeles.

Along the way stand Saudi Arabia, Israel, Bahrain, and Jordan. Unlike BRIC, separated by multiple oceans, this region is one land mass. You can drive to and from any country.

Free trade agreements are in the process of being signed between Israel, the UAE, and Morocco.

This region has a combined GDP of roughly $2 trillion.

Strong Forces Build Momentum for Regional Economic Development

There are several forces at play which might make this new region a reality:

  1. Iran. The stronger Iran gets through rising energy prices, possible sanctions relief, and an American need for a new source of oil, the more spooked Arab nations become. The more they perceive Israel as a new ally.

  2. America. The United States has abandoned the Arab world for Iran. For 70 years they were the military protector of Saudi Arabia. Thirty years ago they went to war over Kuwaiti oil.

Those days are gone. The only military power that has the strength and determination to stand up to Iran . . . is Israel.

The Arab's new knight in shining armor no longer bears the stars and stripes. It has a Star of David.

The price for American protection was massive Saudi investment into the US economy. Our price might be a similar level of economic integration.

  1. Each other. The UAE and Saudi Arabia are fierce economic competitors. Slowly, the UAE is rapidly catching up to Saudi.

If they begin to enjoy a competitive advantage due to their trade with the largest high-tech hub this side of Sunset Boulevard, the Saudis might pursue normalization with the Jewish State just to remain the most relevant player in the Arab World.

Normalization between Saudi Arabia and Israel gives political cover for Kuwait, Qatar, and Oman to join in.

That creates a $2.5 trillion economic region of entrepreneurs, highly educated workers, laborers, financers, and natural resources.

  1. Energy cooperation. To this point, only a select handful of nations have enough oil and natural gas within their borders to make a regional and global impact.

Recent offshore discoveries of the Tamar and Levithan fields in Israel and in the Great Nooros Area in Egypt add two more players to the local energy game.

The war with Russia demands new sources of oil for the western world. As America makes its play for Iranian oil, Europe is pursuing pipelines connecting both Israeli and Egyptian gas to Greece.

Such infrastructure is expensive. Cooperation between these two nations can prove to be lucrative -- especially in the face of rising wheat prices, where bread is a basic staple for the 100 million citizens of Egypt.

Investment Opportunities

The best way to manufacture the new BRIC is with ETFs. There are plenty for Saudi Arabia, the UAE, and Israel.

Check out this chart. It's the ETF for the UAE

UAE performance since 2014

You can see two things. One, they are unchanged over 7 years. Two, since the Avraham Accords, they have doubled.

It's the same with the Saudi ETF. From its inception in 2015, it stayed within a range, rising around 7%. Since the agreement, they rose 70%.

Price action, along with Saudi sentiment and the relatively progressive stance of Crown Prince Mohammed bin Salman imply the Gulf nation will eventually complete our generation's hottest emerging investment region.

My wife grew up in some of the harshest climates in the Soviet Union.

I grew up on Long Island.

She would have to use an outhouse as a bathroom, braving zero degree frost in knee deep snow just to wash her face.

I had a shower that doubled as a bathtub.

Our poor children. When their mother said, “I used to walk three kilometers in snow to go to school,” she meant it. Feigning illness in January never worked out.

When we got married, she saw how much I spent on creature comforts.

She was polite. “David, you don’t have to start the day taking an Advil. Going out for dinner on weekdays is wasteful. Why don’t you eat any produce? It’s healthier and less expensive. We don’t throw away money.”

I knew I would be making changes.

Everything turned out a lot better than I thought. I discovered how she loved to cook. Suddenly, our weekly expenses went down. We had some spending money.

“Honey, how about a nice cruise in the Carribean?”

She smiled.

“How about a few nights camping?”

“I haven’t slept in a tent since I was in the army.”

Her next words hit me like a brick.

“You’re in the army now, baby.”

From Basic Training to Live Drills

Stay One Step Ahead of the Stock Market

Get news, trades & market updates from DailyEI.



After a few years of living in Queens, we moved to the Jezreel Valley in Northern Israel.

Shula reintroduced me to living lean. It was a lot less difficult than I thought. She was able to replace one form of enjoyment with another, albeit less expensive version.

Over time, she showed me 100 different ways to save money without compromising our quality of life. When we went out, we packed a thermos of coffee and a few pita sandwiches. She even showed me how to toast them. We went to a quiet hill and saw the sunset. We saved $40 a week on dinner and had the best time. Over three years, that’s $6,000 – real money.

Once we moved here, we stopped buying specialty coffee. Instead of a $6 spend at a Starbucks, we took a scoop out of the coffee jar. We would use around 1.5 jars per month. That saved us $125 on coffee alone.

What we spent together on a single trip at Starbucks paid for a month’s worth of coffee.

We saved $1,500 a year just on coffee.

Then, we got creative. We noticed that they sold 200 gram bags of coffee at the bulk Costco stores here. We stocked up. We purchased two final glass jars of coffee and kept refilling the jars with the bags.

Total coffee expenses were reduced to $11 per month.

Going out for designer coffee is considered a luxury. We do it from time to time, but once in a blue moon.

How Coffee Conquers Inflation

Let’s assume our yearly income is $80,000 a year. We take home $56,000. The average Starbucks spend is $16 per week. For the two of us, that’s $32, or $1,664 a year on coffee. Compare that to $11 a month. That’s $121 per year for a savings of $1,543.

The money we save on coffee is 2.8% of our take home yearly salary. Inflation in the U.S. for 2021 was 7%.

In one single choice, you can reduce the impact inflation has on you by 40% without taking any risk.

If a single choice can make such a difference, imagine what a series of choices can do.

Arabs don't laugh.

It comes from Bedouin tradition. Laughing is considered showing emotion, and that is considered to womanlike for a man.

There is no progressive movement among the Arabs. There are no feminist movements.

Arab culture is Latino machismo on steroids. The only gender fluidity is the boiling water that will be splashed in your face if you ever bring up the topic.

Forget what you believe. Toss away what you think is right and wrong.

The Arabs have their own code of honor.

Mess with that at your own peril.

Putting Food on the Table

85% of Egyptian wheat comes from Russia and Ukraine. Prices have risen by double digit figures overnight.

The government pays subsidies to make sure bread is affordable to its 105 million citizens.

Rising costs put Egypt in the perilous situation of either maintaining current subsidies to let the price of basic foodstuffs rise, or to keep up with inflation and strain their budget.

Neither choice is easy.

It was just over 10 years ago that a simple Tunisian peddler burned himself to death because he was prevented from caring for his family.

In the Arab world, family is everything. A man's ability to provide for them is his honor.

Wars are fought over honor.

Why didn't we, in Israel, launch another war after the Yom Kippur War in 1973 to put fear back into the Arabs?

We knew that this war, even though it ended in a stalemate, restored Arab honor to these nations. As long as they have their honor, they will not risk another war over it.

The strategy worked. There has not been as major war between Israel and an Arab nation in almost half a century.

The Arab Spring

Ten years ago, prices for bread also spiked. This put the middle and poorer classes in a difficult position.

Many of them couldn't put bread on the table.

A popular uprising ensued that removed then leader Hosni Mubarak from power. He was firmly in control for 30 years.

Current president Abdel Fattah Al-Sisi knows that without bread, he could also have another Arab Spring on his hands.

105 million people are a lot to control.

Supply shortages, war, inflation on energy prices have lifted the price of wheat 50% in the last six months alone.

If Egypt cannot keep the price of bread stable, the same unrest can ensue.

The recent shock to oil and gas prices will have an upward push on fertilizer, which may keep wheat prices higher.

This might result in millions of Egyptians dusting off their old pitchforks.

The End of the War

Vladimir Putin never imagined the war to last more than a few months. The Russians are already encircling Kyiv.

At the same time, sky high commodities prices can prolong inflation into 2023, making a Republican Congressional landslide all the more possible this November.

In a twisted way, it is in the interests of both US President Biden and Putin to end the war and drop the sanctions.

As the Ukrainian resistance shows greater force, and NATO nations threaten to provide Ukraine with their own weapons, this war may not end as fast as anticipated.

Inflation will spread to places we never imagined, causing problems we never foresaw.

Stay tuned.


We talk a lot about God in the Middle East.

Sure, there are those who go in a direction that can be a little, ahem, scary.

I know lots of Jews and Muslims here who love God and don't hate one another.

My auto mechanic is an Arab Muslim who operates his business in a Jewish city and employs Jews, Christians, and Muslims.

He laughs when he talks about it.

"God commands us to love. It's men who pervert His word that try to convince us to hate."

He gets invited to a lot of holiday dinners.

Emotion

I am studying with my learning partner the Tanya, a mix of Jewish Mysticism and Faith.

We are on the subject of the mind and the heart.

The brain is a cold place.

Says my partner. He is quoting his Rebbe.

"But the heart is too hot. If we follow our heart, we are dragged by emotion. We make decisions on emotion."

I quoted a sales legend:

We make decisions on emotion, then justify it with logic.

He laughed.

"Exactly. It's a lot like vegans. They see animals getting slaughtered and they want to stop eating them. It's all emotion. When you think about it, an animal that gets eaten serves a purpose. He didn't live and die for nothing. He served man, even if on a dish with some cole slaw."

"But it's good to get emotional. We live in the most passionate place on earth. Emotion is like air here. You cannot ignore it."

"That is why you have to turn your friend Brian Tracy around. We cannot mix our emotion with logic, but we should mix our logic with emotion."

"The mind must reign over the heart at all times. Once it does, then you can let the heart take some space."

Trading & Investing

It's the same with trading.

People ask me, "Where are all your charts?"

I don't post them.

I use them, a lot. Who doesn't. But I don't like to make the most powerful logical case for any transaction.

The reason is that the logic is so powerful, people get emotional about it.

You can take any position, and create an army of numbers to make it look like the most brilliant move ever.

With a few lines, points, and colors, you can convince someone the stock at $12 will be the next Google by week's end.

That's scary. I have seen it too many times. People buy when they should sell. People selling when they should hold.

It would be best if we could divest ourselves of all emotion when we trade, but that's not possible.

Passion is part and parcel of the trade.

The key is to keep your mind in control. To know that your logic can be wrong, or the current market sentiment (read -- emotion) is overruling your thesis for the foreseeable future and you have to regroup.

Most trades do see a period of red before black. If you are too emotoinal, you could sell right when it's about to turn.

That's why the noggin has to rule. A practical head makes you flexible, dynamic, and able to adapt to changes fast.


Where are all the new drug plants being opened up right now?

In America.

Why not China?

America, Europe, and the rest of the world thought they had it made by buying cheaply manufactured Chinese goods. The Chinese thought they had it made producing everything for the prosperous nations to consume.

It was working for 20 years.

Then COVID-19 struck.

In days, we went from an abundance of medical supplies, machinery, and medicines to a massive shortage. There wasn’t enough to go around.

The American companies did what any nation would do; they took all the medical products they produced and shipped them to hospitals nationwide.

There was just one problem: All of their factories were in China. Everything they produced was in China.

The Chinese government did what any nation would do; it seized all the medical products inside their borders, regardless of who produced them, and used it all to take care of their own.

Desperation

For a while, the west was in a dire situation.

From the Chinese sanctions on the world, lessons were learned.

Lesson #1, in times of emergency, you have to rely on your people to bail you out. Every nation will do everything it can to protect itself.

To this day, throughout America, Europe, and the entire world, efforts are being made to ensure that life necessities are produced locally.

The Chinese make great umbrella hats, but for medicine, food, and anything used for life maintaining services, nations will pay a little more to make sure they have always-on access to it.

I live in the Jezreel Valley, the breadbasket of the Holy Land. Building booms are going on in Jerusalem and Tel Aviv, but they are a little muted here. It’s a national mission to make sure there is enough Land to feed the country.

Big and small nations alike know to make sure their first aid kits are not Made in Taiwan, Japan, or Mexico. They have to be available in-house.

The Russian Lesson

America and the west are cutting Russia off from all dollar-denominated transactions. This is a decisive move to get Putin out of Ukraine.

It might work.

It turns Russia into America during the early days of the pandemic. Russia is now suffering acute shortages of something it relied on another nation to provide. It must quickly find out how to produce it locally.

Like every other nation, Russia relies on the U.S. dollar as the world’s reserve currency.

They will have to figure out how to keep their economy from total collapse by using alternative money. There are nations, like India, which desperately need the fertilizer Russia exports to feed itself. They have to find a way to continue to conduct their business outside of the sanctions.

China cannot continue to operate without Russian oil. They don’t need to follow the sanctions if they don’t want to, and we know they won’t if it is too risky for their economy.

They will find a way to trade around the dollar for Russian oil.

After this is over, Russia will see a need to start building long-term financial solutions without the Dollar.

With its insatiable appetite for Taiwan, China could see itself next in the international hot seat.

They may work with Russia to find a defense against a global economic strategy that may be aimed at them in the near future.

If that happens, the dollar could drop. It could take enough of a shellacking that inflation will remain high and interest rates will start to rise.

Add to the Intangibles

For now, these are powerful currents pushing inflation up:

    1. The supply shortage hasn’t ebbed yet.

    2. Quantitative easing is still happening.

    3. The Russia-Ukraine war is keeping oil prices hovering at $100 per barrel

A new current might be the existential collapse of the dollar as the world’s hard currency.

In 1995, we laughed when Jeff Bezos predicted his new internet startup would replace retail.

In 2005, we thought it was funny when China boasted it could overtake America as the world’s strongest economy.

In 2022, we might laugh at Putin creating something to replace the dollar.

Stay tuned.


pic by ©jegas/123RF.COM

The 1970s stagflation era. That was an entirely different world, and certainly different kinds of markets. There were no ETFs back then. Mutual funds were a new idea and the 401(k) hadn't been invented yet. Online trading was science fiction. So, it's hard to visualize how that kind of recession will combine with today's kind of markets. We haven't seen anything like it.

When I was in basic training, every moment of my life was accounted for. I woke up at a specific time. I went to brush my teeth at the same hour. Cleaning my gun took place at the appointed moment. Daily runs would be within a certain frame. For some tasks, we had an hour to complete. For others, our commanders gave us a few seconds.

Every moment I was in uniform, I was part of a mission.

In guarding freedom, there was no such thing as free time.

After a while, you become programmed to it. You expect your day to be dictated to you, second by second. You don't know what comes next, but you always know something comes next.

Until field week. On day three of maneuvers, there was a mixup in logistics. Our commander needed to back up another unit. It took him twenty minutes to set everything straight.

For those twenty minutes, we had no standing orders. Those 1,200 seconds was unaccounted time.

We stood there in bewilderment, not knowing what to do.

It was kind of like this:

There is No Plan for the Next Moment

We have no historical measure to tell us what comes next.

We are dealing with an economy where demand has been artificially pumped up beyond the economy's ability to supply. This means full employment. It means wage inflation.

We have an inverted yield curve telling us that under no circumstances should we raise rates. We are at the end of an enormous monetary expansion.

The plan for 2022 was like a month in basic training. The powers that be planned everything to a tee.

We would gradually raise interest rates and stop injecting new money into the system. Supply bottlenecks would slowly subside as would inflation by Black Friday.

I guess Vladimir Putin only likes economic plans to take place in Russia.

Ukraine and Russia account for more than a quarter of the world's wheat and half of Europe's energy. Sanctions mean prices for both food and energy will be on the rise for the foreseeable future.

When the bond market is telling us the worst course of action is to raise interest rates, we are at the cusp of a series of what looks to be 6-7 rate hikes of 50 basis points or more.

We either raise rates to stop inflation or we let it be and prices continue to soar. It will take time for the increases to be enough to make a dent and kick in. Even if Fed Chair Powell does pull on the breaks, you cannot stop a supertanker on a dime.

Where’s the Money Going? I Have No Idea

In 1975, US debt accounted for 32% of the size of its economy. In 2021, debt was 137% of GDP. A 1% rise in interest rates can add $200 billion to the American yearly budget deficit.

What comes next if the Fed cannot print more money due to inflation and raising rates will blow out its budget?

Maybe nothing. Perhaps we can afford to go farther off the cliff this time.

In 1975, there was no globalization. There was no internet. There were no computers, email, even portable phones. Productivity gains over the last half-century have been greater than at any other time in human history – combined.

In 1975, the economy of China was smaller than Italy. They didn't have the manufacturing capacity to export deflation to the world. There was no technology to export deflation.

Will there be a terrible recession to clean out all the excesses of the last forty years or are we a lot stronger than we think? Could it really be different this time?

Will the forces of deflation led by China, debt, and technology keep things from getting out of control? Will too much currency in circulation, a supply crunch, and war in the breadbasket (and oil well) of Europe create the first serious inflation crisis since Angelina Jolie was an infant?

Do we rush into hard assets or are there inflation-prone alternatives?

Stay tuned.

My wife has a very simple strategy for success:

Throw as much as you can against the wall. Whatever sticks, go with it.

Even if she said this while our children were all in diapers and she was knee deep in baby wipes, it makes a lot of sense.

The hardest companies to market are the ones where it takes a year to make a sale. One of the companies was a B2B software outfit that sold databases. From the time the developer tried out the product, it could take months, in some cases years before he made a project out of it, then convinced about 8 layers of bureaucracy that it was worth purchasing.

By then, nobody knew who brought him on as a potential in the first place.

It was causing the marketing people a lot of frustration. We couldn’t link our efforts with the company’s bottom line.

We tried webinars, white papers, google ads, Reddit ads, free demos, discounts for early purchase. None of it worked. Or maybe it did, we just couldn’t determine.

Then came the use cases. The CEO saw a page on the website with a few articles about how our customers were using the database and he mentioned that he wanted more.

Given that we had little to show for our efforts, whatever he asked became an immediate priority.

Finding the Golden Question

I started talking with the clients. One of the questions I asked was, what’s the future for your company?

The moment you talk to someone about what they are working on, they open up. Ask a person about his goals and he gets really excited.

They all told me what they were up to.

I always asked what they needed from us to make it happen.

Then they told us what was missing from our product. In some cases, we had it, they just need to know. I even offered to arrange a meeting with them and a developer to show them how to do it.

That year sales jumped for the first time in company history. People were just asking for more resources.

I can’t tell you that it was current clients, who already bought and installed the product, and had their payment details in the system. That all they needed to do after a developer showed them how to achieve what they wanted with something they already had was to press a button and spend a little bit more.

But it makes sense.

It was the first time the marketing team could connect the dots between creating content and generating sales and it came from an unplanned, unintended idea.

Who knew?

That’s why I say do everything you can. Leave no stone unturned. Do all you are able to until you find out what is working. As long as it doesn’t break you, keep throwing as much as you can against the wall.

"Am I better off with half a loaf of bread?" my friend asks me.

"Why? The bread here is first rate. We live in the wheat capital of the country"

"I had to pay 20% more for a loaf of bread today. Prices just shot up overnight."

We both know how commodities work, but when something you feel all around you contradicts what you are hearing -- even if it's true, it's still a little hard to accept.

We live in the Jezreel Valley. This is the wheat capital of Israel. My wife grew up on a farm in the Ukraine. Our favorite watering hole (to actually swim) in located in the center of a big kibbutz (farm).

Every spring we see the wheat. It's a miracle. A wheat kernel half the size of your thumbnail is planted in the ground, and a few months later it grows into a stalk the size of you, carrying 50 more wheat kernels.

When the wheat is fully grown, it's like walking through a vault of gold. The ears at the top of the wheat stalk give a golden shine when the sun reflects off it.

The field has millions of wheat stalks. It's awe inspiring to see so much abundance.

See for yourself:

A field of wheat in Northern Israel

My wife says we get such a good harvest because we have good "black" soil in here in Northern Israel, just like they do in Ukraine.

Wheat Prices in Ukraine Impact Inflation Around the World

Even in places where there is an overabundance of wheat, the cost of a loaf of bread rises.

Once upon a time commodities were local. If it cost $.22 for a pound of wheat in Spain, fine. If it cost $.10 for that same pound in Canada, then why not get it there?

If you could go from Spain to Canada and back then you are in luck. You can't so you are stuck with the local price.

That was 100 years ago. Now, we have exchanges where you can buy and sell wheat from one place to another. You can buy your Canadian wheat for $.10, then sell it on the Spanish market at more then double the price.

If that's the case, why isn't everybody doing it? Well, they are! Whenever there are price discrepancies, traders will buy at the lower price and sell at the higher one.

They make good money. It's called arbitrage.

What happens then? The added demand to buy the cheaper version will up the price, and the added demand to sell the more expensive version will lower the price until the two commodities are selling at the same price.

It's the commoditization of commodities.

It's the reason why the price of wheat in Ukraine is the price of wheat in Northern Israel. It's why my friend just had to fork over an extra 5 spot to get his pita bread.

Is Global Inflation Happening Worldwide?

The answer to that question lies in the price of a loaf of bread.

Ukraine is the fifth largest exporter of wheat. If their supply chain is disrupted, we all feel it.

The price of wheat has gone up 67% in the last two months. It is selling at it's all-time high set in 2008.

The war in Ukraine is disrupting the processing of their wheat crop, impacting 10% of global wheat supply.

Russia is the largest producer of wheat, distributing 15% of global supply. They are subject to sanctions restricting their ability to sell their crops.

One out of every four loaves of bread have been disrupted by a supply chain fracture due to the current war.

This has brought up wheat prices, and everything that is made up of wheat from the cakes you eat at Starbucks to the bun on your burger at McDonalds to the pita bread over a half a billion people in my region of the world eat every day.

Is global inflation happening worldwide? Food is a retail item everyone on earth needs to buy. It is comprised of wheat, and oil?

Oil? The fertilizer that is needed to help crops to grow comes from oil, another major commodity produced by Russia that is subject to sanctions.

Bottom line: Expectations that inflation would subside by the second half of 2022 have exploded like a Ukrainian Molotov Cocktail.

Stay tuned.

Look at this dire warning by Bloomberg:

Speculative equities that went straight up for years have fallen back to earth ... Russia's invasion of Ukraine sparked fears of a global energy crisis and raised the specter of stagflation. It all adds up to a remarkable coda to a two-year run that saw financial assets of all kinds soar as the Federal Reserve's pandemic response flooded the system with money.

The result: Gambler spirits have cooled

The Return of Daddy Warbucks

It's funny on multiple levels.

Just last night, I showed my daughters the 1982 movie Annie. Kind of ironic how the mega wealthy barron living large during the great depression, Mr. Warbucks, just happened to amass all his wealth selling weapons. It turns out that even in the worst economic crisis ever, poeple found ways to advance.

The following song, quite relevant to today's unfortunate situation, shows just how illogical the media is. Here is Annie and Mr. Warbucks having dinner with then president Franklin Delano Roosevelt.

Come one, really, a republican and a democrat eating together?

There's Nothing Left for those Who Don't Want It

Granted, in order to gain traffic, likes, comments, and SERP ratings, you have to put added salt into just about every piece of copy. This article is no different.

But they have it all wrong. If the markets are going down, you can speculate on the downside. You can go long ETFs that move short. You can buy puts.

You can invest in the finest, safest bearish investment of all:

You can buy cash.

If you look at it one way, buying 100 shares of Microsoft (MSFT) is really selling the broker $30,000 and buying 100 shares from Bill Gates.

Flip the transaction and you are BUYING CASH for 100 shares of Microsoft.

It's a small nuance, but an important one. In a weak market, everyone says to hold cash. We don't like to hold. Nobody likes to hold. Holding is for couples during date night.

For investing, it says "do nothing, until."

It reminds me of something the all-time points leader once said:

You miss all the shots you don't take.

Holding is seen as such a passive, nonaction.

Buying is another story. You buy dollars when you feel the value of what you hold is going to be worth less in the future. That way, for the same amount of dollars, you can buy more.

You BUY dollars becuase you beleive the value of the dollar is about to go up relative to the value of stocks.

That's a proactive approach based on continuing to grow your portfolio. That's why we long the dollar: To get back in at lower levels with more shares.

The right outlook make's it okay to be long in cash -- which is what I suppose a lot of these speculators are right now.

All right, let's get back to it. Let me see if I can find something worth reading. Here's one:

Why Putin Won't Win

My friend in the IDF put it to me simply:

Usually armies will use the element of surprise to attack. Putin didn't do that. He put his troops into attack formation for DAYS for all the world to see.

He wanted to know how the western powers would retaliate against his aggression. The moment he understood that the farthest they would go was sanctions, he saw it as a green light from Washington.

People like Putin know force. Unless you use it, or show you are dead serious about using it, he won't stop."

Putin Won't Win? Someone needs to tell these people that he already did.

If you have the right strategy, you can take a bit hit and keep going.

Just ask Muhammad Ali.

Some people said his greatest fight was against George Foreman in 1974 when he regained the title. Others say it was the 14 round Thrila in Manila against Joe Frazier.

There is a small chorus who say his best fight was against Ernie Shavers.

Huh?

Shavers was the Mike Tyson of his time. When Joe Frazier was champion, he asked for a shot. Frazier, knowing how dangerous he was, declined. So did George Foreman when he was champion.

At 35, Ali was past his prime. Shavers claimed that all he needed was two hard shots and he would floor Ali to take the title.

Where Shavers had youth and strength, Ali had a height and reach advantage over Shavers. His strength was his speed and stamina.

If Ali could get the heavy hitter to swing an miss, by the late rounds he would be finished. Going into the fight, Shavers only saw the seventh round 7 times.

That's how Ali could take a big hit. Not two mind you, but one here and there. He would jab and move, ducking Shavers swings, and work away throughout the fight.

It worked. Exhausted, by the 15th round, Ali unloaded on Shavers, almost flooring him with 20 seconds left to go in the fight.

He had a strategy of small gains throughout. He knew that he could take a few hits. He even knew that he could take a bit hit or two, which he did, and still come out on top.

That's Why We Call it Endurance Investments

We just took a big hit. We held a stock that got walloped 11% in 8 trading days. That can ruin your day.

It didn't.

Our income heavy strategies call for trades aimed at generating incremental gains where we get most of the money from those gains up-front.

Nice tactics, right?

As a result, we have a steady stream of mid single-digit returns on multiple trades going on while maintaining the bulk of our portfolio in long-term assets we see as undervalued to the future.

We took the hardest hit in a stock that went from $320 to $190 in a single month while we were holding the position.

Our total loss was 2.6%. In our next trade, we recouped the losses and more. We didn't do it by "upping the stakes" to make up for anything.

We simply stuck to our investment strategy.

Unit Testing a Portfolio

If you want to build an application, you have to test it.

Sitting side by side with the developers who program an application are an army of testers.

The job of the development team is to make the app. The job of the testing team is to break the app.

The testers will hit the application with just about everything they can to see if it will endure.

If the application is still in one piece after the testers do their worst, it's ready for release.

That's the Endurance Portfolio. We are up 17% for the first quarter of 2022.

Our biggest test came and went and we didn't even move backward.

You can subscribe to our fund and get a peek into all our positions. You also see our trades for 2022 stored at a third-party location for verification of authenticity.

We aim to make at least one trade each quarter which can generate for you, at least, the investment you make in this membership, immediately on a $15,000 stake.

Find out how it feels to be the champion of the world.

Vladimir Putin and Joseph Stalin are both political sharks. They do anything to get into power, to stay in power, and to expand their power.

They also have a Kasparov steak to them when it comes to the geopolitical chessboard.

It looks like the world will have Russia, Ukraine, and Putin in checkmate in a few moves. But don't underestimate your adversary. Right when it looks like it's over, he could pull off a move that can have you in check.

Is that possible? What can Putin do to turn the tables on the sanctions suffocating his economy?

Chemical or nuclear weapons could trigger active involvement of NATO armies escalating a local conflict into World War III.

Russia is fighting two wars right now: A military one with Ukraine and a cold war with the rest of the world. To counter the nonmilitary advance of western sanctions, Putin needs something that is equally devastating and just as indirect.

It's also something Russia is infamous for: A Cyber attack on America.

A cyber attack on America is enough to make the west feel the sting of a hit on their economy while keeping the international tit for tat low level enough to keep the war cold beyond the borders of Ukraine.

Russian hackers are among the best in the world. They are trained and sponsored by the government. National and Military intelligence provide the hackers with all they need to launch assaults on systems throughout the world.

Putin can attack infrastructure in Europe and America. He can attack global companies, especially ones like McDonalds and Coca Cola which exited Russia in protest right after the invasion.

If he were to bring down a major platform like Facebook or Google, even if just for a few hours, he could inflict real damage on every citizen in the western world.

Russia's History on Cyber Attacks in America

Such moves would not be without precedent.

Last May, a hack on Colonial Pipeline, and American oil pipeline system, led to a paralysis in gasoline and jet fuel throughout the southeastern United States. The ransomware attack lasted five days and shut down over 10,000 gas stations. Every American wound up paying 6% more for gas.

Such an attack would be worse. America is getting squeezed by price inflation and supply shortages. Any further supply squeeze could send prices even higher and prolong an inflation policymakers are betting on coming to an end.

Russia also has a history attacking Ukrainian servers, only for those attacks to create shockwaves that ultimately bring down European and American systems.

The 2017 Sandworm attack, believed to be orchestrated by the GRU, or Russian Military Intelligence, caused over $10 billion in damage worldwide.

Why Hasn't Russia Brought Down Ukraine?

Over the past decade, Russia has used Ukraine as it's guinea pig for all their cyber assaults.

Prior to the invasion, Russia had attacked Ukrainian banks, government websites and private sector to terrorize the population into letting them roll into Kyiv without resistance.

The question remains, why hasn't Russia disabled all critical digital infrastructure in Ukraine?

One answer may be they intend to occupy the country so they want as much of it's ability to create wealth to stay intact. Another might be they don't want to go too far so as not to trigger another response by America and the west.

There is also a theory that after scores of cyber attacks on Ukraine over the last decade, they learned how to neutralize the threat. After a particularly nasty attack that brought down their electric utilities, the Ukrainians learned to add a manual override to any system controlled by a computer.

The last attack on Ukraine's electrical grid put the system down for a few hours, as long as it took for technicians to arrive on site and flip a few switches.

Stay One Step Ahead of the Stock Market

Get news, trades & market updates from DailyEI.



Will a Cyber Attack from Russia Lead to World War III?

Putin can retaliate by hitting points of intersection in the private sector that do no direct damage, but create enough collateral damage where the shockwave could be more devastating than a Kinzhal missile.

The Colonial Pipeline hack is a good example. No critical infrastructure was hit. The damage was felt for days, then ended. But the price hikes stuck. Thousands of gas stations lost money. Russia doesn't need to implement Cybergeddon, they just need to find a few pressure points in the US economy and launch specific targeted attacks.

An incursion on logistics centers at any American port can disrupt an already vulnerable supply crunch putting upward pressure on inflation. Such an attack is classic Cold War II, it's enough to do damage, but not enough to trigger a military retaliation.

According to the FBI, at least 23 U.S. companies in sectors, such as defense, financial services, and energy. Are being subjected to added scrutiny by bots that can be tracked to Russia. Russian hackers are doing recon to find weak points in private companies to decide where to strike.

America is vulnerable.

The US government has done a good job of securing government systems, but the private sector has not. In a recent speech, American President Joe Biden said, “Under US law, the private sector largely decides the protections that you will or will not take to protect your sources.”

The government cannot mandate cybersecurity. That means shipping, energy, finance, health care, all private sector, can be vulnerable if companies aren't prepared. All it takes is one component of one company and an entire industry can be derailed.

But because there are no laws demanding basic levels of security, companies that lack the resources, or the will to adequately secure their systems, haven't.

This might prove to be the underbelly of the west.

Russia Used Ukraine to Give Putin a Serious Weapon

The dread of a Russian cyberattack on America.

The magnitude of Russia's cyber capacity is fairly consequential. And it's coming.

Will Russia and Putin Launch Cybergeddon over Ukraine?

Putin doesn't have to launch the nuclear weapon of cyber attacks on America to make his point. He needs to hit hard enough to make an impact, but not hard enough to trigger a direct response.

America and Russia hold the two largest nuclear arsenals on earth. They know not to get too close in the ring or they will blow up the entire arena.

As of now, there hasn't been any type of cybergeddon type attack anywhere. Many are asking, why? Russia has the capability to do so. What's taking it so long?

Smart money says that Putin doesn't want to goad America and the west into helping Ukraine any more than it already is. He has his hands full fighting Ukraine. Having to fight the west and America would be too much.

He might wait for one of two outcomes:

  1. He conquers Ukraine. Once Russia has enough of Ukraine, it's military ops will go from invasion to occupation. That's easier. He can pilfer the wealth of the territory he took to pay for his army, and for the foreign mercenaries he hired from Syria and Chechnya.

At that point, he will be able to anticipate the amount of military resources he needs over the coming years and decide when he is ready to launch his cyberattack.

  1. He sees defeat. No, there will be no white flag by Russia. If Putin sees the situation as untenable, he could “agree” to the territory he captured and solidify his gains. This is the same scenario as before where Russia knows how much it will have to invest in occupying land rather than a hot war invasion.

At this point, a frustrated and angry Putin might want revenge against Europe and America for helping Ukraine.

All of this creates a constant defcon 1 of alert for cyberattacks. As much as there was a need for cybersecurity developers, analysts, consulting firms, and products, the need has risen substantially.

One of the hottest industries of the next decade will be, regretfully, cybersecurity. It will be an opportunity.

Investment Play

Performance of Cybersecurity Stocks

What do you see?

The smart money sees what we see, a new institutional threat to the system in the form of Russian cyberattack. The American president stated as such this week. Cyber security stocks and ETFs are outperforming the S&P 500 broader index.

But what about the Nasdaq? Why is one ETF outperforming both by a significant margin while the other is lagging the Nasdaq?

It's the same reason why the best performers are CrowdStrike and Cloudflare. The First Trust Nasdaq CEA Cybersecurity ETF is heavy on cloud security.

The top two performers are companies that focus on securing cloud platforms. The cloud is the future, especially in inflationary times. More companies will go to the cloud to secure their digital assets.

Companies guarding cloud platforms both general and private will be the ones in high demand for the coming decade. We can see it in the price action.

We need people to work in cybersecurity.

Anyone looking for a job? Cybersecurity might be right for you. Ironically, the best example for the world to look at is Ukraine.

If Russia was successful in cybernuking Ukraine, then Ukrainian President Volodymyr Zelenskyy wouldn't be able to Zoom the American Congress, EU, and Israel with such ease. Ukrainian citizens wouldn't be able to take pictures with their smartphones and send them out to the reaches of the earth.

How does Ukraine withstand so much cyber attacks from Russia?

They have been getting ready for the past decade. They were bombarded with constant attacks and shutdowns to their systems over the past decade and a half as Russian hackers, private and government employed would test out everything they developed on Ukraine.

After withstanding constant attack, Ukraine recruited an army of software developers to figure out how to stave off the constant Russian harassment.

As a result, they have a very robust software industry. Here in Israel, many of the major high-tech companies have development offices in Ukraine.

To combat a new threat, software development became a new hot industry. Look for the same to happen, even more, in America and Europe as the need for security developers grows significantly.

This is Inflationary

Wage inflation is the primary driver of CPI. A shortage in software developers drives up the price for one of the highest paid jobs in the world. This will be a systematic need. Every company doubles as a software development business, so every IT department will need a larger budget to secure their systems.

Mass migration to the cloud could mitigate some of the cost hikes, but not all.

Along with shortages in Oil, natural gas, and wheat, there will be a shortage in software developers. This will keep inflation moving upward well into the second half of 2022 and probably 2023.

This will likely put the American Congress into Republican hands next year, neutering most policy initiatives by Joe Biden.

That's another story.

The current one is inflation, which will stay high as it will now come from technology, which has been deflationary to the world over the past 30 years.

Just another tectonic change we are seeing over the past handful of weeks.

Everybody loves the underdog.

When the game begins, we are hoping that some way the weaker team will overcome the odds and defeat the stronger opponent.

If the underdog scores first, the crowd goes wild.

Do you believe in miracles?

For sure. They happen.

Will it happen in Kyiv?

We have to wait for the favored team to get the ball.

Super Bowl XX

Super Bowl 20 was such an occasion.

It was in 1986, when you had a two week break between the playoffs and the Super Bowl.

The heavily favored Chicago Bears won 15 of 16 games that year. They were unstoppable. They faced off against an 11-5 New England Patriots. This was way before the Tom Brady era.

The Patriots were 10-point underdogs.

The Bears were so confident of victory, they even made a rock video. Check out this from December 1985:

That just made even more people want to see an upset.

The Patriots came out fighting. A minute and a half into the game, they were the first to score.

People began to ponder the impossible?

Could this really happen?

Then the Bears got the ball. They scored 44 uninterrupted points over the next 48 minutes to win the game 46 to 10.

The war in Ukraine has been waging for less than a week. Already, there is a 40-mile convoy of Russian troops, tanks, and heavy artillery massing around Kyiv, the Ukrainian capital.

The media is having a field day portraying Ukraine 2022 as today's London 1940. They are digging in, fighting off the blitzkrieg.

They do that a lot. They pick sides. Once they do, that side is seen as the champion no matter what. Even reality won't stop them.

What the Money is Saying

Does the money control the media?

The big money is in Wall Street and High Tech. For sure the money is manipulating the media.

Whatever. It's not my job to judge or moralize about it. It's my task to uncode it all.

Forget the media and their catch of the day.

Follow the money and find the answers.

Stock markets are not budging. The Dow Jones is UP from when the war began. So is the Nasdaq.

If this was a war the in-crowd thought would get worse, the markets would plunge.

Even in the face of $104 oil, that isn't happening.

Markets shudder on uncertainty, but rise on stability.

What if people in the know, know that everything is going to plan?

According to what you see, Ukraine is winning this war. Just like you saw Secretary of State Hillary Clinton demolishing Donald Trump in October of 2016.

The facts on the ground tell a different story. Just because it's not one anyone wants to hear doesn't make it any less real.

That's why those in the know are going in a different direction than those in the CNN Studios.

Markets May Rise

Vladimir Putin and his army did not think they would waltz into the largest country in Europe (outside of Russia) with a population of over 44 million people in a matter of hours.

They knew it would take a lot longer. It would take weeks, months if necessary. They didn't plan for an overnight invasion.

They went in. NATO retaliated with sanctions. The Ukrainians resisted. They made a phone call and Belarus joined in the fighting. Biden started to raise his voice. Putin turned on his nukes.

You cannot mobilize a country with a phone call. Belarus was ready. All of this was planned. You cannot get thousands of nukes ready on a dime. Putin was playing chess on this for a while.

Seven days into the war and Russia is already laying siege to the capital city?

That looks like everything going to plan.

Even Putin himself said to French President Emmanuel Macron a week after the invation began:

'Everything is going according to plan.'

The smart money agrees.

Oil is rising due to sanctions. Gold is rising from the inflation these sanctions will bring.

Stocks are stable, rising even, because it looks like Putin will have swallowed up Ukraine by the end of the month.

If markets take a turn for the worse, then look for Ukraine to shock the world. As long as the Dow gives the all clear, everything is going according to plan.


There is a reason why the house always wins: They have a small advantage.

A blackjack dealer once told me that in 20 years, he never saw the house lose on a roulette table. His best friend was the accountant. The accountant used to show him the monthly statement. It was uncanny how the amount of money they made was so predictable.

People win in roulette. A lot of people win.

If you play long enough, the house takes you. Unless, when that perfect hand comes along you bet big, and then you take the house.

But more lose. It’s simple math:

A roulette wheel has 38 spaces. 18 are red and 18 are black. Two are green. If you bet red or green, you have an 18 out of 38, or 47.4% chance of winning.

That’s not bad. It beats the odds of winning at the slot machines.

But if you have a 47.4% chance of winning, the house has a 52.6% chance of taking your money.

They have a 5.2% advantage.

That small uptick in probability is how casinos make $13 billion each year.

Why can’t we do the same?

Forget the Casino

When you buy a stock, you have to recover commission costs. If you are leveraged, you have to pay back the interest on the margin loan you took out.

For a naked buy, the house is up the moment you begin.

For example,

Say you have a $30,600 position in MSFT. The commission is $25, and you put in $20,000 of your own money. MSFT is trading at $306 so you bought 100 shares.

You hold for a month. You have to pay $25 to buy, $25 to sell, and if your margin loan has the standard 18% annual interest rage, that's 1/12 of 18%, or 1.5% interest on $10,600, which is $159.

The moment you buy, you are already behind $209, or 1% of your holdings. Microsoft has to jump $3 for you just to get started.

That's how the banks and Wall Street Brokerages play the house in trading.

Turn the Tables

The weaknesses both casinos and brokerage houses capitalize on are impatience and greed. They know that once you smell all that money, you can't resist.

All it takes is a handful of stories about people that bet it all and hit the jackpot. They never tell you about the people who bet it all and came home broke.

It's the same with trading. You hear about the Mark Zuckerbergs and Elon Musks who amassed billions in equity while they were still in their thirties. We grow up with the Bill Gates and Jeff Bezos, who are candidates to become the world’s first trillionaires, all due to their stocks.

We smell the sweet candy scent of the ones who made it. That's how they get you. They dangle that right in front of you as if it's there for you to grab.

It's all there to hypnotize you into getting impatience and greedy. The more impatient, the more greedy. The more greedy, the quicker you hand them your money.

What did Robert Dinero say in the movie, Casino?

If they weren't so greedy, they'd be harder to spot.

In gambling, no matter how patient you are, the house will always have the advantage.

Trading is different. If you have patience, and aren't too greedy, you can turn it in your favor.

What if you issued call options against a long position?

What if you sold 1 call contract at $8 to sell MSFT at $315 in 30 days?

That's an immediate income of $800. Even after commission and interest on your entire position, $591. Now you are up 1.6% for just one month and you retain the chance to make another 3%.

If the stock hits $315, you make $1,491, or 4.9%. If it doesn't, you keep the $591 after commission and margin interest charges are settled.

In a naked buy, the breakeven point is $309. In the written call, your breakeven is $300.

Instead of beginning the game down 2-0, you start off up 5 points.

That's the power of Holding the House's Edge.

What is investing? Or trading, for that matter? What about building a startup to a desired exit? We give up comfort today for something greater tomorrow. The best dealers know how to deal in discomfort.

Nobody likes pain. We don't like discomfort either.

Today, we don't have to worry about it in most cases. If we are hungry, we can open the fridge and snack. If we need to know something, we can unlock our phones and find out right away. If we have a headache or feel sore, Advil can get rid of that in a half-hour.

In life, that's a good thing.

It can be a disadvantage in business if you don't seize the opportunity.

Investors deal in discomfort. The very principle of investment is where I take something of comfort, my money, and lock it up somewhere for a while with the expectation that it will return me a greater level of comfort in the future.

We put money aside for pension, often parting with our cash for a half-century to get that return. We spend hours on end every day building a startup, sacrificing time with friends, movies, even health and exercise to perform an even greater exercise on our exit options.

It's a Skill

THERE WERE PLENTY OF MOMENTS WHEN I SCREAMED IN AGONY when I was in the army. The drill instructors all said the same thing, “Work through the pain.”

It was the first time anyone told me to accept and manage discomfort.

It worked.

I could run faster, work harder, and operate on less sleep. This new ethic came with me to the workforce. I didn't sweat when the boss talked about working all night on something; I didn't flinch.

As life becomes more comfortable, this attitude is beginning to feel more voluntary than required.

Bad idea.

Discomfort is when you have a terrible trading position, and the best move is to sit tight. Avoiding pain would be to double your position so it just “needs” to go up half as much to recoup your losses. It would be selling your position right away and guaranteeing the losses.

To maintain comfort, we expose ourselves to a lot of self-destructive actions.

It's that one or two trading days that you stay steady under fire that can make the difference between the stock stabilizing at the new level or bouncing off into higher territory.

This is why intelligence has little to do with investing.

The naive think it's about how smart you are. The successful know that this is about nerve.

It's about patience.

It's about keeping your eyes forward when sirens are blaring, and red lights are flashing in all corners.

How to Gain It

How do you develop this skill?

Do you put your hand over an open flame and try to keep it there as long as you can?

There are lots of ways to build up endurance. It doesn't have to be dangerous, damaging, or even disturbing.

Waking up at 5 AM each morning is an exercise in endurance if you are used to getting up at 8. Even if you get up a five every morning, come the cold months when you wake up to total darkness, it's an exercise in endurance.

If you can continuously push the confines of your level of personal endurance, you will be surprised at what other boundaries you can push beyond.

There's more so stay tuned.

I would say another ten days this should be completely over.

When I was a kid, I campaigned for candidate Bill Clinton in 1992. Whenever I said that, everyone would volunteer their opinion on the election of 1992.

Coming from a Wall Street family, it was funny how everyone was for Clinton. They thought the republicans were "unfair."

Suited me fine. Clinton won the election and was set to take office that January. A month later, in December, everyone I knew was super stressed out.

I asked my dad, and he said, "year end bonuses."

"But it's the beginning of December. Nobody gets this way for another two weeks."

"Well, that's what you get for voting this guy in David."

"huh?"

"Listen. We all know he is going to raise taxes on the rich. That's all these guys you see at our party. Everyone requested from their boss to get their bonus a week early so they could have it in December 1992 instead of January 1993. They prefer to pay Bush's taxes."

"You mean all these people that talked about voting Clinton to help the poor, when it comes to actually doing something, are hiding their money?"

"Welcome to real life, son."

My father smiled slyly.

"Now, out of all these Clinton lovers, how many of them you think actually voted for the guy once they were inside the ballot box?"

What We do In Secret Speaks Volumes

Nobody knows what we do with our money just like nobody knows who we cast with our vote.

Even hedge funds that have to disclose their holdings, do it at least 90 days after the fact. By then, the information is pretty worthless.

People will do one thing with their opinions, because they are held accountable to them right away. They will do another thing with their money.

Everyone knows their opinion, but nobody knows what they are invested in.

A Congressman, activist, even candidate is held under a magnifying glass for everything he or she says and does.

An investor is not held to such standard. He or she can put their money anywhere and nobody will know. Most of us won't care.

That's why the stock market tells you more about what's going on than the media. The media makes their money on drama and emotion.

The people in the industry make their careers by following orders to toe the party line.

Just Like Gaza

It's just like the Gaza Strip. How do journalists get into Hamas controlled Gaza and give interviews without their heads being chopped off?

It's simple.

They go to a senior terrorist and ask for permission to ask questions.

The terrorist says yes, as long as they speak to the right people and ask the right questions.

If they do that, the whole world can watch them be the only "brave" and "fearless" journalist daring to ask questions inside the ganglands of Gaza.

If they don't, they will get killed. Even worse, they will never be allowed back. This promising path to their fame and fortune will be lost.

Can you really trust the media?

Biden and Trump aside, when it comes to issues that aren't about presidential politics the same bias exists.

Ukraine President Volodymyr Zelenskyy was a Hollywood style actor for 22 years. Vladimir Putin is accused of putting President Donald J. Trump into power.

I wonder who they will be biased for?

This matters because we need to make investment decisions based on facts, not narrative.

Where do we find some scent of reality behind all the media smoke?

The smart money.

Follow Where the Money Is

As we speak, stock markets are still higher than the Feb 23 close of 33,131. That's where it traded right before the invasion.

Same with the Nasdaq. It closed on Feb 23 at 13,037. It's still trading higher.

The smart money sees Russia making short work of Ukraine.

As of yesterday, Russian leader Vladimir Putin has stated everything is going to plan.

We have no reason to doubt him.

Even the American military is saying the same.

We see in equities that there are no surprises. Smart money is betting on a successful, and rapid takeover of Ukraine.

Nothing has changed in equity prices to challenge that assumption. As long as that holds, stocks will be stable.

Follow Where the Money is going

Now, take a look at commodities. That tells a different story.

Stocks are looking at Russia vs Ukraine. Oil and Gold is looking at the broader picture.

Behind the hot war between the two countries is an economic war, a financial war, and a diplomatic war between Russia and NATO.

Sanctions mean countries get cut off from Russian Oil and Gas. It means there will be less transactions in the dollar. It means solutions may be devised to undermine the dollar.

In real currency, gold, the dollar is falling.

Oil is rising. That implies any hope of inflation slowing down in the second half of 2022 is unlikely.

Maybe Putin knows America's underbelly and thinks he can bring it down with untenable oil prices.

What do you do if you are Biden, and your presidency may have only 8 months left unless you do something?

You scream fancy rhetoric. You cheer on Zelenskyy. You do nothing to actively support him.

You wait for Putin to swallow up Ukraine.

Then you cut a face-saving deal with the Russian monarch. Relieve sanctions. Get oil back down.

Or, you cut a deal with Iran. They can have their nukes as long as America can have their oil.

That's about where we stand right now.

Stay tuned.


Had Prime Minister of Israel Naftali Bennett never been a God fearing man, he might be hawking Dead Sea products instead of using his competitive advantage.

In the late 1990s, he opened a startup. Armed with an army career and a lot of Israeli chutzpa, he started a company in something he knew nothing about.

Things went well. He grew his dream to a small business employing 75 people.

Then things started to go wrong. He had to lay off two thirds of his staff.

He tried everything to make it work, but the business kept on collapsing.

Finally, his top executives had an intervention:

“Naf, this isn't working out. If we don't change our product. We are finished.”

As a CEO, it was his prerogative to tell his people what they could do with themselves. He was in New York at the time, and a common two-word reply was all he needed.

They were, after all, telling him that he was a failure who needed to start from scratch.

He kept his cool. He bit his lip He started over, remaking his product and rearranging his business model.

It worked.

He rehired everyone he could, plus another 125 people. A few years later, he had a $400 million exit.

Then he went into government.

His path in politics wasn't much different. In his first election, he won over 10% of the legislature. By his fourth election, he didn't have the votes to even get into the Knesset.

He bit his lip, rebranded himself a “consensus maker,” and went from being cut to being Prime Minister.

The Key to Wisdom is Based on this One Truth

Naftali Bennett prays every day. He keeps the Shabbat every week. His actions imply that he is a God fearing man.

What does it mean to be God fearing?

One of the tell-tale signs is that you know when to admit He is right and you are wrong. This is the competitive advantage of life.

Most of us in Israel do things differently because our Creator tells us to.

Jews will not use electricity on Saturday. Muslims don't work on Friday. Both of us do not eat the same meat as everyone else.

While everyone is drooling over the most recent picture of Brittney Spears sharing her anatomy, God fearing men stay away.

That includes Muslims. Christians. Jews.

Even though it feels good to see a young, fit, blond women. God tells us it's wrong.

The competitive advantage in life kicks in the moment we accept that God is right.

It's a process.

God creates the world. That's trillions of galaxies. Quintillions of stars. Billions of people, each one with trillions of connectors in his or her brain, billions of blood vessels, and billions upon billions of cells, all to enable the most sophisticated apparatus in creation say “Good morning.”

I can make breakfast. Maybe coffee.

At my last job, my boss knew 10 programming languages. When I recommended we do an ad campaign about this particular function and he overruled me, I would argue. After a few minutes, I would relent: Always for the same reason.

He knows more about this than I do.

If we decide to let a person who knows a relatively little more about something to make the big decisions, for sure, we will let the Creator of heaven and earth call the shots in our life.

He creates us. He knows us better than we do.

The God Fearing Competitive Advantage of Being Wrong

When we want to eat bacon with our burger and God says no, we accept it because He knows better.

It rubs off on everything else.

When someone clearly knows more than you about a certain situation, a lifetime of trying to be humbler can enable you to defer.

That's an advantage.

Allowing others to overrule you, as long as they have proven their case, puts more people in the room. You can have a company of 100 people, but if all the decisions are being made by a single person, the contributions of 99 others are severely stunted.

Even if it may appear that the “corrector” is the winner, it's really the one who stands corrected who comes out ahead.

Naftali Bennett has a nine figure bank account. He is the Prime Minster of Israel.

Does anyone know who told Naftali Bennett to change his business?

From God allmighty to anyone on your team, deferring a solution is great for success in everything you want in life.

Now if we could just get Mr. Bennett to feel the same way about this year's budget . . .

Yesterday was international women's day, so my wife took it upon herself to teach me a lesson.

She showed me a picture of Golda Meir, the fourth Prime Minister of Israel. We both saw the movie about her with Ingrid Bergman. It opened with Golda hiding in the basement of her home from a gang of rabid anti-semites trying to kill every Jew they could find.

She vowed then and there never to have to hide from these animals again. That's why she moved to Israel.

Golda Meir holds a special place in our heart. She lived on a kibbutz for a number of years. That kibbutz, located in the Jezreel Valley, is walking distance from our home.

When someone posted her story and linked it to Russian brutality, my wife laughed.

My wife was born in the Ukraine and grew up in the Soviet Union.

No stranger to the word zhid, she showed me here reply to this post:

Golda Meir grew up in Kyiv. The murderous anti-semitic rage she fled was not from Russia, but Ukraine.

Bottom line: Don't believe what you read, especially when the media chooses sides.

Act on the Facts

This doesn't vindicate the horrors Vladimir Putin has unleashed on the people of Ukraine. But we have to put into perspective the fact that a few months before the war started, for the first time since the end of the Cold War, Ukraine was upgrading its army to meet NATO military standards. They signed a defense agreement with America. The Biden Adminstration, looking for anything to make Joe Biden electable, was taunting Putin for months.

The media crafts Putin as the cool headed cunning Sovietmaster who made a calculated, yet aggressive move.

Look beyond what you see and it's the Americans and Ukrainians who might be the true ringmasters.

Now to the Numbers

Either way, we need to know where we stand.

Let's take a look at some metrics which can guide us as to the next step in this Russian and Ukraine War.

We start with the obvoius, Natrual Gas. 40% of Europe's natrual gas comes from Russia. What is the price saying?

Endurance Investments Price of Natural Gas over the Russia Ukraine War.

Gas has been steadily going down over the past week. Could the uncertainty be ending?

This war began with Russia using "kid gloves." They saw Ukraine as their brethren and didn't want to bloody them. They thought the invasion would be quick and smooth.

The Ukrainian resistance proved them wrong. As a result, they have taken the gloves off and are hitting their prey with everything they've got. That means using their air force.

This may be enough to either conquer the rest of the country, or occupy enough of it to claim victory and stop fighting.

How about oil?

Europe gets 27% of it's oil from Russia.

Endurance Investments Price of Oil over the Russia Ukraine War.

That's a totally different story.

This war has two sides to it. The physical war between Russia and Ukraine, and the economic and diplomatic war between Russia and the rest of the world.

Does this war "wind down" with sustained sanctions on Russia? Could be. The world might be at war with Russia longer than Ukraine.

Let's take a look at two other charts,

Wheat. Ukraine accounts for 10% of global wheat production. Russia accuonts for almost a quarter of the world's wheat.

Endurance Investments Price of Wheat over the Russia Ukraine War.

Corn. Ukraine and Russia account for 15% of global corn production.

Endurance Investments Price of Corn over the Russia Ukraine War.

Both have been topping off for the past week.

Price action, guided by the smart money going in and out of these commodoties, is telling us that the instability and uncertainty between Russia and Ukraine may be leveling off.

But the greater global picture is still undeveloped.

Stay tuned.


H1

H2

h3

Will you let this man take your money?

this is a test

COMMENT: you have to COMPRESS YOUR PICS, then upload to flickr, then get the URL and apply here.

If the settlement of our Land gets the Europeans noses in a twist, let them walk with twisted noses.

COMMENT: props are quote, speaker, locale (context)
COMMENT: props are the SRCRussia, Ukraine, Israel, and the Coming InvasionCOMMENT: props are the link href="" and the text that is linked

Is global inflation happening worldwide?

Wheat Prices in Ukraine Impact Inflation Around the World

This gives you a breakspace in an MDX post.

Endurance Investments is a model portfolio of long term holdings and trades for the purpose of consistent incremental gains in the equities markets at limited exposure. The goal of Endurance Investments is an annual growth of 25%. The portfolio is shared with the general public via it's newsletter, DailyEI.

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled it to make a type specimen book. It has survived not only five centuries, but also the leap into electronic typesetting, remaining essentially unchanged. It was popularised in the 1960s with the release of Letraset sheets containing Lorem Ipsum passages, and more recently with desktop publishing software like Aldus PageMaker including versions of Lorem Ipsum.

Subtitle


The War in Ukraine was a shock to the global system that is stalling, even reversing the deflationary forces such globalization strengthened. Will the world make up with each other? It all depends on what happens next. If Putin is replaced by a leader who sues for peace, things could change.

That isn't looking imminent.

The other force is a little more alarming. Putin can be replaced and the new world order can be reinforced, we might have control over this one. What we don't have control over is productivity. Technological advances has made every worker consistently more productive. This results in a cheaper cost of labor for everything the workers produce.

This has been underwritten by an ongoing revolution in technology, which has been the primary source of prices staying stable since Pearl Jam.

Is Tech Now Inflationary

Times have changed. Where technology was leading the world to lower prices, that trend has stopped.

The labor shortage started with programmers. In Israel, the cost of a developer has tripled, crippling its vibrant start-up industry. A few years ago, a dream and Wi-Fi was all you needed. Today, to get a few programmers on board, you need funding.

Larger companies boast cash balances larger than countries, like Google's current cash balance being larger than the national economy of Kuwait, or Microsoft having more money in their pocket than Hungary. They can keep bidding up the salaries. It's good if you are a programmer, not so good if you want to buy anything they are programming.

The recent war in Ukraine renders Russian hackers a level 1 threat to the entire world. Innovations like AI, Metaverse, and the cloud only add to the surge in demand, and salaries, for programmers.

This wage push inflation is taking the centrifugal force of worldwide deflation, high tech, and inverting it into a source of inflation.

There is one hope for the world . . .

The Answer is Blowing in the Wind

There is still one place where deflation can be found. One location where costs can stay put, even continue to recede.

It's the cloud.

The cloud is where everyone shares costs for computers, developers, security, and lots of other overhead. Instead of a single company paying for all of this, a cloud platform buys millions of servers, computers, and security options to spread the aggregate cost among all of its customers.

It's a win-win situation.

The company doesn't have to hire too many developers, whose cost is rising. They don't have to buy hardware; they can outsource them to the platforms.

They also don't have the problems of ordering too much or too little. Traditionally, they would pay 15% higher for hardware so they would have the ability to scale out as their application grew. This would bloat out company budgets. Now, they only buy what they need on the cloud. If they need more resources, they can buy it on the fly.

They can also upgrade to newer servers without any major investment. Just tell the cloud to move all your stuff to the newest XY500 and that's that. If a company upgrades and needs less computing power or resources, they can scale back immediately.

These are gains in productivity and cost that can keep the pace of high-tech inflation in check.

For larger companies, the savings are significant. For small businesses, it's a matter of survival. Not having to hire as many developers, computers, even footing the electric bill is a time and money saver.

Sure, there will be inflation on the cloud as well. Amazon, Microsoft, Oracle, and Google are also paying for these computers, and they are the ones hiring the developers. But since the costs are spread out among millions of machines, and hundreds of thousands of clients, they can be spread out more evenly.

This is a nice hedge against inflation. It will attract even more companies, especially new ones to put all their IT infrastructure on the cloud.

Investing Opportunities

It is a good upward momentum to the cloud providers, and it is also a promising career path for anyone trying to navigate what the bond market is telling us might be a recession.

If you learn to program on the cloud, or develop security solutions, you have a future. Even if you aren't at that level, there are so many cloud focused career paths, you can seize tons of opportunity.

What's interesting to note is that the security firms that focus on securing cloud platforms are rising at double the pace of broad cybersecurity ETFs and quadruple the pace of the S & P 500 since the Russian invasion began. That's where you want to be, cybersecurity companies that specialize in securing applications on the cloud and the cloud platforms themselves.

The demand for developers, cloud experts, and cybersecurity ninjas will contribute to wage inflation which will push prices higher inside technology, and the broader economy.

But to keep these increases from eating up too much profit margin, especially of medium size and smaller companies, using the cloud platforms to spread such cost increases around will be a bare minimum for doing business in the 20s.

The Things You Can do Using MDX

Posted: December 29, 2020

This is an MDX file Showing you What you Can Do Totally Awesome, right?

H1 text uses a single #

h2 uses two ##

h3 uses three ###

up to h6 where you use six ######

this is a value statement. How does it look?

note: use a \ to use a command like # that you want to see, but not render

italics uses * at the beginning and the end of what you are italicizing

italics also uses an _ underscore

strong gives you bolded text. Use ** double asterik strong also gives you bolded text using double underscore __

~~ strikethrough uses the double tilde (on top of the back tick) ~~

create a horizontal line to seperate sections with a triple ___ underscore or triple --- dash



This is a quote. Use it by starting out with a >

This is the text inside the blockquote. Use >> double if the blockquote doesn't work -- that's fine. Create a styled react component that takes two props. One prop is the quote, the next is the person who said it. call the component, add the props.

[text](https://link) this is the anatomy of a markdown link. [] in brackets go the text. () parenthesis for the link. inside the parenthesis, after the link use "" quotes for the title text

example: [GatsbyJS Home Page](https://www.gatsbyjs.com/ "the gatsbyjs home page")

GatsbyJS Home Page

blockquote

If you cannot do great things, do small things in a great way.

unordered lists

  • item 1
  • item 2
  • item 3

that's all. just put one * in front of every list item.

* item 1 * item 2

if you want to nest lists inside lists, put the * indented

* item 1 \ [tab indent] * nested item

  • item 1
    • nested item

ordered list: replace the * with 1.

\1. item 1 \1. item 2 \1. item 3

  1. item 1
  2. item 2
  3. item 3

code blocks ```js use three back ticks FOLLOWED BY the language you want to show. You can use "js" for JavaScript. For instructions on what to install "npx install ..." - don't use a language indicator

<p> this is a p tag </p> function (num1, num2) { return num1 + num2; } npm clone my-repo.git

images are the same as links, just with an ! in front. The alt text goes at the end of the () with the image link. You should be able to call images from graphql queries inside of MDX.

!A Gatsby Logo

A Gatsby Logo

task lists -- checklists

  • task 1
  • task 2
  • task 3 returns checks and boxes -- pretty cool

* [x] task 1 * [x] task 2 * [ ] task 3

In MDX, you can import components:

import Youtube from "/src/components/youtube"

then, you can call them

<Youtube url="https://www.youtube.com/embed/k4I3bcDC4rE?start=454" />

In MDX, you can import components:

You can also use any type of html in html code

<button>a button</button>

Here is another component you made. It's important to realize that you can create React components with props, then render them in a page going to gatsby. This is one of the ways you can use react in a gatsby app.

import Number from "/src/components/number" <Number number="5" />

You should also be able to call graphql query results. Next class.

{props.pageContext.frontmatter.title}

Shabbat in Afula

Posted: December 13, 2020

Let's see if we can, Bezrat Hashem, make a carusel in an MDX file.

This is a p tag.

You can also email me at david@dailyei.com.

The holiday of Shabbat is very special to the Jewish People. It is 25 hours with family, community, and Hashem. We escape from the news, television, internet, and smartphones to celebrate an island in time. Shabbat is the acknowledgement of the Creator of the world. It is a celebration of Hashem's creation of the universe. It places His Kingship above everything we do. It says, "God, this is Your world, and we live by Your rules." We all gather under the shadow of His loving protection.

Adding another file in MDX

Posted: December 02, 2020

How about one more?

You can also email me at david@dailyei.com.