Wednesday, October 31, 2007

Photogenic Family

About five years after our last family photo (from Romania), we finally broke down and took more. Here's one of about fifty poses. To maintain the sanctity of Christmas gift-giving, we're withholding the rest for the time being. In a couple of days we'll post many more pictures of our recent trips to Tampa, Houston, and the Halloween corn maze!

Thursday, October 18, 2007

The Economics of Wastefulness

The price you pay for everything is too cheap. Gas should be $10 per gallon, homes should be constructed to last 100 years, and Happy Meals should provide kids with food only, not with a plastic toy.

I’ve had this reoccurring thought for the past several years about how the basic commodities that make up our stuff are too cheap for the benefits they provide. Land, wood, oil and gas, milk, etc. Imagine 300 years from now, when oil is as rare as a Chupacabra, how much they would be willing to pay for a gallon of gas that today costs $3. Likely they would pay upwards of $100 or even $500 a gallon (adjusted for inflation). How annoyed would they be, knowing that we wasted millions of gallons of high-quality gasoline on NASCAR.

I believe managers and policy makers diminish the importance of resources in their financial analyses. Perhaps they should add an additional discount for a factor I call “what would people 300 years from now pay for this.” When performing NPVs and cost-benefit calculations, analysts should be concerned not only about the current market’s supply and demand curve, but future generations’ as well.

The wastefulness of resources is especially a problem in the housing industry. Since post WW-II, new homes last for only about 20 years before they become unfashionable and torn down for more fashionable 20-year house. Isn’t it a waste that all of those materials were mined, chopped down, or chemically composed for a 20-year house? But the problem of wasteful economics is prevalent in all industries. Pizza companies, oil companies, car companies, you name it. The main concern with business leaders is providing the cheapest product at the highest margin the current market will accept. Little concern is given to future generations and how they would much rather use that barrel of chemicals not to create Happy Meal toys, but to create a future power turbine (or maybe a Star Trek phaser).

This is a topic that could easily be developed into a doctoral thesis. So many areas of this theory to explore. Here’s another tangent: Saudi Aramco (biggest, scariest oil company of them all) has reached a point of inflection in its oil extraction rates. Saudi oil production is decreasing, not increasing (as our population and demand is increasing)…

Thursday, October 11, 2007

Three Clever Sites

1) Pandora Radio ( "Create your own radio stations."

This is especially important if you live in Seattle, Houston, or other cities with miserable radio stations. Pandora asks you to "create" a radio station by asking for a song or artist. Then, based on clever algorithms, it plays you a whole string of similar songs. If you don't like one of the songs it plays, you can give it a "thumbs down," and your station grows smarter. I currently have 6 stations. I've found "Coldplay Radio" and "Jack Johnson Radio" to offer wonderful suggestions. I'm still working to perfect "Muse Radio" because Pandora seems to think Muse is related to some pretty wacky stuff. One opportunity for Pandora is to allow listeners to cater their musical tastes to attributes other the sound of the song. For instance, a station that only plays music from the Mid-Atlantic or Northwest. Likewise, my "Caedmon's Call Radio" station doesn't play other CCM music - it actually attempted to play Shakira!

2) FlightStats ( "Flight data galore"

Truly the best flight data website in existence. Before you book your flight - or before you go to the airport, check out FlightStats to find out reliability of your route, flight, airport, etc. Chris (brother-in-law) works on FlightStats and promises that its current functionality is merely the beginning. Great things are on the horizon for this project. I want to buy into that company's IPO. Check out Chris' post on FlightStats (I commented about how it saved my day last week).

3) Wayback Machine ( "You are what you write."

I've admonished my little bro's and sisters that what they write on their social networking sites are published
forever on the information superhighway. The Wayback Machine is easy proof of this. Wayback has literally archived the internet. Enter a website you want to see from 2002 and it will show you. See what Banana Republic was selling last year. One fun hour was spent reliving Enron. Check out its progression from the 1990s websites until the day before the company's collapse. Note the company news that says Jeffrey Skilling is leaving Enron, but "it's all okay. Enron is a solid company." What a hoot!