Die Broke Blogger

Follow your bliss and the universe will open doors where there were only walls ~Joseph Campbell

This month I began blogging on small business and the meltdown on the Die Broke blog, part of the StockTwits network.  My focus is helping small business owners deal with creditors, the IRS, family members and their own inner demons.

What qualifies me for this assignment? Personal experience.

Since shuttering the industrial cleaning businesses in 2007 I’ve continued to deal with creditors (including friends and family), the IRS and a loss of face.  I’ve learned a great deal about financial law, pondered business ethics and done a lot of navel gazing.

It is by going down into the abyss that we recover the treasures of life. Where you stumble, there lies your treasure ~Joseph Campbell

I won’t chronicle the whole debacle here…it will unfold over time over on Die Broke. But I will say that my entrepreneurial “failure” freed me to pursue the writing career I was always told would never be mine.  How?  Janis Joplin’s raspy lyric explains it best: Freedom’s just another word for nothing left to lose.

In 2008, with no money to invest in a different company, a dismal job market and absolute loathing of corporate America anyway, I gave myself permission to hang out my shingle as a business writer.

The privilege of a lifetime is being who you are ~ Joseph Campbell

Fortunately my husband still has a job. The best off-balance-sheet asset an entrepreneur has is someone who lets them bunk in rent free.  Thanks, Matt.

More Joseph Campbell bon mots:

• We must let go of the life we have planned, so as to accept the one that is waiting for us

• Your life is the fruit of your own doing. You have no one to blame but yourself

• I think the person who takes a job in order to live – that is to say, for the money – has turned himself into a slave

• Is the system going to flatten you out and deny you your humanity, or are you going to be able to make use of the system to the attainment of human purposes?

• Opportunities to find deeper powers within ourselves come when life seems most challenging

• The big question is whether you are going to be able to say a hearty yes to your adventure

• The goal of life is to make your heartbeat match the beat of the universe, to match your nature with Nature

October Book Lust

Options Volatility Trading

I’ve said before how much I enjoy following my virtual friend Jim Gobetz on Twitter (@aiki14).  Jim is the Managing partner and CIO in a family office based in Philadelphia PA and Wilmington DE. He appears on StockTwitsTV for a pre-market show  M-W-F mornings.

Jim tweeted about “Options Volatility Trading” By Adam Warner last week and I asked him to write a review for this month’s Book Lust column.  He graciously agreed:

I guess I should begin by stating my bias up front, Adam was one of the first people I found on StockTwits, and I have found his “short form” writing to be of the highest quality. This “long form” effort enhanced that opinion greatly. I think there is literally something for everyone in the book, whether they are experienced guys from the trading floor or newbies getting their first taste of the world of options.

The book begins with a bit of personal history which I found quite interesting. I love stories of the trading that went on, on the floor, back in the day and Adam brings the perspective of a young guy who thought he had a “legacy pass,” and from that starting point does a great job of laying out the workings of the options market and the thinking of the insiders.

He then moves on to the meat and potatoes first of the options themselves, and then the concepts of volatility, and it’s measure, and how traders use these metrics to gain an edge. His chapter on trading the VIX is particularly valuable in this day and age where the popular media feeds the public with constant heaps of this piece of data, without the least interest in whether that public has a clue to it’s limitations. Adam gives the reader a nice dose of reality in Ch. 11 where he addresses some of the popular conceptions and where they diverge from the truth.

The last quarter of the books gives the reader actionable strategies that put the prior chapters information into workable plays , charting concepts for derivatives, and finally a look at some of the rules that have changed and the consequences of these changes.

What I found most interesting was Adam displays an ability to take very technical subject matter and present it in a way that will satisfy the options technophile and not overwhelm the newly initiated.

I would recommend the book to anyone I thought was ready to made the move into options trading, and to all my friends and colleagues who trade them every day.

The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash

Another StockTwits friend is  @Barrie Abalard, who conceals her identity with this  pseudonym.  Barrie’s a technical writer who worked in the financial and funds transfer software industry for fourteen years. She currently supports herself by trading stocks and writing. She is a fellow regular contributor to the Die Broke Blog.

As fellow writers, Barrie and I trade book recommendations, and one of hers to me was The Trillion Dollar Meltdown by Charles R. Morris. Her review follows:

I first read this book in May, 2008 and, despite the occasional jargon and complex explanations of arcane financial instruments, found it compelling. I’ve since read it a second time. Morris has been scarily accurate concerning much of what transpired to create the economic crash of 2008. (Keep in mind that Morris wrote the book in 2007 for a February, 2008, publication date.)

The author contends that the 2008 crash has its roots in what transpired after the last big economic crisis, which ended in 1982. He details how we progressed from leveraged buyouts of banks in the Eighties to the stock market crash of 1987 to the LTCM (Long-Term Capital Management) debacle of the Nineties, all in the first couple of chapters. Chapter 3, “A Tsunami of Dollars,” explains how the Fed’s “years of working the liquidity pump” flooded the world with dollars, artificially keeping markets afloat. Chapter 4 is about what he calls “The Great Unwinding,” accurately predicting what happened to the credit markets in 2008 and to our economy. Morris lays fault upon the ratings agencies as well, and anticipates the crash of the monoline insurers Ambac and MBIA. I’ll leave it to you to read the book and discover his predictions regarding what will happen (and is happening) to the USA post-crash.

I should note that Morris is cool to the concept of “free markets,” but that’s largely because he equates free markets with little to no regulation. (Even a free market, in my opinion, needs some regulation to restrain fraud and the darker side of self-interest.) Otherwise, I have little quibble with the underpinnings of the book.

Do not be fooled by the slimness of this volume—Morris covers everything in 160 succinct pages. Densely packed with explanatory material, it includes detailed descriptions of CDOs (collateralized debt obligations), CDSs (credit default swaps), and MBSs (mortgage-backed securities), as well as how mark-to-market works and its role in the credit crisis. If you want to understand the events leading up to the 2008 stock market crash and recession but don’t have a degree in economics or finance, I urge you to read The Trillion Dollar Meltdown.

Justice: What’s the Right Thing to Do?

I heard the author, Harvard government professor Michael J Sander interviewed on The Diane Rheme Show a couple of weeks ago and wish I had time to read this book.

This review from Publisher’s Weekly: Harvard government professor Sandel (Public Philosophy) dazzles in this sweeping survey of hot topics—the recent government bailouts, the draft, surrogate pregnancies, same-sex marriage, immigration reform and reparations for slavery—that situates various sides in the debates in the context of timeless philosophical questions and movements. Sandel takes utilitarianism, Kant’s categorical imperative and Rawls’s theory of justice out of the classroom, dusts them off and reveals how crucial these theories have been in the construction of Western societies—and how they inform almost every issue at the center of our modern-day polis. The content is dense but elegantly presented, and Sandel has a rare gift for making complex issues comprehensible, even entertaining (see his sections entitled “Shakespeare versus the Simpsons and “What Ethics Can Learn from Jack Benny and Miss Manners”), without compromising their gravity. With exegeses of Winnie the Pooh, transcripts of Bill Clinton’s impeachment hearing and the works of almost every major political philosopher, Sandel reveals how even our most knee-jerk responses bespeak our personal conceptions of the rights and obligations of the individual and society at large. Erudite, conversational and deeply humane, this is truly transformative reading. 

Buddha’s Brain: The Practical Neuroscience of Happiness, Love and Wisdom

Rick Hanson, PhD, wrote this with Richard Mendius. Hanson is a psychologist and teacher of contemplative neuroscience. He cofounded the Wellspring Institute for Neuroscience and Contemplative Wisdom,and has been a board member of Spirit Rock Meditation Center.

Publisher’s Weekly review: The brain physiology associated with spiritual states has been fertile ground for researchers and writers alike. Neuropsychologist and meditation teacher Hanson suggests that an understanding of the brain in conjunction with 2,500-year-old Buddhist teachings can help readers achieve more happiness. He explains how the brain evolved to keep humans safe from external threats; the resulting “built-in negativity bias” creates suffering in modern individuals. Citing psychologist Donald Hebb’s conclusion that “when neurons fire together, they wire together,” Hanson argues that the brain’s functioning can be affected by simple practices and meditation to foster well-being. Classic Buddhist concepts such as the “three trainings”—mindfulness, virtuous action and wisdom—frame Hanson’s approach. Written with neurologist Mendius, the book includes descriptions and diagrams of brain functioning. Clear instructions guide the reader toward more positive thoughts and feelings. While the author doesn’t always succeed at clarifying complex physiology, this gently encouraging “practical guide to your brain” offers helpful information supported by research as well as steps to change instinctive patterns through the Buddhist path.

Conquering Fear: Living Boldly in an Uncertain World

Library Journal: Rabbi Kushner, author of the international best seller When Bad Things Happen to Good People, now focuses on specific fears that impact our lives—terrorism, natural disasters, aging, job loss, death, change, and the destruction of humanity. Some may say that these events are brought on by sinful acts; however, Kushner, who does not believe in a vengeful God, points out that the words “do not be afraid” are mentioned in the Old and the New Testament more than 80 times. Kushner writes that fear can paralyze us, make us tense, and often keep us from taking action. He explains that a small dose of fear is healthy and that we can gain mastery by recognizing legitimate fears, dismissing exaggerated ones, and avoiding letting it keep us from activity. Prayer, meditation, and helping others are the keys to alleviating excessive fear. VERDICT: A short, easy-to-read book filled with a great deal of wisdom and words of hope along with some practical measures for reducing fear. Kushner’s message is inspirational and transcends all religious creeds and spiritualities.

The Surprising Solution: Creating Possibility in a Swift and Severe World

Written by Bruce Piasecki, this review from Publisher’s Weekly: Piasecki (In Search of Environmental Excellence) updates his 2007 book (formerly titled World, Inc.) to address the current economic crisis and further explore the new frontier of sustainability, innovation and corporate social responsibility.

The underlying theme of this thought-provoking work is that big businesses have overtaken governments in terms of political and economic power—51 of the 100 largest economies in the world are now corporations; 300 multinational businesses control 25% of the world’s assets, and as much as 40% of world trade now occurs within these top multinationals. With their disproportionate power, big businesses now wield a tremendous ability to shape our social landscape, and the author impresses the importance of “Social Response Capitalism,” an approach that emphasizes a business’s “social brand” as well as the price and quality of their product or service. While the concepts are fascinating, the shifts in tone from academic to more casual create a jarring inconsistency. Still, for any reader who is a student of innovation and who seeks to understand the role of corporations in addressing global problems in the future, this is a treasure trove of provocative ideas.

End of Email?

Interesting article in WSJ about email’s younger, prettier communication sister: social media.

For those not using Twitter, Facebook and other means of connecting with the outside world, this WSJ quote explains the difference between them and ye olde email: “We all still use email, of course. But email was better suited to the way we used to use the Internet—logging off and on, checking our messages in bursts. Now, we are always connected, whether we are sitting at a desk or on a mobile phone. The always-on connection, in turn, has created a host of new ways to communicate that are much faster than email, and more fun.”

The story quoted Alex Bochannek, curator at the Computer History Museum in Mountain View, CA: “The whole idea of this email service isn’t really quite as significant anymore when you can have many, many different types of messages and files and when you have this all on the same type of networks.”

What’s this bode for email newsletters?

The article doesn’t make my point explicitly, but sets it up well. Email newsletters and all THOUGHTFUL communications have a place OUTSIDE social media. Said another way, to communicate thoroughly, thoughtfully and confidentially, if you can’t meet in person, start with email.

This mirrors my own experience, as a fairly active Twitter(er) who averages 30 daily updates.  For those of you not yet using Twitter, don’t take the impression that I have that much to say about myself — my tweets are usually in response to news items posted by other users or part of a conversation with my “followers” (feels a bit Jim Jones-ish calling them that, but oh well…that’s what they’re officially called).

Sure, I occasionally tweet out the odd “gonna clear my head by taking the dog for a walk” message, but the fun thing about social media is how people find you on the basis of these throwaway tweets. I now have a number of followers who send me pet food coupons and even Cesar Millan aka The Dog Whisperer follows me!

Belt & suspenders approach

Back to the topic at hand. For THOUGHTFUL, well-written communications, there is no substitute for email.  The only thing that comes close is what you syndicate through your RSS feed. However, people get busy and forget to check their readers. An occasional email poke to check the RSS feed will probably always be in order.

Here’s my belt & suspenders approach to being heard:

• My website is home base. It’s the hub of external communications
• Primary communications spokes
  • Blog and its RSS feed
  • Twitter
  • Newsletter
  • Email

1. When I post to my blog ( my website is actually a blogsite), it automatically sends a tweet with the title and a link for all the world to see. It also sends out an excerpt of the post through my RSS feed for those who’ve subscribed and to those directories like Alltop, that carry my content. Those who are linked to me via LinkedIn can see this excerpt on my profile page.  Anywhere that anyone sees an excerpt of my blog posts, they can click to read the whole thing on my blog.
2. I use Twitter to entice the Twitterverse to read my blog posts. With 140 characters per tweet, I use the url shortening service bitly to get the links down to 16 characters, then use what’s left to tease with leads like “Why Email Isn’t Dead.”
3. I also use Twitter to ask specific people to read or comment on posts, according to their inclination and expertise. I know who wants to read my posts about SPAM and who wants a financial blog writing prompt and who’s the best expert to comment on one of my posts. If I’m fortunate, some of my followers will “reTweet” what I’ve sent so their network of followers will have the opportunity to read something they would not have otherwise known existed.
4. When I get comments on the blog I Tweet that out to keep the conversation going. This helps those who’ve commented get their ideas in front of a wider audience, too. The least I can do.
5. My newsletter promises three things every month: something on whole-brain communications, a bit on brevity and updates on topics related to email marketing and newsletters. Eventually everything from the newsletter shows up in the blog. For those who don’t want to read every blog post or remind themselves to check my RSS feed in a reader, they can read my monthly newsletter and click through to anything else that might interest them in the blog. The newsletter is an efficient portal to all the information I offer.
6. I reserve email for my most formal and private correspondence. It’s also how I communicate with those not on social media.  As the WSJ article says, some things require attachments and confidentiality and email is the next-best thing to a tête-à-tête

OK, that’s my communications methodology.  What am I missing that works for you? Do tell (if you comment, I’ll tweet it out)!

Advice for those who need a ghostwriter

As a writer with some tech savvy and a general tendency to extroversion, social media works very well for me and and I’ve found a way to bind all my efforts together strategically. My experience is that those who invest the time in social media will benefit, but not everyone will want to make that investment. Fine.

If you’re a professional of any stripe, start with a custom newsletter written by yourself or a ghostwriter — not something you stick your logo on and call “customized.” No idea what to write? I offer news-driven writing prompts, if that helps.

Keep a consistent publishing schedule and maintain a searchable repository of your articles (not just prior newsletter editions, the individual articles) on your website. One of my clients does this so that we can eventually compile his newsletter articles into feature articles for professional journals. Another client’s newsletter articles go into his blog and will eventually become a book. Re-purpose your material.

My observation is that people are often reluctant to start small when they have big aspirations, but every desert is composed of tiny grains of sand. They add up.

ADDED 10-19-09

Further evidence of the power of Twitter: this morning one one of my tweeps, @derekhernquist, brought this video to my attention:

High Frequency Trading in Jobless Recovery

I follow an outstanding lineup of financial professionals and traders on Twitter. I learned about some of them through Stocktwits, which describes itself as “a social, stock microblogging service.” Stocktwits now offers a free desktop with more functionality than TweetDeck.

StockTwits is an open, community-powered idea and information service for investments. Users can eavesdrop on traders and investors, or contribute to the conversation and build their reputation as savvy market wizards. The service takes financial related data – using Twitter as the content production platform – and structures it by stock, user, reputation, etc.

While I’m not a trader or active investor, I enjoy the intelligent conversation of Stocktwits gurus like @aiki14 @Dasan @iron100 @ekanters @gregormacdonald @nelderini and others from around the world.  They’re quick to extrapolate from a world event to its effects on global economies, individual sectors and stocks.  (Note: follow Charlotte hometown favorite @kevinmhughes as he gains national notoriety).

Truckers and retirees now stock jockeys?

I thought my world view was skewed by my Stocktwits exposure to trading, where lots of folks new to trading and investing subscribe to the charts and advice of experts.  But then I saw an article on un-employed and un-retired people going into trading for the lack of other employment opportunities.   The next day The Daily Show ran a segment on the topic. Hmmm, something’s afoot.

I appreciate that there’s money to be made trading. But all the trading in the world doesn’t feed people, clean the environment or find a cure for cancer. And, as Samantha Bee points out in this piece, it’s not as easy as promoters would have us believe.

The Daily Show With Jon Stewart	Mon – Thurs 11p / 10c
Cash Cow – High-Frequency Trading
www.thedailyshow.com
Daily Show Full Episodes Political Humor Ron Paul Interview

Writing prompts for financial professionals

• What tax considerations to high frequency traders & rookies overlook?
• If you’re a financial advisor, how do you advise would-be traders to allocate their overall portfolio in consideration of high frequency trade risks and returns?
• Review the different software products needed to pursue a career as a trader.
• How long does it take and how much do you need to lose before you figure out whether this career is a good fit for you? What’s the total investment, considering hardware, software and mentoring services?

A Special Place for Spammers

I’ve been waiting for a good case study to illustrate what I’ve been saying about spam filtering over the last several months.

Last week a global provider of bulk email services had to deal with one of its rogue customers who’d gained a reputation as a spammer. While it did, a large-but-untold number of innocent and spam-compliant emailers couldn’t get their messages into customers’ inboxes.

Aha! The rubber hits the highway. Here’s how it went down:

Spamhaus Project, the international cyber crime fighting organization, placed the rogue emailer’s internet (IP) address on its blacklist of spammers. The rogue’s IP address belonged to the rogue’s email provider, which meant the millions of innocent commercial emailers also using that provider were painted with the same “spammer” brush. The Internet Service Providers (ISPs) who subscribe to Spamhaus’ blacklist wouldn’t deliver anyone’s email from that service until the matter was resolved.

Damage control overdrive with Hotmail, Yahoo! and others

The commercial email service provider had to go into damage control overdrive, suspending the rogue’s account, communicating with innocent emailer senders about the delay to their campaigns, and proving to Spamhaus that they’d taken the right precautionary and reactionary measures required. Until Spamhaus removed the address from its blacklist, ISPs like Hotmail, Yahoo! and others wouldn’t deliver any of the provider’s clients’ email.

Ouch!

This is tough to convey in words, and I acknowledge using some jargon here, so I suggest you visit Spamhaus for flowcharts that illustrate how filtering works.

Follow commercial email rules

The upshot for commercial emailers: if your email service provider advises you to use a double-opt-in subscription process or to certify that you haven’t purchased an email list, or subscribed people without their permission, comply quickly and don’t complain about the extra steps. These procedures are necessary to convince Spamhaus and the ISPs that you’re a compliant emailer, even if someone else using your service isn’t.

This also points out the reason to use a bulk email service instead of sending email campaigns from your own email account. That way, if you are accused of spamming, you’ll have a knowledgeable and experienced company go to bat for you with the international cyber services. If I may be so bold to ask, please consider using my email service.

The Spamhaus Project is a great study for international cooperation. Be sure to hit the tags to the right for more of what I’ve written on SPAM and e-newsletters.

Spamhaus: Cyber Crime Fighter

In September I had the pleasure of being a Twitter panelist on how to avoid the spam filters when emailing.  This is the third time I’ve spoken formally on the subject (if you consider tweeting “formal”).  By this third presentation, it struck me that spam is like porn, everyone thinks they know it when they see it, but few can define it in their own words.*

Looking for the most succinct explanation, I turned to the  Spamhaus Project, an international non-profit organization whose mission is to track the Internet’s spam operations, to provide dependable realtime anti-spam protection for internet networks, to work with law enforcement agencies to identify and pursue spammers worldwide, and to lobby governments for effective anti-spam legislation.

The word “spam” as applied to email means “unsolicited bulk email”

The two most important words there are UNSOLICITED and BULK.

Unsolicited means that the Recipient has not granted verifiable permission for the message to be sent.

Bulk means that the message is sent as part of a larger collection of messages, all having substantively identical content.

A message is Spam only if it is both Unsolicited and Bulk.

Unsolicited email is normal email, for example first contact inquiries, job inquiries and sales inquiries.

Bulk email is normal email, for example, subscriber newsletters, customer communications, discussion lists.

Point of clarification: The CAN-SPAM Act goes beyond the technical definition of spam; it applies to commercial email sent to recipients in the US and originated in the States. Download this CAN-SPAM Quick Guide.

*Wow your friends with your command of factoids

I’m not the first to use the phrase ” everyone thinks they know it when they see it.”  The origin is in a US Supreme Court case that helped define the legal standards for determining obscenity. Here’s a bit about the case.

In 1964, movie theater manager Nico Jacobellis was convicted of exhibiting an obscene movie, Louis Malle’s Les Amants, “The Lovers.” The ads were hyperbolic.

“When all conventions explode . . . in the most daring love story ever filmed!”

“As close to authentic amour as is possible on the screen.”

“The frankest love scenes yet seen on film.” “Contains one of the longest and most sensuous love scenes to be seen in this country.”

In the words of the Supreme Court decision: “‘The Lovers’ involves a woman bored with her life and marriage who abandons her husband and family for a young archaeologist with whom she has suddenly fallen in love. There is an explicit love scene in the last reel of the film, and the State’s objections are based almost entirely upon that scene. The film was favorably reviewed in a number of national publications, although disparaged in others, and was rated by at least two critics of national stature among the best films of the year in which it was produced.”

Although the film was shown in some 100 U.S. cities, including Columbus and Toledo, Ohio, Jacobellis was prosecuted for showing it in Cleveland Heights, a middle-class suburb of Cleveland. In a 6-3 decision, the Supreme Court decided that Jacobellis had been wrongly convicted.

The most famous opinion in the case came from Justice Potter Stewart, who said that the only unprotected material in his opinion was “hard-core pornography.” Stewart expressed his concern that such material was impossible to define. “But I know it when I see it.”