Thursday, January 26, 2012

Dow: -22 to 12735 (1/26/12), 10655 (10/03/11), 12724 (7/21/11), 11935 (6/24/11), 12811 (4/29/11).
Nasdaq: -13 to 2805 (1/26/12), 2336 (10/03/11), 2834 (7/21/11), 2653 (6/24/11), 2874 (4/29/11)
S&P 500: -8 to 1318 (1/26/12), 1099 (10/03/11), 1344 (7/21/11), 1268 (6/24/11), 1364 (4/29/11).

Notes:
Figures in parentheses show the dates.
Earlier high points were recorded on 7/21/11 and 4/29/11.
Earlier low points were recorded on 10/03/11 and 6/24/11.

Good News: US durable goods orders up. Caterpillar and 3M meet earnings expectations.

Bad News: Although the economy shows signs of recovery, the pace is not fast enough in today’s report on major economic indicators and weakly jobless claims.

Observations: The market failed to build on the momentum of yesterday. All the three major indexes came down moderately.

Topic for today (1/25/12): Symbols: Beware of their Emotional Effects!

Life is full of symbolism. We employ symbols to display, communicate, inspire, or a combination thereof. Symbols exist in various forms: gestures, objects, buildings, words, styles, or even a song or document. Symbols must project a clear idea or image in order to be effective. On the other hand, some symbols are supposed to convey deep meanings and arouse high emotions.

We employ the body effectively for symbols lasting for a short moment, such as: shaking hands, saluting, waving, blowing a kiss, and showing the middle finger. The simple meanings of these gestures are obvious to the other side. Furthermore, we use facial expression or body movement to convey joy and sadness, approval and disgust, too. Some people are adept at using body language to communicate or to attract the opposite sex. All body gestures last for only a short time. For sustaining emotional effects, objects come into play.

Many objects and buildings are designed as symbols such as: the flag/anthem/constitution of a country, national and religious monuments, holy scriptures and other religious objects, the Statue of Liberty, the little red book of Mao’s quotations, the Apple business logo, etc.

Object symbols convey a deeper meaning subject to interpretation. That’s why they produce different emotional effects on different individuals. In any case, object symbols are supposed to project a positive image intended by the designer.

Very often, the image projected by a symbol falls short of the substance. Let me illustrate below:

Every person going to a job interview likes to wear proper business attires to give the impression of professionalism. It’s up to the interviewer to distinguish between the good, the average and the bad.

Politicians like to pin a small flag on their suit lapel. That does not mean that they are more patriotic. Neither does it mean they will do things for the national interest after being elected.

When you visit an investment company, you will be impressed by the building, the furniture, the friendly staff, and the statistics shown in the brochure about their performance. All these are designed to inspire your trust and confidence. You must ask the substantive question: How much do I get for my money?

Firepower like aircraft carriers, jet fighters, tanks, and cannons produce a sense of awe. But wars are fought by people and won by people. When being defeated, the soldiers will abandon their weapons and run. The Vietnam War is a case in point.

During the height of the Cultural Revolution, millions of Chinese youths were seen brandishing the little red book of Mao’s quotations as a symbol of solidarity and loyalty. They didn’t get anywhere except causing chaos and disruptions. China rises to be an economic powerhouse only after they abandoned the communist production system.

So my point is: Don’t get carried away by symbolism. Most symbols are fake at best and deceptive at worst.

Topic for today (1/23/12): To Be or Not To Be

The choices we face everyday is usually in the form of either or. They are imposed on us by somebody else. Frequently, the choices are not even what we want to see. Is this something we should accept?

When I have dinner in a restaurant, the entrée normally includes soup or salad. Why can’t I have both? I won’t feel full and happy without both. I still have to find a restaurant that offers both as a niche. So I wind up paying a few dollars more to order both soup and salad. The point I want to make is that you can make life fuller and happier if you include more choices. You don’t have to pick either one. You can pick both, or even three, if you refuse to accept what is imposed upon you.

The following are examples of limited choices:

Only two political parties dominate US politics. Why not three or more?

Why must a woman choose between career, housewife, and kids? Can’t she have them all? In fact, many successful women do.

Why tax cuts for corporations and the rich appear to be the only necessary way to create jobs? Who promotes this kind of choice?

Why a small government must be good, and a big one must be bad? Are there such virtues as efficiency and optimal size?

Why do we have to pollute the environment to achieve economic growth? Can a polluted environment sustain economic growth? Can we do both at the same time? Can we make industries cleaner? Can green industries create jobs?

When we look around, the world is full of limited choices. The more we accept, the more limited choices will be presented to us. Things will not improve if we do not demand better. The conventional wisdom is that limited choices are due to limited resources such as time, money and other excuses. Let me point out the flaws of this conventional wisdom:

Time is not what you have. Time is what you make. Motivated people always find time to do whatever they want.

What you want to do depends on your attitude, motivation and energy, which originate from within you and are inexhaustible.

There exists something very powerful called synergy. When you succeed in connecting with other people of similar attitude and motivation, you will create incredible synergy. This is how companies and countries succeed.

Don’t you worry about money. It’s important but is secondary. Money will flow when you are doing the right thing.