Centives

Abnormal Returns takes a look at why individual investors have it better now than ever before:

• Sites such as Twitter draw attention to the very best ideas and practices, making it easier for investors to identify opportunities amid the mass of information accessible on the web.
• With the vast range of instruments available individual investors can easily build a diversified global portfolio.
• Computer algorithms allow you to avoid having to micro-manage your portfolio.
• Real time stock quotes – a dream reserved for those willing to pay top dollar – are now available to all.
• Brokerage fees are being driven closer and closer to zero, allowing you to make trades for free.

To read more about some of the unbelievable advancements made, what investment strategy you should pick based on access to all the technologies available to us, and the behavioural biases that work against us when we invest, click here.

Source: Abnormal Returns

Via: Newmark’s Door

Brian Palmer took a look at why North Korea is perennially dealing with food shortages:

• The country is cold and mountainous – less than ideal conditions for growing food.
• In the 80s after the Soviet Union cut subsidies to North Korea, the North Korean government responded by using drastic measures in a desperate attempt to increase the amount of arable land. This included removing all natural vegetation from the hillsides to create farm land.
• This strategy worked for a while but over time rains washed away the soil which, without any vegetation to keep it tied to the ground, quickly filled the rivers with silt, leaving North Korea with neither vegetation nor farmland.
• Kim Jong-Il is believed to have had a radical plan to flatten the country by destroying the mountains, thus creating more arable land. He never had the resources to follow through with the idea.
• State-directed farming is inefficient.

To read more about the role that the Soviet Union played in sustaining North Korea, some of Kim Jong-Il’s other ideas, and the simple solutions that would solve the food shortage, click here.

Source: Slate

Michael Posner reports on a new initiative to create a territorial entity just off the coast of the United States that would exist outside the jurisdiction of the maritime laws of all countries. Some of the highlights of the report include:

• Silicon Valley has become the home of entrepreneurship, but the US immigration authoriteis have made it difficult for those with innovative business ideas to obtain a visa to the United States.
• To deal with this two immigrants to the United States have launched Blueseed – a planned cruise ship that is retrofitted to be a floating hub of innovation. Residents of Blueship can utilize the B-1 Business visa that allows them to make short visits to the United States over the course of ten years. Entrepreneurs could arrive at Silicon Valley in the morning and take a helicopter back ‘home’ in the evening.
• The project is expected to cost at least $25 million.
• Blueseed would make money by charging the 1,000 tenants a rent of $1,200 a month.
• Billionaire Peter Thiel – somebody who has invested in other hits such as Facebook, Yelp, Zynga and LinkedIn – has given financial backing to the project.

To read more about the initiative, the history of such “seasteading” projects, and other alternatives that are being developed that would allow innovators to build networks with those in the United States, click here.

Source: The Globe and Mail

Via: Marginal Revolution

This month marked the 100^th anniversary of The Oreo. Brian Palmer discussed the longevity of the delightful treat:

• The Oreo was not the first sandwich cookie on the market. Sunshine Baking had been selling Hydroxes for a couple of years before Oreos hit the market.
• However the parent company behind Oreo had significantly more marketing power, and was able to advertise its sandwich cookie more effectively.
• But why has the Oreo survived so long while other cookies from the same company haven’t? Some argue it’s because of the unique name. Others say that it’s because, just like eggs, there are numerous ways to consume the treat. Still others argue that it’s because it’s challenging to perfectly disassemble the cookie, enticing consumers to repeatedly try and thus eat more cookies.
• In 1982 ten cents of every dollar spent on cookies were spent on Oreos.
• The name of the parent company of Oreo, “Nabisco” is actually a shortening of National Biscuit Company

To read what “Oreo” means, why the visual design of the Oreo might have mattered, and why Nabisco had a troubling time penetrating the Jewish market click here.

Source: Slate

Timothy Lee took a look at the difficulties that small software developers encounter in staying clear of litigation. Highlights include:

• Patents normally protect concrete, material things such as a specific machine design or a manufacturing process. Copyrights normally protect intellectual property, things like movies and music. Software is strange because it can be both patented and copyrighted, since it straddles both worlds.
• You infringe on somebody’s copyright if you intentionally duplicate somebody else’s work. This means it’s hard to infringe on a copyright unless you have the meaningful intent to do so. In contrast, it’s possible to infringe on somebody’s patent entirely by accident, without any malicious intent.
• As a software developer it’s impossible to know if your software is infringing on any patents. There are countless lines of code in any piece of software, and just a few of the lines could violate of any of the hundreds of thousands of software patents.
• This has led to the rise of “patent trolls” – firms that produce absolutely nothing of value. All they do is hold onto patents and then sue other companies as soon as they see any signs of infringement.
• Larger companies can withstand this. But smaller companies are crushed by giant patent behemoths which include not only patent trolls, but companies that produce legitimate products as well, such as Microsoft.

To read specific instances of patents making the life of independent software developers difficult, individual patents that have been granted to companies, what the politicians have to say about it, and what this means for Silicon Valley, click here.

Source: Slate

China is projected to surpass the United States as the world’s largest economy in the near future, a prospect that alarms many Americas. Charles Kenny at Foreign Policy writes: “if you really want to preserve America’s top spot in the GDP rankings, there’s only one way to do it. You’ve got to make more Americans…if the United States can’t keep up its output lead by more rapid growth of GDP per capita, then perhaps it should just find some more capita.” Highlights of his tongue-in-cheek argument include:

• The US population is currently projected to grow to 409 million by 2050. If the United States were to allow more immigrants in and let it grow to 450 million by 2050 then it would remain the largest economy in the world.
• The US could just try to grow more people on its own. It could, for example, pay people to get pregnant. But in this case outsourcing would be cheaper. Raising a child to 18 in the United States costs over $200,000. This could raise 34 kids in the developing world.
• Moreover, if the US imports people then it decreases the number of people in other countries – therefore ensuring its own dominance.
• Immigrants are generally entrepreneurial – 25% of science and technology companies founded in the United States between 1995-2005 were led by a foreign chief-executive.

To read about the sneaky policies undertaken by the Pentagon to ensure the United States’ dominance, why the US can use remittances to undermine the economy of other countries, and what role an ageing population has to play in all this click here.

Source: Foreign Policy

Via: Marginal Revolution