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Why Failed Predictions Don’t Matter
The UFOs were supposed to arrive around 4PM on December 17, 1954. At least that’s what the Seekers, a Chicago-based cult group, were told by their leader…
I've had to go a long way. I've given up just about everything. I've cut every tie. I've burned every bridge. I've turned my back on the world. I can't afford to doubt. I have to believe.The most amazing part of this story is that out of the 11 members of the Seekers, only two left the group following the string of incorrect predictions. As the authors of When Prophecy Fails note:
It is reasonable to believe that dissonances created by unequivocal disconfirmations cannot be appreciably reduced unless one is in the constant presence of supporting members who can provide for one another the kind of social reality that will make the rationalization of disconfirmation acceptable.In other words, if you have a social support system, any such conflicting beliefs can be overcome with rationalizations. This is evidenced by the fact that the two members who left the Seekers were the ones most isolated from the group. This brings me to my main point. It's been a week since the long-awaited Bitcoin halving, and it appears that the massive price increase that was supposed to occur, never materialized. Everyone who claimed that, "the Bitcoin halving isn't priced in," and that a drop in supply would lead to a big increase in price was clearly in the wrong. However, I know that this unfortunate fact won't matter to the diehard HODLers of Bitcoin anyway. After all, it didn't matter when these BTC price predictions failed to come to fruition: And won't matter when future ones fail either. It's like this Jurassic Park meme on repeat: In all seriousness, I used to think that making predictions that turned out embarrassingly wrong was bad for your image, but I've slowly begun to realize that most people, and especially devout followers, don't really care. Why? Because it is so easy to rationalize the failed predictions after the fact without causing any long-term reputational damage. For example, do you think that fans of Elon Musk cared when he got this COVID-19 prediction so gloriously wrong? Nope. How do I know? Because look at the level of engagement on this tweet response illustrating Elon's massive error: 5 Retweets. 156 likes. In Elon's world that basically rounds to zero. The tweet might as well not exist. And when I've Tweeted similarly snarky replies towards individuals with equally wrong predictions, do you think this caused a mass exodus among their followers? Not a chance. Just like the Seekers who remained committed in the midst of conflicting evidence, most people can overcome cognitive dissonance with the right amount of social support. You can say the same thing about Bitcoiners, permabulls (like myself), and, dare I say, value investors. After all, the prophets of AQR have come down from the mountain top yet again to tell us why now is a fantastic time to invest in value stocks. This is only 7 months after they nudged us to "sin a little" in value's direction. So, does that imply that today I should be sinning a lot? Should I become the Lucifer of value investing? Despite my sardonic tone, I am not implying that value investors or Bitcoiners are apart of a cult, only that the same mental processes are at work within these groups as well. Reducing cognitive dissonance is a hell of a drug. This explains why most followers won't abandon the faith when their leaders get things wrong. Because failed predictions never really mattered. Just think of how many famous politicians and business leaders have made terrible predictions, yet are still revered. For example, Steve Jobs said that the Segway would be "bigger than the PC", Steve Ballmer laughed at the unveiling of the iPhone, and Alan Greenspan called for double digit interest rates after 2007. All of them were dead wrong, but, who cares? In honor of this recent revelation, here are some predictions I have for the next decade:
- The Dow will reach 60,000 before 2030.
- Interest rates in the U.S. will go negative and will stay low for the foreseeable future.
- Inflation in U.S. dollars will remain low for the foreseeable future.
- Large gatherings (i.e. concerts, cruises, packed bars, etc.) will return even if we don't find a COVID-19 vaccine.
- Working remotely will not replace most in-person offices.
- There will be major overhauls in the tax system to reduce wealth inequality.
Nobody Cares About Your Failures Despite my cynicism throughout this post, there is a silver lining in all this. That silver lining is that people don't care about your failed predictions because they don't really care about your failures. This really hit home for me after reading a post from fellow blogger Four Pillar Freedom where he discussed what he has learned since he turned 18:
The world isn’t watching you as closely as you think. Take more chances. Your failures will mostly go unnoticed. And those who do notice rarely care.And it's so true. We tend to forget that most people are so worried about their own problems that they don't have time to think about your own faults. This is why, earlier this year, I wrote:
When people don't like your work, the response isn't negativity, but silence.But that silence is soon forgotten. Let me prove it. How often do you think about my "less than stellar" blog posts? I already know your answer---never! Because, why would you? You will forget one of my mediocre blog posts much more quickly than I ever could. Well, guess what? The same thing is true for any of your failures as well. They will mostly be forgotten by most people. But if you are still skeptical, consider what one of the greatest athletes of all time had to say about failure:
I missed more than 9,000 shots in my career. I've lost almost 300 games. 26 times I've been trusted to take the game winning shot, and missed. I've failed over and over and over again in my life. And that is why...I succeed. -Michael JordanThank you for reading! If you liked this post, consider signing up for my newsletter. This is post 186. Any code I have related to this post can be found here with the same numbering: https://github.com/nmaggiulli/of-dollars-and-data
stocks covid-19 bitcoin btc
Uncategorized
Shipping company files surprise Chapter 7 bankruptcy, liquidation
While demand for trucking has increased, so have costs and competition, which have forced a number of players to close.
The U.S. economy is built on trucks.
As a nation we have relatively limited train assets, and while in recent years planes have played an expanded role in moving goods, trucks still represent the backbone of how everything — food, gasoline, commodities, and pretty much anything else — moves around the country.
Related: Fast-food chain closes more stores after Chapter 11 bankruptcy
"Trucks moved 61.1% of the tonnage and 64.9% of the value of these shipments. The average shipment by truck was 63 miles compared to an average of 640 miles by rail," according to the U.S. Bureau of Transportation Statistics 2023 numbers.
But running a trucking company has been tricky because the largest players have economies of scale that smaller operators don't. That puts any trucking company that's not a massive player very sensitive to increases in gas prices or drops in freight rates.
And that in turn has led a number of trucking companies, including Yellow Freight, the third-largest less-than-truckload operator; J.J. & Sons Logistics, Meadow Lark, and Boateng Logistics, to close while freight brokerage Convoy shut down in October.
Aside from Convoy, none of these brands are household names. but with the demand for trucking increasing, every company that goes out of business puts more pressure on those that remain, which contributes to increased prices.
Another freight company closes and plans to liquidate
Not every bankruptcy filing explains why a company has gone out of business. In the trucking industry, multiple recent Chapter 7 bankruptcies have been tied to lawsuits that pushed otherwise successful companies into insolvency.
In the case of TBL Logistics, a Virginia-based national freight company, its Feb. 29 bankruptcy filing in U.S. Bankruptcy Court for the Western District of Virginia appears to be death by too much debt.
"In its filing, TBL Logistics listed its assets and liabilities as between $1 million and $10 million. The company stated that it has up to 49 creditors and maintains that no funds will be available for unsecured creditors once it pays administrative fees," Freightwaves reported.
The company's owners, Christopher and Melinda Bradner, did not respond to the website's request for comment.
Before it closed, TBL Logistics specialized in refrigerated and oversized loads. The company described its business on its website.
"TBL Logistics is a non-asset-based third-party logistics freight broker company providing reliable and efficient transportation solutions, management, and storage for businesses of all sizes. With our extensive network of carriers and industry expertise, we streamline the shipping process, ensuring your goods reach their destination safely and on time."
The world has a truck-driver shortage
The covid pandemic forced companies to consider their supply chain in ways they never had to before. Increased demand showed the weakness in the trucking industry and drew attention to how difficult life for truck drivers can be.
That was an issue HBO's John Oliver highlighted on his "Last Week Tonight" show in October 2022. In the episode, the host suggested that the U.S. would basically start to starve if the trucking industry shut down for three days.
"Sorry, three days, every produce department in America would go from a fully stocked market to an all-you-can-eat raccoon buffet," he said. "So it’s no wonder trucking’s a huge industry, with more than 3.5 million people in America working as drivers, from port truckers who bring goods off ships to railyards and warehouses, to long-haul truckers who move them across the country, to 'last-mile' drivers, who take care of local delivery."
The show highlighted how many truck drivers face low pay, difficult working conditions and, in many cases, crushing debt.
"Hundreds of thousands of people become truck drivers every year. But hundreds of thousands also quit. Job turnover for truckers averages over 100%, and at some companies it’s as high as 300%, meaning they’re hiring three people for a single job over the course of a year. And when a field this important has a level of job satisfaction that low, it sure seems like there’s a huge problem," Oliver shared.
The truck-driver shortage is not just a U.S. problem; it's a global issue, according to IRU.org.
"IRU’s 2023 driver shortage report has found that over three million truck driver jobs are unfilled, or 7% of total positions, in 36 countries studied," the global transportation trade association reported.
"With the huge gap between young and old drivers growing, it will get much worse over the next five years without significant action."
Related: Veteran fund manager picks favorite stocks for 2024
bankruptcy bankruptcies pandemic stocks commoditiesUncategorized
Wendy’s has a new deal for daylight savings time haters
The Daylight Savings Time promotion slashes prices on breakfast.
Daylight Savings Time, or the practice of advancing clocks an hour in the spring to maximize natural daylight, is a controversial practice because of the way it leaves many feeling off-sync and tired on the second Sunday in March when the change is made and one has one less hour to sleep in.
Despite annual "Abolish Daylight Savings Time" think pieces and online arguments that crop up with unwavering regularity, Daylight Savings in North America begins on March 10 this year.
Related: Coca-Cola has a new soda for Diet Coke fans
Tapping into some people's very vocal dislike of Daylight Savings Time, fast-food chain Wendy's (WEN) is launching a daylight savings promotion that is jokingly designed to make losing an hour of sleep less painful and encourage fans to order breakfast anyway.
Promotion wants you to compensate for lost sleep with cheaper breakfast
As it is also meant to drive traffic to the Wendy's app, the promotion allows anyone who makes a purchase of $3 or more through the platform to get a free hot coffee, cold coffee or Frosty Cream Cold Brew.
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Available during the Wendy's breakfast hours of 6 a.m. and 10:30 a.m. (which, naturally, will feel even earlier due to Daylight Savings), the deal also allows customers to buy any of its breakfast sandwiches for $3. Items like the Sausage, Egg and Cheese Biscuit, Breakfast Baconator and Maple Bacon Chicken Croissant normally range in price between $4.50 and $7.
The choice of the latter is quite wide since, in the years following the pandemic, Wendy's has made a concerted effort to expand its breakfast menu with a range of new sandwiches with egg in them and sweet items such as the French Toast Sticks. The goal was both to stand out from competitors with a wider breakfast menu and increase traffic to its stores during early-morning hours.
Wendy's deal comes after controversy over 'dynamic pricing'
But last month, the chain known for the square shape of its burger patties ignited controversy after saying that it wanted to introduce "dynamic pricing" in which the cost of many of the items on its menu will vary depending on the time of day. In an earnings call, chief executive Kirk Tanner said that electronic billboards would allow restaurants to display various deals and promotions during slower times in the early morning and late at night.
Outcry was swift and Wendy's ended up walking back its plans with words that they were "misconstrued" as an intent to surge prices during its most popular periods.
While the company issued a statement saying that any changes were meant as "discounts and value offers" during quiet periods rather than raised prices during busy ones, the reputational damage was already done since many saw the clarification as another way to obfuscate its pricing model.
"We said these menuboards would give us more flexibility to change the display of featured items," Wendy's said in its statement. "This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants."
The Daylight Savings Time promotion, in turn, is also a way to demonstrate the kinds of deals Wendy's wants to promote in its stores without putting up full-sized advertising or posters for what is only relevant for a few days.
Related: Veteran fund manager picks favorite stocks for 2024
stocks pandemicUncategorized
Comments on February Employment Report
The headline jobs number in the February employment report was above expectations; however, December and January payrolls were revised down by 167,000 combined. The participation rate was unchanged, the employment population ratio decreased, and the …
Prime (25 to 54 Years Old) Participation
Since the overall participation rate is impacted by both cyclical (recession) and demographic (aging population, younger people staying in school) reasons, here is the employment-population ratio for the key working age group: 25 to 54 years old.
The 25 to 54 years old participation rate increased in February to 83.5% from 83.3% in January, and the 25 to 54 employment population ratio increased to 80.7% from 80.6% the previous month.
Average Hourly Wages
The graph shows the nominal year-over-year change in "Average Hourly Earnings" for all private employees from the Current Employment Statistics (CES).
Wage growth has trended down after peaking at 5.9% YoY in March 2022 and was at 4.3% YoY in February.
Part Time for Economic Reasons
From the BLS report:
"The number of people employed part time for economic reasons, at 4.4 million, changed little in February. These individuals, who would have preferred full-time employment, were working part time because their hours had been reduced or they were unable to find full-time jobs."The number of persons working part time for economic reasons decreased in February to 4.36 million from 4.42 million in February. This is slightly above pre-pandemic levels.
These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.3% from 7.2% in the previous month. This is down from the record high in April 2020 of 23.0% and up from the lowest level on record (seasonally adjusted) in December 2022 (6.5%). (This series started in 1994). This measure is above the 7.0% level in February 2020 (pre-pandemic).
Unemployed over 26 Weeks
This graph shows the number of workers unemployed for 27 weeks or more.
According to the BLS, there are 1.203 million workers who have been unemployed for more than 26 weeks and still want a job, down from 1.277 million the previous month.
This is close to pre-pandemic levels.
Job Streak
Headline Jobs, Top 10 Streaks | ||
---|---|---|
Year Ended | Streak, Months | |
1 | 2019 | 100 |
2 | 1990 | 48 |
3 | 2007 | 46 |
4 | 1979 | 45 |
5 | 20241 | 38 |
6 tie | 1943 | 33 |
6 tie | 1986 | 33 |
6 tie | 2000 | 33 |
9 | 1967 | 29 |
10 | 1995 | 25 |
1Currrent Streak |
Summary:
The headline monthly jobs number was above consensus expectations; however, December and January payrolls were revised down by 167,000 combined. The participation rate was unchanged, the employment population ratio decreased, and the unemployment rate was increased to 3.9%. Another solid report.
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