IQ Test

From across the pond, courtesy of John Pozadzides(?), a fun blog and an IQ test (scroll towards the end of the page):

http://onemansblog.com/2007/11/08/the-massive-list-of-genius-people-with-the-highest-iq/

I didn't score exceptionally high, but at least I scored over 100, and with 10 minutes left to spare. Some of those color combos left me dizzy.

Speaking of IQ tests, here's an FT story on investors and Madoff.

Financial Times Summary (12/17/08)

I just finished reading today's Financial Times. Here are the major points:

1. Saudi Arabia feels that a fair price for oil is $75 a barrel--almost a 100%+ increase from the current NYMEX price of $39.85.

2. Yale's endowment fund lost 25% in the last four months. It's nice to know I'm beating the Ivy League.

Ron Paul on Regulation

Ron Paul publishes reports every month on the following website:

http://www.free-nefl.com/html/freedomreports.html

From his November 2008 bulletin:

Nothing should take the place of your own common sense and due diligence...Regulation can actually benefit big business and corporate greed, while simultaneously killing small businesses that are the backbone of our now faltering economy. This is why I get so upset every time someone claims regulation can resolve the crisis that we are in. Rather, it will only exacerbate it.

I've echoed these sentiments before:

The problem wasn’t and isn’t a lack of regulation, but a lack of ethics and honesty. Unfortunately, there is no law that can curb the human appetite for greed when everyone is seemingly making money. Even a casual student of economics has heard of “tulip mania,” which took place in the year 1637. Back then, the price of a tulip contract sold for more than 20 times the annual income of a skilled craftsman; in other words, people were happy to exchange 41,600 hours of hard labor for a flower that you can now get for a buck at Home Depot. Financial bubbles happen, and then they pop. Unless a law can remove humanity’s attraction to getting rich, another bubble will occur, and more people who bought late in the game will be wiped out.

http://willworkforjustice.blogspot.com/2008/09/ocm-other-countries-money.html

EPIC

EPIC stands for the Electronic Privacy Information Center, a nifty non-profit organization. EPIC files lawsuits against the government, forcing them to provide more information about their privacy policies and domestic surveillance practices. You can learn more by going to privacy.org

You can also donate to the organization here: www.epic.org/donate

How much is your privacy worth?

To Aspiring Lawyers

Many lawyers who cannot find permanent work do temp work. Most of these temporary jobs are projects involving document review. It's not exciting work, but some projects pay well, and the work is a necessary part of litigation. There are so many temp attorneys, there is even a website dedicated to them at temporaryattorney.blogspot.com.

With the number of lawyers increasing with every annual law school graduation and more work being outsourced to capable Indian attorneys, law is no longer a stable profession where most entrants earn a steady paycheck:

http://temporaryattorney.blogspot.com/2008/08/we-should-have-become-plumbers.html

The Temp Attorney post links to a WSJ article that shows that a degree isn't what it used to be. On the bright side, the chart above shows that at some point--many years later--a college degree finally pays off. Still, I can't help but think that the American education system is broken.

First, the paper-pushing jobs--bankers, lawyers, etc.--make more than engineers and doctors, people who provide vital services or who spearhead innovation. As a result, many intelligent young people go into law--which produces no innovation--rather than nursing, engineering, or science. On some level, that's a wise decision--it's easy for companies to hire engineers in other countries for much less. At the same time, it seems strange that America's job market incentivizes students to go into non-innovative professions rather than innovative ones.

Second, many high schools do not teach their students useful subjects, or they encourage too many students to go to college. Not all students need to go to college, and some students are better off spending four years in an internship program or an apprenticeship program. Also, many subjects taught in high schools will have no future application for students. For example, I still know how to take the derivative of x-squared (it's 2x), but I have no idea what that signifies, and I've never used it in my law practice. Yet, I was able to sit through calculus because I knew it made me a more competitive college applicant. Despite calculus's uselessness to me, I had an incentive linked to a long term goal--a college and graduate degree--which made the class and high school tolerable.

I empathize with students who have no interest in math, second languages, science, or any other required core classes. These students have good cause to be disenchanted with school--they know they will most likely never use physics or even algebra. Their disenchantment or disinterest in their classes may actually be a sign of high intelligence. After all, which is a smarter choice: refusing to spend time on a subject that has no utility, or dedicating hours to it?

In addition, if the under-performing students' family lacks the money to send them to college, the students intuitively realize the system isn't designed with them in mind. Common sense tells them--and should tell us--that their first order of business should be getting useful skills that will lead to a non-minimum wage job. To accomplish that end, high schools ought to join forces with local businesses to teach students the skills they need to get a job immediately upon graduation. When a law degree--which takes four years of high school, four years of college, and three years of law school, plus an exam--doesn't lead to stable employment or useful skills, families should realize their property taxes and other taxes are being spent unwisely. There must be a better way to educate students than a system that encourages eight to eleven years of school and the prospect of paying off student loans by the age of 40.

Love in the Time of Wit

This post has nothing to do with economics or the stock market. It's just a well-written article on love--more specifically, how to tell if a woman loves you:

The Morning News

I can't believe I'd never heard of TMN or Pasha Malla till now.

Hat tip to J-Sares for the link.

Pericom Annual Shareholder Meeting

I attended Pericom's (PSEM) annual shareholder meeting on December 11, 2008. There was no presentation. Water and soda were available to attendees. It appeared I was the only non-employee who attended.

Pericom's main business is enabling high-speed serial connectivity. Pericom makes chips that connect high-speed components inside TVs, phones, computers, and servers. You can read more about the company here: http://www.pericom.com/about

Because I was the only non-employee attendee, CEO and President Alex Hui sat down with me after the formal meeting to engage in a Q&A session. I asked him several questions, which he was kind enough to answer.

He said that Pericom had a history of spotting the trends in the market. As a result, they were early to market when it came to inventing technological solutions. Mr. Hui said his company's focus was on "total connectivity" and "timing solutions."

I asked him to identify the areas of growth within the technology market. He said that in 2008, notebooks and servers had led the way; in 2009, digital TV and GPS would be major drivers; and in 2010, he predicted that telecom and networking solutions would experience growth.

Mr. Hui also said that his chips were not "system on a chip," or SoC. He explained that Pericom's chips were analog-based.

I asked him to talk about Pericom's major products. It is difficult for a semiconductor company to explain their specific products to a layperson because their business involves enabling other products, like TVs. Semiconductor companies function like linebackers in a football game--you only notice them if they fail. Yet, if they fail, the entire product or team fails. Mr. Hui said his products related to timing; signal integrity; and switching/routing. He saw competition from Texas Instruments (TXN).

I asked Mr. Hui's thoughts on the recession and how it would affect his company. Like a true entrepreneur, Mr. Hui said he and his company "had to work better and harder." As for the credit crunch and possible solutions, he said the current environment was something "none of us had seen in our lifetimes." He praised the government for "reacting very quickly," but indicated there was "no overnight fix." He expects a turnaround in late 2009 or early 2010.

I asked him who his heroes were. This question surprised Mr. Hui, who appears to be a very humble person. (Few CEOs would have spent time with a small shareholder at the annual meeting.) Mr. Hui, after some thought, said he found inspiration in the Bible.

When asked whether his company would pursue other areas while the economy recovered, Mr. Hui remained steadfast--he said Pericom's "focus will not change," and his company would continue to "enable high-speed connectivity."

It's always fun to see a smaller company take on the competition and not only survive, but flourish. Most--88%--of Pericom's net revenues come from Asia (see page 22 of 10K). If you believe Asia will lead the way out of the current recession, then Pericom may be worth a look. Its stock price is very volatile, which is typical for smaller companies priced in the single digits. Sometimes, however, that volatility can work in your favor. Today, December 16, 2008, Pericom stock increased around 20%.

Disclosure: I own only a few shares in this company.