What's Up, Doc?

For as long as I can remember, I've wanted a pair of Dr. Martens workboots. Considering my total ignorance of punk rock and grunge, I don't know exactly what inspired this lifelong desire, but I suppose I know counterculture when I see it. Today, I received my first pair of Doc Martens' boots in the mail. Since I refuse, on Scottish-infused principle, to purchase any shoes costing more than 50 USD, I had to wait until I found an oddly-colored one on sale. (Tip: before buying, ensure you understand the differences between British and U.S. sizes--they're not the same.) 

The story of Dr. Martens' is an example of globalization and perfect timing. Though the boots are associated with Britain, the creator was actually a German military doctor named Klaus Märtens aka Klaus Maertens. A partnership with a friend from Luxembourg resulted in the business opening in Seeshaupt, Germany, where their comfortable boots were a hit with older women. That's right--Dr. Martens, now a counterculture fashion brand, succeeded because older women with foot problems cared more about comfort than style. From humble beginnings, eh? 

When a family-owned British boots company noticed the German design in an advertisement, it realized the comfortable soles would be perfect for blue-collar workers and purchased an exclusive license. After altering the heel and adding a yellow welt stitch and a two-tone grooved sole edge, Dr. Martens began production in the U.K. on April 1, 1960. As I said, the timing could not have been better: to be born on the cusp of a counterculture revolution means as long as you maintain quality, your brand will never die. 

A newer style. The company is trying to appeal more to a younger generation.

Sadly, Dr. Martens' lifetime guarantee no longer applies: 

From the 27th of March 2018, the For Life range will be discontinued. Dr. Martens will continue to honor all existing For Life guarantees on purchases made before the 29th of March 2018 and registered within 60 days of purchase. The For Life registration website will be deactivated on or about the 25th of May 2018.

If you bought a pair of boots before March 29, 2018 and registered it, you were the last consumers eligible for the authentic Dr. Martens experience. Being a Johnny-come-lately bloke, I'll be buying another pair in the distant future. On that date, I'll go as original as I can: the no-frills black ones, sale or no sale. 

Time to Reduce Exposure to American Stocks?

I told my U.S.-based family members to raise between 10% and 20% cash in any and all stock/investment accounts. I personally wouldn't mind if my sister and brother-in-law increased their cash/money market holdings to 30%, but they are young, and their youth makes it hard to suggest a more conservative allocation. (It doesn't help that bonds paying interest in U.S. dollars seem to be fairly valued.) My parents, who don't generally listen to me, told me they're already all in cash. 

I am still holding onto my General Electric (GE) shares, along with various REIT and other preferred shares, but I do not see much value in U.S. equities markets as of April 2, 2019. 

Shiller P/E is one useful metric to consider for overall valuation.

I suppose Kraft Heinz Co. (KHC), which I recently bought, looks cheap, but its debt load is considerable, and I don't have many shares of it. I like a few other individual U.S. stocks besides GE, but I allocated a considerable amount of my holdings to GE at an average of approximately $12.50/share, and I'll wait for a turnaround. I do hold a few international companies, but none I like enough to suggest publicly. If you're reading this post, good luck, and do your own due diligence. I am not an oracle of anywhere when it comes to investing. 

Disclaimer: The information on this site is provided for discussion purposes only. Under no circumstances do any statements here represent a recommendation to buy or sell securities or make any kind of an investment. You are responsible for your own due diligence. To summarize, I do not provide investment advice, nor do I make any claims or promises that any information here will lead to a profit, loss, or any other result. I am not responsible for any harm arising from following anything construed as advice herein. 

Miscellany

1. S&P 500 closed on 2867 on April 2, 2019, the date of this post. 

2. GE stock is around 9.26/share mid-day April 8, 2019. 

3. KHC is around 33.22/share mid-day April 8, 2019. 

Update on November 7, 2019 

1. S&P 500 closed on 3076 on November 6, 2019. 

2. GE stock closed at 11.02 on November 6, 2019. As far as I know, I have sold all my individual shares, but my positions may change at any time. 

3. KHC closed at 33.14/share on November 6, 2019.

As of November 7, 2019, I have a conservative portfolio, but my positions may change at any time. 

Update on February 1, 2020

The recent correction has caused me to deploy some of my cash. I have bought shares of XOM, CVX, PSX, GT, MUR, and various REITs. My positions may change at any time. You are responsible for your due diligence. 

Update on April 28, 2020

Markets declined substantially in 2020 because of the COVID19 pandemic, hitting a recent low on March 23, 2020 but have since retraced most of their losses. Though indices declined between 10 and 20%, REITs and oil companies declined around 40 to 50%--and have yet to fully recover. I continue to hold banks and oil companies, which are still paying dividends. Facebook's Libra digital currency has not made much progress, indicating USA banks are still strong as long as they co-opt or harness blockchain technology. I have not had General Electric (GE) stock for a while now. As always, my positions may change at any time. You are responsible for your due diligence. 

Update on March 24, 2021

GE stock closed at 12.50/share today. I did not benefit from the full recovery because I sold most or all of my GE shares a while ago. 

KHC closed at 38.23/share today. As with GE, I did not benefit from the full recovery because I sold most or all of the shares a while ago.

The S&P 500 closed at 3892 today. 

American indices have hit all-time highs or close to all-time highs. I have raised considerable cash, but my positions may change at any time. You are responsible for your due diligence.  

G. Willow Wilson: Deceptively Unassuming

For what she's accomplished, G. Willow Wilson ought to be the most cocky, arrogant person in the room, the archetypical superhero fond of snippy remarks. Instead, she's unassuming and kind, and you'd barely notice her if she didn't happen to wear a headscarf. Even her single-colored choice--unlike most Arab Muslims, who favor multi-colored, ornate patterns--is indicative of her desire to blend in. 

At East Bay Booksellers in Oakland, CA

And yet, despite her best efforts, Wilson simply cannot blend in. Following the same path as C.S. Lewis from atheist ("I was desperate for the secular truth that seemed so self-evident to other people.") to religion, she finally found a home in Sunni Islam after a journey taking her from Colorado's Rocky Mountains to Egypt, then Iran, leading to several profound epiphanies, including this one: 

"[W]hen a dictatorship claims absolute authority over an idea--in the case of Iran, Islam, in the case of Egypt, a ham-fisted brand of socialism--frustrated citizens will run to the opposite ideological extreme. [Consequently,] The Islamic Republic was secularizing Iran; in Egypt the short-robed fundamentalists multiplied and multiplied." (The Butterfly Mosque) 

I recently started one of her books, and I'm eager to see what's in store the rest of the way, especially after a passage as perfect as the following: "But I didn't yet have faith in faith--I didn't trust the connections I felt between mountains or memories, and if I had been a little more ambivalent, I could have allowed the Zagros [mountains] to be foreign, and the memory to be coincidence. Fortunately, I didn't." 

Rumble, young woman, rumble

Wilson was in Oakland, California to promote her latest book, The Bird King (2019), about a royal Spanish concubine and a mapmaker able to create maps from imagination, and in doing so, conjure the actual place. Despite her nonfiction and fiction oeuvre, Wilson is more famous for her rendition of Kamala Khan as Ms. Marvel in the comic book universe. Contrasting her books with her comics, Wilson said comics are challenging because the writing must be more structured and planned so the plot-lines don't conflict with anything or anyone in the shared universe. Surprisingly, despite the level of historical detail required for a novel like The Bird King, she doesn't outline: she writes, and in the process of writing, makes numerous notes to herself in the margins, reminding her to return to a certain passage to complete an idea or not to overlook a character's unique traits. 

Writing about ordinary people in a historical context was difficult--what shoes did Spain's Muslims wear, did they have chimneys?--but Wilson enjoyed the research, inspired by a DNA analysis revealing a tiny bit of Iberian and North African blood in her mostly Italian ancestry. For insights into costumes during the relevant time period, Wilson used Libro de los Juegos (Book of Games) by Alfonso X of Castile, published around 1283. 

She enjoys going on book tours because readers see things authors themselves haven't seen or patterns that can be invisible to the author. Her agent wishes she'd write a multi-volume series like Harry Potter, but she just writes in ways that make sense to her rather than setting out to create a particular comic book universe or "world building." Wilson finished her presentation by reading aloud from the first chapter of The Bird King, which she called "one of the most personal things I've ever written," about "finding love and lost knowledge." 

If you're a fan of unplanned journeys and finding love and knowledge in peaks and valleys, try to see G. Willow Wilson on her current book tour. Look for the woman trying her hardest to blend into the crowd, as if she were hiding a secret--perhaps even a superhero costume underneath her clothes. 

© Matthew Mehdi Rafat (2019)

Soniah Kamal explains Jane Austen

Despite a degree in English and several classes on Western/British literature, I've never finished a single Brontë or Jane Austen book. I relied on CliffsNotes, yellow and black summary booklets that save countless American college students. 

Older now, but none the wiser about British literature, I had a chance last night to ask author Soniah Kamal about Austen's pull on so many women, especially intelligent, highly educated ones from affluent families. Her response was brilliant, rendering me able to understand Austen's allure for the first time--a feat none of my college professors managed. 

Soniah Kamal with interviewer Rebecca Richardson

Kamal began by explaining Austen isn't about romance, but about social satire. More specifically, Austen used her pen to mock everyone, especially the upper classes. It's important to remember Austen grew up in a time when options were limited because of her gender. "Keeping up appearances" was vital for women to gain comfortable lives through their most straightforward avenue: marriage, a one-shot deal due to divorce being rare or available only in ways making wives destitute. 

Sadly, in Austen's time, women's dependence on men, whether brother or stranger, was almost total. Existing laws mandated inheritance to male heirs, so a father with three daughters and no sons would likely pass his entire estate to a male cousin--no matter how distant. To summarize, women's chastity and behavior were linked to familial reputation, which in turn was necessarily conservative because a lack of economic opportunities, coupled with sexist laws, buried women alive under social constraints. (My crude belief that the Brontë sisters and Jane Austen suffered from an inability to achieve orgasms, causing them to transfer their Victorian passion into literary dramas now seems grossly unfair. We can also see how such strict norms led to other injustices, most notably in the area of race relations, but that's another topic.) 

Kamal's approach is unique in that she recognizes such social constraints also buried men, who may not have wanted to support a family or even to get married. (Note Jane Eyre's Edward Rochester character, who was tricked into a bad marriage.) Kamal's multi-faceted explanation also helps us understand why Austen's modern-day audience tends to be affluent and educated, despite Austen herself being neither royalty (e.g., a Lady) nor rich. Though she wrote about what she knew, a scope neglecting the working classes, the quality making Austen's writing timeless is her recognition that marriage and "high society" involve appearances for the sake of social inclusion--and, more importantly, that such status can be lost with a single poor choice. (See "Bag Lady syndrome.") 

These themes of social inclusion and social mobility based on superficial traits mean every time someone buys a Louis Vuitton wallet or a Birkin bag, s/he's bringing Austen to life. When we watch Carrie Bradshaw buying a pair of imported Manolos, Austen is lurking in the background, waiting to pounce. Considering that most first marriages, even today, occur at a very young age and are therefore dependent in large part on familial support and reputation, Austen's work seems less outdated. Indeed, it's more accurate to say her muse midwifes itself from rebellion against social repression and constraints rather than Victorian-era sexual mores. Given the universality of youthful rebellion in the context of strict parents, Kamal joked that Austen didn't realize she was Pakistani, Bangladeshi, and perhaps even Italian. 

Let's talk about Soniah Kamal. My first impression was a woman once constrained by social norms, now ready to let loose--but in a manner befitting her social stature. Kamal, born in Pakistan and raised in London and Saudi Arabia, where she attended an international school, won't be seen anywhere near a dive bar, but her alligator skin shoes and colorful dress and scarf tell you she wants to be seen. And yet, I never once saw a prurient quality in her. Observing a photo after taking one with a fan, she decided it didn't meet her standards and told the photographer to "stand up" and try again. The photographer obliged. 

Incredibly, Kamal wrote her latest book, Unmarriageable (2019), a fusion of Pakistani culture and Jane Austen, in two months. She advises aspiring writers, often told to picture their audience that "There is no audience. You are your audience--write what interests you." 

Fans of Austen are familiar with a surfeit of emotion hidden under prim surfaces, and Kamal sheds tears easily. Waterworks occurred when she discussed a reader's poignant note; the unexpected revelation some people were using her book as a gateway to Jane Austen, her original inspiration; and two other instances. Despite my newfound respect for Austen's desire to give her characters more agency on the page than they had in real life, I won't be reading Austen's books. There are too many interesting female writers today, including G. Willow Wilson (The Butterfly Mosque), Chimamanda Ngozi Adichie, Michelle de Kretser (The Life to Come), Zadie Smith and, yes, Soniah Kamal. 

© Matthew Mehdi Rafat (2019)

Bonus I: "For what do we live, but to make sport for our neighbors, and laugh at them in our turn?" -- Jane Austen 

Bonus II: from Kwame Appiah's The Lies that Bind (2018), on Jane Eyre: 

Coming Back to America (2019)

Whenever I return from a long overseas trip, I try to share my thoughts about re-integration. My most recent trip around the world took about ten months, and I've been in the States about 10 days so far. 

1. When I was in SE Asia, especially the Philippines, I complained economic development revolved around shopping malls. Well, investors repeat what worked in the past, regardless of geography, and in the one week I've been in California, my life has revolved around shopping malls. Sigh. 

2. Retail differentiation is becoming nonexistent, causing more consumers to buy online--and countries more willing to demand tariffs against foreign competition. I went on a shopping spree yesterday, buying a new pair of shoes, two jackets, and a pair of casual pants. I didn't need any of them, but at 50% to 70% off at the local outlet mall, the entire experience set me back less than 100 USD.  

In the process of shopping, I realized every single clothing retailer had copied everyone else. Eddie Bauer, like Nike, makes DriFit shirts. Columbia's jackets, like Eddie Bauer's, have a side zipper pocket in the same breast area. For me, the main reason to choose one item over another came down to sizing, especially around the shoulders. Even in one store, a double XL would fit differently--Puma and North Face products seem to be the most inconsistent--and I continue to buy clothing and shoes made in Vietnam, Bangladesh, Jordan, or Indonesia whenever possible. Oddly enough, consumers don't seem to realize manufacturing location matters a great deal. 

After I wrote this post, I saw a unique retail item at Portland, OR-based KEEN.
It's a private company w/ 200m-300m in annual sales.

3. I had purchased many items online while traveling and was expecting outsized temporary happiness when I returned to my pile of self-bought gifts. Unfortunately, the pile of mail waiting me caught my attention first, and I haven't had a chance to get to all the items I bought in an attempt to self-compensate for missing X-Mas, my birthday, etc. 

Interestingly, I've already begun using the items I bought yesterday, indicating the mall experience could compete with online retailers if unique products are offered at competitive prices. The psychological allure of instant gratification isn't going away anytime soon, so once physical retailers become more lean, an equilibrium will be reached between the virtual and the physical--assuming brick and mortar stores prioritize customer service. 

4. America's most noticeable advantages over other countries are its environment and convenience. Pollution is much lower than most other countries. (Even highly developed Singapore has issues due to its proximity to Indonesia's active volcanoes.) As long as an American is in a major city, drinking tap water won't be risky. Traffic may be busy during peak hours, but for the most part, the flow is remarkably smooth. I can't tell you how lovely it is to know I can walk anywhere for as many weeks as I want without developing a cough--even though walking in most major American cities is uncommon because city planners and car lobbies (think: sales taxes) prioritize cars. 

As for convenience, Americans have too many options, and they're all easy to reach. In Guanajuato city, Mexico, a mountainous area, I had to walk up and down one block at a 70 degree angle just to get groceries--and that doesn't include the two flights of stairs installed to make it easier for locals to reach the main street. I actually enjoyed the experience, but I'd often return to my Airbnb only to realize some of the products I had bought had expired, especially the yoghurt. The rougher terrain makes it harder for regular deliveries and also for store/tienda owners to make a profit. 

Additionally, the lack of zoning or self-imposed owner restrictions sometimes meant two small grocery stores on the same small street often sold the same products. Lest you think competition would be more cutthroat, both employees would happily refer me to the other store if they didn't have a product (my favorite brand of milk is Groupo Lala, but another brand, Alpura, seems to do a better job in some neighborhoods). Incentives for honest service increase when the same employee sees the same customers regularly.  

5. History is easier to absorb in other countries because it's all around you. Most people realize that after WWII, the American government was able to impose its policies and processes in other countries, most notably Japan and Germany; however, even before then, borders were ill-defined and countries, especially in Europe, were seeking to expand. Such expansion efforts often caused more powerful countries to run roughshod over smaller ones, in ways Americans and Europeans never learn.  

Averell "Ace" Smith, in Commonwealth Club Magazine

From National Geographic (2019), on El Salvador

Seeing cannons in Cuba near the water helps one realize the importance of naval power--at least until the invention of fighter jets. Seeing forts in Lisbon and Scotland leads to an appreciation of military strategies and the reasons behind extended conflicts, especially if retreating to Northern Africa to regroup was possible. Touring the former Ford Factory in Singapore teaches us civilians are always targeted in invasions and wars, regardless of the countries or groups involved. And so it goes. 

In Singapore. Now a museum.

6. I have to cut this short because I have a job interview in 20 minutes... in a shopping mall. 

© Matthew Mehdi Rafat (2019)

Bonus I: an apt summary of America, from an El Salvadorean immigrant: "Life is cold here, but there is opportunity, and so we must endure." 

From National Geographic (2019)

At least there's free WiFi. 

Bonus II: when returning from any extended trip overseas, it's helpful to double-check several important dates: 

1. Your driver's license. In California, we're supposed to receive notice of automatic renewal (if eligible) two months before the expiration date, but it may be easier to study the written test and take it earlier. 

2. Your passport renewal date. 

3. Your insurance policies. You can typically renew online. 

4. Your credit and debit cards. If you order new cards, be sure to update all the apps and services (Uber, iCloud, etc.). 

5. Your tax filing date(s). You can file for an extension but I always try to finish before the official deadline. 

6. If you have investments, it's a good time to check all your accounts. 

7. Do you have any professional licenses? If so, check to see if you've caught up on all the requirements, including continuing education (CLE, fingerprinting, etc.). 

8. You're usually entitled to one free annual checkup every year, though lab tests may cost extra. If you haven't gotten one in the last year, consider making an appointment.

It took exactly 3 weeks before I felt like I'd caught up on everything, so give yourself as much time as possible before starting a new job. 

Venture Capital Panel on Robotics (Silicon Valley)

I attended a Silicon Valley panel discussion on robotics this evening, and I thought I'd share a summary of the experience. 

Food and drinks were available

Rob Lau of "Idea to IPO" (idea-to-ipo.com) opened the seminar by introducing several of the group's members, including Albert Qian of Albert's List. One entrepreneur, Ali, discussed autonomous tutors available 24/7 capable of answering questions immediately. Another member talked about a geolocation service without satellite communication called No GPS. 

Rob provided a quick mission statement. He acknowledged many entrepreneurs are struggling financially, so he ensures his events are affordable to all. His aim is value for our time, which he called our most valuable asset. His group's global mission is to democratize entrepreneurship, and he referred the audience to his YouTube channel.

I was impressed with Tim Jeghers, the event's videographer. He seemed diligent without being obtrusive. 

Eric Hanson of the nationally-recognized WilmerHale law firm moderated, and he did an excellent job, following up when answers were not clear. 

I've been a huge fan of WilmerHale ever since Attorney Seth Waxman's oral arguments before the Supreme Court, and I was pleased to be able to visit one of the law firm's offices, even though Mr. Waxman works out of D.C., not Palo Alto. 

All the panelists were interesting, but I enjoyed Elana Lian's comments the most. 

Below is a heavily paraphrased summary of each speaker's comments, which attempts to capture the gist of their opinions. 

Elana Lian: I’m with Intel Capital, and I focus on AI and robotics. Opportunity is everywhere. We focus on the B-to-B side. We bring computer vision and the AI to the processing unit, a complex undertaking due to factors like data analysis and different operating systems. One example [of this fusion] is the company Bossa Nova, which makes a robot that scans shelves and QR codes in the retail industry. That involves scanning (robot vision), movement/navigation, and processing.

I agree in the long term, other jobs will replace the ones eliminated by technology, but in the meantime, people recognize short-term challenges, including in media such as Black Mirror.

One of the most critical things is to talk to the end user.

Just because you’re solving a really cool problem doesn’t mean someone will buy it. [My favorite quote of the night.] 

Kelly Chen: I’ve always been interested in the quantitative side. I have an engineering background as well as an MBA. We think about logistics--everything from shipping to packing. I’m optimistic about this space, because due to software and reinforcement learning, we can do things in weeks today that took one full year in 2012. 'Reinforcement learning" is how the robot learns, i.e., the robot uses probabilistic models similar to the human brain rather than machine learning, which doesn’t allow the robot to perform tasks it hasn’t seen before. 

We are also involved in autonomous long-haul trucking. We’re excited about what this technology can do for the labor market, because few people want to do long-haul trucking, such as deliveries from the East coast to the West coast. With new technology, however, drivers can stay closer to home, see their families more often, and focus on handling "last mile" issues. 

National Geographic, 08.2018

We invest on the enterprise side, and enterprises make decisions based on concrete factors. When selling to consumers, it’s more emotional, more based on sentiment. From an investment approach, we tend to be cautious. If you have a demo that works in the lab, it doesn’t mean it will work in the wild. 

I think GDPR and data privacy are important, but a security failure in an autonomous vehicle is much more dangerous than a data breach. 

Brandon Reeves: I’m an early stage investor. How do you reinvent a new cycle in an established business? In the short term, there will be job displacement because of technology, but if the Industrial Revolution is any indication, more jobs will be created in the long-term (10, 20, and 50 years from now). 

From a funding perspective, with consumer robotics, the difficulty is that investors want a market to already exist, while innovators often look ahead to fulfilling a demand that doesn’t yet exist. In terms of what consumers will accept, a lot of it comes from the DNA of a company rather than the product itself. We ask, “Do consumers trust the company?” [Rather than, “Do consumers trust the product?”] 

I’m very against co-working spaces at the early stages [of a company or idea]. 

Re: job displacement, I don’t believe in UBI—I tend to focus on opportunity and retraining. I also think UBI is against immigrants, because it makes it harder from a policy perspective to increase immigration. I believe immigration has been responsible for America's success, and I don't want to support a policy that will reduce it. The way to increase wages is through productivity growth, and you get productivity growth through technology. I do worry some jobs will eventually experience so much productivity growth, they’ll no longer need human beings, but I’m not sure we can predict the exact timeline. 

20% of America's GDP is healthcare or healthcare-related. 

Re: a robot tax to mitigate job losses, in general, you don’t want to levy a tax that hurts innovation in the short term, but the long term is different.

Nuno Goncalves Pedro: I’m a VC investing in next generation applications focused on the consumer. Our time horizon is five to ten years, preferably five to seven years. 

We don’t believe in the idea that robots need to be anthropomorphic. A doorbell or an ATM is also a small robot, but for some reason, people will trust a human-looking robot more than a doorbell or an ATM. Why don’t we have ATMs that look like human beings dispensing money? It’s different selling to consumers than to businesses, but the patterns in usage between businesses and individuals are becoming similar. We’re in the midst of a big shift.

There’s an entrenched supply chain that makes it hard for newcomers to break through, but even these entrenched systems are missing pieces. At the same time, if I’m GM or another OEM, why not own my software? Why rely on third parties just because that’s the way the supply chain is set up? 

There’s a war for the home going on right now. Amazon, Google, Apple are all vying for the home. Facebook tried and failed. 

From an ethics perspective, unfortunately, I do think ethics is in the hands of engineers, and engineers aren’t meant to be thinking about ethics. They’re meant to think about algos and functions. Meanwhile, most CEOs do not know what their engineers are doing, so there’s a gap between technical implementations and business leadership.