Thursday, November 20, 2014

Following the Rails to Promontory Point

Teri and I are considering a road trip that would follow the original route of the eastern portion of the Transcontinental Railroad from Omaha, Nebraska to Promontory Point, Utah. It seems that it would be a fun summer trip through some beautiful scenery and a chance to see some interesting historical sites.

Here are some of the places we are considering visiting:

The Union Pacific Railroad Museum in Council Bluffs Iowa.

Union Pacific Railroad Museum

The Durham Museum located in Union Station in Omaha, Nebraska.

Union Station Omaha, Nebraska

The Golden Spike Tower overlooking Bailey Yard in North Platte, Nebraska.

Golden Spike Tower

Cody Park Railway Museum in North Platte Nebraska.

Cody Park Railway Museum

Cheyenne Depot Museum in Cheyenne, Wyoming.

Cheyenne Depot Museum

The Utah State Railroad Museum at Union Station in Ogden, Utah.

Utah State Railroad Museum

The Golden Spike Visitors Center at Promontory Point, Utah.

Golden Spike Visitors Center

What other sites would you recommend visiting along this route?

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Saturday, November 15, 2014

Avastars Makes You the Star

Avastarship by Avastars
The Avastarship, which launched yesterday in the main foyer of the St. Louis Galleria Mall, would have looked right at home on the set of the original Star Trek series. An aluminum cylinder, ringed with glowing bands of psychedelic color, is hard to miss. The 3D scanner in the center of the ship won't break you apart and beam you through space, but it will launch you instantly into a 65 inch tall, personalized Avastars video where you are the star.

The animated videos let you be a rockstar, fashionista, cheerleader, veterinarian, firefighter, cool rocker, special forces hero or a martial arts master.  A few days after the mall experience, you will receive a 3D printed personalized doll or action figure with your own face.

"This isn't about 3D technology," explains Avastars' cofounder Dan Lauer. "The girl who comes to Avastars doesn't care about 3D printing.  She wants to be a princess or a popstar and that's what really maters."

Avastars doll and action figure
The St. Louis startup was cofounded by Lauer and Jill Barad, the former Chairman and CEO of Mattel who led the explosion in the popularity of Barbie in the 1980s and 1990s. Lauer's previous ventures include the creation of the Water Babies brand of realistic baby dolls. The management team also includes Scott Harmon who honed his 3D technology experience at Zcorp prior to and after its acquisition by 3D Systems and Brandon Elliot, formerly the Director of Digital Ventures at Build-a-Bear Workshop.

In addition to the St. Louis Galleria, Avastarships are also launching this year in Oak Brook, Illinois and Cincinnati, Ohio.  The companies goal is to expand into thousands of retail locations.

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Thursday, November 13, 2014

What Do I Know for Certain?

There is one point on which I am absolutely certain. One thing of which I am certain is that there is little else that I know for certain.

The world does not follow a random and arbitrary set of rules. The laws of physics do not change. Every action has an equal and opposite reaction. But the world is complex and impossible to model accurately.

Because the world is too complex to fully understand, it can appear random and arbitrary at the individual level. I don't know what today will bring.  I hope to finish this post, go for a hike at Rock Bridge State Park then come home and do some reading. But there is also a possibility that I will get hit by a car, shot by a terrorist or attacked by a mountain lion. It might be safer to go back to bed.

It is highly probable that I will have a pleasant walk and a quiet afternoon. Since I write these posts in advance and post them manually, if you are reading this, I made it home.

I don't know for certain what today will bring. I don't know whether the market will go up or down next week. I don't know whether my remaining time is short or long. The one thing of which I am certain is that there is little else that I know for certain.

However, I believe that by thinking in probabilities rather than certainties, my understanding of the world is more accurate. Expecting the expected and some elements of the unexpected is the most reasonable expectation. The way we respond to the unexpected defines us.

What do you feel you know for certain?

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Thursday, November 6, 2014

The Union Pacific Rolls and Rocks

Union Pacific Locomotive
I grew up in a small town in Missouri in a house that was about 100 feet from one of the main tracks of the Missouri Pacific Railroad. I remember the wail of the horn, the roar of the diesel engines and the shaking of the ground when the trains rolled by several times per day. The trains were as friendly as they were powerful and always began with a wave from the engineer in the cab of the locomotive and ended with a wave from the conductor in the caboose.

Originally the Pacific Railroad, ground breaking for the Missouri Pacific took place in St. Louis on July 4th, 1851, making it the first railroad west of the Mississippi River. The line merged with the Union Pacific in 1982 and over the next decade, the familiar blue locomotives were repainted in bright yellow and red.

Although I seldom have the opportunity to count the cars on passing trains anymore, I remain a big fan of the Union Pacific Railroad. It is the second largest holding in my portfolio and one of my favorite companies. Here are a few of the reasons why:

1.  The Union Pacific is a strong, financially stable company with an extremely dedicated and competent management team. The strength of the leadership is apparent in their earnings announcements through the results they present and the way they present those results.

2. As long as the world needs to eat, build houses, drive cars or drill for oil, there will be strong demand for rail services which will allow the company to grow and price its service at a level that will allow for future investment.

3.  The company is protected by a strong moat. The capital investment required to build the rails, purchase the locomotives and rolling stock, staff the trains and yards, and manage the logistics are a barrier against excessive competition.

4.  The operating premise of a railroad is easy to understand and transparent. It is a business that Warren Buffet would love and does since his company owns the Burlington Northern Santa Fe.

5. Reviewing the quarterly financial statements of the Union Pacific provides a wonderful overview of the health of the country's economy as a whole and can reveal trends and opportunities before they are apparent in the mainstream news.

6.  The inertia and stability of a slowly growing company like the Union Pacific helps dampen the gyrations of a portfolio highly weighted in 3D printing companies.

Did you ever count the cars on the trains as they passed?

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Saturday, October 25, 2014

Influenced by the Future

Forecasting is a critically important skill for a businessperson or an investor. But almost all forecasts are wrong to some degree. Why is it so difficult?

George Soros, in his book The Alchemy of Finance, postulates a theory of reflexivity that sheds light on some of the reasons why predicting the future is almost impossible. Reflexivity observes that people make predictions based upon their expectations of the future. The actions people take based upon those predictions actually change the course of events to create a different future. Actions, influenced by future expectations, of millions of people interact in ways that are far too complex to model.

Reflexivity is easiest to observe in the stock market where it leads to the boom and bust cycles that we saw in the technology boom of the late 90s and the housing bubble that caused the great recession. Although the book was originally published in 1987, before either of these crashes, those events fit the theory precisely.

Reflexivity predicts that in the early build up of a boom/bust cycle, there is accelerated growth in a sector that accurately reflects the fundamental growth potential. The accelerated growth creates an expectation of future growth that pushes prices higher than the fundamentals support. After a period of growth, there is usually a price correction that stokes fear of a price crash. When the prices recover from the correction, investors are relieved and the growth cycle begins anew. The very fact that the correction didn't cause a crash makes investors less wary. Prices continue to increase, fueling expectations of more increases until the the difference between the price and the value becomes to great to ignore leading to a catastrophic crash.

If we consider the reflexivity model and 3D printing stocks, it would appear that the period from 2008 through 2013 represents the initial period of accelerated growth. The dramatic decline in prices during the first quarter of 2014 represents the correction. It follows that the stocks should now enter the second period of rapid growth.

What is your favorite growth investment?

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Thursday, October 23, 2014

Printing with Human Cells

3D Bioprinter by Organovo
3D Bioprinter by Organovo
One of the most important applications for 3D printing is still in the very early stages and is projected to grow to a $6 billion dollar market by the next decade. Bioprinting uses 3D printing technology and bio-ink building blocks to create three dimensional tissue where the cell function and viability are preserved within the printed item.

Cross-section of multi-cellular bioprinted human liver tissue
Cross-section of multi-cellular bioprinted human liver tissue

Using research and patents developed by Dr. Gabor Forgacs at the University of Missouri, Organovo is on the verge of releasing a product that uses 3D bioprinting to create a Human Liver System that can detect toxicity in potential new drugs. By detecting toxicity earlier, the Human Liver System reduces the risks of introducing dangerous drugs and saves the expense of testing in live patients.

While the first applications for Organovo's bioprinting are drug testing, the company believes that "engineered tissues will someday be a routine source of therapy for patients with damages or diseased tissue.  Using bioprinted organ patches made from the patient's own cells could prevent transplant rejection and the need for immunosuppresant drugs.

Organovo's scientific founder, Gabor Forgacs, presents on bioprinting at TEDMED.

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Sunday, October 12, 2014

Reverse Mentoring

In his latest book, Mastery, Robert Greene stresses the importance of finding a good mentor and learning all that you can from them. The mentoring relationship is powerful and impacts both the person being mentored and the one doing the mentoring.

I have had some outstanding mentors over the years and I am particularly grateful to Larry Anderson who saw a lot more potential in me than I did back in the early 1980s. When I moved into sales and marketing management, I tried to be a good mentor myself.

One point that is often overlooked in the mentoring discussion is how much can be learned by the person doing the mentoring. With maturity comes an accumulation of useful experience and hopefully a little wisdom, but there is always more to learn. Listening attentively is often more helpful and supportive than sharing those tidbits of wisdom.

Are you a teacher or a learner today?  Or both?

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