Crazy Eyes is BACK!

From the Slope of Hope: I saw a headline on December 24 which put a damper on my Christmas Eve:

Ummm - - so why on earth would this bug me? I don"t have a dog in this fight. If Theranos goes bankrupt, it doesn"t hurt or help me one bit. If they become the most valuable company in the world (ha!), the situation is the same. Utterly neutral and meaningless. So why should I care?

I"ve been pondering my reaction. Theranos is no stranger to the Slope of Hope, as I"ve written about this train wreck at length on eight separate occasions. For most of 2017, I wondered what had happened to them, because the media went completely silent on them. Ms. Holmes" own Twitter account hasn"t issued a tweet for over two years (!), and every time I drive by the gorgeous Theranos headquarters here in Palo Alto, I see a completely empty parking lot. So I figured she basically got away with raising $900 million and having a ruined company without any consequence. But it seems I was wrong.

With the $100,000,000 that Fortress Investment is inexplicably throwing at Theranos, the company has now raised a billion bucks. I figure Holmes must have some SERIOUS dirt on somebody, because nothing about this makes any sense at all. Yes, yes, I realize her board of directors used to have every deep state slimeball imaginable, so maybe that helps, but let"s face it, the Theranos name is mud. I would wager its brand has NEGATIVE value. If you were starting a brand new medical device company, and you could give it the Theranos name for, say, ten dollars, would you do it? Yeah, I didn"t think so.

So, again, why should I care? Well, I think part of it is this:

Holmes" whole schtick was how she was the reincarnation of Steve Jobs. From the bizarre diet to the black turtlenecks to the secrecy ("Hey! Our stuff doesn"t work at all! Shhhhhh! Don"t say anything!"), she held herself out as a younger Steve Jobs who wore a B-cup. For a while, the media gobbled it up, and they actually put her on the front cover of national magazines, repeating the claim that she was worth $4.5 billion. She - - how shall I put this? - - wasn"t.

Here we see Ms. Holmes describing the $100 million as a great investment on a conference call, whose listeners couldn"t detect the air quotes.

I remain floored anyone would put another dime into this place. As the recent Wall Street Journal article mentioned, "An investigation by the Journal in October 2015 sparked a wave of scrutiny about Theranos" practices, at a time when the company had a valuation of around $10 billion. Holmes has continued to lead Theranos through settling multiple lawsuits. However, investigations opened by both the Justice Department and the Securities and Exchange Commission are ongoing." So they are tits-deep in lawsuits and angry shareholders, both Holmes and Theranos have been banned from running labs, and their name has become synonymous with smoke and mirrors. What"s going on here? Just because you throw on a white lab coat doesn"t make you a genius scientist.

Joking aside, I think for me what bugs the holy hell out of me is simply the disappointment. The past eight years have shown us an environment in which fraud, government bailouts, and crooked executives go unpunished, if not celebrated. Once in a blue moon, there"s a piece of shit company which is finally exposed for what it is (other examples - - Color.com and Clinkle.com) and blow up in front of our eyes. We saw that with Theranos, and even though their success or failure doesn"t affect my life one iota, it gave me some minuscule degree of satisfaction that there was still a little bit of judgment, discernment, and fairness to the world.

So when Theranos had an H-bomb dropped on them, and Holmes disappeared from the press, and their parking lot went empty, and their office space went up for least, I thought to myself: there"s still a little bit of sense left out there. But I was wrong. There isn"t. And if you"re a mildly-attractive slender blonde with some razzle-dazzle and the right connections, you can get away with just about anything.

What Bitcoin "Deserves"

From the Slope of Hope: I will preface this by saying I don"t have a dog in this fight. Whether Bitcoin plummets to its intrinsic value of $0.00 and makes people look like idiots, or whether it goes to a trillion dollars per Bitcoin, it doesn"t matter to me. But I want to point out something I find just.......weird.

The press (and, in particular, Bitcoin fanboyz) seem obsessed with the notion that the market cap, so to speak, of Bitcoin is DESTINED to ascend to some higher level. We see diagrams like this:

This is as if to say that Bitcoin "deserves" to be as big as........well......typically, all the gold in the world. I have no earthly idea where this notion came from. Bitcoin no more deserves to be as worth as much as all the gold in the world as I deserve to have the same net worth as Mark Zuckerberg. It doesn"t make any sense.

And I saw this just yesterday:

We are here? Are you serious? Or are you simply inhaling a substantial amount of the marijuana that"s going to be legal in California in just a couple of weeks.

My hand to God. The human race has lost your mind. I think I"ll return to my home planet.

Quixey Makes Sense Now

From the Slope of Hope blog: The main drag here in Palo Alto is University Avenue, which is lined with pricey restaurants and retail. One city to the south of us, Mountain View, has their own main drag, and it"s called Castro Street (not to be confused with the gay mecca in San Francisco, half an hour"s drive north).

I"ve walked Castro many times (again, let"s not confuse the two), and I would often pass a very nice building which was neither a restaurant nor a retail store; on the front was a large sign, QUIXEY, and inside the building were dozens of young engineers, all of whom I"m certain were earning great six-figure salaries, working away at their keyboards. Beneath the "Quixey" name was the tag line: "The Search Engine for Apps"

Now this didn"t make a great deal of sense to me. Why would anyone need a search engine for apps? I mean, if I needed to search for an app, I"d go off and do something crazy like this:

You know......like........do a search. Quixey bragged, "The technology allowed users to search across multiple platforms, eliminating the need for multiple searches using different mobile devices." Ummm, sorry, if I"m an iPhone user, I don"t give a crap about, say, Android apps.

But people with far more money and far more intelligence than me felt otherwise, and thus:

Yes, countless tens of millions poured into the Quixey coffers, valuing the company at way over half a billion dollars for what I"m convinced has to be one of the stupidest and most useless ideas in history. But how are you going to fund free lunches and ping pong for your overpaid twenty-somethings without all this cash, people??

Indeed, although I could only see bits and pieces of Quixey from outside the building, it was apparently a fairly spiffy place for a startup. Its office had themed conference rooms constructed by local set designers, such as Ski Lodge, Picnic, Movie Theater, and Wild West. Hell, they even had Up and Down escalators so the little darlings didn"t have to move their legs to change floors.

So color me surprised when this finally happened:

Strategic options. Got it. Like wondering where your $133 million went.

But this is all too common in the Silicon Valley. VCs, armed with far more billions to throw at ideas than they know what to do with, will just keep hurling the cash until the next Facebook or Google comes along. One home run makes up for a multitude of past sins. And, for those ideas that are too stupid or fraudulent to make it........they just disappear without a trace.

Is Crypto The Only Truth?

In the nearly thirteen years that I"ve been writing Slope of Hope, perhaps the most ironic post (out of over 20,000) was one I did last January called Bitcoin"s Massive Bullish Base. The reason it"s ironic is because Slope is largely dedicated to seeking out short-selling ideas for stocks, whereas the post was about going long a cryptocurrency. Seven-hundred percent later, It turned out to be the greatest trade idea in the blog"s history, which actually doesn"t feel that great for the reason just cited.

In any case, the "bullish base" had merit (just like in the old days for stocks - - remember those?) and, in the months following the post, it"s quite evident what an explosive rally we"ve had. I"ve tinted the original "base" in green.

As cryptos continue to roar higher, and as Bitcoin itself vaults toward $10,000, the world is increasingly awash in excitement, come-ons, scholarly essays, scam artists, and everything in between. Anything that goes from one penny (2009 price) to almost ONE MILLION times that, is going to catch some attention. There aren"t many financial instruments that go from one thousand dollars to a billion dollars in value in the span of eight years. Bitcoin makes Amazon and Apple look like complete garbage investments.

Do cryptocurrencies represent the last bastion of an honest market? After all, you don"t have any central banks screwing around with them (like they do with stocks and bonds), and you don"t have meddlesome governments trying to get their grimy fingers and regulations wrapped around these instruments. It could be argued that, after eight years of absurd and grotesque intervention on so many other financial assets, Bitcoin finally represents a sliver of honest price discovery.

Personally, I"m of two separate minds when it comes to Bitcoin (which I"ll use as a catch-all with respect to cryptocurrencies, since it by far the largest and best-known). One is that, in the same sense that some celebrities are "famous for being famous", like these wastes of space.............

.......Bitcoin is getting more valuable because it"s getting more valuable. Call it the Greater Fool Theory if you like, or just plenty of free global publicity, but as the frenzy feeds on itself, more and more people are piling in, terrified of missing out on what appears to be free money.

Another part of me is thinking that Bitcoin has become the recipient of all the animal spirits that gold was SUPPOSED to inherit. It wasn"t that many years ago, particularly around 2010 and 2011, that the world was going almost as crazy for gold as they are currently going for Bitcoin. Do you remember articles like this one? They were EVERYWHERE.

Writers would speculate that gold, which almost got to $2,000/ounce in September of 2011, was on its way to $3000.........$5000............$10,000. The predictions got increasingly loony, but given the insanity going on with central bank intervention, it actually made a lot of sense that "sound money" would be the place where sensible souls were squeezed into.

As you well know,. however, just when gold mania was peaking at about $1900 per ounce, it went into an almost-any-asset-is-better bear market of its own, stumbling, fumbling, and languishing its way down to a complete lame-o loss of 35% over a period of about six years. Gold has, particularly compared to just about any other asset imaginable, completely sucked.

My declaration that it "sucked" is risk-free now, because any five-year old kid could draw the same conclusion. It would be foolhardy to say the same thing during its heydey, though, even as it was descending in 2012, 2013, etc., since gold bugs were fanatical about their rightness. It took years before someone could shamelessly roll their eyes at precious metals and get away with it, because PM types had a zealotry few religions could match. Now they have fallen into embarrassed silence. There"s only so long you can declare that change is "just around the corner".

This zealotry is present with cryptos these days. Just try to hop onto Twitter or a comments stream and bash (or even question) cryptos. You"ll be torched. So there has been, it seems, a transference of these passions from the world of precious metals to the world of cryptos, and it"s easy to see why; cryptos have made investors tons of money, where gold has let all of its believers down unless they bought it, I dunno, 1999 or something.

It"s an odd thing, though. I mean, let"s face it, gold should be intrinsically more appealing to the human spirit than a bunch of 1s and 0s. Put a stack of gold coins in front of a bunch of five years old that are playing, and put down a few sheets of paper with SHA-256 hash codes printed on them, and watch to see what the kids find more enjoyable. Gold looks pretty, it feels substantial, and it seems like.........money.

Jump back forty years, and you can witness a time when people regarded gold with the same fervor as Bitcoin.......doesn"t this chart look familiar?

If you think Bitcoin is heading for some kind of blowoff top, perhaps gold"s history can suggest what"s next. If financial history repeats itself, perhaps something like this is in store:

I"m pretty ambivalent about cryptos myself, because I"ve never bought one, and God knows even I"m not fool enough to try shorting any of them. As a chartist, just as I was impressed by Bitcoin"s bullish base, I"m likewise impressed by the breakout we"ve seen in Ethereum:

All the same, with all the mayhem surrounding this phenomenon, particularly the celebrities trying to come up with their own cryptos (my favorite: Coinye West), it sure does have all the typical attributes of a fad-based bubble. If so, the fall should be more interesting as the rise. Whether this happens or not only time can tell, but I, for one, don"t want to follow a genius like Newton on a road like the one he took four centuries ago.

How Times Have Changed

From the Slope of Hope: One of my favorite little books is called Hey Skinny! Great Advertisements from the Golden Age of Comic Books, which pretty much describes the contents exactly. It is a hodgepodge of cheesy ads from the mid 1940s to late 1950s for all manner of junk, and it"s eye-opening to see via these come-ons just how much has changed in merchandising. I thought I"d provide a sampling for your amusement, not edification.

First up is the "Lucky Grab Bag", in which children would send in their precious cash in exchange for a bag of..........stuff. God only knows what stuff would come back, but I suspect it was whatever overstock items happened to be laying around the office........ballpoint pens, sanitary napkins, swizzle sticks. I suspect an entire generation of kids learned the meaning of disappointment from the receipt of these parcels o" crap.

Next up is the most amazing sun watch in the world. The fact it was the only sun watch in the world probably helped. Evidently it was a watch with a triangle sticking out of it (helpful for accidentally cutting yourself) which, if you aimed it precisely right on a sunny day, could give you the time within two hours of accuracy. This allowed you to tell time "the truly scientific way". It wasn"t just a watch, though - - this product claimed to have nine functions, including "weather forecaster", which I suppose meant if you couldn"t tell what time it was, it was either cloudy or already raining on your dumb ass.

Now we step into the yesterday of political incorrectness with rubber masks. There"s Satan, an "Idiot", and......umm........a Minstrel. This advertisement, only partly shown, suggests that wearing one of these masks was a great way to bag the ladies, since they found it terribly amusing. In the parlance of the day, you could "panic a party" (whereas today you could "earn a lawsuit.")

This next one is, for me, the most appalling of all. It seems there was a company back in the 50s whose sole purpose in life was to create photo enlargements. In exchange for giving their sales information to twenty of your friends, they would send you.........brace yourself........a monkey. How they shipped it to you or managed to keep it alive during the shipment (or, indeed, kept it from committing monkey suicide out of terror en route) is beyond me. It"s hard for me to believe that the good people of the U.S. had much success with miniature monkeys shrieking and throwing poo around the house across the suburbs of our once-great republic.

For nascent crimestoppers, there is the "new toy gun" which, it seems, fires off pieces of potatoes. No big deal. What I find intriguing is the story they lay out in in the ad, in which a couple of young chaps stop a bank robbery cold (and are immediately paid for doing so by Mr. Bank Manager). It takes some serious suspension of disbelief to think hardened bank robbers would be stopped in their tracks by some ten year old holding what appears to be the letter "L" from Sesame Street in his hand, but that"s how the story is told. One can only hope the kids of the 50s didn"t seek out to emulate this behavior by hanging out in rougher parts of town with their weapon, waiting for their payday.

The ads weren"t all just for kids, though. There were ads aimed at adults as well, and judging from the ad, there must have been plenty of desperate, disillusioned dads in America. Allow me to lay out what was being advertised here, as the story is told: (1) a guy pulls up in his driveway in a new car under the gaze of his envious neighbor, who puzzles over how he could afford such a luxury (2) the car owner states he is pulling down the big money by selling shoes door-to-door (3) Instead of laughing hysterically, the neighbor implausibly inquires as to how he can muscle in on this kind of action (4) the neighbor evidently signs up to be a new salesman for Mason Shoes, and he is provided a catalog and, yes, a sample air cushion which is the distinctive edge of Mason that makes them better than other shoes (5) the poor bastard pesters his neighbors, co-workers, and anyone else with feet to buy these shoes, and he does well enough that Mason sends him some sample shoes, sparing him the continue embarrassment of having nothing more than a soft insole as his only selling aid.

We finish our journey with an ad specifically targeted to adult women (why they would be reading Archie comic books is beyond me, but there we are). The ad portrays a town whose women are having their engagement and wedding rings stolen from their homes. Mary has been robbed too, but she"s chill. How could this be? After all, the diamonds were worth at least a thousand dollars! That"s easy - - because Mary has her actual jewelry locked up in a safe where no one can see or enjoy it. What she"s been wearing on her fingers day after day are a set of rings that cost $2.98, and apparently no one could tell the difference. Nice going, Mary. I bet they look fabulous.

Well, that"s it for our trip down memory lane. Perhaps you were expecting an article on trading. But ask yourself - - how much value have you received from all the articles you"ve been reading about trading for the past eight years? Yeah, that"s what I thought.

Snap's New Business Model

From the Slope of Hope: One of the hottest, most widely-anticipated IPOs in years took place in March of this year - - Snap, Inc., which is, of course, the owner of the Snap app (although they insistently refer to themselves as "a camera company".) Perhaps another mission statement is in order, however, as they appeared to have now expanded to..........Halloween costumes.

No, I am not making this up. The one and only product from Snap you can purchase on Amazon is, in fact, this costume in which you can pretend you are a hot dog. 

So the company has never made a dime, and in fact loses hundreds of millions of dollars, and its shareholders have managed to lose half their money since this dog (so to speak) went public:

In spite of this fiasco - - and laughable diversification of its business model - - I must again request that you cut Evan Spiegel, Snap"s CEO and founder, some slack, as he continues to be fully distracted by his new wife, Miranda Kerr, who found Mr. Spiegel terribly attractive around the time he made his gigantic fortune. How about that.

Beyond the Pale

From the Slope of Hope: I"ve been online for over a quarter of a century, starting with a 300 baud modem and a BBS. During the latter portion of that timespan, the age of the Internet, I"ve been exposed to countless thousands of ads, increasingly customized to my habits, purchases, search engine requests, and whatever else can be ascertained about me by my online activity.

Starting a couple of years ago, I started noticing something odd about the web sites I visited. And here she is:

A woman. A black woman.........or mixed race of some kind.....and on the younger side. I probably didn"t notice her the first dozen times, or even the first few dozen. But over time, particularly on financial sites, I began to notice similar models on Bank of America....

.....and Paypal.........

......although sometimes at least, males would be displayed, such as on CitiBank......

After seeing this going on for years, it"s pretty obvious that there is some serious pandering going on. But if the Internet is so finely-attuned to appeal to precisely whoever is doing the viewing, how come 100% - - one hundred percent - - of the financial sites I use show young black females or, on occasion, younger black boys.

OK, now a few of you are thinking, "ewww, Tim, racist!", to which my reply is: No, i don"t think so. I grew up in the deep south and was raised in part by a black woman. I invited friends to my house as a youngster, and it didn"t even occur to me there would be an issue with race until one of them asked me one day, "Will your parents mind" to which I asked, "Why?" The answer: "Because I"m black!" Plus I"m part of a mixed-race family. So I don"t want to hear your accusations just because I"m puzzling over this peculiar phenomenon. We still have free speech.

So back to the topic at hand: this all just strikes me as odd. If all the websites above instead featured, say,  white women in their 70s, I"d have the same question. Or teenage boys. Or hispanics in wheelchairs. Or Amish teenagers. Or ANY specific kind of human being that is used across the board, 100% of the time, no questions asked. Last time I checked, I wasn"t an attractive young black woman, so I"m not sure why these sites seem to be providing me this image everywhere I turn.

My major from college was in business, so I understand targeted ethnic marketing......

There is no shortage of studies showing that the banking industry is a bastion of the white male, but for some reason, this guilty conscience has addressed itself by way of lots and lots and lots of non-white, non-male models in their ads. So while they"re not really creating a lot of diversity at the highest levels of Goldman Sachs or JP Morgan, they sure are making a difference on the web pages we all use.

And there is likewise a mountain of information for marketers to make the most of these different market segments (positing, among other pearls of wisdom, that black people are not dark-skinned white people).

I even noticed this diversity-in-media-but-not-in-real-life when I was re-watching The Big Short earlier this week. The executive to whom Steve Carell"s character reports is.......drum roll......

But as this Washington Post article states, they didn"t go as far as they might have.

Feel guilty yet? No? Well, give yourself some more time.

I"ll just close this pointless little musing with a full-page color advertisement from, of all things, the NSA. I think it"s supposed to be cute in a "plot twist" kind of way.