I also came across an application that allows you to use the Bluetooth feature of your phone to lock your computer when you (and your phone) walk away. I'm guessing you'll see more of this, maybe for your home and car.
I also heard about an application that lets you take a picture of any item with your iPhone and it finds an online shopping site that carries that exact item. Very cool. (Update: Here's the link: http://www.amazon.com/gp/feature.html?ie=UTF8&docId=1000291661)
These applications got me thinking what else is in the pipeline. I'll take a stab at a few predictions with full knowledge that you will provide links to people already working on these ideas.
WHATS-HIS-FACE: This application would let you discreetly take an iPhone photo of an acquaintance whose name you can't remember then it uses face recognition to search for the name online. Someday everyone will have a Facebook-like web page, so searching for faces will be feasible.
DOCTOR-IN-A-BOX: Someday you'll be able to take an iPhone picture of your suspicious moles, abrasions, fungus, or whatever and get an instant automated diagnosis and suggested treatment.
WHAT'S-IT-LIKE-THERE? Imagine wondering how long the line is to an event, or what a particular forest fire looks like, for example. You send a query through your iPhone for anyone who is in that area, according to GPS tracking, and ask for a look. A kind stranger takes your query, sets his phone to stream video, and gives you the view from his perspective. You would have eyes anywhere there are people.
BRAIN-EXTENDER: Google and Wikipedia are already brain extenders. You can find almost any information you want and quickly. But imagine how much cooler it would be if your iPhone headset was continuously monitoring your conversations and answering your questions as they arise, or whispering suggestions in your ear. That application seems likely to me.
Do you have any more futuristic iPhone predictions?
The list goes on, and that doesn't even include the many restrictions on underage activities. So there is nothing unusual or unprecedented about legal restrictions on freedom when an argument can be made that it protects lives or property.
My argument against allowing individuals to invest in stocks is that unless you have insider knowledge, which is already illegal, your odds of beating the index averages are slim. It is nothing more than gambling.
The myth of stock investing is that a person who does more research has better results. But there is no science to support that view. Indeed, the person who understands the most about individual stock investing avoids them completely and invests in ETFs or index funds.
The problem with doing your own research on stocks is that you must rely on the information coming from the management of a company, and managers are generally misinformed or lying. Even the most seasoned investment professionals running mutual funds perform worse than the indexes on average. Brains and research can't overcome the fact that much of your data is deliberately tainted at the source.
When people go to Vegas to gamble, they usually set some sort of limit for their losses. And they go with the full knowledge that winning is unlikely. It makes sense for that sort of activity to be legal, within limits, because it is viewed as entertainment and not investment. But if it were common for people to bet their retirement savings on Blackjack, you can be sure it would be illegal.
We don't allow unlicensed people to practice law or medicine, sell real estate, or even build a house. It is entirely consistent to restrict the untrained from making risky stock investments.
I reiterate that this runs against my own libertarian philosophy. I would feel I had lost something important if I couldn't invest in individual stocks. But it is also true that my net worth would be larger if I had never done it. And it would be larger still if I hadn't allowed professionals to do it on my behalf.
If anyone comments to this post by saying, "I do my own research and I made money in the stock market," it is proving my point. And if you don't see why that proves my point that further proves my point.
This idea appeals to me on many levels. Obviously I'd want a phone in my casket just in case I pop back to life. Although I'm fairly certain that if I wake up in a casket I would be able to scream through six feet of dirt, I'd still want a phone as a backup.
You might argue that the embalming fluid would eliminate any chance of going back to work on Monday. And the fact I specified cremation in my will reduces the odds of waking up in a casket. But I am cautious by nature when it comes to issues such as being buried alive. There is a non-zero chance my last wishes are misinterpreted then the undertaker runs out of embalming fluid and decides to fake it, and my purported death is nothing but an extra good nap. It could happen, and I want a phone. I also want an outlet and a charger. And I want my casket to be at least 2,000 square feet with 10-foot ceilings, ventilation, good lighting, and a bathroom. So yes, I get the whole cell phone thing.
I'm sure my readers realize this trend creates an opportunity for some world class pranks. Begin by pretending you are putting the deceased person's cell phone in the casket and then pocket it. Later you can call the relatives of the departed and ask questions such as "How's the weather out there?" You might accuse the living of being too hasty about dividing up your possessions. Tell them you have befriended some worms but you are concerned they are up to no good. If they ask how you are doing, say everything was fine until you farted. There's no end to the comedic opportunities.
If you order Dilbert 2.0, my twentieth anniversary book, today or tomorrow, you can still get it before Christmas.
Check out the reviews. It's probably the best thing I have ever done.
Most of the comments fell into two camps:
1. Capitalism is fine the way it is.
2. People would never stand for those new restrictions.
Some people also assumed I was recommending new restrictions on freedoms. I'm not. I'm predicting the restrictions because it will become clear that the alternatives are impractical. And as always, it is just a thought experiment. Don't take it too seriously.
First let's look at the notion that capitalism is fine and we're experiencing nothing more than another recession. I don't think that's the case this time for several reasons. The biggest reason is the baby boomer generation that is retiring and poised to absorb all social security and health care resources while adding little in productivity. And by the way, they didn't save enough money to retire. Next you have the Kazillion dollars in debt, and another tsunami of mortgage defaults that will trigger over the next few years as rates automatically adjust upward according to contract.
Meanwhile I see no obvious candidate for an economic driver to the upside. Apple can only sell so many iPhones.
Unwise debt and unsustainable bubbles had masked the fact that the economy was already bankrupt. The next mortgage meltdown (unavoidable), and the baby boomer impact (unavoidable) are not balanced out by anything that looks like good news. In other words, capitalism Part 1 failed.
The second objection to yesterday's post is that people wouldn't put up with any additional curbs on their spending and investing freedoms. That seems ridiculous to me since we already put up with so many societal restrictions. A few more would hardly be noticed. I don't remember the last time I heard anyone grumble about seatbelts. And if the government told banks they couldn't make billion-dollar loans to the homeless, no one would complain about that new restriction on freedom. Some restrictions on freedom just make sense.
Suppose your so-called restrictions on freedom came down to this question: "Would you rather have affordable healthcare or the right to make ignorant and risky investments?" Or how about, "Would you like to have a job or the right to be obese without being taxed extra?"
I don't know what capitalism's second act will look like, but it probably involves preventing individuals from being as self-destructive as they would prefer.
I remind you that I lean libertarian, so I'm happy to let anyone engage in risky and morally ambiguous behavior, but only up to the point where it has an impact on me. When your behavior raises my taxes it becomes my business.
1. Absurdity is achieved.
2. The reader feels as if it all makes sense.
My comic from Saturday illustrates that principle.
According to Google Alerts that comic has been posted to more blogs than any comic I have ever created. It inspires me to more fully explain the theory of finance in this blog.
Think of financial theory as a stool. The stool is supported by three legs, or truisms.
These three truisms can explain any financial phenomenon. For example, if your financial advisor suggests that you invest in a market bubble that is about to burst, he will explain that the past is no indication of future results. Just because a Price/Earnings ratio of 45 has never been sustainable in the past doesn't mean it won't be perfectly safe in the future.
And when the bubble bursts and you lose half of your money, your advisor will explain it's because history always repeats. In other words, he's an asshat trying to steal your money.
This stool also explains the housing situation. Financial experts knew that making loans to hobos had never been a good idea in the past. On the other hand, past performance is no indication of future returns. Maybe this time would be different. Then history repeated and asshats stole your money. As a bonus, they even stole each other's money this time. You have to admire their thoroughness.
One last thing you need to know: People who say it is a good time to invest are called bulls. The bulls are at the center of all financial problems.
In summary, if you want to understand financial markets find a bull and look at his stool.