TRANSCRIPTS OF
DEAN LeBARON’S
SEPTEMBER 2000
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Share Lockup Determines Price of Recent IPO's |
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Campaign Finance |
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Death of Mutual Funds |
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US Follows Japan's Lead |
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The Chinese Wall Between Investment Research and Investment Banking |
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Convergence: Print, TV and Computer |
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Public Relations |
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Data as a Discovery Source |
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New Way to Select US Vice Presidential Candidates |
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Applying Complexity in Real Life Organization Issues |
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Need for A Complexity Interpretation of Oil Pricing Today |
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Russian Truth |
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Technology Promotion |
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Composite Stock Quotes ... All Exchanges |
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New Media |
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Accidental Surplus |
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Intervention |
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Forecasting Backwards |
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Yin-Yang Management Style |
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New Work |
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Geology of Lake Champlain, Bob Beach, Owner of Basin Harbor Club, Vt.,
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Links: September 1, September 6, September 7, September 12, September 14, & September 18
Share Lockup Determines Price of Recent IPO's
link: IPOLockup.com
The fundamental analyst calculates earnings per share, EBIT, cash flow and so forth in determining value. But in most of the recent IPOs that doesn’t work. There’s obviously something else afoot. It may well be that the valuations are based upon more qualitative valuation parameters such as employee retention, customer reliance, the quality of the products and the like. But it also may well be that we should look very carefully at the flow of shareholder funds. Many cases of IPOs have come and represent only a very small amount of the total amount of stock outstanding and that most of the stock is locked up until some time after the underwriting, usually six months or it can be as long as several years. The purpose of the IPO was to provide a currency to be used for acquisitions or to be available for a so-called liquidity event which is a euphemism for selling out. No matter, we can look at the availability of stock that is likely to come onto the market and follow that as part of the valuation of supply and demand. And I would encourage people who are attempting to value the recent technology stocks to look at the link that I have put here on determining when the locked-up stocks will become free. This may well be the most important valuation parameter between now and the end of the year and maybe beyond that.
Campaign Finance
One presidential candidate, Al Gore, has picked on the theme of one of the principal contenders for the other party, McCain, as his number one piece of business when he is elected president, campaign finance. This is an extremely unusual crossover but one that is highly desirable. My first experience with campaign finance was in my earliest job when I was asked to make a contribution in a brown bag in cash of one percent of my salary to combine with others in the same industry to be given to congressional members who were influential on legislation in my industry. The purpose of this block financing whether or not a candidate was actually running for office then or not was to get value for the investment of the campaign finance. And similarly today the same value is expected. In my case, I was a non-compliant person, the only one as far as I know, and I made my contribution by check to both the national Democratic and Republican committees. And today, corporate financial contributions are a much bigger deal, with so-called soft money going for issue ads covering the candidates but under the guise of covering issues. And shareholders are again demanding that they are getting a return for their very large investment. But in every case this return is counterproductive to the democratic process. It’s not a First Amendment issue. It is a buying votes issue. My first experience made me sensitive to it, and I’m sensitive today. The solution to campaign finance is to have a reform, at the very minimum demand disclosure and repeated disclosure and at the very greatest part have an investigation like the tobacco industry and treat it the same way. It can be damaging to our nation’s health.
Death of Mutual Funds
What industry has been one of the principal drivers of the miraculous American economy for the last two decades, and yet, may not even be thought of as an industry in the course of the next cycle, a decade or two from now? It might not even be present. Can you think of something that could go from the top to the bottom or disappear?
My answer to that, is that it’s mutual funds, investment companies. Investment companies were born in the opportunities of providing lower economies by larger scale to small investors, standardized performance, standardized risk to all investors and delivering a quality of investment insights to investors that would not be possible to them alone. It’s a good idea, and it’s an idea two generations old, having started, essentially, in Boston, after the ruling of Justice Putnam. But now the mutual fund industry is seeing some cracks. Some of its flaws, such as the sharing of tax burden by all investors whether they are warranted for any individual investor or not, the sharing of a risk profile, the ability to achieve diversification that may be well in excess of that which is necessary for a single individual and the lack of control for the unit size which is important today, that is, a market that is considered to be a market of one, rather than a market of many.
Mutual funds are an anachronism in the face of the tools that are available today that can do a better job, cheaper, for the markets that we have today and in the future. They are quite likely to disappear and things like the Investment Company Institute will become thought of as an old guild which no longer serves its purpose. Fidelity, Vanguard and others will become relics. Instead, the new Web sites, many of them listed on my “Innovative Links” section of this Web site, folioFn, mymoney, and so forth, will come on and do a better job. So if you want to look at an industry that’s likely to go from the top to disappear, this is my candidate, among others.
US Follows Japan's Lead
link: Aquitaine Report on Japan, 8/28/00
I have a hunch that the Japanese economy and its markets may give us a clue as to what may be in store in the US. The Japanese may be a decade or so ahead of us in their developments and cycle. Remember back a decade or slightly more when Japanese technology was so highly regarded that the rest of the world was falling all over itself to mimic the Japanese miracle? Interest rates were so low the cost of capital was virtually free and money poured into Japan to make it in effect the second largest, and the fastest growing, economy in the world. The Japanese miracle was a wonderful sight to behold.
After that the financial collapse turned in on itself, imploded. And Japanese management techniques became sources of ridicule with the interlocking ownership bringing every company down regardless of its own activities. And now Japan looks at itself and sees an aging, retiring force which has to be supported. The Japanese miracle has become the Japanese bust.
I’m attaching a link to a recent Japanese report which I think describes the demographics extremely well. I’m not sure the parallel completely holds but it is so strikingly close with a time lead to the US that it is a source of considerable concern and caution. I could add to it, but don’t have a report immediately at hand, that Switzerland went through the same thing. It had a flow of funds into the Swiss market, a relatively small one, about two decades ago, and then went into a state of economic decline following that because it just couldn’t absorb all of the capital that was flowing in. Mostly Japan but also Switzerland – they give us clues to what we should be concerned about in the US.
The Chinese Wall Between Investment Research and Investment Banking
link: Boston Globe Article
There’s always been a Chinese wall between investment banking and investment research. In other words the analysts who were doing research were presumably uninvolved with the functions of the firm’s investment banking clients. Admittedly the Chinese wall was made of rice paper. I remember in my first job as an analyst, I was asked to comment in a report on one of the company’s banking clients. I thought I was supposed to call it as I saw it, the company was making passive resistors and was going to be outmoded by circuit boards. And so I panned the issue and said the stock was a sale. I almost had an instant career move to another job before I had really started at the first one. But I learned not to do that again and although most analysts avoid troubles and that’s why there’re about 95 percent buy recommendations and only five percent sell recommendations, it hasn’t been too obvious until recently that the purpose of investment research is to support the investment banking function. I’m attaching a link to a Boston Globe article which makes this very, very transparent and if the CFA portion of the Analysts society, AIMR, wants to do something other than prosecute people for a non-disclosure of some degree of conflict of interest and fining people $5,000, this is an issue that they could take up. And that is that analysts are now directly compensated for increasing a firm’s investment banking business and analysts are also contractually charged with supporting investment banking functions. The rice paper has been thoroughly pierced. There is no Chinese wall and it needs to be re-examined very, very carefully.
Convergence: Print, TV and Computer
Convergence is a big buzz word at any of the industry conferences that technicians and the electronics people attend. The idea is that anyone’s desktop, especially mine, has too many gadgets on it and we’re trying to bring them all together in a way in which we don’t quite understand. I have two small pocket PCs, five computers, a couple of screens, TV, who knows what, telephones all over the place, ISDNs, five cameras and so on. I’m embarrassed by that but each one has a specialized function and I use them all.
Recently, Forbes magazine demonstrated the ultimate in an attempt to engage in the ultimate of convergence of print, computers and TV by sending out to its subscribers a little mouselike thing, another thing to put on a desktop and this one as you can see has a red light on the end of it, which I hope you can see, which is really a scanner. And it’s to scan bar codes on a TV screen or print to produce through the Web automatically convergent information that will supplement the original experience. Well, it’s a very expensive device. Let’s assume it cost somewhere between $50 or $100 for Forbes to send this free to everybody. But that’s what you have to do get something started. More than that this particular one doesn’t work because it interferes with the audio system and I could not be doing RealPlayer and RealProducer as I’m doing now with this device connected. That’s a bug they will work out in time but for the moment I have disconnected it.
The main point I’m trying to say is that the convergence will probably occur within a single unit rather than with multiple units, just as it happened in hi-fi where we had amps, pre-amps, tuners and the like. Now we tend to have a single unit, probably something like a home theatre system made by Bose or Sony or whatnot, so we will have convergence into a single box and that box will contain the inputs from a variety of different sources all at high quality and high reliability. It won’t be this mess of wires that I have around here and it won’t be with a separate little device, like this that Forbes is sending out. They’re wasting money, but after all, they’re doing it to capitalist tools, like me.
Public Relations
Good P.R. cannot be overemphasized in today’s media crazed world. Every element of media, magazines, the Web, newspapers, movies, TV, has to be fed and the appetite is huge so that it is so easy for a project which gets itself into some difficulty, which most projects do at one time or other, to slip into an abyss usually controlled by lawyers of not disclosing things that they consider to be unfavorable. The answer to good media coverage and its effect is to have maximum sunshine. Increase the lumens, expose everything and including things, and especially those elements which may be seen to be unfavorable. The people who control media have to have stories and they’re going to get stories whether they to have to dig them out or not. And with Web casting, with frequently asked questions, FAQs, on Web sites it’s so easy to have full disclosure and using sunshine. Sunshine is the answer. Lawyers are the enemies of good P.R. because they are brought up in an environment where confrontation is the answer to every solution, so they withhold. But lawyers are wrong on P.R. sunshine is the right way and it can be applied on every single case – on the Firestone-Ford case, on little local projects that are involved, they all can use more sunshine. Media and sunshine is the combination that works.
Data as a Discovery Source
link: Visual Insights
It was very sad to see the Ford executive, the chief executive, in fact, say that Ford was proudly a data driven company and to hold up in his hand the most primitive PowerPoint display, showing a correlation of accidents of its Ford Explorers with Firestone tires and the general population of SUVs. This was such a primitive item that Ford did not see in the data correlations that a more sophisticated analysis would have shown. The purpose of mentioning this is that one should not use data visualization of this simple, unified, one-to-one relationship that is already predetermined, to see anything. In fact, one should not even just look at sheets to see data without attempting to visualize it. I’ve mentioned before that there are data visualization tools available that can handle multidimensional displays, that can be turned and twisted and seen in a variety of different qualitative ways to get behind the statistics that can be quantitatively verified. The link that I have put below, http://www.vdi.com/, is just one of these things. I have used this nine-dimensional display myself to bring up relationships that I would not otherwise have seen. And it’s such a generally available tool, it’s hard to imagine why one of the world’s largest companies, which has a tradition of data superiority uses these rather simple, one-to-one things and says, I’m sorry, we missed it because we didn’t see it in the data. There’s no excuse for that.
New Way to Select US Vice Presidential Candidates
Don’t you think that the selection of a Vice President is too important to be left to a single individual, even a presidential candidate? Yes, I do. Just imagine a world in which Dan Quayle might have become President of the United States and weren’t we lucky that Harry Truman turned out to be a great president rather than what we might have expected which was a continuation of a career of mediocrity. Clinton was very sound in selecting Gore who was his principal rival for the presidency and similarly, John Kennedy did the same thing with Lyndon Johnson. Would Nixon have been plucked out by another process had he not been selected by the party regulars to join Dwight Eisenhower in the presidential race? George Bush of course, was a Vice President under Reagan, and one can reach one’s own conclusions about that. But now we have a system whereby the people could well select the number two. My suggestion would be that the number two vice Presidential candidate be the person who was second in the primary systems, that is, of presidential timber and really wanted the job. It’s not clear that Cheney actually wants the job on the Republican side. So I would let the people pick the number two as the number two and of course then the job would become more important as it already has become with the association of Gore and Clinton. If the number two didn’t want to be selected, then it should go to the party caucus and the party should select the person to join the president. Yes it cuts into the loyalty issue a lot but it will produce a much better result of presidential timber in the number two slot.
Applying Complexity in Real Life Organization Issues
link: A conversation between leader and worker using complexity
A number of managerial concepts seem deceptively easy and provocatively compelling. Re-engineering may have been one of these. But they are difficult to apply – easy to see until you move down to the human element and then the human element seems to take hold and prevent the results from being as promising as they seemed on paper. So it may be with complexity. Almost every management consulting activity is developing a complexity practice. And I certainly encourage this development. However when it comes down to the organization of complexity to the hierarchical organization it seems difficult. Even the seat of complexity, Santa Fe Institute, of which I am a part, finds it extremely difficult to apply the very principles which it espouses. I am attaching a little discussion about somebody trying to apply complexity to their organization. And I think you can see from this discussion, that it’s not as easy as it seems on the surface. No wonder organizations find it difficult to say that complexity works. We need to work on the implementation now, perhaps even more than the theory.
Need for A Complexity Interpretation of Oil Pricing Today
At first glance, the oil price situation would appeal to complexity applications for a profound understanding of what the possible solutions could be. Using linear thinking you can see the truckers blocking roads, they just think that you can just reduce taxes and that solves the situation. Other linear views are that you send politicians to Saudi Arabia, to say increase production at the wellhead. In the complex situation in which oil finds itself, these may be counterproductive moves. It may well be that after roughly a decade of economic recovery in the Western world, the only way to correct the oil situation is on the demand side. Quite likely Ford and Firestone, with their difficulties on SUVs, which might result in fewer SUV sales in the United States, may be doing more to correct it for oil than all other aspects. SUVs are big gas hogs. Taxes are generally considered to be a good thing for the long run availability of oil, because they defer driving and they defer the use of oil to other fuels so it may well be that reducing taxes is wrong. Now we also have, of course, the situation where Iraq is one of the oil producers substantially under-producing right now so politically removing the sanctions from Iraq which has not been suggested, could well improve the situation right away. And it’s not so much that the oil itself that would come from that source would move down in price but the anticipation, what Soros calls reflexivity, could actually do it. And Russia of course has a great reserve, both in the Caspian Sea area and in Siberia, that could be brought on line – not for now, but it would encourage the current producers to produce more because they would anticipate greater competition a decade from now, and pipelines, and weather in the Northeast. In other words, this is a complex feedback situation. It is an ideal situation for complexity thinking to apply forward testing, model building, scenario building, to come out with solutions that could be used to understand the problem. I do hope that some of the complexity theorists will try to put their minds to this and give us some complexity insights that will help us understand the problem.
Russian Truth
link: article from The Independent
Truth in Russia is almost nonexistent. In fact it is so rare that it’s not even discussed a great deal as to whether or not it’s desirable. As the country makes its change to regain pride, one of the thing that it’s sacrificing is press freedom and the expectation that truth is part of a free functioning network system. I’m attaching a link on the latest bizarre story connected to the submarine disaster in the Barents Sea, and whether or not this story is correct, or whether or not the stories in Chechnya are correct, or the economic figures, it makes little difference. The country is moving rapidly to an authoritarian, central structure in which bureaucratic purity is much more important than truth. And therefore it cannot function, at least at a political level, on the basis of faulty information. In terms of the economy it may well function because it will resume a command-like structure on major decisions but a pre-market decision structure on the small decisions. But it’s going to be difficult without a new preservation of truth. And it looks like that is pretty well gone, now.
Technology Promotion
There’s a new and very challenging occupation evolving which I will call technology promotion. Now while it is difficult to raise financing for technology companies and while strategic alliances are the ways in which people are buying things for nothing, and are finding associations that are other than direct mergers and acquisitions, we’re having a new group of people who are comfortable with the new technology, who are skilled in negotiation, who understand the tenets of modern finance with its tracking stocks and derivatives and the like, who know enough about the legal aspects to be able to design contracts and deal directly with lawyers to get things to happen and to be able to operate, in most cases, cross-culturally and often cross countries and cross-globally. This is a very eclectic occupation, and you can see it in the entrepreneurs who are operating in Silicon Valley and elsewhere around the world but it is probably the most important function today being done in a number of the portal companies, in a number of the hardware companies, who are combining together. The latest example, the most dramatic example is perhaps the impending acquisition of a consulting business by Hewlett-Packard. We can see this in and out of the doors of almost every venture capitalist as well. Let’s look for it. Technology promotion and technology promoters, they’re very valuable today.
Composite Stock Quotes ... All Exchanges
I don’t know if you’ve noticed but there’s been a confirmation of some of the impressions I’ve had for quite a while. Newspapers in the country, some of them at least, are now starting to carry composite stock pages. That is all stocks listed in alphabetic sequence regardless of whether they’re listed on the New York, American or the Nasdaq quotation systems. They’re listed regardless of the market. So no wonder the New York Stock Exchange is having such a hard time finding somebody who’s interested in merging with it. And no wonder that other major companies on the Nasdaq exchange quotation system, are staying there and seeing themselves as part of a global system. It doesn’t make any difference which market you are quoted on, your market is going to be electronic anyway.
Oh yes, you may have wondered where I am, and yes, that’s a motorcycle behind me, but the friend also off my shoulder you can see is somebody with whom I discuss and get some ideas from time to time. So if you wonder what impressions I have and how I can hold these opinions, you can see, that’s the bear that I talk to.
New Media
At the same time that we’re having media convergence, combining the sources of information distribution together in new and interesting and unique ways, we’re also having fierce competition among these same entities. Newspapers are in the midst of a furious competition with Web sources even though some of the best associations such as in the New York Times, between its newspaper and its Web site. And in New York we now have what seems to be the ultimate form of competition, that is newspapers are being given away for free, the tabloids are fighting it out, the News and the Post are fighting it out, having free distribution following the Web pricing system. And newspapers around the country are having more color on their pages, new typeset, and integrating with feature magazines, having feature articles during the regular weekday issues. This is all to the good and the newspapers will continue to survive and thrive as they have in the face of competition from radio, television and almost everything else along the way. But meanwhile we must be aware that your today’s competitor can be tomorrow’s colleague or customer, compatriot and we have competition and cooperation existing across a network of competing services in the form of a very complex and very adaptive system. It suits the science.
Accidental Surplus
An accidental surplus is driving the presidential debate. Who would have imagined that there would have been a surplus if we had actually forecasted it. If the forecast had been accurate the surplus would have been spent before now. But since its there as an accident and since it’s dominating our discussion of the future, the presidential candidates are vying with one another as to how they would deal with it. Gore would use it to solve almost every problem, at least the domestic problems, and Bush, at least would give it back to the people who are paying the most of it and that is the top one percent of taxpayers whose incomes have already doubled in the last decade while everybody else’s has remained comparatively flat. Yes, the surplus is dominating the debate over issues.
It has not however brought into focus the foreign issues. Bush says he would repudiate a treaty that is now inconvenient for the United States thereby setting off a firestorm in terms of international relations. And Gore claims that he would continue to have America be a dominant world power although he’s not terribly specific as to what new initiatives that involves. Yes, and nobody even tackles Social Security as being potentially broke although it remains as a fully obligated function of the United States government. You can’t have a surplus and a broke Social Security at the same time. Augmented accounting combines the two. So, we’re hearing hocus pocus accounting. It’s too bad, there are lots of issues worth talking about but the accidental surplus is driving most of them and we’re also coming up, I fear, with accidental solutions.
Intervention
Two major interventions are taking place this week and much is expected of both of them. The G-7 nations are intervening in a cooperative way to prop up the euro which has fallen by 30 percent in the last year and a half. And the euro is undermining the political structure that is expected for the European Union unless it recovers. And so finance ministers decided at their meeting to engage in an intervention. The other intervention that is taking place is in the United States where the administration has opened up a little bit, 30 million barrels, about one and a half days’ supply, for the nation, from the strategic oil reserves. This intervention is also accompanied by a great deal of fanfare and is expected to work.
However, let us remember that the record of interventions, like the record of and boycotts and sanctions is extremely poor. It is extremely difficult for governments to move against the huge amount of private market forces. Intervention on its own is only useful as a signal to indicate unhappiness but rather it rarely changes things because of the nature of the intervention alone. I’m still looking for a complexity solution that is proposed to the beastly oil problem but we would throw the euro in as well. The euro problem probably could be solved if the euro nations themselves would keep their reserves in euros as a denomination rather than in dollars, but that’s a different issue. But don’t expect intervention to work but rather expect it as a signal, and a signal only.
Forecasting Backwards
Most market forecasts are linear, starting from the economic, political or financial ingredients and then forecasting forward to the conditions that would be expected to fit the forecasted underlying variables. But really, I think this is not terribly useful in many circumstances. Instead it is sometimes better to take the market as a given and say what are the conditions that would support the market variables that we see, and go back to those underlying conditions, then go back to the markets and go back and forth in a ping-pong fashion, fitting the landscape together in a way that seems to make the most sense. Actually what makes the most sense is to do this in a scenario form, and doing it several times to come up with a variety of alternatives and then examine those alternatives.
Without going through the complication, let me suggest that there are some market conditions that lead us to some strange conclusions. One is the very sharp fall, and unexpected by me, in the euro, about 30 % in year and a half. I thought the euro would be a second major reserve currency to the dollar and highly desirable because people didn’t want the dollar. But the euro has fallen in favor of the dollar and I think this is only true because we are looking at a condition of future isolationism and that people will want to have their reserve currency in a market that is the largest and most unified market even if it’s high priced and that’s the United States. The United States has become a haven of flight capital, in fact, capital of the world. So the euro argues for not globalization but rather separate countries and the United States benefits from that. Similarly we’re seeing in the United States political climate a very strong urge to isolationism although we’re giving lip service to global prospects, it’s not really true because there are no strategies for that. I could go on but if you ping-pong it back and forth, globalization looks like it is under attack or retreat. And the market conditions would seem to support that conclusion.
Yin-Yang Management Style
Management fads tend to move in a linear fashion from one to another. It can be optimized strategy, it can be then to re-engineering, it can be then to scenario playing and a new one seems to be emerging now on organic practices. In other words mimicking in an organization the behavior of living organisms.
But however it is let me suggest a new management strategy to be considered, and that is the yin-yang management strategy. In a sense it might be possible to have two entirely different management precepts operating at the same time. One can be essentially hierarchical, that is, the normal top to bottom, traditional organization although one that would have more fluidity to it than would otherwise be the case, somewhat in the nature of a topsy-turvy place that is continuously being reorganized rather like Citigroup has traditionally been for the last several decades. And with performance measurements and committees and continuously cycling around but more in a vertical pattern. The other pattern could cut across that and be part of the new networked organization, very flat, very horizontal, not many layers of management, and reporting is largely done through centralized knowledge databases which everybody has access to, and customers and suppliers are included just as much as part of the organization as employees and officers. In other words everybody is a stakeholder in this horizontal organization. And you could have both operating at exactly the same time. And there would be places of intersection where decisions would be made and tension would be produced but the tension would produce better decisions. I think that the yin-yang management style could be one that could be tried today because we have the tools of centralizing databases and we have the traditions of a hierarchical management structure. Yin-yang works in many things. It might work in management too.
New Work
As you can probably tell I’m not in a work place but yet I want to talk about work, because when you leave work today you have a different identification than normally. Normally we think of work as defined by company identification, “I work for IBM” or “I live in Scarsdale.” But no longer is that true. Today we are defining ourselves according to membership in a network and when you’re out of the network, as you are when you travel, you carry a Swiss army knife with you prepared to rewire the telephone system of whatever room you’re in at the detriment of the hotel of course. However, you cannot stand not being connected with your network. And that’s because your work is 24/7. It’s always being done. Yes, it’s productive because there’s no redundancy. You’re a member of several networks but only so long as you can get connected. And you have to be connected wherever you are. Yes, this is the new work, today.
Geology of Lake Champlain, Bob Beach, Owner of Basin Harbor Club, Vt., USA
Bob Beach:
The lake is about a mile and a quarter wide here and
swells up to about 12 miles up by Burlington. This is one of the deeper sections
of the lake averaging about 300 feet through the middle here and at the deepest
point is up by Split Rock which is about 400 feet. The lake was formed about 500
million years ago and at that time this was all subtropical and was located
about where Florida is today. And through tectonic plate rotation it was pushed
and at that time the sea water was about 300 feet higher than it is today and
the mountain peaks were about 10,000 feet tall at the time. First a glacier came
through about 100,000 years ago followed by a second one 10,000 years ago and
these glaciers had a shearing effect on the mountain peaks. The tectonic plate
motion had pushed this region to its current location and these glaciers sheared
the tops of these 10,000 foot peaks off, to their current height. Mount Marcy in
New York, the highest at about 5600 feet. The highest in Vermont is Mount
Mansfield which you can barely make out on the horizon just off to the right
side of the bow that twin hooked mountain, that’s Mount Mansfield and that’s
about 4350 feet, the highest in Vermont. That small mountain that you see off to
the right is called Mount Philo, that’s the first State Park in Vermont and
they found a whale carcass left over from when this was all under salt water,
when they were putting the railroad through in 1850. The melt from the glacier
and the already receding sea water in this area is what formed the fresh water
body of Lake Champlain.