July 29, 2014

A new old video with Peter Lynch

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The number of videos available online starring Peter Lynch was exactly two until May 1, 2014, when someone on YouTube uploaded "Peter Lynch on Investing in the U.S. Economy" from 1994. If you've never heard of him before, what you need to know is that he, in 1977, took over the Fidelity Magellan Fund. 

The number of stocks in the Magellan Fund was 40 when Peter Lynch took over. The number of stocks soon increased to 1,400. 200 companies represented 66 percent of the portfolio. The Magellan Fund became the largest mutual fund in history and it had over a million shareholders. The sad thing is that many shareholders didn't make money by owning the fund since they often sold it at the bottom of the market. In total, Peter Lynch bought 15,000 stocks and analyzed 150,000 companies. To help him, he had Fidelity's research apartment, but he still made all decisions himself. In 1990, Peter Lynch left the Magellan Fund. The Fund had increased with 29 percent each year.

July 27, 2014

Peak Oil - Are we there yet?

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It's time to update our charts to see if the world is running out of oil. If you would like to see the old charts, you can find them here: Oil Since 1859

But what's Peak Oil? The basic idea behind Peal Oil is that the world is running out of oil. The geoscientist Marion King Hubbert, who used to work for the petroleum company Shell, developed a curve. Hubbert's curve says that for any given geographical area – from an individual oil-producing region to the planet as a whole – the petroleum production follows a bell-shaped curve. The top of the curve is the important peak. After the peak has passed, the supply of oil will decrease.

The current amount of oil available was estimated to 1 258 billion barrels. As the world consumed 87 million barrels per day in 2010, this oil will last for about 40 years. The co-founder of the electric car company Tesla Motors, Elon Musk, expects this peak will happen around year 2020 and the world will finally run out of oil in 2050. That's why he's building electric cars.

This graph shows the global oil production and that we can see no signs of Peak Oil as the production still grows.


The next graph shows the data but for US only. We can see that the oil production in US peaked in the 1960s, but has begun to increase again because of fracking. We can also see that US is still dependent on importing oil - 2 817 325 000 barrels per year. 


Something else that has happened since last year is the rise of a number of conflicts in and with the large oil exporters. According to Wikipedia, the largest oil exporters are:
  1. Saudi Arabia
  2. Russia
  3. United Arab Emirates
  4. Norway
  5. Iraq

What has happened with these countries since last year? Saudi Arabia is currently not involved in any conflicts, but the new "terror" organization ISIS has said they will conquer the entire Middle East, including Saudi Arabia. Russia's foreign policy is more aggressive (Ukraine), and the "west" has fought back by a number of sanctions. Today, there was a rumor that Russia would fight back against these sanctions by seizing oil assets owned by companies in the west, PB and Shell. United Arab Emirates is on the same map that shows what countries ISIS will conquer. Norway's oil production has declined for a few years, and the country has issued a terror alert. What happens if these terrorists targets the oil industry? Large parts of Iraq is currently conquered by ISIS. But ISIS is exporting oil, but the question is if the rest of the world will buy this oil?  

So No! Peak Oil has not happened - but the supply of oil may still fall. 

July 24, 2014

Why Tesla sells so many electric cars

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Let's say that you would like to buy an electric car. What technical specifications would you be interested in when you are looking for one? I would like to know the speed, the range, the price, and how many passengers it can take. If you head to Tesla Motors website and would like to find out these specifications, it will be easy to find them. See for yourself here: teslamotors.com/models

But other car manufacturers are not as good at telling you these basic facts. One other electric car is Fiat 500e. This is a screenshot from their website:


So why should we buy the Fiat 500e? Because the "EPA Estimated Fuel Consumption Rate of 29 Kilowatt Hours (kWh) Per 100 Miles+," or the "147 LB-FT (200 Nm) of Torque and 111-HP (83 kW) Electric-Drive Motor." Why do we need to know these facts? There's not a single line about the speed or the range! So it's not strange Fiat sold 645 cars in 2013 while Tesla sold more than 20 000 cars. Other electric car manufacturers are a little bit better than Fiat, but you still have spend time to find the information you need.  

May 14, 2014

An interview with Jackson Palmer

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Jackson Palmer (his Twitter) is working at Adobe and has created the new crypto-currency Dogecoin - a currency very similar to Bitcoin. The interviewer Kevin Rose argued in another interview that Dogecoin might become bigger than Bitcoin because of the fast growth.


Lessons learned
  • Dogecoin began as a joke on Twitter. The founders made a simple website, took someone else's code, and thought it would fail within days. But people began to use it as the idea spread through the Internet.   

More articles in the same series: Lessons learned from the Foundation interviews

March 28, 2014

Mind-blowing facts about Africa

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As the title says, this article will cover mind-blowing facts about Africa. If you are interested in learning about mind-blowing facts about China, click here.

  • Over 1000 languages are spoken in Africa (40 of which have more than one million speakers)
  • Africa's collective GDP is $1.6 trillion, roughly equal to that of Brazil or Russia. South Africa and Nigeria are largest and contribute with 50% of Africa's total GDP
  • Seven of the world's ten fastest growing economies are projected to be in Africa between 2011 and 2015
  • Excluding the bottom 20% of Africa countries, Africa's average level of corruption is approximately equal to the average level of corruption in the BRIC countries
  • Africa has 10% of the world's oil reserves, 40% of its gold, 80-90% of its chromium and platinum group metals, 60% of the world's uncultivated arable land. But commodities is just 16% of GDP
  • 42 African countries have qualified for the debt relief plans initiated by the World Bank and IMF in 1999
  • Unemployed workers in Portugal have begun to move to the former Portuguese colonies Angola and Mozambique
  • High optimism about the future. 2/3 believes their life will improve in the coming five years
  • Number of African children who go to school grew with 50% between 2000 and 2008. 80 percent in Tanzania can read and write. 75% of those who finished elementary school also get a higher education
  • 25 of 53 countries are considered to be democracies and 22 have held recognized elections
  • Number of coups have decreased by 50%. If a coup occurs, it will be solved faster than ever before due to EU and the African Union
  • 19 countries south of Sahara have their own stock market
  • 300 million Africans are considered to be part of the global middle class (can spend $10-$100 per day)
  • Several Africans have 2-3 mobile phones because it's cheaper to call to the same operator
  • 20% have a bank account, but 70% have a mobile phone, so Africans have no need for a bank account. 70% of the people in Kenya are using mobile bank services (such as M-Pesa) - the same number in China is 3% and 5% in India. If you need cash, there are trucks that drive around to the villages with cash machines on their back. It was estimated that in 2015, 350 million will have access to mobile bank services - the same number in 2007 was almost 0%
  • The reason why mobile phones are more popular that computers is because of the low reliability of electricity. Before an election in Nigeria, the number one request was more reliable electricity
  • If you pay $2 per year, you will get a health insurance in Rwanda. The goal in Rwanda is that at least 50% will give birth in a health clinic. Birth control bills are included in this health insurance, so the number of children have decreased
  • Poverty in Africa decreases by 1% per year
  • Joyce Banda, the President of Malawi since 2012, realized that her predecessor had 45 limousines, 7 bikes, and several private jets. She sold everything except 4 cars and 1 private jet, and she reduced her salary by 30 percent
  • A refugee, who had fled from Liberia when she was young and now returned, explained how Liberia now was like a white canvas. Of the 1.1 million who between 2000 and 2007 emigrated from Ghana, only 153,000 didn't move back to the country
  • 85% of all Africans have never flown in an airplane and 60% work within the agricultural sector
  • 12% of all trades is between countries in Africa
  • China has invested $2 billion to establish an industrial zone outside of Addis Ababa, Ethiopia. Hualian Group, a Chinese retailer, will recruit 100,000 Ethiopians within the coming 10 years. They chose Ethiopia because of the low costs and supply of cattle for production of leather
  • Nigerians have begun to recruit craftsmen from Poland and Baltics to help them build buildings
  • It's common among Africans to argue that 50 years of aid from western countries has been a waste of money
  • African politicians and businessmen prefer to work with Chinese - not Europeans - because the Chinese begin immediately while Europeans "discuss for two years" before they begin. More than 1 million Chinese live in Africa. But China are not in Africa to just "steal" commodities - they have built roads, schools, railways, hospitals, and sun-powered traffic lights. China has more peacekeepers in Africa than any other country 
  • Members of the parliament in Nigeria have a higher salary than Barack Obama
  • Have begun to question female circumcision

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