President Biden Visits Michigan This Week in Support of Infrastructure Plan (Tuesday 10-25-21)

The Mystical Swamp Thing
Thinking beyond the bog.

We have visitors coming to Michigan as President Biden seeks to ramp up support for the Infrastructure portion of the bill. From what I have been reading the bill is bogged down into soupy political swamp where swamp monsters drag legislation under to never be seen from again. (Yikes! I apologies for the metaphors.😬) Ok...what I'm trying to say is that there are different perspectives and people advocating for various aspects of the bill, connecting bills together by making one contingent on the other, and lots of political maneuvering that bogs down legislation that might be helpful; or not (People have to choose what they believe.). 

However.....what is the long term objective and perhaps focusing on that may make a difference. Thomas Paine the Founding Father of the United States once said "It is the direction and not the magnitude which is to be taken into consideration". Thomas was a philosopher who wrote Common Sense which advocated for common purpose, strong government, freedom (leading to the Bill of Rights and Constitution), and ruling for the people and by the people.  

Thomas Paine hoped people wouldn't get derailed by being bogged down into the swamp of political abstraction, "The Almighty hath implanted in us these unextinguishable feelings for good and wise purposes,” he continues... “They are the guardians of his image in our hearts.” In other words, we must check in with ourselves and say, "Am I voting my conscious?" As long as our politicians can vote their conscious with a national vision/purpose in mind they will resolve major national issues wisely through Collective Intelligence. Yet that is a choice..... (See Biggest US Threats).

Sometimes I think its important to keep our eye on the big picture and focus on where we want to be as a nation in a couple of decades. I have my vision and I suspect others have their visions (i.e. digital era and economic-social leadership.) Our choices we make today will likely impact our opportunities tomorrow (Notice I didn't say which choices...while I have my preferences our law makers are making a collective choice based upon their preferences as well.). 

The Harvard Blog posted an article 'Understanding Different Negotiation Styles' by Katie Shonk that discusses how Cooperators Styles are more likely to create value for both sides (Shonk, 2021, para 4):

1. Individualists seek to maximize their own outcomes with little regard for their counterparts’ outcomes. About half of U.S. negotiators have an individualistic negotiating style, according to Weingart.
2. Cooperators, about 25% to 35% of U.S. negotiators, strive to maximize both their own and other parties’ outcomes and to see that resources are divided fairly.
3. Competitives, comprising about 5% to 10% of U.S. negotiators, seek to get a better deal than their “opponent.” They behave in a self-serving manner and often lack the trust needed to solve problems jointly.
4. Altruists, who are quite rare, put their counterpart’s needs and wants above their own.

"Teamwork is the ability to work together
 toward a common vision. The ability
to direct individual accomplishments
toward organizational objectives.
It is the fuel that allows common people to
attain uncommon results."
--Andrew Carnegie

You can also read the Infrastructure Investment and Jobs Act and Reconciliation Bill in their full. I have a longer sort of discussion on Infrastructure and Reconciliation Bill (Government and Budgeting) There is an impression that some lawmakers might support the bi-partisan infrastructure bills but that they are concerned about the amount of allocation in the bill to actual infrastructure (This is sometimes why the design of the bill and "add ons" can help or hinder certain bills. This isn't against these bills necessary because almost all the legislation sort of combines different elements. I wonder if writing bills more succinct and focused would lead to higher decision making/focused effort among both parties? Its kind of like these are the things we need to get done and these are the things that we can discuss as a strategic course. i.e. for example if your house has a broken window you know you have to get it fixed asap while we might be able to discuss further the color of the carpet or how we want to remodel the bathroom. I know stupid example...it might only make sense to me but that is the first thing I can think of while drinking coffee.⛾ 😞)

Side note: I'm watching how things get done in Washington (I suspect a lot of people are watching.). I'm a conservative by nature and support robust discussion and understanding of different sides through divergent thinking (Convergent and Divergent Thinking) that with collective action leads to a more strategic choice. Developing my critical thinking skills to get a well rounded picture of the political landscape. (Notice I didn't say I was a critical thinker but I suspect its relative to everyone else in our subjective reality...nerd...🤓.🤷). The Foundation for Critical Thinking states, "Critical thinking...the awakening of the intellect to the study of itself."

To solve problems like this we must continuously question with a positive purpose and be open to the possibility of new ways to do things to find solutions as a whole bodied entity (Democrat, Republican and the majority of society that are not involved in politics and don't really have a say but are still the ultimate stakeholders.). Our ability to work together and solve problems is the banner that will rally around our core principles to spearhead positive change. We may use something like the  Socratic Method to help in examining phenomenon like political actions in what looks like a major cultural shift into an era of rapid change and a possible American Renaissance (and with luck not a decline....but again depends on choices.)......

 "I went to the artisans, for I was conscious that I knew nothing at all, as I may say, and I was sure that they knew many fine things of which I was ignorant, and in this they certainly were wiser than I was. But I observed that even the good artisans fell into the same error as the poets; because they were good workmen they thought they knew all sorts of high matters, and this defect in them overshadowed their wisdom."  Socrates

Shonk, K, (August 10, 2021) Understanding Different Negotiation Styles. Harvard Business Blog, Para 4. Retrieved October 4th, 2021. https://www.pon.harvard.edu/daily/negotiation-skills-daily/understanding-different-negotiation-styles/

The impact climate change has on The Great Lakes

 The weather in the U.P. is already extreme and it can move from -30 F to +40 degrees in a matter of a few days (why I busted a house water pipe a few years ago.). Developing technology to reduce negative climate impact is beneficial and helpful for long term ecological sustainability. 

Chinese Stats Come Out-Competitive Position with U.S.

New statistics released from the The National Bureau of Chinese Statistics  on 09-29-2021 (See China Stats) opens up a couple of questions on global positioning. What we can gather from these statistics is that China is still expecting to expand its manufacturing base but is also seeks to draw in as much innovative capital as possible. The U.S. is struggling in its decision making abilities but can use this time to strategically place itself to enhance its slowly declining manufacturing base and revamp to double down on its innovative capacity by moving beyond prior disjointed paradigms/strategies (See Two Biggest Threats. Notice that the international market/China is not as big as a threat as the choices we make to stay competitive.). 

You can tell from some of the charts that China's economy is focused on material extraction, manufacturing, food production, communications, chemicals/materials, transportation, motor vehicles, machinery, and energy sources.  They are an economy that is heavily focused on manufacturing and cheaper products that come from extraction of resources (See China Tech and Manufacture Push). 

Competition in Doctors, Patents and 
Discoveries

What we might want to do is then go look at how "building" or "expansionist" societies are structured in the literature. Such societies uses resources to build infrastructure and continuously develop new rail roads, ports, material extraction, etc.. through partnerships with other nations. Likewise they are treating their digital structure like hard infrastructure and are not integrating into their economy well. They still seek new technologies and are actively encouraging intellectual companies and R&D to move to China. (See China US. Intellectual Competition.)

China also has been trying to integrate with international partners but the business community and economies are starting to question those economic arrangements. Some of this might be from overly aggressive pro-Chinese behaviors that have raised the stature of trade disputes and created shifts in China's international relationships. This isn't surmountable but brand reputation is important (This is why the U.S. must build its international brand as the "business" place where essential American values are upheld.) You can read McKinsey GlobalInstitute (MGI) China-World Exposure 2019 Report. 

Thoughts on U.S. Competitive Position

China is trying to build innovation to match their manufacturing while the U.S. is in a good position to enhance its existing innovative capital and refocus on its manufacturing based (The scenario will change in 10 years because a new digital economy is emerging and that will likely integrate technology with manufacturing for advanced results. If you don't build it now...we might not have the same strategic options in the future. )

Thus, strategically its going to make sense for the U.S. to refocus on the enhancement of innovation (i.e. education reform, clusters, communication networks, R&D, University-Industry partnerships, arts, etc...), social/stability structures (education again, social expectations, judicial/law integrity, performances-reward capitalism, unity, efficient governance, critical thinking leaders, bi-partisanship, universal values, tax reform, budgets, etc...) while enhancing the manufacturing base (infrastructure, training/education, resource development, partnerships-treaties, investments/FDI, investments/FDI, supply chains, etc...). 

Side note. This is part of an environmental scan of some innovative cluster theory work in meeting emerging challenges.

AI: The Future of Work and Economic Prosperity in the Age of Automation

Artificial Intelligence (AI) is a major movement in the high tech industries bringing with it great opportunities but also a few pot holes enthusiasts should consider for the long-term health of society. Ponder a discussion by Professor Daron Acemoglu at the Detroit Economic Club  on concepts as they relate to AI economics and its impact on the labor force. Some of it will be good and some of it will be more challenging.

Dr. Acemoglu indicates that there are risks to AI in that when we use such technology to supplant human abilities versus enhance human activity, we run the risk of societal strain and a decline in democracy. There is an natural overreach when it comes to technology and as companies overexert technology they may not consider the human element and how it keeps a society and economy together into a single framework. Finding a happy balance is beneficial for labor equilibrium.

What I can say is that looking at his angle/vantage point he has a pretty good point that technology development shouldn't be blind development. It must have a thoughtful direction and purpose. This is why I lean in the direction of AI for things like spaceflight, deep diving, and other unhospitable environments that further enhance reach as well as the capacity to work remotely on important projects. At the same time I lean closer to the development of wearable technology that allows for the enhancement versus supplanting human abilities in the environment and the workforce (In turn keeping labor force in tact and adjusting.). 

We are not smart enough to fully understand the way humans have adapted and changed to their environment by implementing tool adaptations (We just think we know the answers but perhaps we are still just putting sticks in holes to get the ants out. However, this level of technology will have a profound way on which our abilities adjust to its environment. Delving into big data and moving into the minute workings of the brain will open new doors. As we apply those tools to our environment we will also change that environment i.e. pollution management and exploring other planets...such as a space station on Mars and civilian space flight. Our brains will also adjust to rapid information and to VR, AI, and other advanced technologies creating neural density. Keeping in mind running the risk of having too narrow of skill development through technological development bias. Meaning we raise in certain types of technologies, that come from a technology development line, but then don't expose them enough to other activities like swimming, baseball, throwing things, dance, etc... Variety in activities will be very important. On and off line. See Red Queen Hypothesis. ok ok sorry all unsubstantiated hypothetical hyperbole at the moment. 🤓🤣). That is precisely what robotics and AI should be thought of; tool enhancements. We humans must strive against our environment. As soon as we stop thriving because technology has supplanted our internal biological needs then we begin to not adapt down our normal trajectory. Our environmental pressures become limited and we decline as a species from a socio-biological perspective. Thus wearable tech allows us to use technology while still tapping into the inner urges of human development that moves beyond the complacency that tech can bring. 

(At this point, we are really talking about hypotheticals but we are fairly sure the next 20 years will see much more adaptation and cause new ways of living and thinking. A type of renaissance administrators and leaders should think about in capitalizing on to make the U.S. the first advanced digital nation with the economic and manufacturing benefits that come with that. See Societal Platforms Just an idea. 🤷)

Description: "The DEC hosted Daron Acemoglu, Institute Professor of Economics of Massachusetts Institute of Technology, on Wednesday, September 29, in an exclusive discussion. The conversation focused on “AI: The Future of Work and Economic Prosperity in the Age of Automation” and included questions from the audience."

The Importance of Checking Firefighter Hoses-A Geyser Emerges!

Hose spaghetti 

When time is of the essence it can't be wasted replacing busted hoses while a house is in the midst burning. Regularly conducting maintenance is important to ensure that when fire calls occur all of the equipment is going to work as planned. While its not an exciting job to continuously conduct inspections, cleaning and maintenance it certainly is 90% of what allows firefighters to save buildings, help people, and get everyone back to their normal lives. 

In this case we rolled out all of the hoses that were on the trucks and put some pressure in them to test for leaks. We inspected all of the hose parts and replaced the gasket when we found some water escaping. After all the holes appeared functioning well we ramped up the PSI and found a geyser (hose rupture)! Meaning this hose was weak and we can replace there then wait until we are at the fire. 

The U.S. Fire Administration has a number of different guides on equipment, maintenance, NIS, etc... on their 'Fire Department Operations, Management and Safety' page. 

You can also read how to conduct hose testing to ensure that the equipment is safe and maintains its safety throughout its use....until it needs to be retired. HERE

Escanaba Township Fire Department is run by a dedicated crew of firefighters that not only donate their time but also hearts to helping the community. They are out there every week training (likely training more than many other departments) and support nearly all the other communities around them with equipment and training. Firefighting is a community. Esc. Twp. Fire Dept. are in need of a new grass fire truck, air bottles for air packs, and of course motivated volunteers! Check out their Facebook page!

Consumer Spending Rises in August 2021-Spending and Demand

Consumer spending rose in August and that is powering parts of the economy forward. I'm not going into a lot of depth because you can read the report below and the description. I often like the explanations more. You can kind of see income rose and deflation may be leveling off...maybe (Remember that a couple of dots don't always indicate a trend.). There are likely lots of reasons why that is happening of which some is related to shortage in certain supplies and products.

"Personal income increased$35.5 billion (0.2 percent) in August according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased$18.9 billion (0.1 percent) and personal consumption expenditures (PCE) increased$130.5 billion (0.8 percent)." (See Below)

You can get a list of how that increased spending is divided HERE. You can see demand for motor vehicle  and parts rising as well as for other nondurable goods. You may also find that people are simply spending more and that is going to create greater incentives to solve supply chain issues and in turn encourage home based manufacturing to meet those demands.  

October 1st, 2021 BEA Consumer Spending by on Scribd

Flux Power Holdings Inc (FLUX) Does a Stock Nose Dive Make Sense (Mapping Cluster Performance Example)?

On September 22nd/23rd there was a fairly large sell off that led to a significant price drop that has continued to drop; at least until yesterday. That comes on the heels of a positive revenue financial release (See below). One must wonder if someone dumped a bunch of stock at once to take advantage of the little bleep and then push the stock market down.  Why is it continuing to decline and when might it end? What I'm looking for is how a company like this (not saying this company) could work in tandem with other companies to reach innovative milestones.

Q4’21 revenue grew 33% to $8.3M compared to Q4’20 revenue of $6.3M
FY’21 revenue increased 56% to $26.3M vs FY’20 revenue of $16.8M
Q4’21 gross margin increased to 21.0% compared to 17.5% in Q4’20
FY’21 gross margin improved to 22.1% vs FY’20 gross margin of 13.0%

The report also went into discussion on how they paid off of their debts and converted $5.2 million debt to equity. Flux also added more institutional investors as well as some interesting customers under "autonomous electric shuttle vehicles", a large meat processor, paper product, and chemicals manufacturer. Still no real indicators of why? (Lets not get frustrated....if it was all that easy we would all be rich. LOL)

Refreshing my memory I went out and reviewed literature on ways to evaluate stocks and came across the article, 'How to Research Stocks' by Mathew Frankel. Pretty good stuff. You may also want to read about 'Angel Investing: What Experienced Investors Wish They Knew When They Started' by Miruna Girtu. My goal is to sort of look at evaluating stocks and how investors might infuse capital into clustered companies when they work in conjunction with other companies up and down the innovative supply chain to create more wealth from everyone (Don't forget that there are many transactions that lead to a business success. Having more in one place to create something new might have high value as its adapted throughout the rest of the manufacturing-supply chain. What I'm saying is that companies can work competively in tandem with other companies in their own best interest to create more solutions for society while at the same time maximizing ROI. Laser focused capitalism...See Theory of Firm.). 

(Note: I'm working on some cluster research and I want to determine how to not only select companies for growth to add to a cluster to achieve innovative development but also how to map that cluster's internal development through transactions and company financial information that leads to wealth of participating companies. Transactional Subfactor DC. We select companies by their existing strengths and put them with other companies to solve problems thereby increasing both innovation and wealth for interested stakeholders. i.e. making being involved in a cluster as lucrative for investors. I'm just playing around with the idea but you can read MultiClusters in Delta County Michigan Model Example, SME Venture Capitalism DC, DC Market Emergence, DC R&D Firms, HQ Attract DC, Start Up Firms DC)

The author basically breaks down market research into fundamental (long-term stock fundamentals) and technical analysis (short term stock fluctuations.) What we also find is that there are a couple of suggestions of what to look for in terms of the numbers (I'm applying Flux to a couple of them.):

EBITDA Margin

-50.29%

 Generally means low cash flow.

Net Profit Margin

-48.72%

Generally means its not profitable. 

Return on Inves. Capital

-182.11%

Generally means investment capital is not returned. 

Ok ok...it looks terrible but is that the whole story?

What we find from the September 27th Earnings Call is that they are scaling up for bigger clients and some of the expenses are related to increasing capacity. When we delve into that further we can see the company is investing in its capacity, has a few patents and would like to offer a larger version of lithium battery packs to ports of entry (i.e. hard infrastructure and warehousing). Some of the batteries will be used in autonomous vehicles/robotics thereby likely developing technologies interested in by auto, military, manufacturing, and aerospace.(This is just batteries but you can see my point.). So the numbers above may not be fully accurate and when the stock dumped it seemed to have dumped further on animal spirits (No idea...want to be a fly on the wall.). 

Now what? 

Well we find that the company is a start up since 2009 and has established itself in parts of the industry. It is within a growing trend and many of their products are likely to gain more attention. Revenue is increasing along with expenses which indicates a process of development. I bought my at $7.5, $6.3 and $5.9 and the price is currently $5.08 meaning I'm 19.33% down. I guess I'm no stock guru.....but lets wait a minute and see what will happen. There are cash flow issues but a solid base so might be ripe for institutional investment.  I didn't buy much, just enough to watch, and want to see if there is a bottom and what behaviors occur thereafter. I think the company has some strong fundamentals and is in the right market but might be in the process of focusing on a bigger market leading to miscued imperfect numbers. Its average stock price is about $5 ish over the past few years which is a type of mental benchmark for solvent bottom. Analysts say one for moderate buy and the other for negative. So its sort of in the right market but in the wishy wash place (Do not listen to me on stocks....I'm actually looking for verification of another idea for pack investing clusters.). 

Description from Flux 

Flux Power designs, develops, manufactures, and sells advanced rechargeable lithium-ion energy storage solutions for lift trucks and other industrial equipment including airport ground support equipment (GSE), energy storage for solar applications, and industrial robotic applications. Flux Power’s LiFT Packs, including the proprietary battery management system (BMS), provide customers with a better performing, more environmentally friendly, and lower total cost alternative, in many instances, to traditional lead acid and propane-based solutions.

Sidenote: If you watch various stock/financial points within a structure can you see how that structure is changing? ....hypothetically you could map the structure and the supply chain to see which areas are growing and which areas are shrinking leading to better government fiscal management as well as increasingly accurate policy making. Need semiconductors or Autonomous military/civilian vehicles?  put together the R&D people of necessary companies and let them focus on a shared projects, create patents, and innovate their sectors. A cluster can be created around anything as long as the location, resources, infrastructure, labor, etc... are available and/or be developed. Delta County Michigan has some advantages as a potential start-up innovation location. Furthermore in a cluster system if you were to map the stock, transactions, patents, people movements, etc.. could you have a better sense of how to optimize a cluster for maximum innovative performance (as well as scalability to other locations). That would require companies moving into a cluster to be open to cluster research and access to related documents.