The Speed of the Dark is Elizabeth Moon's science fiction book about autism. The science fiction parts of the book aren't very apparent. It's set in the future where autism can be cured in the womb, and follows Lou Arrendale, one of the last autistic people left. He's a high functioning autistic, and can live on his own, hold down a job doing pattern matching, and goes fencing. The novel is told mostly from his point of view.
The central conflict in the novel describes a new director for Lou's job, Crenshaw, who decides that all the extra amenities and facilities that Lou and his colleagues need to be able to work are perks that should be cut. To that end, he "encourages" Lou's colleagues to try out an experimental treatment for curing autism. Crenshaw is a stereotypical corporate villain, and is never fleshed out, which is the biggest flaw in an otherwise excellent novel. But his attack on Lou brings up several issues: if you could cure a deep psychological problem like autism, would it be desirable to do so. If someone has come to an accommodation with his condition, wouldn't the change be traumatic, and possibly be effectively eliminating that person's former self? The novel explores these issues from Lou's perspective.
The best thing about this novel is it's use of the first person perspective to grant insight into how an autistic individual works. If you're a Silicon Valley engineer, reading this novel will give you a very strong sense in how similar many engineers are to an autistic person, and where the big differences are. Jeff Bezoes is quoted as saying, "I learn more from fiction than from non-fiction books," and this book is illustrative: it's more insightful than even autobiographical books like Born on a Blue Day. The treatment is extremely sympathetic, and extremely well written.
For some novelists, the central conflict's resolution would end the novel, but not Moon. She goes on to explore all the deeper issues involved in the novel, and the conversation Lou has with himself is a lot of fun. This is an excellent novel, and I can highly recommend it.
Friday, December 27, 2013
Thursday, December 26, 2013
Review: Tearaway
I'll come right out and say it: I dislike mario-style platform games. I don't think I'd ever finished a platform-style game in my life, not even when it was Braid, written by my college friend (now video game illuminary) Jonathan Blow. Part of it is that most of those games are too difficult (and yes, Braid definitely falls into that category), and geared towards hardcore gamers or kids with a lot of time on their hands with which to get good at anything.
Yet the metacritic scores for Tearaway are simply amazing, with review site after review site proclaiming that if you bought a Playstation Vita, you should play this game, as it is not a game that can be played on any other platform. Thus when the Playstation Network had a holiday sale at $18, I jumped on it. As of this writing, Amazon still has this game at $19.99, but it is out of stock and could take a while to ship. It'd be worth the wait though.
The conceit of the game is that you're controlling a paper message with an envelop making it's way through a world made out of paper from kindergarten arts and crafts projects to you, the player. Everything in the world you wander through is made out of papers, from trees to waterfalls. The rendering is very well done, and has a very natural feel to it. I was never any good at those arts and crafts projects when I was small, but I still enjoyed the visual look and graphic design behind this game.
The word most frequently used to describe Tearaway is "Charming." Despite my prejudice against platform games, Tearway certainly charmed me into playing it. For one thing, the game is not too frustratingly hard, segmenting itself so that you can make it as difficult or as easy as you like. By this I don't mean that the game has difficulty settings: it doesn't. The sidequests and optional goals are what let you adjust the difficulty: if it's too hard you can proceed on with the story without much loss. Even though I dislike platformers, I found myself playing some of the levels in a mode of flow, indicating that the game designers did a good job of making you feel competent despite the complexity of some of the inputs: the rear touch pad, motion sensors, shake sensors, joysticks, and buttons all come into play.
The game makes a great effort to include you in it's presentation. This ranges from displaying a photo of you in the sun "teletubbies-style", to breaking the fourth wall, directly talking to you, the player. In fact, the entire game revolves around delivering a message to you, the player. In particular, one of Iota's idle animation sequences is to turn to you and look adoringly. Early on, the game asks you to draw a picture of a crown using the touch screen, and then immediately uses it when displaying characters to you. The game also lets you shoot photographs in game, in addition to using both front and rear facing cameras to capture textures for in game use. This is a game that truly makes use of every facility on the Vita, and uses it with a facility that puts other games to shame.
A lot of the complaints that hardcore gamers have about the game is that it is too linear. I'm definitely not going to complain about that. You never have to guess as to what you have to do next, and the game provides plenty of hints if you get stuck. The story is fairly shallow, though I still found it exciting enough. Other criticisms are that the game is short, but I'm of the opinion that the game was just right: any longer and I might have the time or patience to play it through, and some of the mechanisms (especially the motion control) would overstay their welcome if they were used more liberally throughout the game.
There's some evidence that girls should play more video games for the cognitive benefits thereof. If you're the parent of a girl, Tearway would be an ideal introduction to video games and 3D-style spatial thinking. Not only is the game non violent and without many horror elements, throughout the game when you snap pictures of white objects you gain access to PDFs of constructibles so you can make replicas of game world object out of paper you run through a printer. Any kid that can be trusted with scissors to build these replicas would be a good candidate to play this game.
I wouldn't go so far as to say that this game was worth buying a Vita to play. For my taste, Golden Abyss is still a more fun game: I wanted more Golden Abyss at the end of that game, but I'm not sure I wanted Tearway to last longer. Nevertheless, the game is creative, innovative, and worth your time to play. I hope it succeeds and Media Molecule (the creators) are encouraged to make more games for the Vita. And if they do build more content for Tearway, I'd probably buy it and play it. Recommended.
Yet the metacritic scores for Tearaway are simply amazing, with review site after review site proclaiming that if you bought a Playstation Vita, you should play this game, as it is not a game that can be played on any other platform. Thus when the Playstation Network had a holiday sale at $18, I jumped on it. As of this writing, Amazon still has this game at $19.99, but it is out of stock and could take a while to ship. It'd be worth the wait though.
The conceit of the game is that you're controlling a paper message with an envelop making it's way through a world made out of paper from kindergarten arts and crafts projects to you, the player. Everything in the world you wander through is made out of papers, from trees to waterfalls. The rendering is very well done, and has a very natural feel to it. I was never any good at those arts and crafts projects when I was small, but I still enjoyed the visual look and graphic design behind this game.
The word most frequently used to describe Tearaway is "Charming." Despite my prejudice against platform games, Tearway certainly charmed me into playing it. For one thing, the game is not too frustratingly hard, segmenting itself so that you can make it as difficult or as easy as you like. By this I don't mean that the game has difficulty settings: it doesn't. The sidequests and optional goals are what let you adjust the difficulty: if it's too hard you can proceed on with the story without much loss. Even though I dislike platformers, I found myself playing some of the levels in a mode of flow, indicating that the game designers did a good job of making you feel competent despite the complexity of some of the inputs: the rear touch pad, motion sensors, shake sensors, joysticks, and buttons all come into play.
The game makes a great effort to include you in it's presentation. This ranges from displaying a photo of you in the sun "teletubbies-style", to breaking the fourth wall, directly talking to you, the player. In fact, the entire game revolves around delivering a message to you, the player. In particular, one of Iota's idle animation sequences is to turn to you and look adoringly. Early on, the game asks you to draw a picture of a crown using the touch screen, and then immediately uses it when displaying characters to you. The game also lets you shoot photographs in game, in addition to using both front and rear facing cameras to capture textures for in game use. This is a game that truly makes use of every facility on the Vita, and uses it with a facility that puts other games to shame.
A lot of the complaints that hardcore gamers have about the game is that it is too linear. I'm definitely not going to complain about that. You never have to guess as to what you have to do next, and the game provides plenty of hints if you get stuck. The story is fairly shallow, though I still found it exciting enough. Other criticisms are that the game is short, but I'm of the opinion that the game was just right: any longer and I might have the time or patience to play it through, and some of the mechanisms (especially the motion control) would overstay their welcome if they were used more liberally throughout the game.
There's some evidence that girls should play more video games for the cognitive benefits thereof. If you're the parent of a girl, Tearway would be an ideal introduction to video games and 3D-style spatial thinking. Not only is the game non violent and without many horror elements, throughout the game when you snap pictures of white objects you gain access to PDFs of constructibles so you can make replicas of game world object out of paper you run through a printer. Any kid that can be trusted with scissors to build these replicas would be a good candidate to play this game.
I wouldn't go so far as to say that this game was worth buying a Vita to play. For my taste, Golden Abyss is still a more fun game: I wanted more Golden Abyss at the end of that game, but I'm not sure I wanted Tearway to last longer. Nevertheless, the game is creative, innovative, and worth your time to play. I hope it succeeds and Media Molecule (the creators) are encouraged to make more games for the Vita. And if they do build more content for Tearway, I'd probably buy it and play it. Recommended.
Tuesday, December 24, 2013
Review: The Everything Store
The Everything Store is a history of Amazon from inception to circa 2012. Of all the tech companies that affect our lives, Amazon is the least sexy to the business press. There's nothing more boring than retail, and it's easy to categorize Amazon as a simple retailer. The truth is, there's nothing simple about what Amazon does. I remember first ordering books over the internet from a bookstore that is now defunct. When I called them up to ask about my order, the woman said, "Oh, it's so nice to talk to you! So you're the guy who's been ordering these great books that I wished everyone would read." Further discussions led to my realization that she and her husband were basically doing all the shipping themselves, and were too overwhelmed with orders to do anything interesting with the website like setting up a review system, etc. When Amazon launched I ordered books from them instead (largely because of the large discounts they offered), I was impressed immediately by how complete their review system was.
Fast forward to just a few years ago, and it's astounding to see what Amazon has done with their razor-thing profit margins that Apple, Google, and Netflix would all sniff at. Amazon has dominated cloud services to the point where Google is an also ran with AppEngine and Google Compute Engine. Amazon has effectively outflanked Apple with the Kindle and continues to dominate ebooks even despite Apple's attempt to raise prices for consumers by entering the market. And I'm not a Netflix subscriber, but as an Amazon Prime customer, my son watches Blue's Clues and Curious George in addition to getting his diapers delivered by Amazon. My wife and I once calculated that the savings from buying diapers alone from Amazon as opposed to Babies R Us more than paid for Amazon Prime.
The book does a fantastic job of describing Jeff Bezo's background and how he came to start Amazon. We get interesting insight into several business decisions, including how Amazon negotiated to buy Diapers.com, and what happened back then. There's also some details about the launch of EC2 and S3, and Stone does a great job of debunking the myth that Amazon launched those cloud services because of excess capacity. And here's information I head from a former Amazon employee that's also in this book: that Amazon initially launched it's cloud services at a loss. "Fat Profits only attract competitors," is a classic Bezos quote.
Lest you think the book paints a rosy picture of Amazon, there's a lot of the ugly exposed as well, which is something that I don't see in books about Apple or Google, for instance. Stone does not shy away from the stories of burnout, the executive politics, mis-steps, and ruthless competition that Amazon imposed on others in the industry. It's quite clear that Amazon is willing to take deep losses in order to hurt competition, but that ruthlessness is tempered by one thing: Amazon's never willing to hurt the competition without also helping its customers, and Amazon is willing to work hard to understand its customers in a way that other successful companies don't.
All in all, this book is well balanced, and does not go overboard in worshiping Jeff Bezos or treating Amazon as a company free of blemishes. In a world filled with books written by sycophants such as Steve Levy, that's a rare thing and worth a read. Recommended.
Fast forward to just a few years ago, and it's astounding to see what Amazon has done with their razor-thing profit margins that Apple, Google, and Netflix would all sniff at. Amazon has dominated cloud services to the point where Google is an also ran with AppEngine and Google Compute Engine. Amazon has effectively outflanked Apple with the Kindle and continues to dominate ebooks even despite Apple's attempt to raise prices for consumers by entering the market. And I'm not a Netflix subscriber, but as an Amazon Prime customer, my son watches Blue's Clues and Curious George in addition to getting his diapers delivered by Amazon. My wife and I once calculated that the savings from buying diapers alone from Amazon as opposed to Babies R Us more than paid for Amazon Prime.
The book does a fantastic job of describing Jeff Bezo's background and how he came to start Amazon. We get interesting insight into several business decisions, including how Amazon negotiated to buy Diapers.com, and what happened back then. There's also some details about the launch of EC2 and S3, and Stone does a great job of debunking the myth that Amazon launched those cloud services because of excess capacity. And here's information I head from a former Amazon employee that's also in this book: that Amazon initially launched it's cloud services at a loss. "Fat Profits only attract competitors," is a classic Bezos quote.
Lest you think the book paints a rosy picture of Amazon, there's a lot of the ugly exposed as well, which is something that I don't see in books about Apple or Google, for instance. Stone does not shy away from the stories of burnout, the executive politics, mis-steps, and ruthless competition that Amazon imposed on others in the industry. It's quite clear that Amazon is willing to take deep losses in order to hurt competition, but that ruthlessness is tempered by one thing: Amazon's never willing to hurt the competition without also helping its customers, and Amazon is willing to work hard to understand its customers in a way that other successful companies don't.
All in all, this book is well balanced, and does not go overboard in worshiping Jeff Bezos or treating Amazon as a company free of blemishes. In a world filled with books written by sycophants such as Steve Levy, that's a rare thing and worth a read. Recommended.
Sunday, December 22, 2013
Long Term Care Insurance
Recently, we've had events that made me really glad that I bought long term care insurance for my parents a decade ago. While it's stressful to have any kind of health event at an advanced age, eliminating the financial worries that go with it is a relief no matter what.
This event caused me to look into long term care again, and the landscape is dramatically different from when I first purchased it more than a decade ago. Statistically, 60% of couples who reach age 65 together will need long term care for at least one of them. This makes the actuarial case for long term care insurance grim. When I first shopped for long term care, it was common to be able to buy unlimited benefits insurance. In other words, the insurance would keep paying for long term care indefinitely for as long as the insured needed it.
I modeled the cost of long term care insurance versus the payout at that time, and discovered that even at a high rate of return, if one of the insured needed long term care for more than a few years, the premiums were more than worth it. In addition to a high daily benefit, I also bought an inflation rider, which bumped up the benefit by 5% a year at a compounded rate. My concession to cost was to buy a high elimination period policy, since the point of insurance is to guard against the worst case scenario of needing long term care for years or even decades.
Well, what happened was that in turns out that those policies I bought were not sound: insurance companies lost money on them. It's not a surprise then, that over the last few years we've had offers from the insurance company to switch us to a limited benefit policy in exchange for a lower premium, and it is also impossible to buy similar long term care insurance today. I tried to get quotes, and the costs are in excess of what you would pay at a luxury senior living facility like Vi of Palo Alto.
Needless to say, long term care no longer makes financial sense for most couples: if you are poor, you'll depend on Medi-Cal if you live in California. If you're wealthy enough to cover the costs of say, Vi of San Diego, you might as well self-insure, since the cost of long term care insurance exceeds the cost of even the highest end nursing facility. There's only a narrow range of net-worth and health outcomes where the limited term long term care insurance benefits might make a difference as to whether your heirs get something out of your estate.
In any case, I suspect that given the numbers I'm seeing, it's unlikely that long term care insurance is worth the hassle. And if you have one of the unlimited term benefit policies that have a reasonable premium, you should do everything you can to keep it.
This event caused me to look into long term care again, and the landscape is dramatically different from when I first purchased it more than a decade ago. Statistically, 60% of couples who reach age 65 together will need long term care for at least one of them. This makes the actuarial case for long term care insurance grim. When I first shopped for long term care, it was common to be able to buy unlimited benefits insurance. In other words, the insurance would keep paying for long term care indefinitely for as long as the insured needed it.
I modeled the cost of long term care insurance versus the payout at that time, and discovered that even at a high rate of return, if one of the insured needed long term care for more than a few years, the premiums were more than worth it. In addition to a high daily benefit, I also bought an inflation rider, which bumped up the benefit by 5% a year at a compounded rate. My concession to cost was to buy a high elimination period policy, since the point of insurance is to guard against the worst case scenario of needing long term care for years or even decades.
Well, what happened was that in turns out that those policies I bought were not sound: insurance companies lost money on them. It's not a surprise then, that over the last few years we've had offers from the insurance company to switch us to a limited benefit policy in exchange for a lower premium, and it is also impossible to buy similar long term care insurance today. I tried to get quotes, and the costs are in excess of what you would pay at a luxury senior living facility like Vi of Palo Alto.
Needless to say, long term care no longer makes financial sense for most couples: if you are poor, you'll depend on Medi-Cal if you live in California. If you're wealthy enough to cover the costs of say, Vi of San Diego, you might as well self-insure, since the cost of long term care insurance exceeds the cost of even the highest end nursing facility. There's only a narrow range of net-worth and health outcomes where the limited term long term care insurance benefits might make a difference as to whether your heirs get something out of your estate.
In any case, I suspect that given the numbers I'm seeing, it's unlikely that long term care insurance is worth the hassle. And if you have one of the unlimited term benefit policies that have a reasonable premium, you should do everything you can to keep it.
Saturday, December 21, 2013
Review: Drake's Deception
After playing Golden Abyss on the Vita, I downloaded Drake's Deception to see how it felt on a big screen. It's a 40GB download (mostly because the download included support for 3D movies), so it took multiple tries before I succeeded but I wasn't in a hurry. If this is the new era of console gaming, there's no question that 500GB HDDs on the next generation of consoles will definitely not be sufficient.
First of all, the game is gorgeous. I don't even mean compared to the Vita. Halfway through the game I liked it so much that I picked up the Uncharted Dual Pack on Amazon. I took a sneak peak and played a couple of chapters from Drake's Fortune, and the differences are immediate, significant, and very obvious. Character expressions are discernible in a way that I never expected to see in a video game. As a computer scientist, this makes me fear the impending death of Moore's law much less. In fact, the way I see it, the lack of continuous improvement to the hardware enables software engineers to pull every trick in the book to get these relatively low powered machines to produce gorgeous graphics. It could be that a few more cycles of stunted performance improvements on Intel's processors could even get Adobe to improve Lightroom's performance. It's ironic that by far the best time to buy a PS3 would be right now, when the game library is biggest and game developers have figured out how best to make use of the hardware.
Drake's Deception is not the most gorgeous game I've seen on the PS3. That title right now would go to the Tomb Raider reboot, which came out 2 years after Drake's Deception. But here's why the Uncharted series has me playing while other games sit on my hard drive: it's relentlessly upbeat, cheerful, and playable. While other games go for the dark, grim and gritty atmosphere, Drake's Deception choose bright, well-lit locations and saturated colors. If this was a movie, I'd say that the movie was shot entirely in Fuji Velvia.
The game play is the same across all the Uncharted games. You have some shooting, some platforming, and some (fairly easy) puzzles. All the puzzles are very fair, and fairly straightforward. I suspect that the puzzles and the platforming which are fairly easy are there so that the game isn't one relentless shoot-fest, which would be extremely monotonous. There two difficulty spikes which I found impossible to overcome in the second half of the game. This was in contrast to Golden Abyss, where the difficulty level didn't change dramatically the way it does. I would understand if the difficulty spikes came at climatic moments of the game's story, but they don't, which left me scratching my head as to why the designers did what they did. My guess is if my son was 6 or 7 instead of 2, that's when I'd just hand the controller to him and just say, "go do this for Daddy."
One of the most fascinating thing about the Uncharted games is that they school you in the visual language of film. The game subtly directs you to move in a certain direction, or jump in a certain way so as to continue the story. In some cases, of course, failure to move as directed results in death and a restart, but after a while you learn the language of the game and where to go becomes intuitive. I thought this part of the game was relatively well considered and well thought out. This is especially fun during the fabulous set piece on an airplane transport. There's a firefight and the plane starts to fall apart in the air, and Drake is not only fighting to stay alive, but is also constantly jostled about the plane and looking for things to hang on to as the plane loses altitude. The "wow" factor while playing this section is very cool, and by this point you are so well-schooled in the visual language of the game that at every point you know what to do and how to do it makes the game flow satisfying. The same could be set in a classic Lawrence of Arabia style chase through a desert canyon with horses, trucks, and motorcycles all mixed in a big climatic scene.
Not all the set pieces are so overtly flashy, however. Early on in the game there's a classic young urchin fleeing from bad guys sequence that's also lovely to play and watch. My wife and son watched me play parts of this and enjoyed it: it's non-violent, exciting, and a lot of fun.
Comapred to all this, however, the end of the game was anti-climatic. You would expect the final villain boss fight to be epic, but instead you're reduced to following on-screen prompt and button mashing. There are also a couple of places where the platforming goes on for just a bit too long. They're not particularly challenging, but I guess they're just there to make the game last the requisite 8-9 hours that hard core gamers demand.
Coming from Vita's Golden Abyss, however, I have to say that I found the PS3's limited controls made for a less satisfying variety of interaction. The Vita has a motion sensor, two touch pads, and a camera in addition to the joystick/button controls, and the result is that the puzzles and reveals have much more of a wow factor. In particular, Golden Abyss's charcoal rubbing was something my toddler loved doing, and of course that's not possible on the PS3. If I had a choice between getting my next Uncharted fix on the PS4 or the Vita, I would definitely pick the Vita, and not just because the PS4 costs $400.
Nevertheless, I can see why the Uncharted series is such a marquee brand for the Playstation, and I certainly would contemplate buying a PS4 just to play the next release of Uncharted. The combination of excellent direction, decent story, and the fact that nobody's actually making movies like this any more makes this a winner, and deservedly so. Recommended. I'm happy I have 2 more Uncharted games to play through before I run out of content.
First of all, the game is gorgeous. I don't even mean compared to the Vita. Halfway through the game I liked it so much that I picked up the Uncharted Dual Pack on Amazon. I took a sneak peak and played a couple of chapters from Drake's Fortune, and the differences are immediate, significant, and very obvious. Character expressions are discernible in a way that I never expected to see in a video game. As a computer scientist, this makes me fear the impending death of Moore's law much less. In fact, the way I see it, the lack of continuous improvement to the hardware enables software engineers to pull every trick in the book to get these relatively low powered machines to produce gorgeous graphics. It could be that a few more cycles of stunted performance improvements on Intel's processors could even get Adobe to improve Lightroom's performance. It's ironic that by far the best time to buy a PS3 would be right now, when the game library is biggest and game developers have figured out how best to make use of the hardware.
Drake's Deception is not the most gorgeous game I've seen on the PS3. That title right now would go to the Tomb Raider reboot, which came out 2 years after Drake's Deception. But here's why the Uncharted series has me playing while other games sit on my hard drive: it's relentlessly upbeat, cheerful, and playable. While other games go for the dark, grim and gritty atmosphere, Drake's Deception choose bright, well-lit locations and saturated colors. If this was a movie, I'd say that the movie was shot entirely in Fuji Velvia.
The game play is the same across all the Uncharted games. You have some shooting, some platforming, and some (fairly easy) puzzles. All the puzzles are very fair, and fairly straightforward. I suspect that the puzzles and the platforming which are fairly easy are there so that the game isn't one relentless shoot-fest, which would be extremely monotonous. There two difficulty spikes which I found impossible to overcome in the second half of the game. This was in contrast to Golden Abyss, where the difficulty level didn't change dramatically the way it does. I would understand if the difficulty spikes came at climatic moments of the game's story, but they don't, which left me scratching my head as to why the designers did what they did. My guess is if my son was 6 or 7 instead of 2, that's when I'd just hand the controller to him and just say, "go do this for Daddy."
One of the most fascinating thing about the Uncharted games is that they school you in the visual language of film. The game subtly directs you to move in a certain direction, or jump in a certain way so as to continue the story. In some cases, of course, failure to move as directed results in death and a restart, but after a while you learn the language of the game and where to go becomes intuitive. I thought this part of the game was relatively well considered and well thought out. This is especially fun during the fabulous set piece on an airplane transport. There's a firefight and the plane starts to fall apart in the air, and Drake is not only fighting to stay alive, but is also constantly jostled about the plane and looking for things to hang on to as the plane loses altitude. The "wow" factor while playing this section is very cool, and by this point you are so well-schooled in the visual language of the game that at every point you know what to do and how to do it makes the game flow satisfying. The same could be set in a classic Lawrence of Arabia style chase through a desert canyon with horses, trucks, and motorcycles all mixed in a big climatic scene.
Not all the set pieces are so overtly flashy, however. Early on in the game there's a classic young urchin fleeing from bad guys sequence that's also lovely to play and watch. My wife and son watched me play parts of this and enjoyed it: it's non-violent, exciting, and a lot of fun.
Comapred to all this, however, the end of the game was anti-climatic. You would expect the final villain boss fight to be epic, but instead you're reduced to following on-screen prompt and button mashing. There are also a couple of places where the platforming goes on for just a bit too long. They're not particularly challenging, but I guess they're just there to make the game last the requisite 8-9 hours that hard core gamers demand.
Coming from Vita's Golden Abyss, however, I have to say that I found the PS3's limited controls made for a less satisfying variety of interaction. The Vita has a motion sensor, two touch pads, and a camera in addition to the joystick/button controls, and the result is that the puzzles and reveals have much more of a wow factor. In particular, Golden Abyss's charcoal rubbing was something my toddler loved doing, and of course that's not possible on the PS3. If I had a choice between getting my next Uncharted fix on the PS4 or the Vita, I would definitely pick the Vita, and not just because the PS4 costs $400.
Nevertheless, I can see why the Uncharted series is such a marquee brand for the Playstation, and I certainly would contemplate buying a PS4 just to play the next release of Uncharted. The combination of excellent direction, decent story, and the fact that nobody's actually making movies like this any more makes this a winner, and deservedly so. Recommended. I'm happy I have 2 more Uncharted games to play through before I run out of content.
Thursday, December 19, 2013
Review: PS Vita Travel Pouch (and other accessories)
The problem with portable electronics is that you actually have to do something to protect them. The PS Vita is particularly problematic, because the twin joysticks stick out and can snag on other things in a backpack or pocket, and of course the beautiful OLED screen needs to be protected. (Note that the Amazon Walking Dead bundle I previously reviewed has gone up to $190 in price, making it no longer a screaming deal, but it's still cheaper than what you can find elsewhere)
The screen protection is easy. Amazon has the official screen protector available for $2 over the holidays (out of stock, but choose Amazon as the seller). The reason you want the official one is that it uses a very cool technique for lining up your screen protector: there's a template that goes over your joystick/button pad, and then when you peel off the official screen protector your screen is correctly covered. Well worth the $2.
The carrying case is problematic. My hope was that there'd be a good case that could carry the Vita, charger, headphones, and game cards, but it appears there's nothing that will carry all of them. The hard cases look intriguing, but none of them actually have the capacity that the soft cases have. I ended up with the official case. This case is designed to carry the Vita, 4 game cards, and pair of ear bud headphones, and the official extended battery, but won't carry the charger that comes with the Vita.
The section of the case that's meant for the Vita is well designed. The game card pouches work, but aren't suitable for extra memory cards, for instance. The memory cards are too small and there's a risk of losing them if you use the game card slots. I think the model that Sony went with is that you're likely to own only one memory card ever.
My favorite headphones to use with the Vita are the Knivio Bluetooth headset. I can pack both the headset the Vita into the carrying case and that's it. For most local use that'll be no problem. For an airplane, I'm guessing that I'll need some sort of extended battery (the Vita is particularly power hungry and will chew through a full charge in about 3 hours of play --- the machine actually gets warm, so you know that the CPU/GPU you paid for is actually working hard), and probably the etymotics instead. That'll probably fit in the case along with the USB cable.
I'm not sure I want to use the word recommended for the official case. It's workable, and fairly cheap for $10, which is as good as you can find.
The screen protection is easy. Amazon has the official screen protector available for $2 over the holidays (out of stock, but choose Amazon as the seller). The reason you want the official one is that it uses a very cool technique for lining up your screen protector: there's a template that goes over your joystick/button pad, and then when you peel off the official screen protector your screen is correctly covered. Well worth the $2.
The carrying case is problematic. My hope was that there'd be a good case that could carry the Vita, charger, headphones, and game cards, but it appears there's nothing that will carry all of them. The hard cases look intriguing, but none of them actually have the capacity that the soft cases have. I ended up with the official case. This case is designed to carry the Vita, 4 game cards, and pair of ear bud headphones, and the official extended battery, but won't carry the charger that comes with the Vita.
The section of the case that's meant for the Vita is well designed. The game card pouches work, but aren't suitable for extra memory cards, for instance. The memory cards are too small and there's a risk of losing them if you use the game card slots. I think the model that Sony went with is that you're likely to own only one memory card ever.
My favorite headphones to use with the Vita are the Knivio Bluetooth headset. I can pack both the headset the Vita into the carrying case and that's it. For most local use that'll be no problem. For an airplane, I'm guessing that I'll need some sort of extended battery (the Vita is particularly power hungry and will chew through a full charge in about 3 hours of play --- the machine actually gets warm, so you know that the CPU/GPU you paid for is actually working hard), and probably the etymotics instead. That'll probably fit in the case along with the USB cable.
I'm not sure I want to use the word recommended for the official case. It's workable, and fairly cheap for $10, which is as good as you can find.
Wednesday, December 18, 2013
Retrospective: How Nintendo lost me as a customer
Golden Abyss got me to start playing Drake's Deception on the PS3, which is pretty remarkable. (I'm certainly enjoying the game and how pretty it is) Looking back at the review of the Nintendo Wii that I wrote in 2007, this is quite a reversal of the turn of events that I expected. The Nintendo Wii is gathering dust, while the PS3 sees almost daily use, if not as a game machine, as a portal for Amazon instant video, blu ray player at times, and YouTube living room, where it serves as a better Google TV than the various Google TV demos I've tried over the years. I haven't even considered a Chromecast because the PS3 has been working so well.
How did this happen? I think the biggest deal was the advent of HDTV. With a big 1080p screen in the living room, the Nintendo Wii's graphics looked old. For a while, it still saw plenty of use as an avenue for Rock Band, but even then, the jaggies started looking more and more glaring compared to the PS3's 720p output for games and 1080p output for movies. For games where a motion controller was preferred, I ended up with a Playstation Move instead.
For the next generation of consoles, the difference is even bigger. Both the XBox One and the Playstation 4 will play Blu-rays and DVDs, while the Wii U, despite having a disc reader, won't even play DVDs. From a performance point of view, the Wii U is so much less powerful than either of the bigger consoles that it's likely to only get games that are coming out for the previous generation of consoles.
But by far the most important reason is the games. While it seems as though I've become an Uncharted addict, I noticed that I never did finish a single Wii game that had a "finish". To be fair, the Wii has many games that don't end. For me, that means that I'd rather pick up a PS 4 when the next Uncharted game comes out rather than getting another Nintendo console that gathers dust.
How did this happen? I think the biggest deal was the advent of HDTV. With a big 1080p screen in the living room, the Nintendo Wii's graphics looked old. For a while, it still saw plenty of use as an avenue for Rock Band, but even then, the jaggies started looking more and more glaring compared to the PS3's 720p output for games and 1080p output for movies. For games where a motion controller was preferred, I ended up with a Playstation Move instead.
For the next generation of consoles, the difference is even bigger. Both the XBox One and the Playstation 4 will play Blu-rays and DVDs, while the Wii U, despite having a disc reader, won't even play DVDs. From a performance point of view, the Wii U is so much less powerful than either of the bigger consoles that it's likely to only get games that are coming out for the previous generation of consoles.
But by far the most important reason is the games. While it seems as though I've become an Uncharted addict, I noticed that I never did finish a single Wii game that had a "finish". To be fair, the Wii has many games that don't end. For me, that means that I'd rather pick up a PS 4 when the next Uncharted game comes out rather than getting another Nintendo console that gathers dust.
Tuesday, December 17, 2013
Wealthfront Client Meeting with Burton Malkiel
This year, Wealthfront hosted a fireside chat with Burton Malkiel at the Stanford faculty club. It was my first chance to talk with Malkiel since 2005, and I got to ask him about his opinion of the stock market. He said that while the US stock market is now historically expensive, but the developed markets and European markets are looking cheap, so "this is a good opportunity to do some rebalancing."
Wealthfront also divulged some interesting information: they currently have $450M in assets under management, compared to $90M around this time last year, so their service has gained a lot of traction. Not only are the number of accounts increasing, the average account size has also been increasing. (The first time you see the tax loss harvesting numbers they post to your account, you'll be motivated to shove more money into the account) They currently have 32 employees with 18 engineers, and they expect to have more than half the company be engineers for the foreseeable future.
Malkiel says they've been splitting up the fixed income segment to do things that make sense under the current environment. For instance, AT&T bonds are paying 4% while AT&T stocks are yielding 5% in dividends. It thus makes much more sense to own AT&T stocks rather than bonds. That's an interesting approach, though I would point out that Swensen thinks that corporate bonds are not worth holding.
Someone pointed out that with the new individual stock based tax loss harvesting, they risk accidentally triggering the wash sale rule if they have accounts elsewhere or vest company stock. The answer to the latter is that they allow you to have a blacklist of stocks that they'll never buy or sell on your behalf, and the wash sale triggering based on another advisor trading on your behalf simply means you don't recognize all the tax losses you could otherwise be entitled to. They note that they plan to provide turbo-tax compatible reports, so turbo-tax should be able to reconcile all the buys and sells that they do on your behalf.
One thing that I was very pleased to see was when someone asked whether the resulting decreased cost basis of your holdings wouldn't wash out in the end when you do withdraw the money. Malkiel's response was that he was so old he didn't expect to pay any capital gains at all on his holdings as they will get stepped up upon inheritance. Andy Rachleff also mentioned that "our tax loss harvesting service is not suitable for short term investments." It's a strong statement of where Wealthfront wants to go, and I applaud them for making such a strong statement up front.
Wealthfront also divulged some interesting information: they currently have $450M in assets under management, compared to $90M around this time last year, so their service has gained a lot of traction. Not only are the number of accounts increasing, the average account size has also been increasing. (The first time you see the tax loss harvesting numbers they post to your account, you'll be motivated to shove more money into the account) They currently have 32 employees with 18 engineers, and they expect to have more than half the company be engineers for the foreseeable future.
Malkiel says they've been splitting up the fixed income segment to do things that make sense under the current environment. For instance, AT&T bonds are paying 4% while AT&T stocks are yielding 5% in dividends. It thus makes much more sense to own AT&T stocks rather than bonds. That's an interesting approach, though I would point out that Swensen thinks that corporate bonds are not worth holding.
Someone pointed out that with the new individual stock based tax loss harvesting, they risk accidentally triggering the wash sale rule if they have accounts elsewhere or vest company stock. The answer to the latter is that they allow you to have a blacklist of stocks that they'll never buy or sell on your behalf, and the wash sale triggering based on another advisor trading on your behalf simply means you don't recognize all the tax losses you could otherwise be entitled to. They note that they plan to provide turbo-tax compatible reports, so turbo-tax should be able to reconcile all the buys and sells that they do on your behalf.
One thing that I was very pleased to see was when someone asked whether the resulting decreased cost basis of your holdings wouldn't wash out in the end when you do withdraw the money. Malkiel's response was that he was so old he didn't expect to pay any capital gains at all on his holdings as they will get stepped up upon inheritance. Andy Rachleff also mentioned that "our tax loss harvesting service is not suitable for short term investments." It's a strong statement of where Wealthfront wants to go, and I applaud them for making such a strong statement up front.
Monday, December 16, 2013
Is Sony making a comeback?
Without noticing it, I somehow ended up being a Sony consumer this year. If you asked me about it a few years ago I would have laughed, since Sony seemed so moribound. For instance, Sony had to buy Minolta to get into the camera business, and Minolta was long considered the weakest of the SLR manufacturers. The PS3 launch was well known for being disastrous, especially when compared to the Nintendo Wii. It still hasn't done anything in the smart phones worth buying, and their tablets are pretty sad.
Then this year, I found myself buying a Sony RX-100, which has a well-deserved reputation for being easily the best point and shoot camera you can buy. Despite being a Canon loyalist for as long as I've been a serious photographer, I ended up buying one. I would have expected Canon to have a better answer to the RX-100 by now, but it seems as though they've been caught flat-footed this time.
Then I found myself buying a Playstation Vita on black friday, and it's re-kindled a love of games that I'd thought I'd lost.
Looking around as I visited Costco and the occasional shopping mall, I can't help notice that the PS 4 is pretty much sold out everywhere, while you can saunter into any Microsoft Store or Costco and buy an XBox One. Sony also did something clever with the PS 4, which is to require all new games be PS Vita compatible, doing the kind of integration that Microsoft was famous for.
If Sony keeps executing the way it has been for the last couple of years, the future will be very bright for it indeed. If I were the kind to buy individual stocks, I'd definitely do more research into its financials.
Then this year, I found myself buying a Sony RX-100, which has a well-deserved reputation for being easily the best point and shoot camera you can buy. Despite being a Canon loyalist for as long as I've been a serious photographer, I ended up buying one. I would have expected Canon to have a better answer to the RX-100 by now, but it seems as though they've been caught flat-footed this time.
Then I found myself buying a Playstation Vita on black friday, and it's re-kindled a love of games that I'd thought I'd lost.
Looking around as I visited Costco and the occasional shopping mall, I can't help notice that the PS 4 is pretty much sold out everywhere, while you can saunter into any Microsoft Store or Costco and buy an XBox One. Sony also did something clever with the PS 4, which is to require all new games be PS Vita compatible, doing the kind of integration that Microsoft was famous for.
If Sony keeps executing the way it has been for the last couple of years, the future will be very bright for it indeed. If I were the kind to buy individual stocks, I'd definitely do more research into its financials.
Saturday, December 14, 2013
Review: Unaccountable
Unaccountable is Dr. Marty Makary's book about the lack of transparency in medicine. For me, it's an eye opener about how to approach healthcare, surgeon selection, hospital selection, and potential surgery. Here are a few (by no means exhaustive) interesting titbits from the book:
What strikes me over and over again is the importance of culture at hospitals. Makary refers to many prestigious hospitals that nevertheless have poor safety culture (and therefore poor patient outcomes). In keeping with the culture of secrecy in medicine, however, he's not allowed to name them. If you read between the lines, however, you get a good idea of which hospitals he's not recommending. Furthermore, he explains why certain hospitals such as the Mayo clinic are so highly regarded and how they come about having a great safety culture.
At $3.99 at the Kindle store, buy this book and read it. It has the potential to save you and your loved ones a lot of pain. Highly recommended.
- The best hospitals don't pay doctors based on the number of procedures they do, but rather a salary. The incentive based/market based approach breaks down for healthcare because insurance companies pay per procedure, rather than on the basis of patient outcome. As a result of the "Eat What You Kill" model of compensation, many patients get unnecessary and potentially life-threatening procedures rather than minimally invasive surgery.
- If you're told you need major surgery by an older doctor, get a second opinion from a younger one. The younger surgeon might know about newly invented minimally invasive surgery techniques that the older one does not.
- If you're told you need surgery on a major body part for a disease, get second opinions from both experts on the disease as well as experts on the body part. For instance, if you have cancer of the liver, you want an expert on the liver, as well as an expert on cancer of the liver. For instance, many transplant experts would recommend a transplant, while a cancer surgeon would suggest eliminating the tumor through surgery.
- The easiest measure of safety culture is simple. Collect answers from the nurses and doctors of a hospital to the question: "Would you want to be treated at this hospital." This data is actually collected, but isn't published by the government or hospital. Similarly, readmit rates are collected but are not published. This means that it's nearly impossible for a patient to select hospitals on the basis of competency, which is why hospitals compete on the basis of parking lots and advertising.
- Ask for a video of your procedure if possible. Merely knowing that someone else will watch the video improves quality and increases time spent on the procedure.
- Children's hospitals frequently have a more people in fundraising than doctors. That's because fundraising for children's hospitals is so effective that it's a better revenue model than actually treating patients.
What strikes me over and over again is the importance of culture at hospitals. Makary refers to many prestigious hospitals that nevertheless have poor safety culture (and therefore poor patient outcomes). In keeping with the culture of secrecy in medicine, however, he's not allowed to name them. If you read between the lines, however, you get a good idea of which hospitals he's not recommending. Furthermore, he explains why certain hospitals such as the Mayo clinic are so highly regarded and how they come about having a great safety culture.
At $3.99 at the Kindle store, buy this book and read it. It has the potential to save you and your loved ones a lot of pain. Highly recommended.
Friday, December 13, 2013
Reread: The Things They Carried
I first read The Things They Carried right after high school. As a soon to be conscript, the book struck a deep chord in me in a way none of the books that were assigned in school as "literature" ever did. The book was so raw, so filled with reality while acknowledging that some stories cannot be told correctly, no matter how many times the author circles back to his material, that it spoke to me in a way that no mere novel could provide. Over the years, I've given away so many copies of the book that I've lost count, and over several moves, I've never managed to recover any of my personal copies. When the Amazon Matchbook program listed this book for me at $2.99, I jumped on it so that I could have my very own copy, which cannot be given away or lost as long as Amazon stays around.
Many books lose their power over you as you age. The intensity of emotion that I had as a youth has no parallel in me today, but this book brings back those memories in ways that even reading my own writing from 20 years ago cannot. O'Brien brings home the nastiness of being a soldier in South East Asia, where even the weather and climate will bury you despite all the technology at your disposal (though remembering that the war was fought in the 60s, there wasn't actually that much technology).
What strikes me the hardest this time around, however, is the lack of fulfillment you sense in O'Brien throughout the novel. It's palpable in the way he retells the stories over and over again, sometimes from a different angle, sometimes in the same way but in a different context, and other times to make a completely different point. Together, the stories in this book form a mosaic that lets you get at the essence of the truth in O'Brien's past and his trauma, and explains why 20 years later, he is still telling these stories.
One of the big differences between the USA of today and the USA of Vietnam is that since switching to an all-volunteer army, the gulf between the elite and the soldiers who fight on behalf of the country are wider than before. As a result, books like this are more important than ever. I highly recommend this book, but more importantly, if you're a US citizen or green card holder, you need to read this book:
Many books lose their power over you as you age. The intensity of emotion that I had as a youth has no parallel in me today, but this book brings back those memories in ways that even reading my own writing from 20 years ago cannot. O'Brien brings home the nastiness of being a soldier in South East Asia, where even the weather and climate will bury you despite all the technology at your disposal (though remembering that the war was fought in the 60s, there wasn't actually that much technology).
What strikes me the hardest this time around, however, is the lack of fulfillment you sense in O'Brien throughout the novel. It's palpable in the way he retells the stories over and over again, sometimes from a different angle, sometimes in the same way but in a different context, and other times to make a completely different point. Together, the stories in this book form a mosaic that lets you get at the essence of the truth in O'Brien's past and his trauma, and explains why 20 years later, he is still telling these stories.
One of the big differences between the USA of today and the USA of Vietnam is that since switching to an all-volunteer army, the gulf between the elite and the soldiers who fight on behalf of the country are wider than before. As a result, books like this are more important than ever. I highly recommend this book, but more importantly, if you're a US citizen or green card holder, you need to read this book:
‘’If you don’t care for obscenity, you don’t care for the truth; if you don’t care for the truth, watch how you vote. Send guys to war, they come home talking dirty.’’
Thursday, December 12, 2013
Review: Uncharted - Golden Abyss
If I had any doubts that my purchase of a Playstation Vita would be a waste, Golden Abyss has dispelled them. Despite my having owned a Playstation 3 for several years, I had somehow avoided playing any of the Uncharted games on that console, and now I regret not having done so, especially since Golden Abyss is frequently cited as the weakest of the series.
The gameplay is basically that of a platform shooting game translated into 3D. Nathan Drake, the protagonist, jumps, climbs and bounces around levels as though he was in a Mario game, but rather than jumping on his enemies to dispel them like the plumber, he acquires and uses a variety of weapons and shoots at enemies via cover. There are also several puzzles, none of which are particularly challenging intellectually, but do break up the flow of the game so that it's not a series of action sequences.
The graphics behind this game is gorgeous. There are many times when I'd be traversing a canyon, a cave, or some set piece, and I'd want to stop just to rotate the view and enjoy the scenery. The colors pop, and the scenery is well put together and real.
What blew my mind, however, was how well the game used all the features of the Vita. The most compelling section came when the characters came across a blank piece of paper. You're asked to hold up the paper to a light, and sure enough, when you hold the Vita up against a light bulb, letters appeared on the parchment in a slow reveal. This is a cool use of the rear camera, and gave me a feeling of "wow" that none of the other games I've played on real game consoles have provided. When you're asked to do a charcoal drawing, you actually use your fingers to rub against the touch screen. Very sweet. When you're asked to take a photograph, you can hold your Vita just like a real camera, and control how you snap pictures that way. Not all the interfaces were as smooth as that particular piece. For instance, using the touch screen for hand-to-hand combat felt like a miss compared to using the physical buttons. Using the rear touch sensor for holding and rotating an object didn't feel natural, and neither did using the gyroscope to control a sniper rifle. Fortunately, most of the time you could also use the joysticks (which are a delight to use).
The story is well put together, and it's worth reading Bend Studio's post-mortem on the game to see what tweaks and changes they had to make in order to make the female lead likable to most players. Unfortunately, as with all games of this type, the story usually has you feeling like you're on rails. For instance, there's a scene in the game where Drake is hiding behind a pillar watching one of the villains have a conversation with a lackey. There's no PC in D&D history that wouldn't just take a headshot at the villain there and then and save himself a lot of trouble later. But this being a computer game that's on rails, the game takes control away from you for that scene, which might not be frustrating if you're used to the game doing so, but for me, just jarred me out of the immersion mode that the game otherwise worked so hard to put me into.
The game's difficulty setting on Easy (I didn't use "Very Easy") was perfect for an out-of-touch gamer. I died often, but not so often as to become frustrated, and in general I had a lot of fun.
In any case, playing this game made me immediately go out and download Uncharted 3 to my PS 3 (it's a free game this month on Playstation Plus). I doubt if I'll get through that game as quickly as this one, because having something on the Vita makes it so much easier for me to sneak in 15 minutes of gaming here and there when I have time, rather having to be at home and having to power up the TV the console and taking over the living room.
In any case, Golden Abyss is highly recommended and I definitely felt like I got my money's worth from the Vita just based on this game.
The gameplay is basically that of a platform shooting game translated into 3D. Nathan Drake, the protagonist, jumps, climbs and bounces around levels as though he was in a Mario game, but rather than jumping on his enemies to dispel them like the plumber, he acquires and uses a variety of weapons and shoots at enemies via cover. There are also several puzzles, none of which are particularly challenging intellectually, but do break up the flow of the game so that it's not a series of action sequences.
The graphics behind this game is gorgeous. There are many times when I'd be traversing a canyon, a cave, or some set piece, and I'd want to stop just to rotate the view and enjoy the scenery. The colors pop, and the scenery is well put together and real.
What blew my mind, however, was how well the game used all the features of the Vita. The most compelling section came when the characters came across a blank piece of paper. You're asked to hold up the paper to a light, and sure enough, when you hold the Vita up against a light bulb, letters appeared on the parchment in a slow reveal. This is a cool use of the rear camera, and gave me a feeling of "wow" that none of the other games I've played on real game consoles have provided. When you're asked to do a charcoal drawing, you actually use your fingers to rub against the touch screen. Very sweet. When you're asked to take a photograph, you can hold your Vita just like a real camera, and control how you snap pictures that way. Not all the interfaces were as smooth as that particular piece. For instance, using the touch screen for hand-to-hand combat felt like a miss compared to using the physical buttons. Using the rear touch sensor for holding and rotating an object didn't feel natural, and neither did using the gyroscope to control a sniper rifle. Fortunately, most of the time you could also use the joysticks (which are a delight to use).
The story is well put together, and it's worth reading Bend Studio's post-mortem on the game to see what tweaks and changes they had to make in order to make the female lead likable to most players. Unfortunately, as with all games of this type, the story usually has you feeling like you're on rails. For instance, there's a scene in the game where Drake is hiding behind a pillar watching one of the villains have a conversation with a lackey. There's no PC in D&D history that wouldn't just take a headshot at the villain there and then and save himself a lot of trouble later. But this being a computer game that's on rails, the game takes control away from you for that scene, which might not be frustrating if you're used to the game doing so, but for me, just jarred me out of the immersion mode that the game otherwise worked so hard to put me into.
The game's difficulty setting on Easy (I didn't use "Very Easy") was perfect for an out-of-touch gamer. I died often, but not so often as to become frustrated, and in general I had a lot of fun.
In any case, playing this game made me immediately go out and download Uncharted 3 to my PS 3 (it's a free game this month on Playstation Plus). I doubt if I'll get through that game as quickly as this one, because having something on the Vita makes it so much easier for me to sneak in 15 minutes of gaming here and there when I have time, rather having to be at home and having to power up the TV the console and taking over the living room.
In any case, Golden Abyss is highly recommended and I definitely felt like I got my money's worth from the Vita just based on this game.
Tuesday, December 10, 2013
The Only Reason to Buy Individual Stocks
I recently wrote about why I no longer buy individual stocks. I will now detail my one exception to this rule. If I was working at Google, Facebook, or owned large amounts of those stocks that I couldn't or didn't want to divest myself of (very common in the case of RSUs that aren't vested), then this is what you need to do.
For the rest of your portfolio, when you're buying indices, you can custom construct an index such that those individual stocks are left out. While it only makes sense to do this if your portfolio exceeds a certain amount, the net result is that your overall portfolio is better balanced because you don't have to own Google again, for instance, both in the index and in individual holdings.
What's the portfolio level at which this makes sense? At one point, the only solution was Parametric Portfolio Associates, at a minimum of $5M. However, today, Wealthfront has dramatically lowered the entry level to $500,000. Once you've got such a custom index built, as Wealthfront has detailed, you can now do tax-loss harvesting at an individual level, bringing your tax loss harvesting potential up even further. This is a huge incentive for high networth individuals to use Wealthfront, as their fees are substantially lower than Parametric's, for instance. In fact, once you build a custom index, you no longer have to pay Vanguard's management fee, for instance, so Wealthfront's equivalent portfolio costs come close to Vanguard, and the additional tax-loss harvesting delta will tip the edge in Wealthfront's favor.
In How to Interview a Financial Advisor, I explain why most Googlers who were offered the opportunity turned down Parametric's offer. The problem is that if you fire Parametric, now you're stuck with a portfolio of 499 individuals stocks, and now you have to either manage that portfolio yourself, or find someone willing to do it for you. As you can imagine, unless you're about to write your own software to do this, that effectively makes Parametric/Wealthfront a roach motel, where you can always check in, but you can never leave.
When I spoke with Wealthfront about this latest feature, I proposed a solution to this issue. It's very much technically feasible, and I look forward to seeing if Wealthfront will implement it. The nice thing about being a Silicon Valley startup is that they can move forward far faster than the stodgy banks on Wall Street used to big fat margins.
As for myself? I will continue to move more assets over to Wealthfront as they free up elsewhere. The additional bonuses from what they're doing at higher asset levels is just too much even for this DIYer to pass up.
For the rest of your portfolio, when you're buying indices, you can custom construct an index such that those individual stocks are left out. While it only makes sense to do this if your portfolio exceeds a certain amount, the net result is that your overall portfolio is better balanced because you don't have to own Google again, for instance, both in the index and in individual holdings.
What's the portfolio level at which this makes sense? At one point, the only solution was Parametric Portfolio Associates, at a minimum of $5M. However, today, Wealthfront has dramatically lowered the entry level to $500,000. Once you've got such a custom index built, as Wealthfront has detailed, you can now do tax-loss harvesting at an individual level, bringing your tax loss harvesting potential up even further. This is a huge incentive for high networth individuals to use Wealthfront, as their fees are substantially lower than Parametric's, for instance. In fact, once you build a custom index, you no longer have to pay Vanguard's management fee, for instance, so Wealthfront's equivalent portfolio costs come close to Vanguard, and the additional tax-loss harvesting delta will tip the edge in Wealthfront's favor.
In How to Interview a Financial Advisor, I explain why most Googlers who were offered the opportunity turned down Parametric's offer. The problem is that if you fire Parametric, now you're stuck with a portfolio of 499 individuals stocks, and now you have to either manage that portfolio yourself, or find someone willing to do it for you. As you can imagine, unless you're about to write your own software to do this, that effectively makes Parametric/Wealthfront a roach motel, where you can always check in, but you can never leave.
When I spoke with Wealthfront about this latest feature, I proposed a solution to this issue. It's very much technically feasible, and I look forward to seeing if Wealthfront will implement it. The nice thing about being a Silicon Valley startup is that they can move forward far faster than the stodgy banks on Wall Street used to big fat margins.
As for myself? I will continue to move more assets over to Wealthfront as they free up elsewhere. The additional bonuses from what they're doing at higher asset levels is just too much even for this DIYer to pass up.
How to Interview A Financial Advisor now out in paperback
My latest book, How to Interview a Financial Advisor is now out in paperback. For this book, I'm enrolling in the Matchbook program, which means that for $2.99, you can get the digital copy of the book as well as the paperback if you buy the paperback. I loved the Matchbook program, and I was happy to sign up this bookf or it, both as an experiment and also because I feel it's a great way to provide a discount: buy a copy for your friend, and keep a copy for yourself!
Sunday, December 08, 2013
Review: Fables #17 and #18
I was so disappointed with Fables #16 that I didn't bother reading the books at all last year. I finally picked up Inherit the Wind and Cubs in Toyland this year and read them through in a couple of nights. This part of the story involves Snow White and Bigby Wolf's family. They grapple with the loss of the North Wind and the selection of the future god of winds from the young wolflings.
Inherit the Wind is easily one of the weakest volumes in the series thus far. There's a lot of distraction, and the graphic novel tries to set up yet another long-running plotline as part of the side story, leading to the main story suffering from both neglect and no small amount of ennui.
Cubs in Toyland is a much stronger work. We see the fate of two of the Bigby's Scions, as they grapple with being transported to a fantastic new world with a hidden, deadly secret. The problem with the resolution of this story is that while it's shocking, it's impact is mostly on characters we're not invested in, so that dilutes the impact. The story is also a bit derivative, with the newness focused on the world Willingham's created just for this story, and the world is too simple for us to also derive much satisfaction from it.
The volume closes with a final story about Bigby Wolf, which does bring back Willingham's original story telling powers. It's a great short story, and I wish the rest of the work was like it. If not for this last section, I would have said that Willingham should have ended the series with the end of the first arc. Recommended, but only for people who have read the rest of the series. Otherwise, start at the beginning.
Inherit the Wind is easily one of the weakest volumes in the series thus far. There's a lot of distraction, and the graphic novel tries to set up yet another long-running plotline as part of the side story, leading to the main story suffering from both neglect and no small amount of ennui.
Cubs in Toyland is a much stronger work. We see the fate of two of the Bigby's Scions, as they grapple with being transported to a fantastic new world with a hidden, deadly secret. The problem with the resolution of this story is that while it's shocking, it's impact is mostly on characters we're not invested in, so that dilutes the impact. The story is also a bit derivative, with the newness focused on the world Willingham's created just for this story, and the world is too simple for us to also derive much satisfaction from it.
The volume closes with a final story about Bigby Wolf, which does bring back Willingham's original story telling powers. It's a great short story, and I wish the rest of the work was like it. If not for this last section, I would have said that Willingham should have ended the series with the end of the first arc. Recommended, but only for people who have read the rest of the series. Otherwise, start at the beginning.
Friday, December 06, 2013
Review: Amazon Playstation Vita Holiday Bundle
It's not a secret that in recent years, the iPad and other tablets have become the most ubiquitous video game platform. However, the games for the platform are pretty sad. Much of this has to do with the touch interface: there are precious few games that can do it justice. So far, Space Station Frontier and Strikefleet Omega are the only two games that I think use the touch interface for maximum effect and fun game play. Most of the other games are either marred by extensive in-app purchasing business models or just absolutely terrible UI. For instance, The Dark Knight Rises uses a touch-based joystick and it's pathetically unplayable. Even Clash of Heroes, which is a port from the Nintendo DS suffers from playability problems due to the touch interface. One would think that the tower-defense genre would be perfect for the touch interface, but even then, none of the games I've tried come close to Defense Grid.
The net result is that for an immersive experience, I have to play on a PC or game console. Yet both of these are relatively heavyweight operations. For instance, the PS3 lives in the living room, and the gorgeous experience does mean that it takes up everyone's attention while it's on. The PC obviously requires boot up time, and while it provides a nice interface, it's still a little less satisfying than the dedicated game consoles. And the biggest defect is that when on the PC, I feel guilty about doing anything other than working on the next book!
Amazon has an exclusive holiday bundle for the PS Vita bundled with a small memory card and 3 games, so I picked it up. One reason to pick up a PS Vita this year as opposed to waiting for yet another price drop is that next year, the Vita will lose its OLED screen and switch to an LCD screen instead.
After unboxing the unit, I downloaded Uncharted Golden Abyss, and started playing. It's a beautiful experience. The screen disappears from the unit, and the controls are responsive and quick. While not a full-screen movie experience Drake's Deception is on the PS3, it's was for me an incredible hook and motivated me to download Drake's Deception on the living room console after getting started on Golden Abyss. If you're used to tablet games, the games on the PS Vita are a revelation. For one thing, there's no in-app purchasing, in-game advertising, cross-promotions for other products, etc. You paid for the game, you get to play. It's great. And unlike even PS3 games, there's no constant need to download patches, new content, etc. (I was shocked that Drake's Deception after a 40GB download, required another 500MB patch to start) The interface is intuitive, though some are gimmicky (in particular, melee combat using the touch screen is as pathetic as it would be on a tablet).
One of the best deals in gaming is the Playstation Plus membership. If you get in on the holiday deals, this is about $30/year for effectively 2-3 free games every month on all your platforms (PS 3, PS 4 -- currently out of stock online, PS Vita). During the holiday season, Sony's promising a free game a week. For a light gamer, this is more games than you'll use, and is an outstanding deal, even if many of the games would not be to your taste.
The PS Vita can also act as a remote gaming console for your PS3. I tried this on Shadow of the Colossus, and it's an impressive piece of work, streaming audio/video to the Vita from the PS3. There aren't that many games that support PS Vita remote play for the PS 3, but if you do upgrade to the PS 4, the story is that Sony has required that all games on that platform support the Vita.
The best way for me to describe the Vita is that it's like a Kindle for video games. Video games are a lot like books in that the time it takes to finish reading one is substantial, and for adults with children, the only way to consume them is in sips rather than binges. In that sense, an instant-on, always available device that lets you get in a few minutes here and there makes it well worth the entry price. Recommended.
The net result is that for an immersive experience, I have to play on a PC or game console. Yet both of these are relatively heavyweight operations. For instance, the PS3 lives in the living room, and the gorgeous experience does mean that it takes up everyone's attention while it's on. The PC obviously requires boot up time, and while it provides a nice interface, it's still a little less satisfying than the dedicated game consoles. And the biggest defect is that when on the PC, I feel guilty about doing anything other than working on the next book!
Amazon has an exclusive holiday bundle for the PS Vita bundled with a small memory card and 3 games, so I picked it up. One reason to pick up a PS Vita this year as opposed to waiting for yet another price drop is that next year, the Vita will lose its OLED screen and switch to an LCD screen instead.
After unboxing the unit, I downloaded Uncharted Golden Abyss, and started playing. It's a beautiful experience. The screen disappears from the unit, and the controls are responsive and quick. While not a full-screen movie experience Drake's Deception is on the PS3, it's was for me an incredible hook and motivated me to download Drake's Deception on the living room console after getting started on Golden Abyss. If you're used to tablet games, the games on the PS Vita are a revelation. For one thing, there's no in-app purchasing, in-game advertising, cross-promotions for other products, etc. You paid for the game, you get to play. It's great. And unlike even PS3 games, there's no constant need to download patches, new content, etc. (I was shocked that Drake's Deception after a 40GB download, required another 500MB patch to start) The interface is intuitive, though some are gimmicky (in particular, melee combat using the touch screen is as pathetic as it would be on a tablet).
One of the best deals in gaming is the Playstation Plus membership. If you get in on the holiday deals, this is about $30/year for effectively 2-3 free games every month on all your platforms (PS 3, PS 4 -- currently out of stock online, PS Vita). During the holiday season, Sony's promising a free game a week. For a light gamer, this is more games than you'll use, and is an outstanding deal, even if many of the games would not be to your taste.
The PS Vita can also act as a remote gaming console for your PS3. I tried this on Shadow of the Colossus, and it's an impressive piece of work, streaming audio/video to the Vita from the PS3. There aren't that many games that support PS Vita remote play for the PS 3, but if you do upgrade to the PS 4, the story is that Sony has required that all games on that platform support the Vita.
The best way for me to describe the Vita is that it's like a Kindle for video games. Video games are a lot like books in that the time it takes to finish reading one is substantial, and for adults with children, the only way to consume them is in sips rather than binges. In that sense, an instant-on, always available device that lets you get in a few minutes here and there makes it well worth the entry price. Recommended.
Saturday, November 30, 2013
Review: MSI Radeon HD 7870 2GB Video Graphics Card
The best thing about being a PC owner is that you can actually upgrade your hardware. In the old days, this didn't matter much, because CPUs/motherboards were getting so much faster year after year that within 3 years it was time to retire the old motherboard and buy a whole new machine. In recent years, that has changed.
For instance, for video games, the bottleneck is no longer the CPU. 2009's Intel i920 quad core processors are about half the performance of the latest Haswell machines, but that's still plenty of power to drive any video game. The bottleneck is the GPU. While CPUs have gone faster by only about 100%, GPUs have sped up by about 200% over the same time period. The reason for this is that GPUs are extremely parallel machines, and therefore process improvements from 40nm to 28nm enable that many more parallel computations simply through replication.
A recent sale got me to buy the MSI Radeon 7870. The way you shop for a GPU is to visit Tom Hardware's Graphics Card Performance Hiearchy Chart. They recommend not upgrading if the proposed upgrade is less than 3 levels above your current hardware. Since I'm not as enthusiastic as they are, I waited until the sales generated upgrades 6 tiers above the old Radeon 4850 that came with my machine.
Replacing the hardware was both straightforward and annoying. The straightforward part is ripping the old card out. Some idiot at HP thought he was working at Apple and zip-tied the graphics card to the motherboard, giving me conniptions until I noticed the tiny zip-tie. One snip with a pair of scissors and it was gone. The next level of annoyance came when I realized that the new card came with 2 mini-display port outputs, 1 HDMI output, and 1 DVI output. My old setup depended on 2 DVI outs. OK, no problem, one of my monitors has one of the new-fangled display port inputs. I duly bought a 3m display port cable and plugged in to discover that it didn't work. Then I read the Display Port FAQ and realized that display port is unreliable over 2m cables for high resolution displays. So I returned the display port cable, and bought a mini display port to DVI cable. Note that this only works for lower resolution displays that don't need a dual DVI input, but fortunately, my secondary display was one of those.
So now I can play Arkham City at 1440p with detail level set to "high" and never drop below 30fps. I tried overclocking the GPU, but had one glitch during a game, so I'll hold off on doing that for now. If you don't run high resolution screens like I do, you probably can get 40-50fps without problems, but then you probably wouldn't ever get the urge to upgrade the GPU on your machine, either.
All in all, it was a bit of a hassle but I think the upgrade was worth it. Recommended.
For instance, for video games, the bottleneck is no longer the CPU. 2009's Intel i920 quad core processors are about half the performance of the latest Haswell machines, but that's still plenty of power to drive any video game. The bottleneck is the GPU. While CPUs have gone faster by only about 100%, GPUs have sped up by about 200% over the same time period. The reason for this is that GPUs are extremely parallel machines, and therefore process improvements from 40nm to 28nm enable that many more parallel computations simply through replication.
A recent sale got me to buy the MSI Radeon 7870. The way you shop for a GPU is to visit Tom Hardware's Graphics Card Performance Hiearchy Chart. They recommend not upgrading if the proposed upgrade is less than 3 levels above your current hardware. Since I'm not as enthusiastic as they are, I waited until the sales generated upgrades 6 tiers above the old Radeon 4850 that came with my machine.
Replacing the hardware was both straightforward and annoying. The straightforward part is ripping the old card out. Some idiot at HP thought he was working at Apple and zip-tied the graphics card to the motherboard, giving me conniptions until I noticed the tiny zip-tie. One snip with a pair of scissors and it was gone. The next level of annoyance came when I realized that the new card came with 2 mini-display port outputs, 1 HDMI output, and 1 DVI output. My old setup depended on 2 DVI outs. OK, no problem, one of my monitors has one of the new-fangled display port inputs. I duly bought a 3m display port cable and plugged in to discover that it didn't work. Then I read the Display Port FAQ and realized that display port is unreliable over 2m cables for high resolution displays. So I returned the display port cable, and bought a mini display port to DVI cable. Note that this only works for lower resolution displays that don't need a dual DVI input, but fortunately, my secondary display was one of those.
So now I can play Arkham City at 1440p with detail level set to "high" and never drop below 30fps. I tried overclocking the GPU, but had one glitch during a game, so I'll hold off on doing that for now. If you don't run high resolution screens like I do, you probably can get 40-50fps without problems, but then you probably wouldn't ever get the urge to upgrade the GPU on your machine, either.
All in all, it was a bit of a hassle but I think the upgrade was worth it. Recommended.
First Impressions: Dell Venue 8 Pro
I gave my wife a Dell Venue 8 Pro for her birthday. Last year, she got a Nexus 10, but she found that the 10" form factor led to it not getting used much, and Bowen ended up being the primary user of the device instead. As a result, she asked for a smaller device. While I've been pleased with the Nexus 7, all the indications are that the latest Intel Bay Trail processors run circles around their ARM equivalents, so I took a leap of faith and bought the Dell when it became available for $230. If you shop around on Black Friday I'm sure you can find similar deals for this device.
The best thing about the Dell is that it's a Windows box. That means, for instance, that I can back it up using the Windows Home Server that I use for backing up other PCs. This is a great feature, since the default Nexus/Google tablet backup doesn't seem to back up as much as it ought to. (Switching devices, for instance, usually means a massive reinstall of Amazon stuff)
Unlike Google, Dell doesn't suffer from as much Apple envy. As a result we get a microSD card slot. What this means is that even though I bought a 32GB device, an additional 32GB costs only $18, with the prospect of very cheap upgrades to 64GB and 128GB storage options in the future. This type of future proofing means that the additional $5 premium over the latest generation Nexus 7 is well worth it.
On top of that, the Dell device comes with a full license of Microsoft Office, and can run any of the applications that a regular Windows machine can. That means the contortions I used to get the Nexus 7 into a partially decent photo-editing tool are obsolete: I can just run Lightroom! Or Picasa. None of those have Android equivalents, and it truly is amazing to have them available in this form factor.
The device is fast! After using it as a web-browser during Black Friday to do some online shopping, the Nexus 7 feels slow. What this means is that while buying from Amazon is straightforward on the Nexus 7, any other site (such as Newegg) is agonizing. The Dell, however, feels just like my desktop. Everything behaves like it should, and pages load fast and snappily.
What's more, Windows 8.1 really does make use of all the power of the device. For instance, I wife discovered she could run two "metro" apps side by side. That's a power-user feature, but she found out about it quite naturally by simply playing with the device. And of course, Windows has had multi-user support for ages, so everything works like you expect. For instance, installing Chrome for one user automatically installs it for all users as long as you use administrator privileges to do so.
There are cons to the device: Windows 8.1 is not quite fully adapted to the world of touch devices. So for instance, at times, the on-screen keyboard will block the input field that you're entering into. That's annoying. Unlocking requires typing in a password instead of using gestures or a pin. That's potentially a security hole if you use it on a plane and share the same password as on your regular desktop, which Microsoft encourages because you're supposed to login using your hotmail account.
At 1280x800, the Venue 8 Pro has pretty much the same resolution as last year's Nexus 7, instead of the new 1920x1200 that the Nexus 7 spots. The reality though is that if you need to pop to the desktop for any amount of time, the lower resolution means your fingers aren't as fat. So that's not as big an issue as you might imagine.
And of course, there's not the rich ecosystem of "apps" on the Windows 8 store. But who cares? Since you're running full Windows with a real web-browser, applications like Amazon Instant Video which aren't available on the Google Play store can simply be run on the device like a native PC. Anybody who faults this device for the lack of apps simply doesn't understand that it's a real PC, not a tablet.
All in all, this device is the tablet that Microsoft should have launched last year, instead of foisting Surface RT on us. It's as cheap as an Android tablet, but has much much more functionality. Highly recommended.
The best thing about the Dell is that it's a Windows box. That means, for instance, that I can back it up using the Windows Home Server that I use for backing up other PCs. This is a great feature, since the default Nexus/Google tablet backup doesn't seem to back up as much as it ought to. (Switching devices, for instance, usually means a massive reinstall of Amazon stuff)
Unlike Google, Dell doesn't suffer from as much Apple envy. As a result we get a microSD card slot. What this means is that even though I bought a 32GB device, an additional 32GB costs only $18, with the prospect of very cheap upgrades to 64GB and 128GB storage options in the future. This type of future proofing means that the additional $5 premium over the latest generation Nexus 7 is well worth it.
On top of that, the Dell device comes with a full license of Microsoft Office, and can run any of the applications that a regular Windows machine can. That means the contortions I used to get the Nexus 7 into a partially decent photo-editing tool are obsolete: I can just run Lightroom! Or Picasa. None of those have Android equivalents, and it truly is amazing to have them available in this form factor.
The device is fast! After using it as a web-browser during Black Friday to do some online shopping, the Nexus 7 feels slow. What this means is that while buying from Amazon is straightforward on the Nexus 7, any other site (such as Newegg) is agonizing. The Dell, however, feels just like my desktop. Everything behaves like it should, and pages load fast and snappily.
What's more, Windows 8.1 really does make use of all the power of the device. For instance, I wife discovered she could run two "metro" apps side by side. That's a power-user feature, but she found out about it quite naturally by simply playing with the device. And of course, Windows has had multi-user support for ages, so everything works like you expect. For instance, installing Chrome for one user automatically installs it for all users as long as you use administrator privileges to do so.
There are cons to the device: Windows 8.1 is not quite fully adapted to the world of touch devices. So for instance, at times, the on-screen keyboard will block the input field that you're entering into. That's annoying. Unlocking requires typing in a password instead of using gestures or a pin. That's potentially a security hole if you use it on a plane and share the same password as on your regular desktop, which Microsoft encourages because you're supposed to login using your hotmail account.
At 1280x800, the Venue 8 Pro has pretty much the same resolution as last year's Nexus 7, instead of the new 1920x1200 that the Nexus 7 spots. The reality though is that if you need to pop to the desktop for any amount of time, the lower resolution means your fingers aren't as fat. So that's not as big an issue as you might imagine.
And of course, there's not the rich ecosystem of "apps" on the Windows 8 store. But who cares? Since you're running full Windows with a real web-browser, applications like Amazon Instant Video which aren't available on the Google Play store can simply be run on the device like a native PC. Anybody who faults this device for the lack of apps simply doesn't understand that it's a real PC, not a tablet.
All in all, this device is the tablet that Microsoft should have launched last year, instead of foisting Surface RT on us. It's as cheap as an Android tablet, but has much much more functionality. Highly recommended.
Thursday, November 28, 2013
PSA: 30% off any printed book at Amazon (Expires Dec 1st)
Until December 1st, if you enter the coupon code BOOKDEAL while buying any printed book at Amazon.com, you get 30% off the highest price book. The blatant self-promoter in me obviously wants you to buy any or all of my books, but another high priced item would be The Complete Calvin and Hobbes. Amazon says that that collection normally requires a shipping charge but gets free shipping today. There's an upper limit of $10 for the discount, so the $50 collection would still cost you $40.
Note that to qualify, the books must be on paper, rather than in electronic format, so unfortunately, Kindle versions of my book don't qualify for this deal.
Note that to qualify, the books must be on paper, rather than in electronic format, so unfortunately, Kindle versions of my book don't qualify for this deal.
Wednesday, November 27, 2013
College Savings
If you're an immigrant like I am, the American college financial aid system looks completely bonkers. Those of us from Asia, which has a more or less egalitarian elementary, middle, and high school education system roll our eyes about the "need-based" financial aid system. Most of Asia runs on merit-based system, because none of the insanity about property-taxed based local schools exist there. The property-tax based school system in the U.S. ensures that the poor remain poor, without much opportunity to qualify for higher education.
That being what it is, if you're a relatively high earner in Silicon Valley, it means that you do have to consider financial planning an essential part of preparing your child for college. Schools like to brag that 50% of their students receive some form of financial aid, which means that the other 50% essentially pay for college out-of-pocket in one form of another. Colleges also frequently include student loans as part of their financial aid packages, and I don't know about you, but I consider loans not "aid", but rather indentured servitude.
The first rule of financial planning for college is to fund your retirement accounts first! This is important because parental assets that are sequestered away in IRAs and 401(k)s cannot be considered in the financial aid planning formulas. Neither are primary residences most of the time. So that means if you're lucky enough to live off a $10M IRA and live in a $5M mansion in Menlo Park, all you have to do is to minimize withdrawals during the years your children are in college and you'll be treated like a trailer-park parent living off social security for the purposes of financial aid. Note that if you were to somehow manage to sequester everything away into your retirement plans and still end up having to spend some money on your child's education from the IRA, IRA withdrawal for paying higher education expenses are not subject to the early withdrawal penalty, though any withdrawal would still be subject to income tax.
The next tax shelter is the 529 account or the ESA. Most Silicon Valley high earners won't qualify for the ESA, but the 529 is available to anyone. The problem with ESAs in any case is that there aren't many low cost options for investing in them. Vanguard, for instance, has discontinued their ESA line of products. My wife writes about some interesting properties of the 529 here. Not only are 529s considered parental assets and therefore aren't as disadvantageous for financial aid purposes as a UGMA/UTMA account in the case where you do qualify for some financial aid. The big feature of the 529 is the tax-free compounding of assets as well as the tax-free withdrawal of gains for the purposes of paying for college education. It's relatively flexible and worth considering.
The final consideration is the UGMA/UTMA custodial account. The advantage here is the the child's investments get taxed at the child's rate. The problem here is that if the child accumulates a lot of assets, that will reduce his or her eligibility for financial aid at a much faster rate than if the assets were accumulated in the parental IRA or 529 accounts. However, if you're confident that your child is not going to qualify for financial aid no matter, then this is a viable strategy for the tax reduction.
Ultimately, of course, none of this matters if your child doesn't want to go to college or ends up being so highly sought after by colleges that they all offer him or her a free ride. In which case you should still fund your retirement accounts first!
That being what it is, if you're a relatively high earner in Silicon Valley, it means that you do have to consider financial planning an essential part of preparing your child for college. Schools like to brag that 50% of their students receive some form of financial aid, which means that the other 50% essentially pay for college out-of-pocket in one form of another. Colleges also frequently include student loans as part of their financial aid packages, and I don't know about you, but I consider loans not "aid", but rather indentured servitude.
The first rule of financial planning for college is to fund your retirement accounts first! This is important because parental assets that are sequestered away in IRAs and 401(k)s cannot be considered in the financial aid planning formulas. Neither are primary residences most of the time. So that means if you're lucky enough to live off a $10M IRA and live in a $5M mansion in Menlo Park, all you have to do is to minimize withdrawals during the years your children are in college and you'll be treated like a trailer-park parent living off social security for the purposes of financial aid. Note that if you were to somehow manage to sequester everything away into your retirement plans and still end up having to spend some money on your child's education from the IRA, IRA withdrawal for paying higher education expenses are not subject to the early withdrawal penalty, though any withdrawal would still be subject to income tax.
The next tax shelter is the 529 account or the ESA. Most Silicon Valley high earners won't qualify for the ESA, but the 529 is available to anyone. The problem with ESAs in any case is that there aren't many low cost options for investing in them. Vanguard, for instance, has discontinued their ESA line of products. My wife writes about some interesting properties of the 529 here. Not only are 529s considered parental assets and therefore aren't as disadvantageous for financial aid purposes as a UGMA/UTMA account in the case where you do qualify for some financial aid. The big feature of the 529 is the tax-free compounding of assets as well as the tax-free withdrawal of gains for the purposes of paying for college education. It's relatively flexible and worth considering.
The final consideration is the UGMA/UTMA custodial account. The advantage here is the the child's investments get taxed at the child's rate. The problem here is that if the child accumulates a lot of assets, that will reduce his or her eligibility for financial aid at a much faster rate than if the assets were accumulated in the parental IRA or 529 accounts. However, if you're confident that your child is not going to qualify for financial aid no matter, then this is a viable strategy for the tax reduction.
Ultimately, of course, none of this matters if your child doesn't want to go to college or ends up being so highly sought after by colleges that they all offer him or her a free ride. In which case you should still fund your retirement accounts first!
Tuesday, November 26, 2013
Why I no longer buy individual stocks
Every time I'm tempted to buy an individual stock, I have to remind myself that I shouldn't do so. Now, vast fortunes have been and are being made in individual stocks today, so it's not because you can't make money that way. Similarly, I've bought and sold individual stocks in the past, and even made money doing so, so it's not because I'm not capable of making money that way.
Here's the deal: the overall stock market is a representation of corporate earnings in the USA. Over time, that growth is very much predictable: you can pretty much count on a 3% annual real return. Back when inflation was 3%, that meant 6% a year. You might have heard about the average 10% growth per year, but I believe that's excessively optimistic, and a result of bad math. For instance, if your portfolio dropped by 50% one year and then grew by 30% for the next two years, your portfolio would end up around 84% of where it was at the start of year one. In other words, it takes much more growth to overcome a big down year than simply taking the arithmetic mean of the growth would imply. The entire market is quite capable of doing such big swings, as most of us who've lived through the 2001 and 2007 crashes know.
An individual stock is even more volatile. Yahoo! for instance gave us quite a ride over the last 10 years, and is right now regaining the peaks it achieved in 2005, during the proposed Microsoft buyout. Is this because new CEO Marissa Mayer is going to jazz up the earnings? No, not really. It turns out that Yahoo's Alibaba stake is what's causing Yahoo stock to go up. So taking a bet on Yahoo is like taking a bet in the pre-IPO Alibaba. And in case you do want to bet on Alibaba, you should know that Yahoo's stock has already been bid up because of this!
In any case, I have no idea where Yahoo is going to go, and neither do most folks. Since that's the case, I have no business owning the individual stock. It gets even worse when it comes to stocks that you think you know something about, because that's when it's very easy for you to get caught up with the story you want to build and ignore poor performance. For instance, many techies hate Microsoft, and would want it to fail. Yet there's an argument to be made the Microsoft could be the next Apple. Don't believe that slide deck? Neither do I. Then again, I didn't want to believe that Apple would be the next Apple, since my personal bias is that the world would be better off if Apple didn't exist. (I bought Apple at $9/share and sold it at $50/share after deciding I couldn't trust Steve Jobs)
There is one stock I exempt from this rule, which is Berkshire Hathaway, which I consider to be a mutual fund run by Warren Buffett. During the 2008 crash, I found myself buying in, because the economic environment was one that Warrren Buffett is known to do very well in. I was right. But even then, I have a lot of trouble figuring out what to do with holdings now. Buffett is now very old, and who knows if he will kick the bucket soon, at which point I'll take a loss. So even in this case, I have my doubts as to whether what I did was wise.
The big difference between investing and gambling, therefore, is having a long term plan in place, and sticking to it. That's why despite all these stories about stocks being about to crash 40-55% (which I can believe in), I'm still sticking to my asset allocation. As John Maynard Keynes writes:
I would say that it is from time to time the duty of the serious investor to accept the depreciation of his holdings with equanimity and without reproaching himself.Now this quote isn't relevant because everyone will lose money at some point or another. It's also there to remind yourself that the discipline to stick to your asset allocation is important, and overrides any desire to outsmart the market or yourself. The problem comes if you don't have the discipline, which then behoves you to hire someone else to drive the car while you get drunk.
Book Launched: How to Interview a Financial Advisor
The book has a launch price of $9.99 on the Kindle store or on my web-site. My past books have been larger, and appealed to a narrower audience than this one would, hence the lower price. My hope is that this would prove useful to more people than the usual people who read this blog. The paperback will price at $19.99.
Sunday, November 24, 2013
2014 Book Reviews
Update: Books of the Year 2014 have been selected!
Non Fiction
Fiction
Non Fiction
- Unaccountable
- The Everything Store
- Do You Believe in Magic?
- The Emperor of All Maladies
- Ghost in the Wires
- The Rise of Superman
- Caffeinated
- Aggressive Tax Avoidance for Real Estate Investors
- How to Win Friends and Influence People
- If You Can
- A Troublesome Inheritance
- The Great Inversion
- All Joy and No Fun
- Sailing A Serious Ocean
- A Fighting Chance
- Capital in the 21st Century
- The Flash Boys
Fiction
- Silent Echo
- The Things They Carried
- The Speed of the Dark
- Soy Sauce for Beginners
- NOS4A2
- Circle of Sorcerers
- Super Powereds: Year 1
- Super Powereds: Year 2
- Tunnel Vision
- Locked In
- The Dark Defiles
- The Inquisitor's Apprentice
- The Magician's Land
- Life With A Fire Breathing Girlfriend
Comics
Review: Silent Echo
Silent Echo is J. R. Rain's short mystery novel. The premise is intriguing: our protagonist/detective is retired in a hard way: he's dying from cancer. However, one of his friends comes by and asks him to investigate an old flame's disappearance, which he can't resist, so he comes back for one last case.
The problem with the novel is that Booker does a lot of moping and self-pitying. He's not a very likable person, and the moping doesn't move the plot any further. The other problem is that with the limited mobility and fragility of the Booker, the author can't do very much with him. As a result, the list of prospective murderers are small, and you pretty much know who did it when you realized you're halfway through the book and there's only a handful of characters that have been introduced.
The reveal, when it comes isn't much of one, and I think only die-hard fans of the author would like it. Don't waste your time otherwise.
Disclosure: I got this book free through Kindle First.
The problem with the novel is that Booker does a lot of moping and self-pitying. He's not a very likable person, and the moping doesn't move the plot any further. The other problem is that with the limited mobility and fragility of the Booker, the author can't do very much with him. As a result, the list of prospective murderers are small, and you pretty much know who did it when you realized you're halfway through the book and there's only a handful of characters that have been introduced.
The reveal, when it comes isn't much of one, and I think only die-hard fans of the author would like it. Don't waste your time otherwise.
Disclosure: I got this book free through Kindle First.
Wednesday, November 20, 2013
Books of the Year 2013
This was an unusually poor year for reading, with family crisis, and other things getting into the way. I only read 51 books this year, which falls just a bit short of a book a week, and none of them were graphic novels.
On the non-fiction side, the winner is clear: The Story of the Human Body is the best non-fiction book I've read all year. It's a rich story, well told, and nearly every page will teach you something new about the origins of humanity and how it came about. It's well worth the money. The biggest impact on my life, however, is Modernist Cuisine at Home. This book has thoroughly changed what I thought was possible at home as far as home cooking is concern, and it continues to change what we eat and how we eat on an almost daily basis. Honorable mentions go to Nate Silver's The Signal and The Noise, as well as The Sports Gene.
On the fiction side, this has been a less than stellar year. The Hydrogen Sonata, for instance, didn't turn out to be a great Culture novel. Ghost Spin was good was a great novel, however, and lived up to my expectations for it. Every Day has a great voice, and is a lot of fun to read, except that the ending sort of ruined it. Even Zen and the Art of Motorcycle Maintenance wasn't as good as I remembered it, though it's still a still at the amazing price of $2.99 on Amazon. Don't get me wrong. All of these books are worth reading, and I would recommend them to anyone, but compared to last year's Hugo Winners? This year's batch of novels just aren't up to snuff.
Nevertheless, if there's one novel that stands out, it's Ghost Spin. Don't read it straight off the bat, though. Read Spin State and Spin Control first. The evolution of the characters and the setup of the context is worth it, and Chris Moriarty is one of the most under-rated writers in the business.
On the non-fiction side, the winner is clear: The Story of the Human Body is the best non-fiction book I've read all year. It's a rich story, well told, and nearly every page will teach you something new about the origins of humanity and how it came about. It's well worth the money. The biggest impact on my life, however, is Modernist Cuisine at Home. This book has thoroughly changed what I thought was possible at home as far as home cooking is concern, and it continues to change what we eat and how we eat on an almost daily basis. Honorable mentions go to Nate Silver's The Signal and The Noise, as well as The Sports Gene.
On the fiction side, this has been a less than stellar year. The Hydrogen Sonata, for instance, didn't turn out to be a great Culture novel. Ghost Spin was good was a great novel, however, and lived up to my expectations for it. Every Day has a great voice, and is a lot of fun to read, except that the ending sort of ruined it. Even Zen and the Art of Motorcycle Maintenance wasn't as good as I remembered it, though it's still a still at the amazing price of $2.99 on Amazon. Don't get me wrong. All of these books are worth reading, and I would recommend them to anyone, but compared to last year's Hugo Winners? This year's batch of novels just aren't up to snuff.
Nevertheless, if there's one novel that stands out, it's Ghost Spin. Don't read it straight off the bat, though. Read Spin State and Spin Control first. The evolution of the characters and the setup of the context is worth it, and Chris Moriarty is one of the most under-rated writers in the business.
Review: Whirlpool 1.9cu ft Over-The-Range Microwave
My wife was unhappy with a crack in the microwave door, so we decided to replace the microwave with a different model. I'd become increasingly unhappy with the LG products in our house, so we made a point to avoid LG this time. The big feature that drew me to the WHM32L19AS was the big fan: 400CFM!
400CFM is big enough that you can feel the difference when you turn it on. There's less grease on the ceiling from cooking, there's smoke all over the place, and the machine is quite powerful. Reheating food used to take much longer than it does now.
The big downside is the reliability of the machine is suspect. After less than 6 months, it's already been broken. And not a cheap easy broken-ness, but a magnetron breakage. I asked the repair man how much it would have cost to fix it, and the answer was around $300, which meant that it would have been cheaper to buy a new one than to fix it. I asked how long he expected the new magnetron to last, and the answer was: "I've seen them die as quickly as in 6 months to a year." He added that the over-the-range hood microwaves get all the grease that used to be on my ceiling, and that when he pulled our magnetron it was very greasy.
Great. Just great. Why not just seal the darn thing better? My LG lasted much longer and had no problems. Worse, both the installation and repair was incredibly poor service. I'm no longer buying any products from Lowe's.
Not recommended. Next time, I'm just going to get a separate hood and a combi-oven microwave instead.
400CFM is big enough that you can feel the difference when you turn it on. There's less grease on the ceiling from cooking, there's smoke all over the place, and the machine is quite powerful. Reheating food used to take much longer than it does now.
The big downside is the reliability of the machine is suspect. After less than 6 months, it's already been broken. And not a cheap easy broken-ness, but a magnetron breakage. I asked the repair man how much it would have cost to fix it, and the answer was around $300, which meant that it would have been cheaper to buy a new one than to fix it. I asked how long he expected the new magnetron to last, and the answer was: "I've seen them die as quickly as in 6 months to a year." He added that the over-the-range hood microwaves get all the grease that used to be on my ceiling, and that when he pulled our magnetron it was very greasy.
Great. Just great. Why not just seal the darn thing better? My LG lasted much longer and had no problems. Worse, both the installation and repair was incredibly poor service. I'm no longer buying any products from Lowe's.
Not recommended. Next time, I'm just going to get a separate hood and a combi-oven microwave instead.
Monday, November 18, 2013
Review: Dear Mr. Watterson
I watched Dear Mr. Watterson in the hopes of gaining some insight about Calvin and Hobbes, easily one of my favorite strips. Since Bill Watterson's pretty much a recluse, you're not going to see him in this movie. However, you do get to see a lot of other cartoonists, including Bill Amend (Foxtrot), Berkeley Breathed (Opus).
You do get to see the place where Watterson grew up, and if you have good memories of the strip, that's going to be very evocative. You do see some Calvin and Hobbes originals, but unfortunately, the choice of shallow depth of field means you don't actually get to see what the folks in the movie talk about, like the white-out in various panels, etc. The strips, when they are displayed, are shown in MTV-style. Rushed pans, and single focus which basically means you never actually do get to read a strip to remind you in case you haven't gotten every strip ever done memorized.
All in all, the director squeezed a 90 minute picture out of a 30 minute picture. Avoid. Spend your money on the book collections instead.
You do get to see the place where Watterson grew up, and if you have good memories of the strip, that's going to be very evocative. You do see some Calvin and Hobbes originals, but unfortunately, the choice of shallow depth of field means you don't actually get to see what the folks in the movie talk about, like the white-out in various panels, etc. The strips, when they are displayed, are shown in MTV-style. Rushed pans, and single focus which basically means you never actually do get to read a strip to remind you in case you haven't gotten every strip ever done memorized.
All in all, the director squeezed a 90 minute picture out of a 30 minute picture. Avoid. Spend your money on the book collections instead.
Saturday, November 16, 2013
4 Months of Modernist Cuisine
It's been a while since I last posted about Modernist Cuisine, which is still my go-to book for cooking at home. For me, at least, it's significantly transformed my food preferences as well as the amount of cooking I'd do at home. I've done Creme Brulee, 72-hour short ribs, pressure cooked chicken adobo, and used the pressure cooker and sous vide machine far more than I ever expected to. I've applied to pressure cooker to even some of my favorite recipes outside the book, such as beef rendang and Japanese curry, to good effect---the time it takes to make those dishes have been cut down dramatically and the food quality has improved.
As for the Sous Vide Supreme Demi, I found myself appreciating it more after borrowing a DorkFood setup from a friend of mine. First, it's useful to have a second sous vide machine because while you have a 72 hour short rib cooking for 3 days, you might want to cook other stuff. But second, the slow cooker variants are slow! With the Sous Vide Supreme Demi, I can dump water straight from the tap into the machine and expect the machine to come up to temperature within 30 minutes even if it was ice cold water. No such luck with the DorkFood. You could pour boiling water into the slow cooker and still have to wait for hours for the temperature to come up if you're making Creme Brulee because most of the energy goes into heating up the cold porcelain of the slow cooker! The time saved from using the purpose built device has already paid for itself. Not to mention that DorkFood is loud!
By far the best recipe is the 72 hour short ribs. Those are to die for. If you've not had them, you need to try them. They freeze well, so it's not unusual for me to cook $50 worth of short ribs to freeze them for later use. The most common use for the sous vide machine has to be for chicken. At 66C for 2 hours, you can cook up the best chicken most people have ever tasted at relatively short notice.
All in all, I've found myself using the oven less and the sous vide machine has become the second hardest working machine in my kitchen. (In case you're wondering, the hardest working machine is the rice cooker!) Recommended.
As for the Sous Vide Supreme Demi, I found myself appreciating it more after borrowing a DorkFood setup from a friend of mine. First, it's useful to have a second sous vide machine because while you have a 72 hour short rib cooking for 3 days, you might want to cook other stuff. But second, the slow cooker variants are slow! With the Sous Vide Supreme Demi, I can dump water straight from the tap into the machine and expect the machine to come up to temperature within 30 minutes even if it was ice cold water. No such luck with the DorkFood. You could pour boiling water into the slow cooker and still have to wait for hours for the temperature to come up if you're making Creme Brulee because most of the energy goes into heating up the cold porcelain of the slow cooker! The time saved from using the purpose built device has already paid for itself. Not to mention that DorkFood is loud!
By far the best recipe is the 72 hour short ribs. Those are to die for. If you've not had them, you need to try them. They freeze well, so it's not unusual for me to cook $50 worth of short ribs to freeze them for later use. The most common use for the sous vide machine has to be for chicken. At 66C for 2 hours, you can cook up the best chicken most people have ever tasted at relatively short notice.
All in all, I've found myself using the oven less and the sous vide machine has become the second hardest working machine in my kitchen. (In case you're wondering, the hardest working machine is the rice cooker!) Recommended.
Thursday, November 14, 2013
Review: Jabra Journey Bluetooth Car Speakerphone
I got used to the Scion's built-in Bluetooth integration with my phone, so I ended up buying a Jabra Journey Bluetooth Car Speakerphone. You expect these 3rd party after-market solutions to be much worse and kludgey than say a built-in OEM solution, but you'd be wrong. The Jabra outperforms the Scion's Bluetooth integration significantly.
The Scion, for instance, only pairs with one phone at a time. The Jabra will pair with two phones at once. That's really useful, since sometimes both of us get in the car at the same time, and the Scion would inevitably pair with the wrong phone while the Jabra never has that problem. (The passenger can always click the Bluetooth button on a call to call basis)
What's great about this unit is that I expected to have to constantly recharge it. It does turn out that the 45 day standby time is correct. We've had to recharge it a couple of times since we purchased the device, but it's never run out of juice. What's amazing is that the auto-on-off works. Just getting into the car and closing the door is enough to trigger the device to power on and connect to our phones.
Voice clarity is variable, and I suspect it has to do with the phones involved much more than the device. When the phone is streaming Google maps directions, for instance, we can always hear it loud and clear. But if the voice call is iffy or noisy, for instance, why would you expect the Bluetooth speakerphone to work better than the earpiece?
Since the Journey supports A2DP, streaming music or Google Maps directions works automatically and magically. It's very cool, and in this respect is way better than the Scion's integration, where you'd have to switch the audio channel manually to see it.
All in all, I've been very impressed by this piece of technology, and would highly recommend it.
The Scion, for instance, only pairs with one phone at a time. The Jabra will pair with two phones at once. That's really useful, since sometimes both of us get in the car at the same time, and the Scion would inevitably pair with the wrong phone while the Jabra never has that problem. (The passenger can always click the Bluetooth button on a call to call basis)
What's great about this unit is that I expected to have to constantly recharge it. It does turn out that the 45 day standby time is correct. We've had to recharge it a couple of times since we purchased the device, but it's never run out of juice. What's amazing is that the auto-on-off works. Just getting into the car and closing the door is enough to trigger the device to power on and connect to our phones.
Voice clarity is variable, and I suspect it has to do with the phones involved much more than the device. When the phone is streaming Google maps directions, for instance, we can always hear it loud and clear. But if the voice call is iffy or noisy, for instance, why would you expect the Bluetooth speakerphone to work better than the earpiece?
Since the Journey supports A2DP, streaming music or Google Maps directions works automatically and magically. It's very cool, and in this respect is way better than the Scion's integration, where you'd have to switch the audio channel manually to see it.
All in all, I've been very impressed by this piece of technology, and would highly recommend it.
Sunday, November 10, 2013
Review: The School For Good And Evil
Sophie and Agatha live in the town of Galvadon, a story book town where once a year, the Schoolmaster kidnaps two children away to attend The School for Good and Evil. These children will then end up in fairy tales and be written about for posterity.
Sophie is blond, fair, and pretty, and seems (to herself) to be a shoo-in for the school for Good. Her friend Agatha, dresses in black, and lives next to the cemetery, but doesn't believe in either the school or the fairies, and has no desire to be kidnapped. When they end up being kidnapped and Agatha ends up at the school for Good and Sophie at the school for Evil, the plot revolves around Agatha trying to get both of them home and Sophie trying to swap places with Agatha while winning her prince.
The book plays up to all the story book cliches, where the school for Good has classes like "beautification", "talking to animals", etc., and the school for Evil teaches "Uglification" amongst others. The story is funny and entertaining, especially as Sophie demonstrates her twisted ideas about what it means to be good.
Unfortunately, the author writes himself into a corner and ends up with a disappointing ending that fails to take advantage of the milleu. The big reveals turn out to be not all that interesting, and the characters never end up being very fully developed. Ignoring the ending, however, it is a fun read and can be mildly recommended for airplane reading.
Sophie is blond, fair, and pretty, and seems (to herself) to be a shoo-in for the school for Good. Her friend Agatha, dresses in black, and lives next to the cemetery, but doesn't believe in either the school or the fairies, and has no desire to be kidnapped. When they end up being kidnapped and Agatha ends up at the school for Good and Sophie at the school for Evil, the plot revolves around Agatha trying to get both of them home and Sophie trying to swap places with Agatha while winning her prince.
The book plays up to all the story book cliches, where the school for Good has classes like "beautification", "talking to animals", etc., and the school for Evil teaches "Uglification" amongst others. The story is funny and entertaining, especially as Sophie demonstrates her twisted ideas about what it means to be good.
Unfortunately, the author writes himself into a corner and ends up with a disappointing ending that fails to take advantage of the milleu. The big reveals turn out to be not all that interesting, and the characters never end up being very fully developed. Ignoring the ending, however, it is a fun read and can be mildly recommended for airplane reading.
Friday, November 08, 2013
Review: The Temple of Gold
William Goldman, who wrote The Princess Bride, wrote The Temple of Gold as his debut novel. I'm a big fan of The Princess Bride, so when I saw they shared the same author and Amazon offered it for a low low price of $1.99, I jumped on the novel and bought it.
I shouldn't have. This is an awful, awful novel. The lead character is unlike-able, and does so many stupid things that at one point I just stopped reading because I just couldn't stand reading a novel about someone this stupid. This isn't even about him being an anti-hero, this is just stupidity. For instance, he recognizes when someone's really good for him in a relationship, but abandons the relationship anyway.
I eventually kept reading because I was stuck in a situation where I had nothing else to do, and kept hoping for a note of redemption in this novel. Unfortunately, there was none. Stay far far away from this book. I can hardly believe that the same person wrote The Princess Bride. Now I will hesitate to ever pick up another William Goldman novel again.
I shouldn't have. This is an awful, awful novel. The lead character is unlike-able, and does so many stupid things that at one point I just stopped reading because I just couldn't stand reading a novel about someone this stupid. This isn't even about him being an anti-hero, this is just stupidity. For instance, he recognizes when someone's really good for him in a relationship, but abandons the relationship anyway.
I eventually kept reading because I was stuck in a situation where I had nothing else to do, and kept hoping for a note of redemption in this novel. Unfortunately, there was none. Stay far far away from this book. I can hardly believe that the same person wrote The Princess Bride. Now I will hesitate to ever pick up another William Goldman novel again.
Review: The Ages of the Investor
The Ages of the Investor is the first book in William Bernstein's "investing for adults" series. It's unusual in that it provides an unconventional series of recommendations that I don't necessarily agree with, but makes good fodder for thought.
Bernstein looks at lifetime retiring savings as a human capital/financial capital trade-off model. In other words, when you're young, you have plenty of human capital in terms of future earnings growth, but very little in savings. When you're old, the reverse is true. He acknowledges that this view of things is simplistic, in that a young person can nevertheless fall ill, decide to have 12 kids, or do lots of other things to impair their future earnings growth, while his model of financial wealth includes all the risks involved in holding financial securities.
One of the earliest points of the book is that series risk is important. In other words, during your investing career, if you get to take advantage of low stock prices early on, it's a really big advantage, whereas if you get the penalty of a booming stock market in your early years, you don't get to buy stock at low prices, at which point any market crash can really nuke your savings. He points out, however, that if you get a lump sum and invest it all at once, you get to neutralize all series risk, and you avoid extreme outcomes and get to use the market average. This insight doesn't help much, Bernstein admits, because unless you get a big inheritance (or got rich from an IPO), there's no way to find this large lump sum.
Bernstein then examines folks at the beginning of their investing career. This part is not controversial. It's well known that young investors are unnecessarily conservative in their investments (mainly because it takes time to understand financial markets as well as how they react during a downturn), and should actually leverage themselves, as opposed to putting their money in a stock/bond mix. The problem is that most people don't want to use leverage, and even if they did, could quickly panic during a downturn. Bernstein recommends using a DFA-type portfolio instead to increase the risk that they take in their early years.
Then end game is where Bernstein's recommendations are controversial. His thought here is that once you've reached your "magic number", you should avoid taking further market risk. Well, the problem here is that there really is no avoiding market risk except by taking on inflation risk, and for any 30 year period, inflation risk is really high. He suggests a ladder of TIPS (Treasury Inflation Protected Securities), but doesn't point out that TIPS have really poor tax characteristics, and are also paying record low interest rates at this point. He also recommends purchasing an inflation adjusted annuity, but also points out that those have historically been very poor deals. He suggests value stocks, but again, those don't eliminate market risk.
Here's the thing, buying a ladder of government bonds during a period of unusually low interest rates is very likely to send you to the poor-house. Furthermore, once inflation returns, the interest generated from your portfolio would be insufficient to live on. This advice worked well for Robin & Dominguez, but they retired in the 1980s during record high interest rates. I'm not sure Bernstein is doing his readers a favor in 2013 by suggesting a similar route.
The only uncontroversial recommendation he makes here is to delay taking security as late as possible if you're in good health so as to get a great "annuity" from your social security income stream. Of course, if you're a die-hard libertarian I don't expect you to take that advice. Even worse, his examples don't note that those who have their assets in mostly taxable accounts actually have an advantage over those who have most of their assets in tax-sheltered accounts, which is the ability to control taxation through judicious use of when to take capital gains as well as substantial advantages to be found in using tax-loss harvesting. I'm not quite sure what to make of this omission.
All in all, the book makes a bunch of good points and gives you lots to think about, but I find Bernstein's recommendations here thin and not really very strong compared to the resources say, at The Retire Early Home Page. He doesn't even address those issues, or the very important question of how you would arrive at your magic number. While I think the book was worth the very quick read, I cannot give many of its recommendations my endorsement. Read and apply the advice at your own risk.
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